ML19256E410

Proposed Findings of Fact,Opinion,Conclusions & Order Re Site Certificate for Const & Operation of Facility. Requirements of Specific Stds Are Met

ML19256E410
Person / Time
Site:	05000514, 05000515
Issue date:	09/12/1979
From:	Bergen L OREGON, STATE OF
To:
Shared Package
ML19256E401	List: ML19256E400 ML19256E404 ML19256E406 ML19256E408 ML19256E410
References
NUDOCS 7911050161
Download: ML19256E410 (91)

Text

,

BEFORE THE ENERGY FACILITY SITING COUNCIL OF OREGON In the Matter of the Application of )

Portland General Electric Company, ) PROPOSED FINDINGS _

and Others, For a Site Certificate ) OF FACT, OPINION, to Construct and Operate an Energy ) CONCLUSIONS, AND ORDER Facility at the Pebble Springs ) (Volume I)

Site, in Gilliam County, Oregon. )

1255 157

'7911050/5[

SUMMARY

OF CONTENTS: VOLUME I I. INTRODUCTION................................................ 1 II. D EMAN D FO R EN ERGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 III. ECONOMIC PRUDENCE............................ ............. 34 IV. ABILITY TO FINANCE......................................... 42 V. ABILITY TO CONSTRUCT, OPERATE, AND RETIRE.................. 47 VI. LAND-US E P LANN ING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3 VII. HI STORIC OR ARCH AEOLOGICAL S ITES . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4 VIII. BENEFICIAL USE OF WASTES AND BY-PRODUCTS . . . . . . . . . . . . . . . . . . . 5 5 IX. WATER REQUIREMENTS......................................... 57 X. ENVIRONMENTAL IMPACTS...................................... 59 XI. SOCIO-ECONOMIC IMPACTS..................................... 67 XII. SAFETY A. Emissions During Normal Oper ations . . . . . . . . . . . . . . . . . . . . . 72 B. Pl a n t S e c ur i ty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4 C. S pe n t F uel S to r a g e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6 D. Spe n t F uel T r a ns po r ta ti on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 7 E. Dam Safety and Dewatering.............................. 81 1255 158 i

e TABLE OF CONTENTS: VOLUME I I. INTRODUCTION A. Background.............................................. 1 B. Int er pr e ta tion of S tandar ds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 C. Relationship Between Specific and General Standards. . . . . 5 D. Si te C er ti fi ca t e Condi ti ons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 E. Evi de n c e i n R e co r d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 F. Burden of Proof and Eviden ti ary Rule. . . . . . . . . . . . . . . . . . . . 7 G. Description of Record and Abbreviations . . . . . . . . . . . . . . . . . 8 II. DEMAND FOR ENERGY A. Introduction and Overview............................... 9 B. The Forecasts and General Standard 3 45-75-0 25 (1) (a)

1. T h e S t a n d a r d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

2. Por tland Gene ral Electric Co. . . . . . . . . . . . . . . . . . . . . . . 12

3. Pacific Power and Light Co......................... 15

4. Puget Sound Power and Light Co..................... 16

5. Pacif ic Nor thwes t Generating Co. . . . . . . . . . . . . . . . . . . . 18

6. Public U tility Commissioner . . . . . . . . . . . . . . . . . . . . . . . . 19

7. D epa r tmen t of En er gy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 0

8. Northwest Energy Policy Proj ect . . . . . . . . . . . . . . . . . . . . 21 9 . M r . M cH u g h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 1 0 . S umm a r y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 4 C. Forecasted Rates of Growth

1. A ppli cant Fo r e cas ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 4

2. O th e r F o r e ca s ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 5 D. Matching Forecasted Demand to Resources

1. Applicant's Matching of Loads and Resources........ 26

2. NEPP Matching of Loads and Resources............... 27

3. McHugh Matching of Loads and Resources............. 27

4. PUC Matching of Loads and Resources................ 27

5. Energy Conservation Coalition Matching of Loads and Resources..................................... 27

6. DOE Matching of Loads and Resources................ 28 7 . U n c e r t ai n ti e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 9 E. Analysis of Demand Dates............................... 29 f

III. ECONOMIC PRUDENCE A. Introduction........................................... 34 B. General S tandard 3 45-75-0 25 (1) ( b) . . . . . . . . . . . . . . . . . . . . . . 3 4 C. Cost Analysis and Calculational Techniques

1. S t a n d a r d s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 5

2. Must the Analysis of Load Characteristics be Included in the Production Cost Analysis?. . . . . 37 The DOE Cos t Analysi s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 D. Alternatives........................................... 40 E. Wind Tur bine Generators as an Alternative . . . . . . . . . . . . . . 41 F. Conclusions............................................ 42 ii -

l255 159

TABLE OF CONTENTS: VOLUME I (continued)

IV. ABILITY TO FINANCE A. The Standards.......................................... 42 B. T h e N e e d t o F i n an ce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3 C. T he I nve s t o r- ow n e d C o-cw n er s . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3 D. Co-own er Or gani zed as Cooper a ti ve . . . . . . . . . . . . . . . . . . . . . . 4 5 E. Decommissioning........................................ 46 F. Conclusions............................................ 46 V. ABILITY TO CONSTRUCT, OPERATE, AND RETIRE A. The Standards,......................................... 47 B. Employment of Architect-Engineer....................... 47 C. D e v i a ti o ns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 7 D. On-Site and O f f-Site O rgani zations . . . . . . . . . . . . . . . . . . . . . 48 E. Training Program for Management........................ 50 F. Training Progr am f or Operators and Supervisors. . . . . . . . . 51 G. Written Agreement Among Owners......................... 52 H. Conclusions............................................ 53 VI. LAND-USE PLANNING A. The Standard........................................... 53 B. D is cus si on and Fi ndings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3 C. C o n cl us i on s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4 VII. HISTORIC OR ARCHAEOLOGICAL SITES

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A. The Standard........................................... 54 B. D is cus si on and F i ndings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4 C. Conclusions............................................ 55 VIII. BENEFICIAL USE OF WASTES AND BY-PRODUCTS A. The Standard........................................... 55 B. WasteHeat.............................................55 C. Water Withdrawn from Reservoir......................... 56 D. Chemicals.............................................. 56 E. Radioactivity.......................................... 56 F. Conclusions............................................ 56 IX. WATER REQUIREMENTS A. The Standard........................................... 57 B. Withdrawal of River Water.............................. 57 C. Withdrawal of Well Water............................... 58 D. Permits t o W i t h d r aw W a t e r , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 8 E. Conclusions............................................ 58 iii i 2SS i60

TABLE OF CONTENTS: VOLUME I (continued)

