Text

Suppl 1 to Facility SER
	ML20244A489
Person / Time
Site:	Skagit
Issue date:	10/20/1978
From:	; Office of Nuclear Reactor Regulation
To:	;
Shared Package
ML20197B262	List: ML20244A489; NUREG-0309, Forwards Safety Evaluation Rept for Subj Facil;
References
	NUREG-0309, NUREG-0309-S01, NUREG-309, NUREG-309-S1, NUDOCS 7811060070
	Download: ML20244A489 (70)
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i Available from N:tional Technical Information Servica Springfield, Virginia 22161 Price: Printed Copy $5.25 ; Microfiche $3.00 The price of this document for requesters outside of the North American Continent can be obtained from the National Technical Information Service.

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1 NUREG-0309 Supplement No. 1 October 1978 1

SAFETY EVALUATION REPORT BY THE OFFICE OF NUCLEAR REACTOR REGULATION U.S. NUCLEAR REGULATORY COMMISSION IN THE MATTER OF PUGET SOUND POWER AND LIGHT COMPANY SKAGIT NUCLEAR POWER PROJECT, UNITS 1 AND 2 DOCKET NOS.'50-522 AND 50-523

TABLE OF CONTENTS PAGE

1.0 INTRODUCTION

AND GENERAL DISCUSSION . .. . . .. . . .. 1-1 1.1 Introduction. . .. . . . . 11 1.8 Requirements for Future Technical Information. . . 1-1 1.9 . Summary.of Outstanding Issues. . . . .. . 1-2 2.0 SITE CHARACTERISTICS., . .. .. . ...... . . . . 2-1

2. 3 Meteorology. . . ... . . , . . . .. . .... . 2-1 2.5 Geology, Seismology and Geotechnical Engineering. .. . 2-1

3. 0 DESIGN CRITERIA FOR STRUCTURES, SYSTEMS AND COMPONENTS . . 3-1 3.2 Classification of Structures, Components and Systems. ... . . 3-1 3.6 Protection Against Dynamic Effects Associated with the Postulated Rupture of Piping... .. .. . . , ,. 3-1 5.0 REACTOR COOLANT SYSTEM AND CONNECTED SYSTEMS.... ., ... . . 5-1 5.2 Integrity of Reactor Coolant Pressure Boundary. . .. 5-1 5.4 Component and Subsystem Design. . . .. .. . 5-1 i

6.0 ENGINEERED SAFETY FEATURES. .. . .. . .... . .. 6-1 6.2 Containment Systems.. . .. . . 6-1 6.4 Habitability Systems. . . . . . ... . . .. 6-1

7. 0 INSTRUMENTATION AND CONTROL.. . . . . . . 7-1 7.3 Engineered Safety Feature Systems. . .., . . . 7-1 7.4 Systems Required for Safe Shutdown. . , .. , 7-1 7.5 Safety-Related Display Instrumentation. . . . 7-1 9.0 AUXILIARY SYSTEMS. . . . . 9-1 9.2 Water Systems. . .. . 9-1

.9.3 Process Auxiliaries. . . . .. . 9-2 9.4 Air Conditioning, Heating, Cooling and Ventilation Systems. 9-2 i

TABLEOFCONTENTS(Continued]

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11.0 RADI0 ACTIVE WASTE MANAGEMENT. . .. 11-1 11.1 Summary Description. . .. 11 11.6 Conclusions. . . ., 11-7 15.0 ACCIDENT ANALYSES., - .. .. . . . . 15-1 15.3 Design Basis Accidents. . . . ..... . .. 15-1 18.0 REPORT OF THE ADVISORY COMMITTEE ON REACTOR SAFEGUARDS. 18-1 20.0 FINANCIAL QUALIFICATIONS. ., . .. 20-1 20,1 Introduc t ion.' . . . . . 20-1 20.2 Construction Cost Estimates. . . . .. . .. . . 20-1 20.3 Sources'of Construction Funds. . . ,. . .. . . 20-2 20,4 Financial Analysis. . .. .. . .. . 20-2 20.5 Conclusions on Financial Qualifications. .. .. . . 20-21

21.0 CONCLUSION

S. . . . ..... . ... . 21-1 LIS1 0F APPENDICES A. ' CHRONOLOGY. . . , . A-1

8. REPORT ON THE SKAGIT NUCLEAR POWER DROJECT, UNITS 1 AND 2. . B-1 C. ERRATA. .. . .. . . .. . .. . . C-1 ii

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LIST OF TABLES PAGE TABLE 11-3~ CALCULATED RELEASES OF RADIDACTivE MATERIAL-- . . '11-3 TABLE 11-4 PRINCIPAL PARAMETERS AND CONDIT0NS USED IN CALCULATING RELEASES OF RADI0 ACTIVE MATERIAL-- . .. 11-4 ,

TABLE 11-5 SKAGIT NUCLEAR POWER PROJECT, UNIT N05. 1 AND 2 RELATIVE CONCENTRATION (X/Q) AND DEPOSITION VALUES (0/Q) USED FOR DOSE CALCULATIONS. , . . .. . . 11-6 TABLE 11-6 COMPARISON OF CALCULATED DOSES TO A MAXIMUM INDIVIOUAL---WITH---APPENDlX I TO PART 50.- . .. 11-8 TABLE 11-7 COMPARISON OF CALCULATED DOSES TO A MAXIMUM INDIVIDUAL---WITH---DESIGN OBJECTIVES PROPOSED BY STAFF. . .. . . .. 11-9 TABLE 20-1 FINANCIAL DATA FOR THE FOUR INVESTOR-0WNED APPLICANTS-- ... 20-3 TABLE 20 2 SOURCE OF FUND 5+--(PUGET SOUND POWER & LIGHT COMPANY). . 20-5 TABLE 20-3 SOURCE OF FUNDS---(PORTLAND GENERAL ELECTRIC COMPANY). 20-10 TABLE 20-4 $0VRCE OF FUNDS---(PACIFIC POWER & LIGHT COMPANY). 20-14 TABLE 20-5 PRO FORMA SOURCES OF FUNDS--(WASHINGTON WATER POWER COMPANY). . . , . . . . . 20-17 1

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1.0 INTRODUCTION

AND GENERAL DISCUSSION 1.1 Introduction The Nuclear Regulatory Commission staff's safety Evaluation Report for the Skagit Nuclear Power Project, Units 1 and 2 (NUREG-0309), Docket Hos. 50-222 and 50-223, was issued September 1977. At the time that-the report was issued there were a number of issues that needed to be resolved prior to a decision on issuance of construction permits (see Table 1-4 and 1-5 of NUREG-0309). There also were two

! concerns which were not discussed in NUREG-0309. These concerns were the design criteria'for volcanic ash fall-(see Sections 9.2 and 9.4 of this supplement) and the generic problem associated with control rod drive return line nozzle cract IN observed in several operating BWR vessels (see Section 5.2.1 of this supplement).

This supplement to NUREG-0309 discusses the resolution of the issues that were considered outstanding at the time of NUREG-0309 issuance ~and the additional matters reviewed by the staff since that ilme. The Advisory Committee on Reactor Safe-guards' reports relative'to the Skagit Project are also included in this supplement (see Appendix B). The Advisory Committee on Reactor Safeguards raised no issues t not considered by the staff's review and resolved in NUREG-0309 and this supplement.

The two remaining matters still not resolved and one remaining matter still in disagreement between the staff and the applicant are discussed in Sections 2.5 and 5.2.5 of this supplement, respectively.

This supplement also contains an errata (Appendix C). In addition, Section 2 3.5, "Eong-Term (Routine) diffusion Estimates," has been revised in its entirety for updating. There are no changes in the staff's safety conclusions resulting from ,

the updating or corrections to the Safety Evaluation Report. ,

The sections of this supplement are numbered the same as the corresponding sections of NUREG-0309 which are referenced for more detailed discussion of the issues and the staff's positions.

1.8 Requirements for Future Technical Information Tables 1-2 and 1-3 of NUREG-0309 are modified to include the verification program for modifications to the control rod drive return lines to eliminate nozzle cracking.

The staff will require that Puget Sound Power and Light Company verify that the final design for the control rod drive return lines reduces cracking due to thermal cycling to acceptable limits (see Section 5.2.1 of this supplement).

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1. 9 Summary of Outstanding Issues l l

l The issues listed in Tables 1 4 and 1-5 of NUREG-0309 which were resolved and are discussed in this supplement are:

Section Reference Item Description 3.2.1, 3.2.2 The Nuclear Regulatory Commission staf f will require that cooling water lines to the reactor recirculation pumps ce designed as seismic Category I and Quality Group C.

3.6.2 Review of main steamline tunnel design changes for protection of safety related equipment.

5.4.5, 7.4.3, 9.3.1 Review of compressed air system for automatic depres-surization system valves to assure that it will provide noninterruptible air supply.

6.2.9 The Nuclear Regulatory Commission staff will require that the acceptance criterion for the low pressure drywell leak test be 10 percent of the capability of the containment to accommodate bypass leakage at the test pressure.

6.4.1 Review of control room pressurization testing commit-ment and provisions to provide operators with protective clothing and eye protection.

7.3.5 Review of suppression pool makeup system controls.

7. 5 Review of safety related display instrumentation criteria.

11.1 Review of radwaste systems to meet the design objec-tives of Appendix I to Title 10 of the Code of Federal Regulations, Part 50.

15.3.3 Review of the postulated fuel handling accident within containment.

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2.0 SITE CHARACTERISTICS

2. 3 Meteorology 2.3.'5 Long-Term (Routine) Diffusion Estimates During the Appendix.I review reported in Section 11.0 of this supplement, the staff revised its evaluation of long-term (routine) diffusion estimates to take into consideration elevated releases and intermittent gaseous releases as well as spatial and temporal variations of the airflow. The revised evaluation does not change the staff's conclusions stated in Section 2.3.6 of NUREG-0309. Section 2.3.5 of NUREG-0309 is revised in its entirety as follows.

Using the 10-meter level wind data and the vertical temperature difference data from the two years of onsite collection, the staff made reasonable estimates of average atmospheric dispersion conditions for the proposed Skagit site using its atmospheric dispersion model for long-term releases (Sagendorf and Goll, 1976).

This model is based on the " Straight-Line Trajectory Model" described in Regulatory Guide 1.111 " Methods for Estimating Atmospheric Transport and Disper-sion of Gaseous Effluents in Routine Releases from Light-Water-Cooled Reactors."

Based on the criteria of this guide, the staff considered that the releases f rom the plant process vents were a mixture of elevated and ground-level releases and that releases from the radwaste building vent were ground-level only. The staff evaluated intermittent gaseous releases separately from continuous releases. The staff included an estimate of maximum increase in calculated relative concentra-tion (X/Q) and deposition (0/Q) due to the spatial and temporal variation of the airflow not considered in the straight-line trajectory model (as discussed in Regulatory Guide 1.111)

Table 11-5 of Section 11.0 in this supplement, describing the staff's evaluation of the proposed Skagit plant for conformance to Appendix I to 10 CFR 50, lists the X/Q and D/Q values used for the dose calculations listed in Section 11.0.

2.5 Geology, Seismology and Geotechnical Engineering The staff has not completed its review of the geological and seismological aspects of the proposed Skagit Nuclear Power Project, Units 1 and 2. As a result of new concerns raised by the staff and its consultant, the U.S. Geological Survey, the Puget Sound Power and Light Company is conducting additional field explorations in the vicinity of the proposed Skagit site. It is anticipated that this field work will be completed in late 1978. We will report on this matter in a future supple-ment to NUREG-0309.

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3.0 DESIGN CRITERIA FOR STRUCTURES, SYSTEMS AND COMPONENTS

3. 2 Classification of Structures, Components and Systems At the time of the staff's safety evaluation, and as reported in NUREG-0309, Section 3.2, Puget Sound Power and Light Company did not agree with the staf f's position on seismic category and quality grot, classification of recirculation pump cooling lines (see Table 1-5 of NUREG-0309). However, in a letter, dated October 20, 1977, PLN-162, to the Acting Director, U.S. Nuclear Regulatory Commission, Puget Sound Power and Light Company stated,

" Item 1, The NRC Staff will require that cooling water lines to the reactor recirculation pumps be designed as seismic Category I and Quality Group C An evaluation is currently being performed by the General Electric Company to evaluate the consequences of loss of component cooling water to the recirculation pumps. This evaluation is scheduled for submission to the NRC by December 31, 1977. In the event that loss of cooling water to the recirculation pumps is found to have unacceptable consequences, Puget Sound Power and Light Company commits to either upgrade the component cooling water lines as identified in the NRC Staff's position or to provide an alternative acceptable to the NRC Staff. Puget anticipates that this commitment will satisfy the NRC Staff's immediate concerns in this area."

The staff finds this commitment acceptable for the construction permit stage of review and considers this issue stated in Sections 3.2.1 and 3.2.2 and listed in Table 1-5 of NUREG-0309 to be resolved 3.6 Protection Against Dynamic Effects Associated With the Postulated Rupture of Piping 3.6.2 Systems tocated Outside Containment In order to meet the staff's positici regarding the protection of safety-related equipment against a postulated rupture of the main steam lines, Puget Sound Power and Light Company committed to change the steam line tunnel design and to qualify all safety-related equipment in the tunnel to the environment resulting from a postulated rupture of a steam line (see Section 3.6.2 of NUREG-0309). Puget Sound Power and Light Company submitted the preliminary redesign of the steam line tunnel in Amendment No. 18 to the Preliminary Safety Evaluation Report.