X. ENVIRONMENTAL IMPACTS A. General Standardo...................................... 59 B. Chemicals.............................................. 59 C. Waste Heat an d M o i s t ur e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 0 D. Sanitary Wastes........................................ 61 E. Rad i o ac ti ve Was t e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 F. Miscellaneous Environmental Impacts . . . . . . . . . . . . . . . . . . . . 6 3 G. Retirement............................................. 64 H. Endangered Species..................................... 65 I. Conclusions............................................ 66 XI. SOCIO-ECONOMIC IMPACTS A. Statute and Standard................................... 67 B. Discussion and Findings................................ 67 C. C o n cl u s i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 XII. SAFETY A. Emissions During Normal Operations

1. T h e S t an d a r d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2

2. D is cuss ion and F indi ngs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2

3. Conclusions........................................ 74 B. P l an t S e c u r i t y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4 C. Spent Fuel Storage

1. The S t an d a r d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6

2. On-S ite S tor age of Spent F uel . . . . . . . . . . . . . . . . . . . . . . 76

3. Prevention of Loss of Water........................ 76

4. Protection f rom Mechanical D amage . . . . . . . . . . . . . . . . . . 77

5. Capability f or Limiting Radiation Exposur e. . . . . . . . . 77

6. Other Evidence..................................... 77

7. Conclusions........................................ 77 D. Spent Fuel Transportation

1. The Standard....................................... 77

2. Shipment of Spent F uel Assemblies . . . . . . . . . . . . . . . . . . 78

3. Ability of Shipping Casks to Withstand Accidents. . . 79

4. P r e ss ur e Releas e Sys tem . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 0

5. S umm ar y a n d C on cl us i ons . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 E. Dam Saf ety and Dewatering

1. D am S af e t y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

2. Dewatering......................................... 83

3. C o n cl us i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 4 1255 161 .

iv

BEFORE THE ENERGY FACILITY SITING COUNCIL OF OREGON In the Matter of the Application of )

Portland. General Electric Company, ) PROPOSED FINDINGS and Others, For a Site Certificate ) OF FACT, OPINION, to Construct and Operate an Energy ) CONCLUSIONS, AND ORDER Facility at the Pebble Springs ) (Volume I)

Site, in Gilliam County, Oregon. )

I. INTRODUCTION A. Background Portland General Electric Company (PGE), Pacific Power

& Light Company (PP&L) , Puget Sound Power and Light Company (Puget), and Pacific Northwest Generating Company (PNGC)1 propose to construct and operate two 1260 megawatt nuclear-f ueled power plants in Gilliam County, Oregon.2 Oregon Revised Statutes Chapter 469 requires project sponsors to obtain a site certificate f rom the Energy Facility Siting Council (Siting Council, Council, or EFSC) before constructing the proposed f acility. This document embodies recommendations to the Siting Council by the undersigned, who conducted the hearing and considered the evidence. The IPNGC is a generation and transmission cooperative organized to obtain generating resources for its seventeen members. The members are distribution cooperatives located in Oregon, Idaho, Washington, and Wyoming. The seventeen cooperatives are:

Benton Rural Electric Association; Big Bend Electric Coopera-tive, Inc. ; Blachly-Lane County Cooperative Electric Associa-tion; Central Electric Cooperative, Inc.; Clearwater Power Company; Columbia Rural Electric Association, Inc.; Consumers Power , Inc. ; Coos-Curry Electric Cooperative, Inc. ; Inland Power and Light Company; Kootenai Electric Cooperative, Inc.;

Lane Electric Cooperative, Inc.; Lincoln Electric Cooperative Inc.; Lower Valley Power and Light Company; Mid-state Electric Cooperative Inc.; Occas Power and Light Company; Raf t River Electric Cooperative Inc. ; and Umatilla Electric Cooperative Association.

2 Initially PGE was alone in applying f or a site certificate, but was later joined by PP&L, Puget, and PNGC (At the time of the hearing, PNGC was negotiating to join the other proj ect sponsors, but a final agreement had not been reached. It is ass umed the negotiations will be successf ul . ) .

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recommendations are based on analysis of whether the material received into evidence satisfies the requirements of the Siting Council standards.

In additien to ORS Chapter 469 this proceeding is governed by the Administrative Procedures Act found in ORS Chapter 183 and the rules adopted by the Siting Council, codified in Oregon Administrative Rules Chapter 345.

On December 7, 1972, PGE filed a Notice of Intent to file an application for a site certificate. The Nuclear and

_ Thermal Energy Council (NTEC) 3 gave public notice et the Notice of Intent the following day. Af ter the required one-year waiting period, on December 14, 1973, PGE filed an appli-cation to construct and operate an energy facility. As amended, the application is for two pressurized water reactor units. The application was accepted for filing by NTEC on January 8,1974.

Since then, eleven amendments have been made to the application.

Between January and June,1974, six public workshops

_ were held. PGE, NTEC's staf f, s tate agencies, Gilliam county officials, and interested members of the public reviewed and commented on the application. Public notice was g?ven of the workshops, and minutes kept.

In October,1974, Lloyd K. Ma.rbet and Harold C.

Christiansen filed petitions to intervene in opposition to the site certificate application. In an order dated October 18, 1974, the NTEU granted the petitions, subject to certain conditions.

On October 4 and November 7,1974, prehearing con-ferences were held to identify issues. A public hearing was held on the application in Arlington on November 12, 1974, and in Portland on November 14 and 15,1974. Hearings Officer William C. Duvalle presided at the hearing.

After consideration of the evidence, on April 11, 1975, the NTEC issued an order recommending the Governor issue a site certificate to PGE. Messrs. Marbet and Christiansen appealed the order to the Oregon Court of Appeals, which upheld the NTEC decision in June, 1976. Mr. Marbet then requested and was granted review by the Oregon Supreme Court. On March 3, 1977, the Oregon Supreme Court reversed the NTEC Order and remanded for further proceedings.

In April,1977, the Siting Council announced its intention to adopt standards by which to judge applications to 3NTEC was replaced by the Energy Facility Siting Council in 1975. Oregon Laws 1975, Chapter 606.

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construct and operate " energy f acilities", as defined in ORS 469.300(10). Hearings Officer Robert Miller presided at a hearing on proposed standards en June 9,1977. On July 19, 1977, the Siting Council adopted 10 such standards, ref erred to as "gener al standards ." The Council also decided to adopt

" specific standards" applicable to applications f or thermal energy f acilities, and Mr. Miller conducted a hearing on proposed specific standards on October 24, 25, and 26, 1977.

An order adopting 10 specific standards was signed on March 13, 1978. On December 13, 1977, the Council amended the land-use standard, 345-75-025 (5) (b) ; on February 14, 1978, it changed the wording in the general standards to reflect that its final decision is no longer a recommendation to the Governor; and on July 21,1978, i t revised the demand-f or-energy standard ,

345-75-025 (1) (a) . The general standards are codified in Division 75, and the specific standards in Division 76, of Chapter 345 of Oregon Administrative Rules (OAR) .

On April 20, 1977, the Siting Council gave notice it was reopening the record in the Pebble Springs application proceeding. Full party status without conditions was granted to: Lloyd Marbet, Forelaws on Board, Coalition for Saf e Power, Harold Christiansen, Oregon Citizens f or Economic and Environ-mental Balance, Inc. (OCEEB), the Oregon Public Utility Commis-sioner (PUC), the Josephine County Nuclear Saf eguards Committee, the Energy Conservation Coalition (ECC), the Fusion Energy Foundation (FEF), the United States Labor Party in Oregon (USLP) ,

and Lionel V. Topaz. The Oregon Department of Energy (DOE) is the staff for the Siting Council (OKS 469.040(b)) and was treated as a party during the proceeding.

Notices of conf erences and hearing session.s were given to the parties, the news media, and those on the Siting Council's mailing list. Five conferences to discuss preliminary and pro-cedural matters were held between August 12, 1977 and May 26, 1978. The hearing was conducted on 72 days between October 11, 1977 and February 27, 1979. The hearing session on October 11, 1977, was conducted in Arlington, and comments were received frem residents of the region where the proposed facility is to be located. The other hearing sessions, and all the confer-ences, were held in either Portland or Salem.

The names of those who have entered appearances during this proceeding appear on Appendix A to this document.

Ten general and ten specific standards estaolish the critoria for determining whether to approve or reject the appli-cation in this proceeding. The general standards address the f ollowing subj ects:

1. Need for power

a. Demand f or energy 1255 164

b. Economic prudence of the proposed facility and alternative means for meeting the demand;

2. Public health and safety;

3. Environmental impacts;

4. Beneficial use of wastes and by-products;

5. Land-use planni

6. Historic or archaeological significance of the proposed site;

7. Water requirements;

8. Ability to construct, operate, and retire the proposed facility;

9. Financial ability; and

10. Socio-economic impacts.

The specific standards ectablish additional requirements relating to general standards 1(b), 2, 3, 8, and 9.

Currently, ownership of the Pebble Springs Project is allocated like this:

Unit 1 Unit 2 PGE 40 % 40 %

PP&L 25 % 25 %

Puget 20 % 20 %

PNGC 10 % 0 Unallocated 5% 15 %

The co-owners expect the unallocated portions to be purchased by utility companies. Until that occurs, the anallo-cated portions are apportioned among PGE, PP&L, and Puget on a pro rata basis. SCA 5-2.

This document refers to the co-owners, together, as the applicant. ORS 469.300 (1) and (12).

B. Interoretation of Standards General Standard 345-75-020 directs the Council to approve an application for a site certificate if it finds that its standards have been met. The standards therefore govern whether a site certificate application is to be approved or rejected. If the Council makes affirmative findings on all the 1255 165 standards, it is duty-bound to approve the application. If the Council does not make af firmative findings on all the standarda, it is duty-bound to reject the application. -

Compliance with Council standards is being judged in this document by a " literal" or " strict" interpretation of the requirements of the standards. Attempts at meet-ing standards or significant compliance with them is insufficient. A standard is not met unless there is reliable, probative, and substantial evidence in the record on which specific findings of f act can be made. The comments in the orders adopting the general and specific standards are significant indicators of Council intent.

C. Relationship Between Specific and General Standards Must the specific standards be satisfied before an af firmative finding can be made on the general standards? Put another way, can a general standard be met by evidence that does not meet the requirements of a corresponding specific standard? Could the applicant ignore a specific standard and choose its own method to prove ccmpliance with a general standard?

Specific Standard 345-76-015(3) r.nswers a related question. It says proof of compliance with three of the five s ubj ects the specific standards address (public health and saf ety, ability to finance, and ability to construct and operate) is suf ficient proof of compliance with the corres-pending general standscds. Prcof of compliance with specific standards dealing with the other two subjects (economic pru-dence and environmental impacts) is not necessarily sufficient to satisfy the corresponding general standards. More evidence may be required. Specific standard 345-76-015(3) does not answer the question of whether compliance with the specific standards is a prerequisite to an affirmative finding on the general standards.

The DOE suggests that an af firmative finding can be made on the general standard dealing with ability to finance without meeting the specific standard on ability to finance.

But it also argues that the Council cannot make an affirmative finding on the general economic prudence standard without first finding that the specific standards on economic prudence have been met. No persuasive reason was shown why proof of compli-ance with specific stand- is required for one general stan-dard and not required fc. .ather. DOE Opening Brief , pp.192, 199; DGE Memorandum in Support of Opening Brief, p. 22.

A look at tae language in the specific standards reveals the Council's desire to be supplied with the information required in the specific standards. Phrases like the " Council will require ," " Council must find ," and " applicant mus t" are i2bb 166

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f ound throughout. Compliance with the specific standards is mandatory,, not directory.

D. Site Certificate Conditions If a site certificate issues, ORS 469.400(3) requires it to contain conditions for the protection of public health and saf ety. The site certificate must also require compliance with state laws and Siting Council Rules. An issue regarding the proper use of site certificate conditions presents itself:

May conditions be used in determining whether affirmative findings can be made, or may they be used only af ter af firm-ative findings have been made?

The DOE argues that conditions can be used to satisf y requirements of a standard. That is, if proof of compliance with the requirements of a standard is not adequate, the f ailure can be excused if a protective condition is added to the site certificate. Applicant takes the same position by recommending a condition in the site certificate to satisfy compliance with the ability to finance standard. DOE Memo-randum, in Support of its Cl/ining Brief, p. 7; Applicant's Proposed Findings of Fact on Demand, Econ. Prudence, and Ability to Finance, p. 95 and 96; Applicant's Opening Brief on Demand, Econ. Prudence , and Ability to Finance , p.100.

Using certificate conditions to satisfy requir ents of a standard raises several questions: May a conditir.: be used to overccme a minor f ailure of proof, or also to c vercome a majou lack of proof? May a condition remedy a lack of proof on standards of lesser controversy, or may a condition remedy a f ailure of proof regarding a major standard? If a differenti-ation is made among major-minor ! ailures, and among various standards, where should the line of differentiation be drawn?

If a condition is used to satisfy the requirements of a standard, must the hearing ba reopened later?

The difficult decisions necessary to answer the f oregoing questions are avoided in this document by deciding that certificate conditions are available only af ter the standards have been met. The standards announce the criteria by which applications wil. be judged. That j udgment should be made by determining whethet each standard has been met, not by deciding whether adequate site certificate conditions can be drafted. Also, nn authority has been cited indicating the Council has authority to use site cettificate conditions to satisf y requirements of standards.

E. Evidence in Record As stated, the Council must make af firmative findingr before a certificate can be approved. The findings must be b

{2DD

based on evidence in the record. Unless a standard indicates otherwise, evidence supporting an affirmative finding of f act need not come from applicant. Existence of the evidence in the record is sufficient.