The staff reviewed the information providad in Amendment No. 18, June 1977, to the Preliminary Safety Analysis Report with respect to the redesign of the steam line 3-1

4 tunnel to accommodate the pressu"e and temperature effects of a nonmechanistic steam line break in the tunnel. The new design provides means for venting the steam line tunnel for a postulated single flow area break in a steam line so that resulting pressures will not exceed toe tunnel internal design pressure of 7.5 pounds per square inch gauge, thus ensuring that safety-related equipment in areas adjacent to the tunnel will be protected. All safety related equipment in the tunnel will be qualified for the resulting pressure and temperature environ-ment. The staf f finds the preliminary design acceptable and considers th,is issue to be resolved.

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5.0 REACTOR COOLANT SYSTEM AND CCNNECTED SYSTEMS l

i 5.2 Integrity of Reactor Coolant Pressure Boundary 5.2.1 Design of Reactor Coolant Pressure Boundary Components in addition to the cracking found in feedwater nozzles, similar cracking has been discovered on the blend radii and bore regions of the control rod drive return line nozzles of several operating BWR vessels. On one plant, cracking also war discovered in the vessel wall in an area slightly below the control rod drive return line nozzle. The staff is reviewing this problem on a generic basis with the General Electric Company. At the present time, it is believed that the crack initiating mechanism for these cracks is the same as that for the feedwater nozzle cracks. At the final design review stage, the staff will require that Puget Sound Power and Light Company furnish test data and analysis that establishes that the design modifications incorporated into the Skagit plant, consistent with the design criteria specified in the Preliminary Safety Analysis Report, have eliminated the control rod drive return line nozzle cracking problem from the Skagit reactor vessel. Also, as for the feedwater nozzles, the staff will require that the blend radil and nozzle bore surface areas of the Skagit vessel control rod drive return line-nozzles be amenable to inservice inspection by nondestruc-tive inspection techniques with a sensitivity demonstrated to be sufficient to permit detection of the type cracks that have been experienced in the cperating plants as of the date of this report. The applicant's proposed modifications and verification program are acceptable at the construction permit review stage.

Consistent with its practice, the staff will review the inservice inspection program at the operating license review stage when the details are available.

5.2.5 Loose Parts Monitor The staff's requirement for a loose parts monitor is stated in NUREG-0309 and the bases for the staff's position is contained in a letter dated July 20, 1978 to Puget Sound Power and Light Company. This matter is being discussed with the applicant but to date, the Puget Sound Power and Light Company has not committnd

, to the installation of an acceptable loose parts monitoring system. As stated in NUREG-0309 the rtaff will recommend that the construction permits be conditioned to require the installation of a loose parts monitoring system, the details of which will be required to be submitted at the operating license stage of review.

5.4 Component and Subsystem Design 5.4.5 ' Residual Heat Removal System in the staf f's Safety Evaluation Report (see Sections 5.4.5, 7.4.3 and 9.3.1 of NUREG-0309), the staff concluded that the oesign bases and criteria for the 5-1

l-compressed air supply system were not acceptable since they did not meet the safety grade requirements for operation of the automatic depressurization system as an alternate system for achieving cold shutdown in the event of a single failure'in the residual heat removal system. In Amendment No. 20 to the Preliminary Safety Analysis Report, the Puget Sound Power and Light Company revised the design bases and criteria for the air supply system.

The compressed air system now will include a safety-related subsystem that will meet the requirements of a continuous safety grade air supply to the automatic depressurization system. This subsystem will include redundant air banks consist-ing of 12,400 standard cubic foot air bottles per bank. Each bank will be capable of meeting the minimum requirements for providing a continuous safety grade air supply to the automatic depressurization system valves as required by the interface requirements of GESSAR-251-N$55. The GESSAR-251 interface requirements recommend a seven-day supply of air capable of providing an initial 120 standard cubic foot followed by a continuous eight standard cubic foot per hour at 140 pounds per square inch gauge. Each bank of the automatic depressurization system air supply system will be capable of providing approximately three times the recommended capacity at 140 pounds per square inch gauge.

The portions of the automatic depressurization system air supply subsystem necessary for automatic depressuri.zation system valve operation will be designed to Quality Group C, seismic Category I requirements, and will meet the single failure criterion.

i The staff reviewed the design basis and criteria for the compressed air system and concludes that for the safety-related portions of the system, they are in accordance with Regulatory Guides 1.26, " Quality Group Classifications and Standards for Water , Steam , and Radioactive-Waste-Containing Components of Nuclear Power Plants," and 1,29, " Seismic Desigo Classification," meet the staff's single failure requirements, and the interface requirements of GESSAR-251 N$$5.

In addition, this proposed design is in conformance with the recently approved Revision 2 of Standard Review Plan Section 5.4.7. Therefore, the design basis and criteria are acceptable.

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6.0 ENGINEERED SAFETY FEATURES 6.2 Containment Systems 6.2.9 Steam Bypass of the Suppression Pool As stated in NUREG-0309, Sectior 6.2.9, Puget Sound Power and Light Company did not agree with the staff's position on acceptance criteria for the drywell low pressure leak test (see Table 1-5 of NUREG-0309). However, in a letter, dated October 20, 1977, PLN-162, to the Acting Director, U.S. Nuclear Regulatory Commission, Puget Sound Power and Light Company stated,

" Item 3, The NRC staff will require that the acceptance criteria for the low pressure drywell leak test be 10 percent of the capability of the containment to accommodate bypass leakage at the test pressure.

Puget Power's position relative to the issue of committing to the 10% test criteria is that the NRC staff bases for 10% criteria is weak and excessively conservative.

Testing at the 10% criteria would not significantly improve safety and reliability considerations while possibly requiring unnecessary exter.ded outages and reporting.

Puget Power's technical bases for suggesting a 75% test criteria is addressed in detail in reference 2, the ACRS transcript, and in reference 3, the NRC meeting notes dated October 5, 1977.

Further this issue, as the previous issue, does not impact design or design basis criteria. Puget believes a commitment to the staff's position at the CP stage to a technical specification is premature. Puget Power, therefore, requests that the NRC posture on this issue as a construction permit requirement be reevaluated and that it be more appropriately addressed at the final design stage of review. At that time, Puget and the NRC should have available operating experience from which a sound engineering decision can be reached."

However, at the 211th meeting of the Advisory Committee on Reactor Safeguards, November 4, 1977, Puget Sound Power and Light Company stated that it would commit to the staff's position on this matter and confirmed by letter, dated June 6, 1978, to the Director of Nuclear Reactor Regulation that design changes to the facility are not necessary as a result of this commitment. The staff considers this issue resolved.

6.4 Habitability Systems 6,4.1 Radiation Protection Provisions As stated in NUREG-0309, Section 6.4.1, calculation of radiation doses (Beta) to the control room operators during a postulated design casis loss-of-coolant 6-1

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1 accident at the preliminary design stage indicated that skin doses may be marginal with respect'to the staff.'s criterion for requiring protective clothing and eye-protection (General De'ign s Criterion 19 of Appendix A to 10 CFR 50). However, in a letter, dated October 20, 1977, PLN-162, to the Acting Director, U.S. Nuclear Regulatory Commission, Puget Sound Power and Light Company stated,

."Jtem4,RevieGofControlRoomPressurizationTestingCommitmentandProvisions ,

to Provide Operators with Protective Clothing and Eye Protection Puget Sound Power and Light Company is well aware of the NRC regulations and positions and will provide periodic pressurization testing for the Skagit control rooms if such tests are required during. operation.

Puget further commits to prov'ide protective clothing and eye protection that will be available to, control room operators in the event final dose calculations at the OL review stage indicate the necessity,"

t Since control room doses will be recalculated at the final design stage using as-built parameters for the facility, the staff will reassess its position on this i matter at the final design review stage. For the preliminary design stage the staff finds the abov, commitment acceptable and considers this issue to be resolved.

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7. 0 INSTRUMENfAT[0N AND CONTROL 7.3 Engineered Safety Features Systems 7.3.5 Suppression Pool Makeup System As stated in NUREG-0309 (Section 7.3.5), the Puget Sound Power and Light Company did not provide suf ficient information in the Preliminary Safety Analysis Report for the staff to conclude that inadvertent dumping of the suppression pool makeup pool would not occur, s

Puget Sound Power and Light Company provided the additional information on instru-mentation and controls for the suppression pool makeup system, requested by the staff, in Amendment No. 18, dated June 9, 1977, to its Preliminary Safety Analysis Report. The staff reviewed this information and found that the system is similar to the GESSAR-238 Nuclear Island Standard Design System previously reviewed and found acceptable by the staff. Therefore, the staf f concludes that the proposed design is not susceptible to single failures that could cause inadvertent dumping and that the proposed uesign criteria and conceptual design are acceptable for the construction permit stage of review.

7.4 Systems Required for SafetShutdown 7.4.3 Reactor Shutdown Cooling System See Section 5.4.5 of this supplement for resolution of the noninterruptible air supply issue discussed in Section 7.4.3 of NUREG-0309.

7.5 Safety-Related Display Instrumentation As stated in NUREG-0309 (Sectior, 7.5), the staff required that the Puget Sound Power and Light Company commit to a qualification program for the safety-related display instrumentation that meets the requirements of Institute of Electrical and Electronics Engineers Standards 279-1971 and 323-1974.

In Amendment No. 18, dated June 9, 1977, to the Preliminary Safety Analysis Report, Puget Sound Power and Light Company committed to comply with the minimum require-ments of the staf f's Technical Position E1CSB-23 as contained in the Standard Review Plan. Essentially, this commitment means that for safety-related display instrumentation:

(1) Each monitored parameter will be provided with redundant channels with a separate indicator for each channel and at least one channel will be recorded.

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(2) Each channel will be powered f roin the emergency power system.

-(3) The entire system will be designed to the applicable requirements of IEEE 279-1971 including conformance to IEEE 323 1974 and IEEE 344-1975 for all equipment.

The staff concludes, based on the above commitment, that the design of the '

safety-related display instrumentation for the Skagit facility is acceptable.

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9,0 AUXILIARY SYSTEMS 9.2 Water Systems Puget Sound Power and tight Company considered a design basis volcanic ash fall of 6 inches in 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months in the design of critical structures with respect to building loads. However, it was still in the process of developing design criteria for the protection of engineered safety features and safe shutdown systems and their essential auxiliary systems against the design basis ash fall at the time NUREG 0309 was published. The staff. anticipates that ash fall will impact the performance of exposed water systems and air intake systems and that some provi-sions for protection and mitigation of consequences may be required in the design.

The applicant provided the staf f with this information and the staff concludes the following based on its review, The systems needing protection from a postulated vo'canic ash fall include the ultimate heat sink and the ventilation inlets for the ultimate heat sink complex, diesel generator buildings, and the control room. The staff reviewed the design bases and criteria for the protection of these systems from the effects of ash fall. These design bases and criteria include the removal of the ash from the ventilation systems by air washers for the diesel buildings and ultimate heat sink complex, and air particulate filtering of the control room ventilation system while in the low flow rate (standby) mode of operation, For the ultimate heat sink, the design basis is to protect the water systems from the effects of the ash on the cooling tower basins and associated safety-related water systems. These effects include acidity, abrasion, and ash sediment buildup on the bottom of the basin. The review and evaluation of the acidity effect on the cooling tower basin are described below. The abrasive effects on cooling water equipment will be accommodated by special design features in the equipment selected. The buildup of ash in the basin will be accommodated by providing a weir around the service water pump suction to minimize the sediment drawn into the service water system.

The staff will review the actual design of the filtering systems and the special features of the selected equipment during the operating license review when the details will be available. The staff concludes that the design bases and criteria for the protection of the auxiliary systems against the effects of ash fall are acceptable for the construction permit stage.

Potential areas of concern for volcanic ash fall which may require mitigating action are the effects on the ultimate heat sink cooling tower basins and associated safety-related water systems. These effects, which must be considered in the design, result from entrainment or suspension of ash within the cooling towers and include the following:

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(1) Acidity of cooling tower basin water (2) Abrasion caused by suspended particles (3) Buildup of a sediment layer on the bottom of the basin (4) Scaling of heat' exchanger tube surfaces The Puget Sound Power and Light Cnmpany committed to have caustic solution available onsite to neutralize the acidity of the basin water in the event a volcanic ash fall should occur during plant operation. It stated that the equipment to be selected will accommodate the abrasive effect of suspended

particles. It further committed to providing a weir around the standby service water pump suction to minimize sediment drawn into the standby water system.

Furthermore, there will be no screens or strainers in the pump suction which would be susceptible to fouling. A potentially longer term effect than those described -

above is the possibility for impairment of heat trant fer capability of the standby service water system heat exchangers from scaling. The Puget Sound Power and Light Company conmitted that, should this occur, the redundant standby service water loop would be used while cleanup is performed on the impaired loop.

From an engineering standpoint the staff concurs with the Puget Sound Pawer and Light Company's assessments of potential ef fects of ash fall and the provisions proposed for mitigating them. The design considerations discussed above are sufficient for a construction permit licensing recommendation. Review of detailed design criteria and equipment will be conducted during the operating license review. The staff concludes, based on the above, that the effects of volcanic ashfall will not result in a hazard to the health and safety of the public or preclude safe shutdown of the plant.

9. 3 Process Auxiliaries 9.3.1 Compressed Air System ;

See Section 5.4.5 of this supplement for resolution of the noninterruptible air supply issue discussed in Section 9.3.1 of NUREG-0309.

9.4 Air Conditioning, Heating, Cooling and Ventilation Systems See Section 9.2 above for the discussion of protection of ventilation systems from the effects of postulated volcanic ash fall.

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4 11.0 RADIOACTIVE WASTE MANAGEMENT 11.1 Summary Description In a letter, dated October 20, 1977, PLN-162, to the Acting Director, U.S. Nuclear Regulatory Commission, Puget Sound Power and Light Company stated that it would provide the staff with its evaluation of the Skagit Nuclear Power Project against the 10 CFR 50, Appendix I, guidelines by December 31, 1977. This information was received on February 6,1978.