F. Burden of Proof and Evidentiary Rule The followi's position taken in the DOE memorandum filed with its opening brief, at page 3, is adopted:

The Oregon Administrative Procedures Act (ORS Ch. 183) is silent regarding the burden of proof in a contested case procceding. It is generally held that, absent a statute, the burden of proof is considered to be upon the party asserting the affirmative of an issue before an administrative agency, just as it would be in a court proceeding. (Citations omitted.]

The Ccuncil must make many affirmative findings of fact before a site certificate application can be approved.

Absent a statute or rule to the contrary, the parties desiring the Council to make those positive findings have the burden to provide the evidence on which those findings can be made.

Opponent-intervenors do not have a burden to demonstrate that a standard has not been met.

On page 6 of the Order Adopting Standards (General),

the Council comments:

The evidentiary test is not a preponder-ance tesr- TMs council is not required to weigh the evidence on each particular .

standard and determine which party has prevailed. The council is required to review the whole record and base each of-its findings as to whether a standard has been met on reliable probative and substantial evidence.

The " evidentiary" test, for the purposes of this proceeding, is neither a " preponderance" test, nor is it any other test along the " continuum of proof."

The findings and conclusions in this document are made under the assumption that they are proper if consistent with statute and decisional law, as well as the Council's rules, and are based on reliable, probative, and substantial evidence.

ORS 183.4 50 (5) .

1255 !68 G. Descriotion of Record and Abbreviations Division 25 of Oregon Administrative Rules tells applicants what to include in an application for a site certifi-cate for a thermal power plant. In this proceeding, the appli-cation is contained in two bound volumes of material and three volumes of appendices. Evidence sponsored by applicant to support approval of the application is identified as Exhibits A-1 through A-7 2.4 Evidence sponsored by the staff of the Siting Council is identified as Exhibits S-1 through S-67.

Evidence sponsored by other intervenors is identified as Exhi-bits I-l through I-60. Written evidence sponsored by members of the public who did not acquire party status is identified as Exhibits P-1 through P-12. Evidence sponsored by the Council itself is identified as Exhibits C-1 through C-6.

The transcript of the original hearing runs 94 0 pages and is found in five volumes. The transcript in the reopened hearing (since the matter was remanded by the Oregon Supreme Court) runs 12,575 pages, and is contained in 74 volumes.

At the end of many paragraphs in this proposed order are ref erences to portions of the record where the reader can find evidence on the subject discussed. The references are not intended to be a complete listing of all evidence in the record on each subject, but are intended to aid the reader who is not familiar with the entire record, but would like to study a matter in mvre detail. The following abbreviations are used in those refq?ences:

SCA - Site Certificate Application. Unless otherwise i.idicated, the references are to page numbers. The number eding the hyphen denotes the chapter , and the number af ter hyphen denotes the page number. For instance, reference SL 12 -38 is to page 18 of chapter 13 in the site certificate ap lication; Sec. - Section of a document cited. If to the SCA,

, aamber before the period indicates the chapter cited; Fig. - Figure; App. - Appendix; Att. - Attachment; Exh. - Exhibit; 4 The application and amendments to it were received into evi-dence in Exhibits A-1, A-5, A-6, A-8, A-26, and A-71.

-1 : \z65 \64

Sch. - Schedule; Tr. - Transcript; et seq. - The topic is discussed on the following pages, as well; _

Fo. - Number;

p. and pp. - Page and pages.

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II. DEMAND FOR ENERGY A. Introduction and Overview

1. Overview and Definitions To establish that there is a need for a proposed facility, it must be proved that a demand will exist for the electrical output from the facility, and that the facility will be an economically prudent method of meeting that demand. The demand for the output from the proposed facili ty will now be addressed.

PGE, PP&L, Puget, and PNGC each presented a forecast of future demand for electricity by their customers. Each company prepared its forecast for its own service territory.

The four forecasts were then summed for the applicant composite forecast. The DOE presented a forecast it prepared for the state of Oregon. It utilized the Northwest Energy Policy Project (NEPP) moderate growth scenario to derive a forecast for the West Group Area. The Public Utility Commissioner of Oregon (PUC) presented a forecast prepared by his staff for the Oregon commercial and industrial customers of PGE and PP&L.

The PUC then used forecasts prepared by others for the remaining customer classes and service territories to derive a total fore-cast for the combined service territories of applicant. NEPP presented a forecast for the states of Oregon, Washington, and Idaho. Applicant witness McHugh, who wor ked on the NEPP fore-cast, prepared forecasts for Oregon and Washington, based on updates and revisions to the NEPP forecast.

Throughout the discussion of forecast demand, expected resources, and economic prudence, the " Pacific Northwest" (PNW) means the area encompassed by the states of Oregon, Washington, and Idaho. The " West Group" refers to the West Group of the Northwest Power Pool, and encompasses all of the state of Washington, most of the state of Oregon, the portion of northern California served by PP&L, the portion of western Montana west of the Continental Divide served by PP&L and the Bonneville Power Administration (BP A) , and BPA loads in southern Idaho.

_9 _

i255 i70

It does not include any loads of Idaho Power Company in eastern Oregon or southern Idaho. Exh. C-1, p. V; Tr. 7251, 9807.

A utility company has an obligation to supply the firm _

energy demanded by its customers. As used in this document, a utility company's " ability to meet energy requirements" is its capability to supply the total number of kilowatt hours of electricity demanded by its customers in a particular time period. The rate at which the electricity will be demanded during a time interval will vary. The utility company's resource capability to meet the maximum rate of demand within ~a time period is its " peak capacity."

A kilowatt hour (kwh) is one kilowatt of electricity supplied to or taken f rom an electric circuit steadily for one hour. Average yearly demand is the total kilowatt hours demanded in a year divided by 8,760, the number of hours in a year.

In this section, the forecasts will be described; their legal sufficiency will be tested; the differing rates of load growth will be listed; and expected demand will be matched to resources. A party's compliance with General Standard 345-75-025 (1) (a) will be determined by comparing its primary forecast with the requirements of the standard. Secondary forecasts were offered as checks on the reasonableness of the primary f orecasts, not as proof of compliance with the standard.

2. Applicant Forecasts PGE utilizes end-use analysis in constructing its primary forecast, called the " company composite" forecast.

End-use analysis considers the uses to which the electricity will be put and f actors aff ecting those uses. As a check on the reasonableness of its camposite f orecast, PGE prepared an econometric forecast. The econometric forecast projects con-sumption to grow at rates comparable to the ccmposite forecast.

Puget's forecasting methodology is similar to PGE's in that Puget also utilizes end-use analysis in its primary forecast. But Puget uses trending of historical data for its f orecast of commercial sector consumption. Puget also prepared an econometric forecast to check the reasonableness of its primary forecast, and the econometric forecast projects growth rates comparable to the primary forecast.

The PP&L forecast is based on extrapolation of his-torical trends of electricity usage by its customers. The PNGC forecast is the composite of its 17 member cooperatives, all of whom use time-trend analysis to derive their forecasts.

'I 'L SJ' i 7 I

Dr. Kent Anderson, of National Economic Research AJsociates (NERA), prepared a forecast to check the reason-ableness of the applicant forecasts. His forecast is econo-metric and utilizes data f rom Oregon and Washington only.

3. DOE Forecast The DOE prepared an econometric forecast for all customer sectors in Oregon. It also presented an end-use fore-cast f or residential consumption in Oregon. The DOE-preferred f orecast f or this proceeding consists of the end-use residen-tial forecast and the econometric f orecast for the other sectors.

4. NEPP Forecast The Pacific Northwest Regional Commission, con-sisting of the governors of Oregon, Washington, and Idaho, and a federal representative appointed by the President of the United States, sponsored a comprehensive study of the energy picture in the PNW. NEPP was created to perf orm the study, which includes a forecast of demand for energy.

NEPP started work in November, 1975, and published its final report in May, 1979. Several experts from the BPA worked for NEPP, including the NEPP Director, Myron Katz. NEPP also hired independent cons ultants to perf orm work . W. Michael McHugh was a major contributor to the demand model used in the NEPP forecast. He also updated and revised the NEPP forecast and presented the results in this proceeding. Exh. A-43; Exh.

C-2; Tr. 6858-65, 9473.

The NEPP forecast lists three alternative growth scenarios - low, moderate, and high. Mr. Katz believes the moderate growth scenario is the one most likely to occur.

Tr. 6928-29.

5. PUC Forecast Since the PUC forecast is only for the Oregra commercial and industrial customers of PGE and PP&L, other forecasts are needed to have a complete forecast for appli-cant's service territory. The PUC uses the DOE end-use forecast for Oregon residential customers (with a slight modification) , the PP&L forecast for its loads in Wyoming, Montana, and Idaho, a time-trend proj ection for the balance of PP&L's Oregon / Washington / Calif ornia area, and the Puget and PNGC forecasts. The PUC uses this combination of forecasts to match forecasted demand with resources.

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3. The Forecasts and General Standard 3 4 5-75-0 25 (1) (a)

1. The Standard One of the affirmative findings of f act which must precede approval of a site certificate application is a finding that:

There will be a demand for the energy to be supplied by the proposed energy facil-ity, demonstrated by demand forecasting evidence which:

(A) Identifies the contribution of major customer classes to total demand; and (B) Explains how total demand results' from assumptions made regarding various factors which influence energy demand including, but not limited to, population levels, personal income levels, employ-ment levels, energy prices and the eff ects of conservation and alternative energy programs likely to be in effect during the demand forecasting period.

2. Portland General Electric Co.

a. Forecast Description The PGE end-use forecast is for the period 1976 to 1997. A separate, more detailed forecast is presented for the first five years of the forecast period.

For the residential. sector, the number of customers -

and use-per-customer are the major components of the forecast.

In the five-year forecast proj ections of population levels, new custcmer connections, housing demolitions, and vacancy rates are used to derive the estimated number of customers, while in the 20-year forecast a long-term population projection is utilized.

The five-year forecast utilizes direct customer input to derive a f orecast of industrial sector demand. In the 20-year forecast, all nonresidential customers are combined, then disaggregated into 13 customer categories. Their electri-city demand is forecast on the basis of projected economic activity per category in the PGE service territory.

The nonresidential excluding Schedule 89 sector is treated basically the same in both the five-year and the 20-year f orecasts . Both are driven by projections of customer 1255 173

output and electrical usage intensity. SCA 5-6 through 5-9; SCA App. C.1, PGE, Executive Summary.

b. Identification of Customer Classes The PGE composite (end-use) forecast dis-aggregates customers into three classes: residential, Schedule 89 (large industrial accounts taking service at transmission voltage), and non-residential excluding Schedule 89. Cons umption of electricity by residential customers is f orecasted to in-crease 2.3 percent per year during the 20-year forecast period.

The corresponding annual growth rate for the non-residential excluding Schedule 89 sector is 5.8 percent, and for the Sched-ule 89 sector it is 7.1 percent. SCA App. C.1, PGE, Executive Fummar y , pp . xi x , xx.

c. Explanation of How Factors Affect Demand (1) Population PGE projects population in its service territory to increase at approximately its historical annual ra e: 1.8 percent. In the first five years of the forecast period, the population f orecast is used as a check against PGE's projection of the number of residential customers in its service territory. In the remainder of the forecast period, the population estimate is used to project housing units. The number of housing units f orms the basis for the projection of expected customers. SCA App. C.1, PGE, pp. 11, 19, 194.

(2) Personal Income, Employment Levels, and Energy Prices.

Since 1973, several events have affected customer usage of energy. In 1973, adverse hydroelectric condi-tions, followed by the oil embargo, encouraged conservation. An economic recession in 1975-76 lowered real income levels and raised the unemployment rate in Oregon.5 During the 1976-77 water year, streamflow levels were below normal. During these years the real prices of electricity, natural gas, and oil increased, contrasting with the previous downward trend. The impacts of these factors were not quantified individually, but PGE attempted to incorporate their total effect by using recent usage levels in each customer class , and by utilizing end-use analysis in the residential sector. SCA App. C.1, PGE, pp. 13, 14.

Real electricity price increases also affect the demand forecast by encouraging conservation. Conservation ef f orts , in turn, reduce forecasted total demand. SCA App. C.1, PGE, p. 65.

5"Real" income is income that has been adj usted to a ref erence time to remove the eff ects of inflation.

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Projections of employment levels, productivity, and energy usage intensity drive the forecast for the non-residential excludir.: Schedule 89 sector. Tr. 7954 -55.

The forecast is the result of interaction among many factors. Among those f actors are personal income, employment levels, and energy prices.

(3) Conservation In the residential sector, PGE estimates specific conservation actions and greater appliance efficiency will reduce electricity consumption below what it would otherwise be. Included among the actions are increased installations of insulation, lower thermostat settings on hot water heaters, increased use of shower flow restrictors, and increased use of heat pumps. SCA App. C.1, PGE, pp. 70-89.

Similarly in the commercial sector, expected conserva-tion measures reduce the demand forecast. Specific conservation actions assumed include lowering heating thermostat sertings, raising cooling thermostat settings, reducing lighting loads, and modifying existing buildings to make them more energy-efficient. Resulting total electricity usage in the commercial sector is expected to be 20 percent less in 1982 and 35 percent less in 1997 than extrapolated pre-1973 levels would show.

SCA App. C.1, PGE, pp. 93-96.

For the industrial sector (Sch. 89) , five industries were isolated and the impacts of conservation on future con-sumption of electricity were estimated. Specific conservation actions and incentive programs were analyzed for each industry group. Estimated savings for each industry group in 1995 ranged from an eight percent reduction to a 14 percent reduc-tion from what consumption would otherwise be. SCA App. C.1, PGE, pp.98-103.