On May 5,1975, the Nuclear Regulatory Commission announced its decision in the

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rulemaking proceeding concerning the numerical guides for design objectives and limiting conditions for operation to meet the criterion "as low as is reasonably achievable" for radioactive materials in light-water-cooled nuclear power reactor effluents. This decision is set forth in Appendix I to 10 CFR 50.

Appendix I requires an applicant for a permit to construct a reactor to file with the Commission (1) information necessary to evaluate the means employed for keeping levels of radioactivity in effluents to unrestricted areas "as low as is reasonably achievable," and (2) plans for proposed Technictil Specifications developed for the purpose of keeping releases of radioactive materials to unrestricted areas during normal operation, including anticipated operational occurrences "as low as is reasonably achievable."

In conformance with the requirements of Appendix I, the Puget Sound Power and Light Company, filed with the Commission on July 21, 1975 and in a subsequent submittal on February 6,1978 the necessary information to permit an evaluation of the Skagit Nuclear Power Project, Unit Nos. I and 2, with respect to the require-ments of Sections II. A, II.8, II.C and II.D of Appendix I. In these submittals, Puget Sound Power and Light Company provided the necessary information to show conformance with the Commission's September 4, 1975 amendment to Appendix I rather than perform the detailed cost-benefit analysis required by Section II.D of Appendix !.

The purpose of this evaluation is to present the results of the staf f's detailed evaluation of the radioactive waste treatment systems proposed for the Skagit )

Nuclear Power Project, Unit Nos. I and 2 (1) to reduce and maintain releases of l radioactive materials in liquid and gaseous effluents to "as low as is reasonably l achievable" levels in accordance with the requirements of 10 CFR 50, Parts 50.34a.

and 50.36a, (2) to_ meet the individual dose design oblectives set forth in Sections II.A, II.B and II.C of Appendix 1, and (3) to determine if the proposed l

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radwaste systems satisfy the design objectives proposed in the rulemaking hearing Concluding Statement of Position of the Pegulatory Staf f (Docket No. RM-50-2) rather than an individualized cost-benefit analysis as required by Section 11.0 of Appendix I.

The staff performed an independent evaluation of Puget Sound Power and Light Company's proposed method to meet the requirements of Appendix 1. The staff's evaluation consisted of the following: (1) a review of the information provided by Puget Sound Power and Light Company's July 21, 1975 and February 6, 1978 sub-mittals; (2) a review of the radioactive waste (radwaste) treatment and effluent control systems described in the Preliminary Safety Analysis Report; (3) a review of Puget Sound Power and Light Compcny's response to the staff's requests for additional information; (4) the calculation of expected releases of radioactive materials in liquid and gaseous effluent (source terms) for Skagit, Unit Nos. I and 2, facility; (5) the calculation of airborne relative concentration (X/Q) and deposition (D/Q) values for the Skagit site region; (6) the calculation of individual doses in unrestricted areas; and (7) the comparison of the calculated releases and doses with the proposed design objectives of RM 50-2 and the require-ments of Sections II.A, II.8, II.C and 11.0 of Appendix I. The staff's evaluation is discussed in the following paragraphs.

Tne radwaste treatment and effluent control systems provided at Skagit Nuclear Power Project, Unit Nos. I and 2, have been previously described in Section 11.0 of the staff's Safety Evaluation Report dated September 1977 and in Section 3.5 of the Final Environmental Statement dated May 1975.

Based on more recent operating data at other operating nuclear power reactors, which are applicable to the Skagit Nuclear Power Project, Unit Nos. I and 2, and on changes in the staff's calculation models, new liquid and gaseous source terms were generated to determine conformance with the requirements of Appendix I. The gaseous source '7rm, shown in Table 11-3 of this supplement, was calculated using the model and parameters described in Nt; REG-0016, " Calculation of Releases of Radioactive Materials in Gaseous and Liquid Effluents from Boiling Water Reactors (BWR-GALE Code)," April 1976. In making these determinations, the staff considered waste flow rates, concentrations of radioactive materials in the primary system and equipment decontamination factors consistent with those expected over the 30 year operating life of the plant for normal operation including anticipated l operational cccurrences. The principal paran.eters *nd plant conditions used in calculating the new gaseous source term are given in Table 11-4 of this supplement.

Safety Evaluation Report Section 2.3.5 of this supplement describes the meteoro-logical reevaluation the staff made for routit.e releases of gaseous effluents from the proposed Skagit plant. Table 11-4 of this supplement presents calculated 11-2

(

n TABLE 11-3 CALCULATED RELEASES OF ilADI0 ACTIVE MATERIALS IN GASEOUS EFFLUENTS FROM SKAGIT NUCLEAR POWER PROJECT, UNil N05. 1 AND 2 ' *

(Curies per year per reactor)

~

Mechanical Radwaste furbine Vacuum e Radio d Containment Auxiliary Air Total nuclide Building Building Building Building Eiector Pump ,

25 J' Ar-41 25 a a a a a Kr-83m a a a a a a a g Kr-85m 3 3 a 68 78 a 150 Kr-85 a a a a 310 a 310 Kr-87 3 3 a 130 a a 140 Kr-88 3 3 a 230 4 a 240 Kr-89 a a a a a a a Xe-131m a a a a 19 a 19 Xe-133m a a a a a a a Xe-133 66 66 10 250 450 2300 3100 Xe-135m 46 46 a 650 a a 740 Xe-135 34 34 45 630 a 350 1100 Xe-137 a a a a a a a Xe-138 7 7 a 1400 a a 1400 TOTAL NOBLE GASES 7200 Cr-51 3(-6) 3(-6) 9(-5) 1.3(-4) c c 2.3(-4)

Mn-54 3(-5) 3(-5) 3(-4) 6(-6) c c 3.7(-4)

Fe-59 4(-6) 4(-6) 1.5(-4) 5(-6) c c 1.6(-1) ,

Co-58 6(-6) 6(-6) 4.5(-5) 6(-6) c c 6.3(-5) N ,

Co-60 1(-4) 1(-4) 9(-4) 2(-5) c c 1.l(-3) M Z n-65 2(-5) 2(-5) 1.5(-5) 2(-6) c c 5.7(-5)

Sr-89 9(-7) 9(-7) 4.5(-6) 6(-5) c c 6.6(-5)

Sr-90 5(-8) 5(-8) 3(-6) 2(-7) c c 3.3(-6) .

Z r-95 4(-6) 4(-6) 5(-7) 1(-6) c c 9.5(-6) /

S r- 124 2(-6) 2(-6) 5(-7) 3(-6) c c 7.5(-6) I Cs-134 4(-5) 4(-5) 4.5(-5) 3(-6) c 3(-6) 1.3(-4) -

Cs-136 3(-6) 3(-6) 4.5(-6) 5(-7) c 2(-6) 1.3(-5) .

Cs-137 5.5(-5) 5.5(-5) 9(-5) 6(-6) c 1(-5) 2.2(-4)

Ba-140 4(-6) 4(-6) 1(-6) 1.l(-4) c 1.l(-5) 1.3(-4)

Ce-14: 1(-6) 1(-6) 2.6(-5) 6(-6) c c 3.4(-5)

TOTAL PARTICULATES 2.6(-3) 1-131 0.0017 0.0017 0.005 0.0019 a 0.0003 0.011 1-133 0.0068 0.0068 0.018 0.0076 a a 0.039 H-3 95 - - - - -

95 C-14 - - - -

9.5 -

9.5 i a = less than 1.Q4Curie per year per reactor for noble gases and carbon-14, less than 10 Curies per year per reactor for iodine.

= exponential notation; 3(-5) = a x 10

-5 b

c = less than 1 percent of total for this nuclide.

d = radionuclides not listed are released in quantities less than those specified in notes a and c from all sources.

11-3

TABLE 11-4 PRINCIPAL PARAMETERS AND CONDITIONS USED IN CALCULATING RELEASES OF RADICACTIVE MATERIAL IN GASEOUS EFFLUENTS FROM SKAGIT, UNIT N05. 1 AND 2 (FETTE ACTOR )

Reactor Power Level (Megawatts thermal) 3800 Plant Capacity 0.80 Fraction of fuel Releasing Kacioactivity to the Primary Cociant Noble Cases 60,000 micro-curies per second for 3,400 r.ega-watts thermal after 30 minutes Iodine-131 (independent of power level) 5 x 10-3 ,;c7g, curies per gram Primary Coolant System Mass of liquid 6.1 x 10 57 Steam Fic. Rate (pounds per hour) 1.7 x 10 Condenser air inleakage (standard cubic feet per minute) 30 lodire Partition Factors (gas / liquid) 0.02 Steam / liquid in the reactor vessel Ho! dup Times Holdep pipe 0.1 hours1.157407e-5 days 2.777778e-4 hours 1.653439e-6 weeks 3.805e-7 months Refrigerated charcoal system Kr 1.9 days xe 43 days Dynamic Adsorption Coefficients for Charcoal Delay Systems (cubic centimeters per gram)

Kr (Operating temperature - 0* Fahrenteit dew point - 20' Fahrenheit) 105 Xe (as above) 2410 Ce:ontamination factors Charcoal Adsorbers DF (Iodine Removal)

Containment Building 100 Auxiliary Building 100 Turbine Building 100 Rad-aste Building 10 a

HEPA Filter DF 8

0n Containment, Auxiliary, Turbine, and Radw aste Guilding ventilation Exhausts 11-4

values of reiative concentration (X/Q) and relative deposition (D/Q) for specific points of interest. The summary of calculaud doses given in Tables 11-6 and 11-7 of this supplement are different from and replace those given in Tables 5.5 and .

5.6 of the Final Environmental statement because of this reevaluation.

The staf f's dose assessment considered the following two dif ferent ef fluent categories: (1) potential pathways associated with noble gases released to the i atmosphere; and (2) pathways associated with radiciodines, particulates, carbon-14, and tritium released to the atmosphere. The mathematical models used by the staff to perform the dose calculations to the maximum exposed individual are described in Regulatory Guide 1.100, " Calculation of Annual Average Doses to Men from Routine Releases of Reactor Effluents for the Purpose of Evaluating Compliance with 10 CFR Part 50, Appendix 1," Revision 1, October 1977.

)

The dose evaluation of pathways associated with the release of radioactive materials in liquid effluents was based on a prior determination that there will be no provisions for release of radioactive liquid waste as liquid effluents 8 (Section 11.2 of NUREG-0309).

4 The dose evaluation of noble gases released to the atmosphere included a calcula-tion of beta and gamma air doses at the site boundary sector having the highest dose and total body and skin doses at the site boundary sector having the highest dose. The maximum air doses at the site boundary were found at 0.61 mile southeast relative to the proposed Skagit Nuclear Power Project Nos. I and 2. The location of maximum total body and skin doses was determined to be at 0.43 mile south-southeast, at a residence located at the site boundary.

The dose evaluation of pathways associated with radiciodine, particulates, f

carbon-14, and tritium released to the atmosphere was also based on the maximum exposed individual. For this evaluation, the staff considered the maximum exposed individual to be an infant located 0.75 mile west southwest of the proposed Skagit plant that consumes cow's milk (330 liters per year) from a cow grazing at the same location.

Using the dose assessment parameters noted above, the calculated releases of radioactive materials in gaseouw effluents given in Table 11-3 of this supplement i and the appropriate relative concentration (X/Q) value given in Table 11-5 of this supplement the staff calculated the annual gamma and beta air doses at or beyond the site boundary to be less than 10 mrad /rcactor and 20 mrad / reactor, respectively, in conformance with Section II.B of Appendix 1.

Using the calculated releases of radiciodine, carbon-14, tritium and particulates given in Table 11-3 of this supplement, the relative concentration (X/Q) and deposition (D/Q) values given in Table 11-5 of this supplement and the appropriate I dose assessment factors, the staff calculated the annual dose or dose commitment 11-5

TABLE 11-5 SKAGIT NUCLEAR POWER PROJECT, UNIT N05. 1 AND 2 RELATIVE CONCENTRATION (X/Q) AND DEPOSITION VALUES (D/Q)

USED FOR 005E CALCULATIONS X/Q D/Q Distance (seconds per (per square Receptor Type Direction (miles) Release Type cubic meter) meter )

Site Boundary SE 0.61 A 1.2E-5 4. 6E- 8 8 3.1E-5 1.2E-7 C 2.7E-5 1.0E-7 D 2.0E-5 4.5E-8 Site Boundary SSE 0.43 A 1.6E-6 4.3E-9 B 4.1E-6 1. 3E-8 C 3.4E-6 1.lE-8 0 5.lE-5 6.8E-8 Maximum Individual WSW 0.75 A 3.3E-6 3.9E-8 B 4.1E-6 5.2E-8 C 3.7E-6 4. 7E-8 D 1.3E-5 8.lE-8 A. Continuous release from process vents.

B. Purge releases from process vents. (24 per year, 2 hours2.314815e-5 days 5.555556e-4 hours 3.306878e-6 weeks 7.61e-7 months each).

C. Purge releases from process vents. (4 per year, 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months each).

D. Continuous release from radwaste building vents.

11-6

to any organ of the maximum exposed individual to be less than 15 mrem / reactor in conformance with Section 11.0 of Appendix I. -

The summary of calculated doses given in Tables 11-6 and 11-7 of this supplement ,

are different from and replace those given in Tables 5.5 and 5.6 of the Final Environmental Statement for the reasons stated above.

Rather than perform an individualized cost-benefit analysis required by Section II.D of Appendix I, the Puget Sound Power and Light Company elected to show conformar,ce with the numerical design objectives specified in the September 4, 1975 amendment to Appendix I (RM 50-2).

The dose design objectives contained in RM 50-2 are on a site basis rather than a .

per reactor basis while the Curie releases bre on a per reactor basis.