(4) Alternative Energy Programs PGE expects the installation of solar units, used to augment water and space heating, to reduce demand for electricity. PGE estimates that by 1997 twenty percent of homes will have solar-assisted water heaters and five percent of homes will have solar-assisted space heating systems. SCA App. C.1, PGE, pp. 73, 87.

d. Conclusions The PGE forecast identifies the contribution of major customer classes and explains how forecasted demand results from assumptions made regarding the factors specified in General Standard 34 5-75-025 (1) (a) (B) .

• l}$3 )/}

3. Pacific Power & Light Co.

a. Description of Forecast The forecast is based on extrapolation of historical trends of the period January,1963 to June,1977.

The historical data base is adjusted so it will reflect what is considered to be a normal time period. An exponential curve is then fitted to the historical data and extended to provide a forecast of the future. PP&L divides its service territory into four segments: Oregon / Washington / California, Montana, Wyoming, and Idaho. Usage in each segment is forecasted separately. In a supplement to its basic forecasting evidence, PP&L discusses various f actors that could influence the forecast and considers whether those factors dictate changes in its basic forecasting method. SCA App. C.1, PP&L, p. III-1, 2, App. A,

p. 2, App . B , p. 1 et seq.

b. Identifica' a of Customer Classes The forecast itself does not separate cus-tomers into classes. By analysis performed af ter the forecast was derived, PP&L disaggregates its customers into residential, commercial, and industrial sectors. Historical rates of growth of each sector are used to project future rates of growth.

During the forecast period, PP&L expects sales to customers in the three sectors to grow at the following annual rates-residential, 5.1 percent; industrial, 5.6 percent; comnercial, 6.6 percent. By 1996, the residential and industrial sectors are each expected to consume 35 percent of total sales and commercial customers 30 percent. The PP&L demand forecasting evidence identifies the montribution of major customer classes to total demand. S CA Ap.. C.1, PP&L, App. B, p. 73; Tr. 7376.

c. Explanation of How Factors Affect Demand A basic assumption of PP&L's forecast is that fluctuations in economic, social, political, and behav-ioral variables which may affect the demand for electric power tend to balance out over time. In Appendix B to its forecasting evidence, PP&L discusses each )f the factors listed in General S tandard 345-75-025 (1) (a) (B) . Population and income growth and employment levels are expected to continue at or above histor-ical rates. Real electric prices are projected to increase two percent per year, which is lower than the expected increase in oil and natural gas rates. Conservation is expected to improve through more stringent standards for new buildings and retro-fitting of existing houses. But the resulting reduction in demand will be offset by increases in the percentage of resi-dences using electricity to heat space and water. Also, the historical data base is not adjusted for the conservation that occurred as a result of the 1973, 1974, and 1977 low water 1255 176

years, thereby projecting that conservation to continue into the future. Solar water and space heating and the increased une of heat pumps are the alternative energy resources expected to affect demand for electricity. S CA App . C .1, P P& L , p . III-1.

The PP&L forecast is not derived f rom explicit projections of the behavior of the various factors. But by explaining that i ts forecast is a matter of fitting a line to historical data, and by explaining that the forecast assumes that the f actors causing the historical data to be what they are, will, in the aggregate, behave in a similar manner in the future, PP&L has explained how the forecasted demand results from assumptions about the factors listed in the standard.

d. Conclusions PP&L's forecasting evidence identifies the contribution of major customer classes and explains how fore-casted demand results from assumptions made regarding the factors specified in General Standard 34 5-75-025 (1) (a) (B) .

4. Puget Sound Power & Light Co.

a. Forecast Description Puget prepared a forecast of electricity sales for the period 1978 through 1992 for each of its customer sectors: residential, commercial, and industrial. The forecast was then extended to 1997 by trend extrapolation. The sem of the three sector forecasts comprises the official company forecast. The residential forecast is based on end-use analysis.

The commercial forecast is the result of trending historical data, adjusted for income levels, energy prices and population growth. Puget derived its industrial forecast from knowledge of and information from the relatively small number of those customers. Puget also constructed ar. econometric forecast to test the reasonableness of its main forecast. SCA App. C.1, Puget.

b. Identification of Customer Classes As stated in the previous paragraph, tP three major customer classes contributing to total deman( _&e the residential, commercial, and industrial sectors. Currently, the residential sector accounts for approximately 56 percent, the commercial sector 25 percent, and the industrial sector 19 percent of the company's electricity sales. Between 1978 and 1992, Puget projects sales to custcmers in the three sectors to grow at the following annual rates: residential, 4.3 percent; commercial, 6.6 percent; and industrial, 5.2 percent. SCA App . C .1, Puget , pp. 4-5, Exh. 3.

)2bS }((

c. Explanation of How Factors Affect Demand (1) Population Washington population forecasts issued by the BPA and the Washington State Office of Program Planning and Fiscal Management are used to proj ect the number of residential customers Puget will serve each year of the fore-cast period. Residential customers are f urther divided into subgroups, and the forecasted usage per customer is multiplied by the number of customers to obtain the total residential usage forecasted. SCA App. C.1, Puget, p. 11.

(2) Perscnal Income and Emplognent Levels Puget ass umes the historical 2. 5 per-cent per year rate of growth in personal income will continue throughout the forecast period. An increase in demand for electricity in the residential and commercial sectors will r es ul t . Historical employment trends in Puget's service terri-tory are assumed to continue into the f uture. SCA App. C.1, Puget, pp. 7, 8, Exh. 22, p. 1.

(3) Energy Prices In the residential sector, expected f uture energy prices are considered in estimating f uture pene-tration of electric space heating into the space heating market.

In the industrial sector, expected prices of electricity, natural gas, and oil are considered in determining whether there will be substitution of electricity f or other f uels. SCA App. C .1, Puget, pp. 6, 7.

(4) Conservation Puget assumes building design changes and insulation standards will improve energy usage ef ficiencies throughout the forecast period. Voluntary conservation efforts will continue. Conservation efforts and actions will decrease the rate of energy load growth. Puget does not quantify the effects of conservation, but considers it j udgmentally in its forecast. SCA App. C.1, Puget, p. 9.

(5) Alternative Energy Programs Puget assumes no alternative energy programs will significantly affect its load growth during the forecast period. Therefore, potential alternative energy programs are not included in its forecast. SCA App. C.1, Puget, p. 10-11.

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d. Conclusions Puget's forecasting evidence identifies the contribution of major customer classes and explains how total demand results from assumptions regarding the factors specified in General Standard 34 5-75-025 (1) (a) (B) .

5. Pacific Northwest Generating Co.

a. Forecast Description All 17 members of PNGC are financed by loans from the Rural Electrification Administration (RE A) , and prepare forecasts according to guidelinas established by the REA. Each uses a time-trend analysis in which a mathematical relationship is established between electricity sales and time. A logarith-mic or curvilinear trend curve is fitted to the historical data.

Any adjustments for conservation, energy prices, or other factors are then made. Historical data through 1976 are used by 16 mem-bers, and through 1975 by one member. SCA 5-12, 5-13.

b. Identification of Customer Classes Each ramber projects future electricity consumption for four customer classes: residential, small commercial, large commercial, and irrigation. Totals for all 17 members are not given, nor are annual growth rates for all members given, but the record contains sufficient information from which those numbers can be calculated. The PNGC forecasts do identify the contribution of major customer classes to total demand. SCA App. C.1, PNGC, Atts. 3,4; Exh . A-41.

c. Explanation of How Factors Affect Demand Since PNGC's forecast is the result of trending analysis, a basic assumption is that electricity sales will continue into the future in a manner consistent ,ith past patterns. Except for adjustments to the forecast owing to important factors expected to occur in the future but which were absent in the past, or which are expected to change or disappear from historical patterns, the effects of the variou:

factors are assumed to offset one another. SCA App C.1, PNGC,

p. 4.

Most PNGC members considered many factors that might cause demand in the future to be different than that indicated by past trends, including the f actors listed in General S tan-dard 34 5-75-025 (1) (a) (B) . Based on a consideration of these factors, adjustments were made to their forecasts. Neverthe-less the adjustments usually offset one another. None of the adjustments was of major significance. SCA App. C.1, PNGC; Exh. A-41.

As was explained in the concluding paragraph of the analysis of the PP&L forecast, a trend forecast is not derived from explicit projections of how various factors will behave.

But by explaining that its forecast is a matter of fitting a line to historical data and by explaining that the forecast assumes that the factors causing the historical data to be what they are, will, in the aggregate, behave in a similar manner in the future, PNGC has explained how the forecasted demand results

-from assumptions about the factors listed in the standard.

d. Conclusions The PNGC forecasting evidence identifies the contribution of major customer classes and explains how fore-casted demand results from assumptions regarding the factors specified. in General Standard 34 5-75-025 (1) (a) (B) .

6. Public Utility Commissioner

a. Forecast Description PUC witness Dr. Zepp offers an econometric forecast for PGE's service territory and the Oregon portion of PP&L's service territory. The forecast is for the commercial and industrial customer classes of each company and encompasses the period 1977 through 1997. The PUC forecast cdopts the DOE Oregon residential forecast, except that a PUC forecast of PGE residential sales in 1979 is used. Dr. Zepp uses a time-trend forecast for P7&L's service territory in California and Washington. The PUC forecast then utilizes the forecasts prepared by Puget and PUGC for their service territories and PP&L for the remainder of # ts service territory, to encompass the complete territory served by applicant. Whether the other forecasts utilized by the PUC to make his forecast complete meet General Standard 34 5-75-025 (1) (a) is discussed in the cections dealing with those forecasts. This section examines whether the PUC's econometric forecast of the Oregon commercial and industrial customers of PGE and PP&L meets General Standard 34 5-75-025 (1) (a) . Exh. I-4 2, p . 4; Exh. I-4 3, Revised Table 12.

b. Identification of Customer Classes The forecast clearly is for two customer classes: commercial and industrial. In the forecast for PGE, contribution to total demand is listed by commercial and industrial tariff schedules. For PP&L the contribution of the commercial and incustrial classes together is shown. Sales in average megawatts are shown for each ic.apany for each year 1980 through 1997. The forecast does identify the contribution of the customer clGsses it anay ras. Exh. I-42, p. 32-33.

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c. Explanation of How Factors Affect Demand (1) Population, Personal Income, and Employment Levels

-- Demand for electricity is affected by interaction among various factors. Two factors used in creating the PUC forecast are value-added in manuf acturing and personal income. Dr. Zepp obtained the values fo: those two variables f rom the DOE. The DOE in turn derived them f rom BPA population and employment projections. Population, personal

- income, and employment levels are used as raw data inputs to the forecast of total demand. Exh . I-41, p . 8 ; Tr . 90 0 3 , 9013.

(2) Energy Prices The econcmetric model uses four equa-tions, and real electric and natural gas prices are part of the general specifications for all four. Exh. I-4 2 pp. 5, 9-19.

- (3) Conservation and Alternative Energy Programs These factors affect demand to the extent they were reflected in 1977 actual data, and by the decrease in future demand as a result of rising real electric prices. Tr. 9057-58, 9075.

d. Conclusions The forecasting evidence of the PUC identi-fies the contribution of major customer classes and explains how total demand results from assumptions regarding t's f actors specified in General Standard 34 5-75-025 (1) (a) (B) .

~

7. Department of Energy

a. Forecast Description The DOE presented an econometric forecast for residential, commercial, and industrial customers. The DOE also presented cn end-use forecast for residential customers.

The " official" DCE forecast is econometric for the commercial and industrial sectors and end-use for the residential sector.

(No DOE witness explicitly stated that the end-use residential forecast supersedes the econometric residential forecast, but that clearly was the DOE position. See Exh. S-30, Timm, p. 10; Tr. pp. 8736, 8911-13, 8924-35; DOE reply brief, p. 4.) Exh.

S-3 0, Timm , Fang , and Nadai Testimony , and Schs. 1F, IT.

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b. Identification of Customer Classes The basic framework of the DOE econometric forecast presented in this proceeding comes f rom a model de-scribed in a document entitled " Energy Demand Forecasting Model f or Oregon" dated February, 1977. That model dealt with elec-tricity, natural gas, and petroleum. Usage was disaggregated into residential, commercial, industrial, transportation, agri-c ultur e , and other sectors. The evidence presented in this proceeding concentrated on electricity usage, and on the resi-dential, commercial, industrini, street and highway lighting, and irrigation sectors. The end-use forecast is only for the residential sector. Exn. S-30, Fang, Schs. 1F, SF.

The DOE forecast identifies the contribution of major custcmer classes to total demand.

c. Explanation of How Factors Affect Demand (1) Population, Employment Levels, Personal Income, and Energy Prices These factors are input assumptions in the econometric forecast. Population is also a data input to the housing stock submodel of the end-use residential forecast.

Exh. S-30, Nadal, p. 5 , F ang , p . 7.

(2) Effects of Conservation and Alternative Energy Programs The aconcmetric forecast does not explicitly consider consers 'cion or alternative energy programs.

The end-use residential forecast projects that thermal insula-tion retrofitting, higher insulation standards for new houses, and greater appliance ef ficiency will reduce consumption of electricity. It also assumes solar installations will assist in heating space and water. Exh. S-30, Timm, p. 9, Nadal p. 33 et seq.

d. Conclusions The DOE forecast identifies the contribution ci major customer classes and explains how assumptions about

. factors listed in General Standard 3 45-75-025 (1) (a) (B) af f ect total demand.