3 As shown in Table 11-3 of this supplement, the calculated quantity of iodine-131 released in gaseous effluents is less than one Curie per year per reactor. Also, as shown in Table 11-7 of this supplement, the calculated doses for the proposed Skagit site are less than the dose design objectives set forth in RM 50-2, and, therefore, satisfy the requirements of Section II.D of Appendix I.

11.6 Conclusions ,

The staff performed an independent evaluation of the radwaste systems to be installed at the Skagit Nuclear Power Project, Unit Nos. I and 2. The evaluation shows that the proposed systems will be capable of maintaining releases of radio-active materials in liquid and gaseous effluents during normal operation including anticipated operational occurrences such that the calculated individual doses will be less than the numerical dose design objectives of Section II. A, II.B, and II.C of Appendix I to 10 CFR 50. In addition, the staff's evaluation shows that the radwaste systems will satisfy the design objectives set forth in RM 50-2 and, therefore, satisfy the requirements of Section II.D of Appendix I to 10 CFR 50. .

Based on the foregoing evaluation, the staff concludes that the radwaste treatment systems to be installed at the Skagit Nuclear Power I 'oject, Unit Nos. I and 2 will be capable of reducing rel'ases of radioacf' e materials in liquid and gaseous .

effluents to "as low as is reasonable achievable" levels in accordance with the l requirements of 10 CFR 50, Part 50.34a and, therefore, are acceptable.

1 i

11-7 u

TABLE 11-6 COMPARISON OF CALCULATED DOSES TO A MAXIMUM INDIVIDUAL FROM 5KAGIT NUCLEAR POWER PROJECT OPERATION WITH SECTIOR$ II.A, II.B. AND II.C OF APPENDIX I TO PART 50 Appendix I Dose Calculated M Desion Objective Oose

<id Effluents Dose to total body from all pathways 3 mrem per year per reactor 0 mrem per year per reactor d Dose to any organ from all pathways (Adult-bone) 10 mrem per year per reactor 0 mrem per year per reactor d Noble Gas Ef fluents (at site boundary, Table 11-5)

D Gamma dose in air 10 mrad per year per reactor 4.6 mrad per year per reactor U

Beta dose in air 20 mrad per year per reactor 5.6 mrad per year per reactor Dose to total cbody of an individual 5 mrem per year per reactor 1.1 mrem per year per reactor '

Dosetosk{nofan individual 15 mrem per year per reactor 3.1 mrem per year per reactor Radiciodine and Particulatesa (at maximum individual, Table 11-5)

Dose to any organ from all pathways (0.75 mile WSW) 15 mrem per year per reactor 7.6 mrem per year per reactor 8 I Carbon-14 and Tritium have been added to this category.

b Nearest site boundary, 0.61 mile southeast.

' Nearest site boundary, with a residence (full-time occupancy) 0.43 mile south-southeast.

No liquid radioactive releases, 11-8 ,

1

i TABLE 11-7 COMPARISON OF CALCULATED DOSES TO A MAXIMUM INDIVIDUAL FROM SKAGIT fiGC[T T~ POWER PROJECT, UNIT NOS. 1 AND 2 OPERATION WITH GUIDES FOR

( DESIGN OBJECTIVES MBTOSED BY THE STAFF RM-50-2 DOSE CALCULATED a

CRITERION DESIGN OBJECTIVE DOSES Iiquid Effluents 9 Dose to total body or any organ from all path'says (Adu't bone) 5 mrem per year per site 0 mrem per year per site boble Gas Effluents (at site boundary, Table 11-6)

Gamma dose in ai5 10 mrad per year per site 9.2 mrad per year per site Beta dose in air 20 mrad per year per site 11 mrad per year per site l Dosetotogalbodyofan individual 5 mrem per year per site 2.2 mrem per year per site Dose to skin of an individual 15 mrem per year per site 6.3 mrem per year per site f<adiotodine and Particulatesd (at maximum individual, Table 11-6)

Doses to any organ from all pathways (infant-thyroid 0.75 mile W5W) 15 mrem year per site 15 mrem per year per site a

Guides on Design Objectives proposed by the Nuclear Regulatory Commission staff on February 20, 1974; considers doses to individuals from all units on site. From

" Concluding Statement of Position of the Regulatory Staf f," Docket No. RM-50 2, February 20, 1974, pp. 25-30, U.S. Atomic Energy Commission, Washington, D.C.

t' Nearest site boundary, 0.61 mile southeast.

C Nearest site boundary with a residence (full-time residence), 0.43 mile south southeast.

Carbon-14 and tritium have been added to this category.

'No liquid radioactive releases.

11-9

15.0 glDENTANALYSES 15.3 Design Basis Accidents 15.3.3 Fuel Handling Accident The staff stated in the' Safety Evaluation Report (NUREG-0309, Section 15.3.3) concern over the timeliness of containment isolation and subsequent filtration of radioactivity that would be released following a postulated fuel handling accident inside the containment.

In a letter, dated October 20, 1977, PLN-162, to the Acting Director, U.S. Nuclear Regulatory Commission, Puget Sound Power and Light Company stated that it would provide the staf f with its evaluation of the postulated fuel handling accident .

within containment by December 31, 1977. Puget Sound Power and Light Company stated in Amendment 20, dated January 31, 1978, to the Preliminary Safety Analysis Report that it had performed the evaluation and that the resulting doses are below 10 CFR 100 guidelines. The staff was provided with the analysis in April 1978.

The staff reviewed this information and concludes the following, t

In response to this concern, the Puget Sound Power and Light. Company submitted an analysis which tne staff reviewed. Based on this review and its independent anal-ysis, the staff determined that the proposed prelia.inary design of the containment isolation system will not be as effective in isolating potential releases from fuel handling accidents as is achievable unless the Puget Sound Power and Light Company specifies isolation times for the closure of isolation valves less than assumed in the Puget Sound Power and light Company's conservative analysis. As a result of the staff's review, the Puget Sound Power and Light Company committed to provide, at the operating license review stage, a containment isolation system design with isolation times which will assure that the postulated radiological releases will be contained inside the containment proper to the extent achievable.

On the basis of the staff's review of the Puget Sound Power and light Company's preliminary design, the staff determined that modifications to achieve timely isolation can be made to minimize any release and to control the resulting offsite doses to be well within the guideline values of 10 CFR 100. The staff concludes that the proposed design commitment for mitigating the radiological consequences of a postulated fuel handling accident inside the containment is acceptable. At the operating license review stage, the staff will review the containment isolation design in detail to assure that the acceptance criteria (about 25% of Part 100 guidelines' will be met.

15-1

Y

'18.0 REPORT OF THE ADVISORY COMMITTEE ON REACTOR SAFEGUARDS

~The Advisory Committee on Reactor Safeguards reviewed the Skagit Nuclear Power Project, Units 1 and 2, at its 211th meeting on November 4,1977. The Committee's i reports relative to the Project are included in Appendix B to this supplement to

' NUREG-0309. The Committee raised no issues as a result of its review which have not been considered by the staff and resolved in NUREG-0309 and this supplement.

The Committee stated that the safety items identified by the staff, which will require resolution before issuance of. construction permits,' should be resolved in a manner satisfactory to the staff. Witn the exception of the items noted in this supplement, those items have been resolved as discussed herein.

The Committee also identified the generic items listed in its Report No. 6, dated November 15, 1977, " Status of Generic Items Relating to Light-Water Reactors,"

which it considers to be relevant to tne Skagit Nuclear Power Project and, therefore, should be dealt with by the staff and applicants as solutions are found. The staff addressed the items 1isted in the Committee's Report No. 5, dated February 24, 1977 in NUREG-0309, and since that time has addressed the status of items listedm the Committee's Report No. 6 in the staff's report to the Committee, dated May 4, 1978. Item 11-58 of the Committee's Report No. 6, which was not addressed in NUREG-0309, is addressed in the staff's May 4, 1978 status report The staff is continuing its review of tectonics of the Pacific Northwest as it pertains to the proposed Skagit site and has considered the Committee's generic report, " Regional Tectonics of the Pacific Northwest," in its effort to establish the basis for the proposed Skagit Project safe shutdown earthquake. The staff will report on this matter in a future supplement to NUREG-0309.

The Committee believes that if due consideration is given to the items identified by the staff and the Committee, the Skagit Nuclear Power Project, Units 1 and 2 can be constructed with reasonable assurance that they can be operated without undue risk to the health and safety of the public, i

18-1'

i l

20.0 FINANCIAL QUALIFICATIONS 20.1 Introduction The Nuclear Regulatory Counission regulations relating to the determination of an applicant's financial qualifications appear in Section 50.33(f) and Appendix C to Title 10 of the Code of Federa1' Regulations, Part 50. These regulations state that there must be reasonable assurance that an applicant can obtain the necessary funds to cover the estimated construction cost of a proposed nuclear power plant and its related fuel cycle costs. This standard of reasonable assurance, however, must be viewed in light of the extended period of time from the start of construction to the date of commercial operation. The revised date for commercial operation of the proposed Skagit facility is estimated to be March 1985 for Unit No. I and March 1987 for Unit No. 2. Consequently, the staff must make certain basic assumptions in its financial analysis about future conditions. The staff's analysis of the

, applicants' financial qualifications assumes that there will be rational regulatory policies with respect to the setting of rates and that viable capital markets will l

! exist. The former assumption implies that rates will be set by the appropriate regulatory agencies to at least cover the cost of service, including the cost of capital. The latter assumption implies that capital will be available at some price. Given these fundamental assumptions, the staff'k evaluation is then focused on the reasonableness of the applicants' financial planning.

The applicants have submitted financial information in support of their applica-tion. The following analysis summarizes the staff's review of the information, and gives the qualifications of each applicant to finance its respective share of the costs for the design and construction of the proposed Skagit facility.

20.2 Construction Cost Estimates The most recent cost estimates for the proposed Skagit facility are provided in the applicants' letter of May 21, 1978. The cost estimates are summarized as follows:

(millions of dollars) Total Total nuclear production plant costs- - - - - - - $2,443 Transmission, distribution, and general plants costs - - - - - - - - - - - - - - 22 Nuclear fuel inventory cost for the first core - - - - - - - - - - - - - - - - - 108 TOTAL $2,573 20-1

l The staf f compared the cost of the proposed nuclear production plant estimated by applicants with the cost projected by the costing model (CONCEPT) developed by the Department of Energy. This analytical model projected the cost of the proposed Skagit facility in be 17,338 million, compared with the applicants' estimate of

$2,573 million. Since the CONCEPT model is used primarily as a rough check of the cost estimate made by the applicants and is not intended to be a substitute for detailed engineering cost estimates, the staff concludes that it is reasonable to use the applicants' more conservative estimate in the staff's financial analysis.

1 20.3 Sources of Construct ion Funds lhe ownership, costs and electrical output of the proposed Skagit facility will be shared according to the following percentages:

Washington Water Power 10%

Portland General Electric Company 30%

Pacific' Power & Light Company 20%

Puget Sound Power & Light Company 40%

I This percent allocation is bared on the preliminary agreement signed by the four parties on January 23, 1976. Each owner will pay its ownership percentage of the cost of constructing the project ano bear its ownership percentage of all liabili-ties in connection with the project.

The applicants will finance their respective ownership costs from internal funds, i external sales of debt and equity, and short-term borrowing. Available funds from these sources in 1977, after debt payments and retirements, totaled $102.9 million for Puget Sound Power and Light Company; $196.5 million for Portland General Electric Company; $350.4 million for Pacific Power and tight Company; and $73.6 million for Washington Water Power Company.

1 The most recent financial information for the twelve-month period ending December 31, 1977, is presented in lable 20-1 for each of the four applicants, Extreme drought conditions adversely affected several of the applicants' operating results in varying degrees. The participants became purchasers of power rather than sellers. Power was purchased from neighboring areas at a cost somewhat hiy er than the cost of self generated power. This produced unusually high expenses resulting in lower earnings than would normally be expected. More favorable operating results can be expected as' weather conditions return to normal.

20.4 FinancialAnalysp i t The ability of an investor-owned utility to finance a construction program over a future period is a function of a number of variables, the most important of which is the level of profitability. Profitability can be assessed by referring to 20-2

TABLE 20-1 FINANCIAL DATA FOR THE FOUR INVESTOR-0WNED APPLICANTS FOR THE PROPOSED SKAGIT FACILITY DURING THE TWELVE MONTH PERIOD ENDING DECEMBER 31, 1977 Puget Sound Power and Pnrtland General Pacific Power & Washington Water Light Company Elec tric Company Light Company Power Company Operating Revenues 212.5(*) 253.1 404.6 168.0 Net Income 26.I 23.3 74.5 18.4 Total Capitalization 803.5 1,221.5 2,168.2 462.0 Long-Term Debt 50,5% 53.7% 59.2% 60.8%

Preferred Stock 12.3% 12.6% 8.6% -----

Common Equity 37.2% 33.7% 32.2% 39.2%

Return on common equity 10.36% 5.81% 11.23% 10.47%

Pre-tax coverage of long-term interest charges 2.61 1.99 2.33 2.08 Bond Rating (Moody's/5&P's) Baa/8BB Baa/BBB-Baa/BBB* A/A (a) Millions of dollars 20-3 I

(he return a utility earns on the capital it employs in its business ingrained in public utility regulation, The capability of an electric utility to finance a construction program requiring large amounts of external financing will depend, in part, on its ability to earn such a fair rate of return. Further, a fair rate of return on total capital will also result in the return on common equity being fair and reasonab'le, since common equity is a component of total capital. All other things being equal, the return on common equity is the best indication of a company's profitability and will have a substantial impact on other facets of a company's financial performance. l l

Although a fair rate of return might be characterized as the most significant i variable af fecting an applicant's ability to finance its proposed construction l program, it must also be coupled with a reasonable balanced capital structure to provide reasonable assurance that acequate coverages on its senior securities will result, thereby maintaining their marketability. Historically, the average investor-owned electric utility has had a capital structure comprised of around 50 to 55 percent long-term debt, 10 to 15 percent preferred stock, and 30 to 40 percent common equity. Given a particular capital structure with its embedded costs of debt and preferred stock, the return on common equity will determine the level of interest coverage and preferred dividend coverage. These coverages, in I turn, will significantly affect the ratings assigned to a company's senior securities by the principal rating agencies and, consequently, the interest rate demanded by investors to purchase these securit'les. The return on common equity will also affect the expected rate of dividend growth and thus the price and attractiveness of the company's common stock. When large amounts of securities need to be sold to finance a construction program, the ability to sell common stock is the key to maintaining a reasonably balanced capital structure In addition, the return on common equity affects the level of internally generated funds through its impact on retained earnings, although the primary source of internally generated funds is depreciation.

Since a lengthy and uncertain future period is involved in the analysis of an applicant's financial qualifications, the staff does not look solely at historical data. For this reason, the staff requested the applicants to submit a projected system wide " sources and uses of funds" statement covering the period of construc-tion, demonstrating how anticipated construction expenditures might be met by internal and external sources of funds. The staff analysis of the submitted projections then focuses on the reasonableness of these projections and their underlying assumptions.

The projected " sources and uses of funds" statements submitted by the Skagit appli-cants for the period from 1978 to 1989, together with the underlying assumptions, are presented in Tables 20-2 through 20-5.

1 20-4 l l

6 i

TABLE 20-2 Applicant: PUGET SOUND POWER & LIGHT COMPANY Nuclear Plant SOURCE OF FUNDS FOR 5YSTEM-WIDE CONSTRUCTION EXPENDITURES OURING PERIOD OF CONSTRUCTION OF SUBJECT NUCLEAR POWER PLANT (Millions of Dollars)

Construction Years of Subject Nuclear Power Plant Security issues and 1981 1982 1983 1984 1985 1986 1978 1979 1980 Other Funds 69.2 89.0 108.2 130.5 124.9 51.8 63.8 Common Stock 43.4 57.5 44.0 94.6 0.0 0.0 62.7 59.4 44.0 55.0 22.0 Preferred Stock 170.0 220.0 248.9 -295.0 225.0 195.0 Long-Term Debt 65.0 160.0 110.0 2.2 3.8 23.1 11.1 13.9 35.1 39.0 20.9 Notes Payable (Short Term) 21.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Contributions froin Parent 17.5 13.3 7.7 1.9 0.0 0.0 0.0 Other Funds (Pollution Control) .7 23.1 3T1 7 355.6 244.4 182.5 342.8 393.8 471.4 480.9 Total 131.0 Internal Funds 66.1 80.9 100.8 119.5 153.2 223.1 230.l t 3 Fe G come (Adjusted) 35.7 58.7 (8.5) (14.0) (19.2) (23.2) (27.8) (29.9) (34.2) a.Lest: Preferred Dividenas (8.2) (8.1) (91.9) (106.6) (118.0)

Common Dividends (23.2) (31.5) (38.8) (49.5) (60.4) (76.4) 18.8 17.4 21.2 19.9 33.5 86.6 77.8 Retaineu Earnings 4.3 19.1 1!.5 20.2 30.3 2.4 (.1) 1.1 .7 3.8 9.4 Deferred Taxes 21.4 17.4 21.5 32.6 '25.8 7.9 17.5 14.0 10.3 Investment Tax Credit (Deferred) 40.3 51.1 61.9 71.0 88.6 115.3 Depreciation and Amortization 25.5 30.6 35.0 (36.5) (30.4) (43.9) (56.0) (59.2) 51.7)

Less: AFDC (12.3) (21.0) (18.1) 67.1 64.1 81.5 168.6 9.

Total 27.8 46.1 50.8 32.2 375.0 460.9 5TCT 562.4 5TD- 3 55T T Total Funds T5EB 290.5 333.3 Construction Expenditures

181.1 278.9 330.4 349.7 306.4 328.4 Nuclear Power Plants ** 63.0 95.6 125.0 193.9 182.0 205.7 212.7 203.9 224.7 Other 95.8 194.9 208.3 Total Construction 375.0 460.0 536.1 562.4 510.3 553.1 Expenditures 158.8 290.5 333.3 76.9 88.0 98.1 66.1 55.5 6.5 0.0 Skagit#1f 35.4 72.0 66.6 49.5 0.0 .8 4.8 32.7 81.0 133.0 107.0 Skagit #2

TABLE 20-2 (Continued)

Construction Years of Subject Nuclear Power Plant Security issues and '

Other Funds 1987 1988 1989 1990 Common Stock 51.9 68.4 76.0 95.8 Preferred Stock 44.0 55.0 66.0 72.6 Long-Term Debt 205.0 250,0 270.0 345.0 s Notes Payable (Short Term) 20.1 17.0 20.7 34.7 Contributions from Parent 0.0 0. 0 0.0 0.0 Other Funds (Pollution Control) 0. 0 0.0 0.0 0.0 Total 321.0 390.4 432.7 548.1 Internal Funds Net Income (Adjusted) 278.2 319.9 370.0 420.9 Less: Preferred r vidends s

(42.3) (46.3) (51.2) (57.2)

Common Dividends (130.1) (143.2) (158.0) (176.0)

Retained Earnings 105.8 130.4 160.8 187.7 Deferred Taxes 37.7 39.8 38.3 42.4 Investment Tax Credit (Deferred) 29.6 34.0 39.5 39.0 Depreciation and Amortization 134.7 153.1 171.1 185.6 Less: AFDC (51.3) (53.9) (60.5) (74.7)

E! Total E2 . 303.4 349.2 380.0 s, Total Funds 577 5 693.8 781.9 928.1 Construction Expenditures

Nuclear Power Plants ** 337.1 424.2 485.6 587.7 Other 240.4 269.6 296.3 340.4 Total Construction Expenditures 577.5 693.8 781.9 928.1 Skagit #1 3.4t 2. 7 2.4 2.7 Skagit #2 5.2 0.0 3.8t 3.0 Exclusive of AFDC (Allowance for Funds used During Construction).

See footnote on exhibit listing generating units, transmission, distribution, and generai plant planned and estimated for construction.

@ Includes related transmission and first core loads.

t Decommissioning costs of first core load.

This source of funds statement is based upon and qualified by the assumptions described on the attached pages and has been prepared and furnished at the reauest of the Nuclear Regulatory Commission. It is not used in connection with the sale of purchase of the Company's securities.

Puget Sound Power & Light Company ASSUMPTIONS FOR SOURCE OF FUNDS FOR SYSTEM WIDE CONSTRUCTION 1978-1990 (1) Maintain rates sufficient to provide approximately a 13% return on average common equity and maintain the Company's ability to finance.

(2) Growth Rates:

a) KWH sales 5.38%

b) Revenues 16.05%

c) Expenses . 14.43%

d) Interest charges 19.05%

e) Net income . 19.51%

(3) An inflation factor of 6% compounded annually is used through the forecast period for construction expenditures, both labor and materials, with the exception of the WPPSS #3 Nuclear Power Project which is inflated with 6% material and 8% labor rates compounded annually. A 6% inflation rate compounded annually is used in projecting future operating and maintenance expenses and a 6% inflation rate com-pounded annually is used to forecast the 0 & M of major generation plant.

(4) Preferred dividend rate on new issues is 9.0%.

(5) Interest rates used in forecast:

Notes payable (short-term):

Bank loans 8.00-8.63% prime rate Approximate 8.7 - 9.4 effective rate Commercial paper 6.98 to 7.4B%

Long-term debt 9.0%

(6) Target Capital Structure: 1978-90 Notes payable (short-term) 5%

Long-term debt 50%

Preferred stock 10%

Common stock 35%

(7) Market / book:

Market Value - The dividend is set to be approximately equal to 8% of book value.

The market price is calculated from the dividend by dividing .08 into it, yielding a market / book of approximately 1.

l 1

I l

20-7 l

1 i

i TABLE 20-2 (Continued)

The market price shown below is l 1978 1979 1980 1981 Market / book 17.50/13.50 19.62/19.97 20.75/20.70 22.00/22.13 Ratio .946 .983 1.002 .994 1982 1983 1984 1985 23.00/23,12 25.06/24.75 26.46/26.I1 28.32/27.37

.995 1.012 1.013 1.035 1986 _ 1987 1988 1989 1990 29.84/29.34 31.43/30.86 33.10/32.60 34.84/34.29 36.89/36.29 1.017 1.019 1.015 1.016 1,016 (8) Common dividend payout ratio averages .612.

(9) Target dilution rate for afditional common stock is set in the 15% range in any !

given year. I

)

(10) In line with the 1975 Tax Reduction Act (Sec. 402 of P.L. 94-12) the following I investment tax credit assumptions are incorporated in the projections, a) Investment tax credit rate - 1978 through 1981 at 10%; 1982 through 1990 4 at 7%. I b) Progress payments on constructed property is treated as creditable invest-ment in the ytar made for Colstrip 3 and 4, Skagit Units 1 and 2, Pebble Springs Units 1 and 2, and 1990 through 2000 projected nuclear plants

Applicable transition percentages for phasing in qualified progress payments are 1978, 80%; and 100% after 1978.

c) Use of investment tax credit to offset the tax liability is 80% in 1978 and phased down 10% annually until 1981 when a 50% limitation is maintained thereafter.

1990-2000 plants are not now planned, however, the Company's long-range forecast indicates the need for additional base load generation in the 1990-2000 period. For the purpose of this study it has been assumed that typical nuclear generation units will be constructed to meet the projected need even though the type, size, and location of such units has not been determined.

20-8

TABLE 20-2 (Continued)

(11) AFDC (Allowance'for Funds Used During Construction) rates:

T & D - transmission, distribution, and general plant.

Production generation plant and related station and transmission facilities.

1978 1979 1980 1981 1982 1983 1984 1985-1990 T&D .092 .093 .096 .096 .097 .099 .099 .10 Production .084 .070 .034 .047 .033 . 04 .04 .04 (12) Nuclear fuel will be purchased and initial fuel core loads are included in con-struction expenditure estimates of nuclear plants.

(13) Power Supply: -

a. System resources are based on an average of the 40 water years included in the 1978 West Oroup Forecast.

b. Purchased hydro power costs debt service requirements are as prescribed in the project owners official statement.

c. Secondary (non-firm) sales are made either.within or outside the Northwest Power Pool and are based on relative levels of surplus. Revenues derived from sales are primarily based on establ.ished BPA rates or other agreements as applicable.

l

d. Wheeling charges are based on:

1) Required capacity to move purchased power to Puget's system

2) BPA established rates.

e. Purchased power expense includes a early accrual starting on January 1, 1979, for Rock Island debt service based on a total annual debt service of $19,972.052.

The amount accrued from January 1 to July 1,1979 is amortized over the five year period July 1, 1979 to June 30, 1984.

(14) Indenture and SEC fixed charges coverages:

1978 1979 1980 1981 ?982 1983 1984 1985 1986 1987 Indenture 2.32 2.67 2.64 2.56 2.60 2.57 2.47 2.60 2.76 2.68

. SEC 2.15 2.32 2.22 2.31 2.47 2.37 2.38 2.38 2.28 2.32 1988 1989 1990 2.71 2.66 2.64 2.34 2.32 2.32 20 L '

I.

TABLE 20 Applicant: Portland Gereral Electric Company Nuclear Plant SOURCE OF FUNDS FOR SYSTEM-WIDE CONSTRUCTION EXPENDITURES DURING PERIOD OF CONSTRUCTION OF SUBJECT NUCLEAR POWER PLANT (thousands of dollars)

Construction Years of subject Nuclear Power Plant

~1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 External Financing' Common Stock $110,330 $ 93,050 $ 81,969 $104,844 5 94,622 $165,359 $127,739 $ 68,415 511,045 511,419 $ 12,567 $ 14,992 Preferred Stock - (3,000) 33,000 37,000 (3,000) (3,000) 77,000 (3,000) 77,000 (1,500) - - -

Long-Term Debt 138,728 127,828 167,828 157,798 252,173 116,548 248,207 208,960 66,771 3,602 150,910 (254,880)

Notes Payable 11,370 26,560 3,340 37,600 14,800 2,570 (24,440) (87,580) 46,910 13,130 (111,360) 216,350 Contributions from Parent-Net - - - - - - - - - - - -

Other Funds

,. E'(describe) 4,970 (10,819) (6,576) 13,475 10,915 12,404 3,183 10,138 . 16,479 11,163 11,285 9,785

. ' ; Subtotal $262,398 $269,619 $283,561 $310,717 $369,510 $373,881 $351,689 $276,933 $139,705 $39,314 5 63,402 (13,753)

Internal Generated Cash Net Income $ 62,859 $ 83,313 $110,303 $127,956 $145,771 $166,019 $194,279 $216.222 $234,667 $243,707 $252,276 $261,805 Less:

Freferred Dividends (14,247) (13,902) (17,127) (20,052) (19,707) (20,562) (32,217) (35,472) . (40,056) (40,013) (40,013) (40,013)

Common Dividends (40,409) (51,341) (63,052) (72,558) (85,139) (96,967) (110,727) (125,499) (137,922) (145,886) (154,287) (163,727)

Retained Earnings 8,208 18,070 30,124 35,346 40,925 48,490 51,335 55,251 56,689 57,808 57,976 58,065 Deferred Taxes . 12,962 19,737 15,504 18,309 23,456 28,825 .34,246 37,570 34,804 38,613 39,941 34,241 Investment Tax Credit-Deferred 5,256 13,591 9,323 10.199 7,326 9,247 11,402 13,256 24,255 34,517 43,690 52,321 Depreciation and Amortization 37,492 38,818 39,036 54,010 58,025 73,274 87,611 s100,345 133,211 167,291 199,209 223,225 tess:

AFDC (31,753) (51,077) (58,688) .(70,449) '(90,198) (103,816) (128,488) (131,665) (95,804) (78,642) (72,430) (40,283)

Subtotal $ 32,160 $ 39,139 5 35,299 5 47,415 $ 39,534 5 56,020 ~$ 56,106 5 74,857 $153,155 .5219,587 $268,386' $327,569 TOTAL FUNDS $294,558 $308,758 $318,860 $358,132 $409,044 $429.901 $407,795 $351.790 $292,860 $258,901 '$331,788 $313,816

--h- _ -A,-.--- _ . - - - ----_,---M:-------, t-.e_- , _

,__'T' e.--- . , ..,,.._.+_._,-se 2 _

h TABLE 20-3 (Continued)

Construction Years of Subject Nuclear Power Plant 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Construction Expenditures

Nuclear Power Plant 5 86,229 $ 85,534 $145.104. $196,541 .5281,804 $302,703 $295,905 5264,388 $164,663 $113,532 $119,481 $1*1,879 -

Other' .

208,329 223,224 173,756 161.591 127,240 127,198 .111,890 87,402 128,197 145,369 212,307 199,937L Total Construction Expenditures $294,558 $308,758 $318,860 $358,132 $409.044 $429,901 $407,795 $351,790 $292,860 $258,901 $331,788 .5313,816 Skagit 1 26,764 52,596 60,943 70,179 71,124 46,272- 30,548 4,884 - -

Skagit 2 0 1,029 12,024 36,621 70,562 106,380 69,537' 37,893 30,958 5,180 - -

Direct construction cost and capitalized taxes of plant and initial fuel load. Excludes AFDC and associated tax items.

O I

4 r

s

_ _ - - _ _ - _ _ _ _ , - - _ + _ _m_ _ w - -- -

w

l TABLE 20-3 (Continued)

PORTLAND GENERAL ELECTRIC COMPANY INPlli ASSUMPTIONS FOR 50tlRCES OF FUN 05 STATEMFNT ltem Numerical Value Rate of return on average common stock 13.0%

equity Preferred stock dividend rate (I) 9.0%

Long-term debt interest rate~ fl) 9.0%

Short-term debt. interest rate 9.1% - 9.3%

Market / book ratio with respect to the 1.05/1.00 on 12/31/77 projected common stock offerings I2) 1.06/1.00 on 11/30/85 i Common stock dividend payout ratio 85.0% (1978).to 74.9% (1989)

Target capital structure 55% debt 10% preferred 35% common Growth rates I3) a) KWH sales. 4,9%

b) Revenues I4) 13.84% l c) Expenses 13.70%

d) Interest charges 10.62%

e) Net income 13.85%

Resultant SEC and indenture coverages over the period of construction ( ) Indenture- SEC 1978 2.523'- 2.022 1979 3.134 2.387

'980 2.759 2.513 1981 2.609 2.414 1982 2.618 2.454 1983 2.783 2.398 1984 2.770 2.499 1985 2.799 2.506 1986 2.983 2.654 1987 3.377 2.776 l

i

.1988 3.405 2.876 l 1989 4.163 3.037 l

20-12

1 TABLE 20-3'(Continued)

PORTLAND GENERAL ELECTRIC COMPANY ;

REFERENCES 1

(1) Applies to new issues.

(2) The market / book ratio is not an independent input; it is the product of other forecasts and therefore varies over the range shown.

(3) Each element of revenue and expense is individually analyzed and forecasted so that no single growth rate is used in their development. The values given summarize the results of all of the detailed analysis for the period December 31, 1978 to December'31, 1989 on ;

an annually compounded rate of growth basis.

(4) includes forecasted rate of increase in average sales price of 8.52 percent. Remaining growth rate is attributed to increased unit sales, j

{

(5) Indenture - December 31, covering earnings divided by Decerber 31 annualized interest requirements of the Company's first mortgage bonds.

SEC - December 31, covering earnings divided by. December 31 annualized fixed charges.

Fixed charges include, interest on all.long-term debt, interest on short-term debt, l Interest factor in the long-term combustion turbine leases, one-third annual rentals under long-term leases and amortization of. debt discount and expense.

~

E f

r f

i 20-13 l

TABLE 20-4 Applicant: Pacific Power & tight Company Subject Nuclear Plants: Pebble Springs Units 1 and 2; Skagit Units 1 and 2-

_SI1URCES OF FUNDS FOR SYSTEM-WIDE CONSTRUCTION EXPENDITURES DURING CONSTRUCTION OF SUBJECT NUCLEAR PLANTS (Millions of Dollars)

Construction Years of Subject Nuclear Plants 1978 1979 1980 1981 1982 1983 1984- 1985 1986 1987 1988 1989 Security Issues and Other Funds:

-Common Stock 5 54 5 60 $ 90 5 60 $ 60 $ 80 - $130 5125 5120 $160 5170 $180 Preferred Stock 40 35 30 30~ 40 55 75 75 75 95 105 110 Long-Term Debt - Net of Maturities 87 165 141 194 234 295 395 400 435 505 565 610 Notes Payable .

39 (6) 10 (33) 4 6 3 (7) 18 17 14 (12)

Contributions from Parent - Net - - - - - - - - - - - -

@ Other Funds - - -

7 Subtotal 227 254 271 251 338 436 -603 593' 648 777 854 888 Internal Funds:

Net Income (Consolidated) 101 129 143 188~ 231 262 300 .346 389 442 500 563 Less:

Preferred Stock Dividends 16 18 22 25 29 34 39 - 48 53 61 70 80 i

Common Stock Dividends 64 71 79 89 99 113 132 152 173 198 225 254 Retained Earnings 2T 40 7 74 T63 TT5 TM TE Ts3 T83 2ii5 229 Earnings Retained in Subsidiaries (13) (14) (17) (27) (32) (38) (45) (53) (62) (71) (82) (94)

Deferred Taxes 1 2 3 3 4 4 5 5 6 6 7 7 Investment Tax Credit - Deferred 10 5 3 4 5 6 6 7 7 8 8 9-Depreciation and Amortization 53 59 68 70 74 85 97 115 135 160 195 225 Less:

AFUDC 29 45 44 52' 70 92 122 137 149 174 225 258 Subtotal 43 47 55 72 84 80 70 83 100 112 108 118 Total Funds (uti' sty) 5270 $301 5326 5323 5422 5516 5673 5576 5748 5889 5962 51,006

TABLE 20-4 (Continued)

Construction Years of Subject Nuclear Plants 1979 1980 1981- 1982 1983 1984 1985 1986 1987 1988 1989 1978 Utility Construction Expenditures:I Nuclear Power ' ants 2

5 74 $ 96 $146 $188 $280 $376 $472 $473 5535 $684 $732 5 737 196 205 180 135 142 140 201 203 213 205 230 279 Other

$323 $422 $516 $673 $676 $748 $889- $962 $1,006 Total Construction Expenditures $270 $301 $326 Subject Nuclear Plants:1,2 .

Pebble Springs No.1 5 22 5 12 5 32 $ 40 $ 58 $ 54 5 45 5 31 5 13 $ - 5 .- $ -

3 23 37 75 101 66 47 24 20 Pebble Springs No.2 2 -

2 - - -

Skagit No. I 18 36 39 44 50 35 30 14 -

16 41 67 54 34 27 11 - -

Skagit No. 2 - -

2 Total $ 42 $ 48 $ 75 $103 $172 $193 $204 $180 $106 5 58 $ 24 5 20 yIIncluces direct construction cost an<f capitalized taxes (excludes AFUDC).

521ncluces initial fuel load.

Applicant: Pacific Power & Light Company subject Nuclear Plant: Pebble Springs Units 1 and 2, Skagit Units I and 2 PREPARATION ASSUMPTIONS FOR SOURCES OF FUNDS FOR SYSTEM-W10E CONSlRUCTION EXPENDITURES DURING CONSTRUCT 0N PERIC0 OF SUBJECT NUCLEAR PLANTS (a) Overall utility rates of return of approximatey 9.5%, with an implicitly assumed utility return on average common equity of approximately 13.0%.

(b) Preferred stock dividend rate for new issues of 9.0%.

(c) long-term debt interest rate for new issues of 9.0% and a short-term debt interest rate of 8.0%.

(d) Target market / book ratio whereby Pacific Power projects sales of additional shares of common stock at a ratio of not less than 1.0.

(e) Common stock dividend payout ratios ranging between 50% and 65%,

(f) Target capital structure composed of 54% long-term debt,10% preferred stock and 36% common equity.

(g) Resultant interest coverages for SEC test purposes range between 2.3 and 2.5, while for mortgage bond indenture purposes the coverage range is between 2.4 and 2.7.

(h) Growth rates as follows:

Kwh sales 5.7%

Revenues (utility) 13,0(inclusiveofprojectedraterelief)

Expenses (utility) 13.0 Interest charges 15.9 Net income 16.9 5

March 14,.1978 20-16

TA8LE 20-5 THE WASHINGTON WATER POWER COMPANY-5KAGIT UNITS 1 & 2 PRO FORMA SOURCES OF FUNDS FOR SYSTEM WIDE CONSTRUCTION EXPENDITURES AND CAPITAL STRUCTURE (MiTTions of Dollars)

Construction Years of Subject Nuclear Plants 1978 1979 1980 1981 -1982 1983 1984 1985 1986 1987 External Financing:

Common stock 5 22 5 23 5 28 5 29 5 32 5 35 5 31 5 21 5 - 5 14 Preferred stock 25 25 25 25 25 25 '30 20 - -

Long-term debt -

50 50 55 70 95 60 35 .- 60 Notes Payable 13 1 ( 9) 2 15 ( 44) - -

25 (25)

Total External Funds 60 99 94 111 142 111 121 76 25 49 Internally Generated Funds:

E$

1. Net income 24 28 35 41 48 59

" Less:

Dividends 15 20 25 30 36 41 Retained earnings 9 8 10 11~ 12 18 Details Not Available Investment credit deferred 4 6 9 3 2 -2 Depreciation and amortizatio.. 11 12 13 14 17 21 Other changes in working capitat ( 4) ( 6) ( 8) ( 9) ( 15) ( 8)

Total Internal Funds 20 20 24 19 16 33 35 40 40 40 Total Fands 5 80 5119 5118 $130 5158 '5144 5156 5116 5 65 5 89 Construction Expenditures:

Nuclear power plants $ 19 5 29 5 32 5 46 5 50 5 54 5 34 5 18 5 3 5 1 '

Other 50 88 85 - 83 82 90 122 98 62 58 Total Construction Expenditures 5 69 5117 5117 5129 5132 5144 5156 $116 5 65 5 59 Subject Nuclear Plant 5 10 5 18 5 22 5 36 5 44 5 52 5 34 5 18 5 3 5 1 l

t 1

I TABLE 20-5 (Con'inued)-

t Construction Years of Subject Nuclear Plants' ,

1978 1979 1980- 1981 1982 1983 1984- 1985 1986 1987 Other Capital Requirements:

Redemption of maturing bonds $ 7 5 - 5 - SD- 5 25 5' - 5 -

5 -' - '.5 -

$ 30

' Bond sinking funds 1 1 1 1 1 Miscellaneous 3 1 -

Total 11 2 1 1 26 - - - -

30 Total Capital Requirements 5 80 $119 5118 $130 5158 5144 5156 5116 5 65 5 89 Capital Structure in Percent:

Total debt 58% 56% 54% 53% 52%- 51% 50%' 50% ~ 51% 52%

Preferred stock 4 8 ~10 11 12 13 12 --- 12 11 10 '

Common stock 38 36 36 36 - 36 36 38 38 38 . 38

.m - -.- -- - -_

.____2________ _ _ _ _ .

TABLE 20-5 (Continued)

THE WASHINGTON WATER POWER COMPANY Assumption to the Source of funds Schedule

3. a:

(a) Return t.i Common Equity: 12.75 - 13.25% Earned on Avg. Equity (b) Preferred Dividend Rate: 9.25% - 1978-1987 Estimated based on projected market conditions, giving effect to con-tinuing inflation at 6-7% annually and the heavy financing needs pro-jected for all sectors of the economy throughout the period.

(c) Annual Growth Rates (General Business)

1. Kwh sales Avg. 4%

2. Price per Kwh Avg. 15%

Electric revenues included in tne forecast are a result of general l business kilowatt hour sale trends and include elements of rate relief which are programmed throughout the forecast as needed.

(d) Market / Book Ratio: Approximately 105%

Based on an assumption that market price of stock will be approximately 100% of book value throughout period.

(e) Common Stock Dividend Payout Rati'a: 65-70%

Payout ratio is assum-?d to continue at historic average payout levels throughout the period.

(f) Target Capital Structure: 50-52% Total Debt 10-12% Preferred 36-38% Common (g) Interest Coverages: (Times) 1978 2.4x 1979 2.7 1980 3.0 1981 2.9 1982 3.0 1983 3.0 1984 3.0 1985 3.0 1986 3.0 1987 3.0 (h) Mortgage Bond Interest Rate: 8.75% - 1979 9.0% - 1980-1987 See (b) above.

Short-term Interest Rate: 8.25% - 1979-1987 20-i?

1 TABLE 20-5 (Continued) 3.a:, contd.

Composite rate developed in conjunction with assumptions in (b) above.

Assuming two bank lines - 1 short-term,1 intermediate-term. The com-posite rate gives effect to a commitment fee on the intermediate-term line as well as a 1.0% differential in rates between the two lines.

k v

20-29 i __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ _ _ _ _ _ _

l The applicants project a rate of return on year-end common equity in the range of 12.75% - 13.25%, during the 12 year construction period. Based on information submitted by the applicants, a rate of return of this order of magnitude has been determined to be just and reasonable by State Public utilities Commissions in their respective service areas. Given prevailing and reasonably forseeable capital market conditions, the staff concludes that the applicants' assumptions with respect to rates of return on common equity are within a reasonable range.

The assumed capital structures for the applicants are 50 to 55 percent long-term

> debt; 10 to 12 percent preferred stock; and 35 to 38 percent common equity. As noted above, these assumed capital structures are historically typical of the ,

electric utility industry and, in the staff's judgment, are within the zone of reasonableness. Furthermore, the projected rates of return, when applied to these capital structures, will result in adequate coverages of fixed charges (i.e., total l interest charges and amortization of debt discount expense) for each applicant.

20.5 Conclusions on Financial Qualifications ,

Based on its analysis, the staff concludes that Puget Sound Power & Light Company, the Portland General Electric Company, the Pacific Power and Light Company, and the Washington Water Power Company have reasonable assurance of obtaining the necessary funds to cover the estimated constructior. cost of the Skagit facility and its related fuel cycle costs. The staf f does not consider these financial projections to be a forecast of the financing which will actually occur. The staff requires only that the applicants demonstrate one possible method by which their planned s construction program, including the subject facility might be reasonably financed. ,

Since the staff is dealing with future events, it naturally expects that financing plans will change from time to time to accommodate changing conditions. Neverthe-less, the financing projections submitted by the applicants are in accordance with <

general industry practice and the underlying assumptions, although not susceptible to precise measurement against absolute criteria, are consistent with the postulated conditions. Consequently, since the staff finds that the applicants' financing projections are reasonable, it concludes that the standard of reasonable assurance has been satisfied. Accordingly, the staff finds the applicants are financially qualified to design and construct the proposed Skagit facility.

20-21

l l

21.0 CONCLUSION

S Based on its evaluation of the application as set forth in NUREG-0309 and in this l

supplement, and subject to favorable resolution of the outstanding matter described herein, the Nuclear Regulatory Commission staff will be able to affirm the conclusions presented in Section 21.0 of NUREG-0309.

l l

21-1

APPENDIX A CHRON0 LOGY - (Continued from NUREG-0309)

May 6, 1977 Meeting with Puget in Menlo Park concerning Shear Zone "A" May 18, 1977 Puget letter (W. Fergusen to J. Stolz) transmitting Amendment No.17 to the Skagit PSAR.

May 20, 1977 Minutes of May 5, 1977 meeting with fuget issued.

June 7, 1977 Puget letter (W. Fergusen to J. Stolz) regarding anticipated transients without scram.

June 7, 1977 Minutes of May 25, 1977 meeting with Puget issued.

!. June 9, 1977 Puget letter (W. Fergusen te J. Stolz) transmitting Amendment No. 18 to the Skagit PSAR.

June 17, 1977 NRC letter (J. Stolz to J. Mecca) requesting additional financial information. j June 30, 1977 Puget letter (J. Mecca to R. Boyd) transmitting Puget's fire protection evaluation report.

July 11, 1977 Puget letter (J. Mecca to J. Stolz) regarding design and testing of l penetrations and guard pipes.

July 19, 1977 Puget letter (J. Mecca to J. Stolz) regarding schedu'e for response to request for financial information. =

August 11, 1977 Meeting with'Puget and USGS on Skagit USGS letter.

August 24, 1977 Minutes of August 11, 1977 meeting with Puget and USGS issued.

( September 1, 1977 NRC letter (J. Stolz to J. Mecca) transmitting the Skagit Safety Evaluation Report.

September 1 and 2, ACRS subcommittee meeting on northwest seismicity in San Francisco.

1977 September 8, 1977 ACRS full committee meeting on northwest seismicity in DC.

A-1

APPENDIX A (Continued)

September 16, 1977 Minutes of September I and 2,1977 ACRS subcommittee meeting in San Francisco and full committee meeting Seotember 8, 1977 in D.C.

issued.

September 30, 1977 ACRS subcommittee meeting on Skagit in Seattle.

October 5, 1977 Minutes of ACRS subcommittee meeting on Skagit on September 30, 1977 it, Seattle issued. j October 10, 1977 Puget letter (J. Mecca to J. Stolz) transmitting additional financial information.

October 19, 1977 NRC letter (J. Stolz to J. Mecca) responding to Puget letter of July 11, 1977 on containment penetrations.

October 20, 1977 Puget letter (J. Mecca to J. Stolz) concerning WPPSS investigation of Frazer River-Straight Creek Fault Zone.

October 20, 1977 Puget letter (J. Mecca to J. Stolz) responding to staf f safety evaluation open issues.

October 21, 1977 Puget letter (J. Mecca to J. Stolz) concerning small October 13, 1977 earthquake in Skagit. Valley.

October 27, 28, ACRS subcommittee meeting on northwest tectonics in Portland, Oregon.

1977 November 3, 1977 NRC letter (J. Stolz to J. Mecca) regarding BWR relief valve control system and associated containment loads.

November 4, 1977 ACRS full committee meeting on Skagit.

November 9, 1977 Minutes of ACRS subcommittee meeting on October 27 and 28, 1977 in Portland, Oregon issued. t November 10, 1977 Minutes of ACRS full committee meeting on November 4,1977 issued.

November 16, 1977 Puget letter (J. Mecca to J. Stolz) concerning resolution of BWR relief valve control system and associated containment loads issue.

November 17, 1977 Meeting with General Electric Company on GESSAR-238-251 related to ADS

. solenoids and fast scram.

l i

l A-2

APPENDIX A (Continued)

November 22, 1977 Minutes of November 17, 1977 meeting with GE issued.

l November 23, 1977 NRC letter (J. Stolz to J. Mecca) transmitting the ACRS report on Skagit.

f December 12, 1977 Puget letter transmitting Amendment 19 to the PSAR.

December 22, 1977 NRC letter transmitting Aerojet Nuclear Co. report on single failure of ECCS of the GE Standard BWR/6 plant.

l December 27, 1977 Puget letter transmitting investigation of the stability of the Bed of Skagit River near Sedco Wooley, January 7, 1978 NRC letter (J. Stolz to J. Mecca) transmitting 11-15-77 letter from ACRS.

February 6, 1978 U.S. Department of Interior letter,1-30-78, sutus review of geology / seismology for Skagit.

February 6,1978 Meeting notice for meeting with Puget on SER Supplement issues -

Feb. 9, 1978.

February 10, 1978 Puget letter transmitting Amendment 20 to the PSAR.

February 13, 1978 Puget letter 2-6-78 transmitting Appendix I Report.

February 14, 1978 Summary of February 9, 1978 meeting with Puget.

February 15, 1978 U.S. Department of Interior letter 2-14-78 transmitting USGS status report.

February 22, 1978 Puget letter 2-16-78 transmitting Amendment 18 to the PSAR.

February 27, 1978 U.S. Department of Interior response 2-23-78 to NRC request for review of geology and seismology.

February 28, 1978 NRC letter, 2-28-78, to Puget on staff position on the use of austenitic stainless steel in BWR, NUREG-0313.

A-3

' APPENDIX A (Continued)

March 27, 1978 Puget letter 3-21-78 in response to NRC 2-28-78 letter, use of austenitic stainless steel.

April 18, 1978 NRS letter to Puget regarding Western Geophysical offshore seismic lines.

April 19, 1978 NRC letter 4-19-78 to Puget transmitting revised Intrusion Detection Systems Handbook.

9 i

April 19, 1978 Puget letter 4-13-78 in response to NRC 11-4-78 letter regarding volcanic ashfall.

-April 19, 1978 Puget letter 4-18-78 in response to NRC 3-11-78 regarding fuel handling accident analysis.

May 5, 1978 NRC letter 5-5-78 transmitting NUREG-0219.

May 5, 1978 Puget letter 4-17-78 regarding loose parts monitoring systems.

May 8, 1978 Puget letter 5-4-78 regarding-financial qualifications.

May 10, 1978 Meeting notice for 5-11-78 meeting to discuss seismology / geology.

June 1, 1978 Puget letter, 5-26-78, requesting exception to ANSI N45.2.1, June 8, 1978 Puget letter, 6-8-78, transmitting Amendment I to Appendix I Report.

}

A-4

l APPENDIX B REPORT ON THE SKAGIT NUCLEAR POWER PROJECT, UNITS 1 AND 2 I

i 1 e ,a, ff y)3m

NUCLEAR REGULATORY COMMISSION UNITED STATES g

1 puj f .*,

ADVISGRY COMMITTEE ON REACTOR SAFEGUARDS WASHINGTON. D. C. 20555

- - - - November 18, 1977 l

l Honorable Joseph M. Hendrie Chairman U. S. Nuclear Regulatory Ccmnission Washington, DC 20555 SUa7ECr: REPORT ON THE SKAGIT NUCLEAR POER PKUECT, UNITS 1 AND 2

Dear Dr. Hendrie:

During its 211th meeting, Novenber 3-5, 1977, the Advisory Ccanittee on Reactor Safeguards empleted its review of the application of the Puget Sound Power and Light Ccupany, the Pacific Power and Lignt Co pany, tne Washington Water Power Capany, and the Portland General Electric Coapa-ny (the Applicants) for a permit to construct the Skagit Nuclear Power Project, Units 1 and 2. The Puget Sound Power and Lignt Company will te responsible for the design, construction, and operation of the station.

The application was reviewed at a Subcomittee meeting in Seattle, Wasn-ington on Septemer 30, 1977. A visit was made to the site try Succom-mittee abers on August 30, 1976. Regional tectonics and matters pertaining to the seismicity of the Skagit site were discussed at Sub-comittee metings on September 1-2, 1977 in San Francisco, California, on October 27-28, 1977 in Portland, Oregon, and during the 209th meeting, Septecter 8-10, 1977. During its review, the Ccmnittee had the benefit of discussions with merrbers of the Nuclear Regulatory Comnission Staff (NRC Staff), and with representatives of the U.S. Geological Survey (USGS) ,

of the Applicants, the Bechtel Power Corporation and the General Electric Company. The Comittee also had the benefit of the documents listed and of participation by members of the public.

The Skagit Nuclear Power Project includes two 3800 MWt boiling water reactors of the BWR-6 type, each housed in a Mark III containrent. The design of the Skagit Nuclear Power Project is similar to that of the Grand Gulf Nuclear Station, Units 1 and 2 and the River Bend Station, Units 1 and 2, on which the Comittee reported in its letters of May 15, 1974 and January 14, 1975, respectively.

The NSSS for the Skagit plant is similar to but not identical to tne GESSAR-251 reference design. Because of differences in tne designs and because GESSAR-251 had not received Preliminary Design Approval wnen the Skagit application was sunnitted, tne NIC Staff made a custom review of the Skagit plant. The Comit*ee reported on GESSAR-251 in its letter of December 17, 1976.

B-1

APPENDIX B (Continued)

)

l Honoracle Joseph M. Hendrie November 18, 1977 f

1 The plant will be located in Skagit County in nortnwestern Washington, aiw pronmately 60 miles north of Seattle, Washington and 37 :niles soutneast of Bellingham, Washington. The site consists of 1500 acres of land on tne north side of the Skagit River Valley in tne forested western footnills ;

of tne Northern Cascade Mountains. The minimum exclusion area boundary distance is 1,980 feet. The low population zone nas a radius of 4 miles and includes a population of 1,563 (1970 Census) . Tne nearest center of population is Mt. Vernon, Wasnington, which had a population of 8,532 in 1970 and is 9.5 miles from the plant.

t In view of statements made by the NT Staff and the USGS, information ;

presented by the Applicants, and opinions provided by ACES consultants, '

the Cocmittee believes that horizontal ground accelerations of 0.359 for tne safe shutdown earthquake and 0.175g for tne opdrating basis earth-l quake, conmitted to by the Applicants, are acceptable.

The UFC Staff has identified a number of safety itenn which will require l

resolution before issuance of a Construction Permit. These natters should -

be resolved in a mnner satisfactory to tne NFC Staf f. The Cocmittee be-lieves these itenu can ce resolved prior to the issuance of a Construction

, Permit.

1 With regard to tne generic problems listed in the Cocnittee's report,

" Status of Generic Itens Relating to Lignt-Water Reactors - Report No. 6,"

dated November 15, 1977 itecs considered relevant to tne Skagit Nuclear Power Project are: II-4, 5A, SB, 6, 7, 9,10; IIA-4; IIB-2, 3, 4 ; IIC-1, 2, 3A, 38, 5, 6; IID-1, 2. These proolean should be dealt with ey the NRC Staff and the Applicants as solutions are found.

The Advisory Comnittee on Reactor Safeguards (411 eves tnat if due consid-eration is given to the fotegoing, the Skagit Nuclear Project, Units 1 and 2 can ce constructed with reasonable assurance that they can be operated without undue risk to the health and safety of the puolic.

Sincerely yours, l

%. 4 M. Bender Chairman l

l l .

B-2 l l

1 _. . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

APPENDIX B (Continued)

L Honorable Joseph M. Hendrie November 18, 1977 Feferences

1. Ptget Sound Power and Light Ccrpany: " Preliminary Safety Analysis Report for Skagit Nuclear Power Project, Units 1 and 2" with Amendmnts 1-18 and Supplemnts 1-18.

2. U.S. Nuclear Regulatory Comission: " Safety Evaluation Report by the Office of Nuclear Reactor Regulation, Related to the Puget Sound Power and Light Ccmpany Construction of Skagit Nuclear Power Project, Units 1 and 2, Docket Nos. STN 50-522 and Sri 50-523,"

NUBEG-0309, dated Septent>er,1977.

3. E. S. Cheney, " Interim Report on tne Seismic and Geologic Hazards to the Proposed Skajit Power Site, Sedro Wooley, Washington," Revision of Detocer,1977, unpublished ranuscript.

4. Letter f rom Roger M. Leed to Dr. S. H. Bush, concerning the selsrdc potential for the Skagit site, dated Novemoer 1,1977.

5. Letter from f aculty mmbers in the Eartn Sciences at tne University of Washington, as signed on letter, to the U. S. Geological Survey and the U. S. Nuclear Regulatory Comission, concerning the need for nere detailed geological maps of the Skagit site, dated Novencer 2,1977.

6. Letter from D. B. Vassallo, Assistant Director for Lignt Water Reactors, Division of Project Managemnt, to Mr. Myer Bender, Chairran, Advisory Comittee on Reactor Safeguards, concerning NBC Staff position on Skagit seisnic design, dated Novencer 15, 1977.

B-3

APPEN0!X B (Continued) f[p atg I UNITED STATES E gg 'g p, NUCLEAR REGULATORY COMMISSION

{g 'l ADVISORY COMMITTEE ON REACTOR SAFECUARDS g

WASHINc ton. D. C. 20565 q,g* . . . -= f November 15, 1977 i

Mr. Lee V. Gossick Executive Director for Operations j U. S. Nuclear Regulatory Comission ,

Washington, DC 20555 SULUECD REGION, T8C70NICS OF THE PACIFIC NOlmf4ST Dear Mr. Coccick The Advisory Conraittee on Reactor Safeguards inet and considered tratters related to the regional tectonics of the Pacific Northw.7t at its 209i.h and 211th meetings. Subcomittee meetings have been held on this subject on September 1-2, 1977 la San Francisco, California and on October 27-23, 1977 in Portland, Oregon. The Comittee and its consultants have had the cenefit of presentations on this matter by representatives of the Nuclear Regulatory Coarission (NFC) Staf f, the U. S. Geological Surve/ (USGS),

Puget Souna Pcwar and Light Company, Portland General Electric Company, Washington Ptiilic Power Supply System, their consultants, aqd menbers of ,

the public. '

The Comittee and its consultants have given extensive consideration to the txusible intensity of the lti72 Wenatchee earthquake. Tne USGS, as a consequence of the manner of application of the Modified Mercalli (M) criteria, considers that the assigned intensity of this earthquake cannot be less than MM Intensity VIII and is probably M Intensity IX, based pri-marily on the occurrence of a large landslide at RibMn Cliffs, believed to have been caused by this carthquake. This higher intensity differs from the previously cited Intensity of VII - VIII, usually given in prior l

studies and discussed in the Coombs Review Panel Report. The Comittee l

' and its consultants have considered this matter and have concluded that the 1872 Wenatchee earthquake should be considered as an Intensity VIII.

In reaching tnis conclusion, the Comittee considered the bases on which the relation octween m intensity and horizontal ground acceleration re-lationships were derived. Tne Comittee recognizes that higher M inten-sities of ten are reported when seismic data are scanty aml rcultiple e criteria cannot ce used. Tne ext ensive data compiled by the utilities and their consultants have been reviewed by the ACRS and its consultants.

These data pertain not only to the 1872 earthquake but also to the region-al tectonics, regional qeology, and the various nuchanisma considered responsible for the seis;' tic events observed throughout the Pacific r orth-west. Based on a review of these data, the Cortittee agrees with the 8-4 l

9 APPENDIX B (Continued) iir. Lee V. Goasick November 15, 1917 I

opinlons expressed by most participants and ACfG consultants that arbitrary movement over extended distances of a prototype 1872 cartnquake, for pur-poses of seismic design, should be reexamined. This is particularly true for the Colurbia Plateau whicn appears to oc citner a dif ferent tectonic province than that in which the 1872 earthquaxe occurred, or a region of f lower saismic activity with regard to frequency and intensity.

The Comittee believes that the studies currently being performd on the tectonica of the Pacific Northwest will better identify the seiraic [x>-

tential of the various regions within the Paci fic Northwest. The studies being performd for the Columbia Plateau Region are particularly pro.n--

ising with respect to better defining its seismic potential. The Comit-tee wishes to be kept informd of the progress of *.hese studies and to f

discuss these rutters with the NRC Staf f when they have completed their review.

Sincerely yours, M. Bender Chairman R?ferences:

1. H. A. Coo.rbs, " Report of the Revies Panel on the December 14, 1872 1 Earthquake," dated Decemoer,1976.

2. Ptget Sound Power and Light Company: ' Preliminary Safety Analysis Report for Skarjit Nuclear Powar Project, Units 1 and 2," Chapter 2.5 and Appendix 2J, " Investigation of tne DeccKber 14, 1872 Ear thquake in the Pacific Northwest," by Bechtel Corporation, Inc. , dated J une, 1975.

3. Portland General Electric Company: " Preliminary Safety Analysis Report for Pebble Springa Nuclear Plant, Units 1 and 2," Cnapter 2.5.

4. Washington Public Power Supply Systeau: " Preliminary Safety Analysi.

Report for WPPS3 Nuclear Power Projects 1 and 4," Cnapter 2.5 ard Amndment 23.

5. Weston Geophysical Research, Inc. , "Tne 1872 Earthquake - Significant Data and Conclusions," undated.

6. Wootsard-Clyde Consultants, " Review of the Pacific Northwest Earth-quake of December 14, 1872," undated.

7 N. H. Scott, " Evaluation of the Epicenter and Intensity of tho Pacific Northwest Earthquake of Decemoer 14, 1872," dated September 13, 1976.

B-5

l APPf.NDIXB(Continued)

Mr. Leo v. Gossick November 15. 1977

8. Shannon and Wilson, Inc., " Reconnaissance Investigation of the Riboon

l. Cliff Landslide, Entiat, Cnelan County, Washington," dated August, j 1976. ;

j 9. Shannon and Wilson, Inc., " Geologic Studies of Coludia River Basalt j Structures and Age ot Deformation, Tne Dalles-Caatilla Region, Wasn- '

ington and Oregon, Boardr.in Nuclear Project," dated dovember,1973,

10. Shannon and Wilson, Inc., " Regional Geologic and Seismic Investiga-tions, Boardan Nuclear Project," dated January,1973. '

11. Lettets from D. L. Renberger, Washington Public Power Supply System, .

to 0. L. Parr, Of fice of Nuclear Reactor Regulation, dated September 14, l

1977 and September 2,1977, respectively, concerning the results of field i westigation of the Fraser River - Straight Creek Fault Zone.

12. E. S. Cheney, " Interim Report on the Seismic and Geologic Hazards to the Proposed Skagit Pwer Site, Sadro Wooley, Waanington," Revision of Octooer, 1977, unpublished manuscript.

13. U. S. Geological Surwy, "A Study of Earthquake losses in the Paget Sound, Washington Area," Open File Report 75-375, dated 1975.

14. U. S. Geological Survey, "Maximun Intensity of the Washington Carth-qui <c of December 14, 1872," dated April 1, 1977.

15. U. S. Geological Survey, " Status of Review - Skagit, Washington," by W. Hays and S. Drockman, dated Jaly 21, 1977.

16. Portlard General Electric Company: " Final Safety Analysis Report for the Trojan Nuclear Plant," Chapter 2.5.

17. Washington Public Power Supply Syctem " Preliminary Safety Analysis I Report for WPPS3 Nuclear Project No. 2," Chapters 2.6 and 2.7.

18. Letter from Edcon G. Case, Acting Director, Offico of Nuclear Reactor Regulation, to R. F. Fraley, Executive Director, Adviec.ty Coanittee on Reactor Safeguards concerning the review of the geology and ceis-mology for the Skagit Nuclear Project, dated July 28,'1977.

I 8-6 l l

1

APPENDIX C ERRATA TO NUREG-0309 l

M l-2 - Second line - Change "22" to "23" l-2 - Twenty-fifth line - Change " assurance" to " issuance" l-23 - Table I Second Item - delete " state-of-the art" 2-20 - Last line - Spelling " construction" l

l 3-10 - Seventeenth line - Should read ". .accordance with the Technical Position Mechanical Engineering Branch 3-1, " Postulated Break and Leakage Locations I

f in Fluid Piping Outside Containment," and Auxiliary Power and Conversion System Branch 3-1,.. "

3-10 - Thirty-second line - Change " Auxiliary Power and Conversion Systems" to

" Mechanical Engineering Branch" 3-11 - Twelfth line - Change " required" to " recommended" 3-17 - Seventeenth line - Spelling " category" 3-18 - Thirty second line - Add "and Class 2" between " Class 1" and " piping" 3-19 - First paragraph of Section 3.9.3 - add the following before the last sentence.

"It should be noted in Table 1-1 of NUREG-0309 that the Skagit core has a higher coolant flow rate (122,500,000 pounds per hour) than the Grand Gulf core (113,500,000 pounds per hour), and the Skagit core has a larger number of fuel assemblies (848) than the Grand Gulf core (784). These differences may not influence the prototype relationship, but they will be reviewed along with other differences, if they exist, by the staff during its review of the Final Safety l Analysis Report to assure that Granc Gulf is a valid prototype for the Skagit preoperational vibration assurance program."

3 22 - Thirteenth line - Change "3.9.4" to "3.9.2.4" C-1

APPENDIX C (Continued) 3-22 - Section 3.10 - Add "for the nuclear steam supply system" between l

the words " equipment" and "will" in the first sentence of the second paragraph.

Add the following paragraph between the second and third paragraphs.

l "For other than nuclear steam supply system seismic Category I electrical equipment the Puget Sound Power and Light Company referenced Institute of I Electrical and Electronics Engineers Standard 344-1971 and its program contains features which recognize and provide solutions for standard test program implementation problems, consistent with the Regulatory Standard Review Plan .

Section 3.10 " Seismic Qualification of Category I Instrumentation and Electrical Equipment." This program constitutes an acceptable basis for satisfying the applicable requirements of General Design Criteria 2."

3-24 - Section'3.ll - Add "for the nuclear steam supply system" t'etween the words

" equipment" and "the Puget" in the first line.

- Add "other than for the nuclear steam supply system" between the words

" safety" and "will" in the first sentence of the fourth paragraph on page 3-24.

5-2 - Thirty-seventh line - Add "all of the" between "of" and " test" 5-3 - Seventh and Ninth lines - Change GESSAR-251" to "Skagit" i

I 6-25 - Section 6.2.15 - Add the following paragraph.

"The staff concludes that the containment isolation system design will conform to Criteria 54, 55, 56 and 57 of the General Design Criteria, regulatory guides, staff positions and industrial codes and standards, and is acceptable."

6-25 - Third sentence of third paragraph of Section 6.2.6 - delete "However, when . Commission staff."

6-26 - Change Section 6.2.18 to 6.2.17 6-37 - Twenty-eighth line - Delete ".., which is dependent upon the hydrogen ion concentration of the spray solt. tion,"

C-2 I

l

APPENDIX C (Continued) 7-1 - First line of first paragraph - Add " nuclear steam supply system" between "the" and " instrumentation" 8-3 - Twenty-fourth line - Change " requirements" to " recommendations" 11 Table 11 Main Steamline - add notes "b and c" 15 Fourth and Fifth Line - Delete "both" and "in the fuel storage pool" 15 Twenty-fourth line - Change "less" to "more" 17 Twenty-fifth line - Delete "(See Appendix B to this report)"

B-4 ~, enty-tirst line - De!ete "and as indicated in Section 10.5 of this supplement" l

O Y

C-3

NRC FoRu 335 U.S. NUCtJ AR REGULATORY COMMISSION 03b Sh"[YY BIBLIOGRAPHIC DATA SHEET

4. TITLE AN D SUOTlTLE (Add Volume No. of approonare) 2. (Leave blek)

Safety Evauation Report Supplement No.1 for Skagit Nuclear Power Project, Units 1 and 2 3. RECIPIENT S ACCESSION NO.

5. D ATE REPORT COMPLE TE D

7. AUTHOR (S)

MONTH [ YEAR October 197R 9 PERFORMING ORGANIZATION NAME AND MAILING ADORESS f/nclude 20 Coud) CATE REPORT ISSUEO voNm IveAa U. S. Nuclear Regulatory Commission Office of Nuclear Reactor Regulation Oct3ber 1978 6 It'*** 6'*a*>

l Washington, D. C. 20555 8 (Leave Diens)

12. SPONSORING ORG ANIZ ATioN NAME AND MAILING ADOR*SS (Include leo Cooel 10. PROJECT' TASK / WORK UNIT NO.

Same as 9 above n. CONTRACT NO.

i PE RICO COV E RE D floclussve defes)

13. TYPE OF REPORT Skagit Safety Evaluation Report Suppl. No. 1

15. SUPPLE VEN TARY NOTES 14. (Leave c/ek)

16. ABSTR ACT (200 words or less)

This Safety Evaluation Report Supplement No.1 to the Skagit Nuclear Power Project, Units 1 and 2, discusses the resolution of the issues that were considered outstanding at the time the SER was issued and the additional matters reviewed by the staff. The Advisory Committee on Reactor Safeguards' reports relative to the Skagit Project are also included in this supplement. ,

17. KEY WORDS ANO COCUMcNT AN ALYSIS 17a OESCRIPTORS 17b. IDENTIFIE RSiOPEN ENDED TERMS

18. AV AILA81LITY STATEMENT 19 SECURITY CLASS (Tms report) 21. NO OF P AGES

20. SECURITY CLASS /This pasel 22. P RICE Release Unlimited $

NRC FORM 335 (7 771

- _ _ _ _ _ . _ _ . _ _ _ _ _ . . _ _ _ _ _ . _ _ _ _ _ _ _ . . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ____ __ _ __

ML20244A489

Contents

Text

1.0 INTRODUCTION

21.0 CONCLUSION

1.0 INTRODUCTION

21.0 CONCLUSION

Dear Dr. Hendrie:

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ML20244A489

Text

1.0 INTRODUCTION

21.0 CONCLUSION

1.0 INTRODUCTION

21.0 CONCLUSION

Dear Dr. Hendrie:

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