8. Northwest Energy Policy Proj ect

a. Forecast Description The NEPP basic forecast uses the econometric approach generally, but also utilizes other techniques, parti-cularly end-use analysis in the residential sector. Alternative 1255 182

assumptions about the future are made and three scenarios listed: low, moderate, and high growth. The forecast is for the states of Washington, Oregon, and Idaho. When the totals f or e'ch of the three states are summed, the f orecast is for the PNW. I n J uly , 1978, and again in September,1978, the NEPP moderate growth scenario forecast was adjusted and updated.

The revisions resulted in a small increase in the forecasted rate of growth of electricity demand, from 2.93 percent per year to 2.94 percent per year for the PNW. The historical period used in the forecast is 1964 through 1974, and the f orecast extends f rom 1974 to 2000. Exh . C-1, pp . v , viii ,

xv, xvi, Table V-18; Exh. C-3 ; Exh. C-4.

b. Identification of Major Customer Classes The basic NEPP f orecast is for electricity and other energy forms, and includes the transportation sector. Pertinent to this proceeding, customer classes are disaggregated into residential, commercial, industrial, and irrigation sectors. The contribution of each sector to total demand is separately listed. The forecast projects residential usage to increase at an average rate of 4.2 percent per year, commercial usage to increase at an average rate of 2.15 percent per year , industrial usage to increase at an average rate of 2.38 percent per year, and irrigation usage to decrease at an average rate of 1.01 percent per year. Exh . C-1, pp. v , 17, 20-27; Exh. C-4, Table 2.

c. Explanation of How Factors Af f ect Demand (1) Population Population levels are the basis for projections of the number of households in the PNW. An i n-crease in population causes an increase in demand for energy.

Alternative projectiona concerning future population levels, i ong with alternative projections about other variables, are what diff erentiate the low, moderate, and high growth scenarios.

Exh. C-1, pp. vii, 32; Exh. C-3, p. 1.

(2) Personal Income, Employment Levels, and Energy Prices Per capita income is a variable in the demand forecasts for the residential, commercial, and indus-trial sectors . Alternative income projections are made for the low, medium, and high growth scenarios. Employment levels for each scenario were supplied by BPA and are used as variables in the commercial and industrial sector f orecasts. In the resi-dential sector, electricity and natural gas prices are vari-ables in the forecasts of appliance and residual electricity cons umption . In the commercial and industrial sectors, elec-tricity, natural gas, oil, and coal prices are variables used 1255 18,5

to forecast demand for electricity. Exh. C-1, pp. 36-41, 46-48, 60-61, 64, 69-70, 100-104 ; Tr. 7131.

(3) Conservation The majority view of the NEPP experts is that natural adoption of conservation measures will cause 12 percent less electricity to be consumed in the year 2000 than would otherwise be consumed, assuming the moderate growth scenario materializes. The primary causal factor is the response to increases in energy prices. Also, conservation activities in the past are reflected in historical data, and the forecast projects the historical conservation trend to continue. NEPP also projects increased efficiency over the forecast period of 0.4 percent by the four major home appli-ances included in its residential forecast. Tr. 6929-6943.

(4) Effects of Alternative Energy Programs The NEPP assumes that alternative energy programs will not contribute to meeting demand during the fore-cast period. But if they do contribute, the contribution will occur near the end of the forecast period. Tr. 6944 et seq.,

7115-16.

d. Conclusions The NEPP forecast identifies the contribu-tion of major customer classes to total demand and explains how total demand results f rom assumptions made concc ,:ning the various factors specified in General Standard 34 5-75-025 (1) (a) (B) .

9. Mr. McHugh Mr. McHugh, Vice President of Applied Economic Associates, Inc., updated the data base for the NEFP forecast to include actual 1976 data and removed the consumption of the aluminum industry f rom the data base and the foracast. His evisions to the NEPP moderate and high growth forecasts for Oregon increase growth rates slightly. Going a step further, Mr. McHugh updated and re-estimated the NEPP model equations for the commercial and industrial sectors. The forecast growth rates for Oregon then become 3.98 percent per year , moderate growth scenario, and 5.66 percent per year, high growth scenario. The corresponding growth rates for Washington are 4.09 percent and 5.88 percent per year. Exh . A-4 3 , pp . 4 -6 ;

Exh. C-1, p. 120; Exh. C-4, p . 1.

The forecast presented by Mr. McHugh is an updated and revised version of the NEPP forecast. The analysis of whether the NEFP forecast meets the requirements of General Standard 34 5-7 5 -0 2 5 (11 (a ) also applies to Mr. McHugh's forecast.

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10. Summary The forecasts of PGE, PP&L, Puget, PNGC, the DOE, the NEPP, Mr. McHugh, and the PUC all identify the contribution of major customer classes and explain how the forecasted demand results f rom assumptions made regarding the f actors listed in General S tandard 345-75-025 (1) (a) (B) .

C. Forecasted Rates of Growth

1. Applicant Forecasts PGE - PGE's official forecast is that its energy loads will grow 4.5 percent per year between 1976 and 1982, 5 percent between 198 2 and 1997, and 4.9 percent for the entire 1976 through 1997 forecast period. By custcmer sector, the annual growth rates for the 1976 through 1997 forecast period are: residential, 2.3 percent; Schedule 8 9, 7.1 percent; no n-residential excluding Schedule 89, 5.8 percent. PGE's econo-metric forecast projects rates of growth at va-ious confidence inter vals . With 80 percent confidence, it forecasts the yearly growth rate in electricity sales will be between 3.2 percent and 6 percent, with a mean rate of 5 percent. The PGE econo-metric single point forecast is 4.3 percent. SCA App. C.1, PGEt pp. xvii-xviii.

PP&L - Energy sales to customers are expected to increase an average of 5.7 percent per year during the 1978-1998 forecast period. In the Oregon / Washington / California segment of its service territory (which accounts for over three fourths of its total sales) the expected growth rate is 5. 2 parcent. By company-wide customer sectors the forecacted annual growth rates are: residential, 5.1 percent; commercial, 6.6 percent; indus-trial, 5. 6 percent. SCA App. C.1, PP& L, p. IV-1 an d App . B , p . 73.

Pucet - Puget's official forecast is for an aver-age annual growth in energy sales between 1976-7 7 and 19 96 -97 of 5 percent. Between 1976 -77 and 198 6 -8 7 the forecasted annual growth rate is 5.3 percent; the growth rate then drops to 4.8 per-cent for the last decade of the forecast period. By customer sectors, between 1978 and 1992, the forecasted annual growth rates are: residential, 4.3 percent; commer ci al, 6.6 percent; industrial, 5.2 percent. Puget's econometric forecast projects a range of possible annual growth rates between 1977 and 1997 of 3.5 percent to 6.3 percent. The base case econometric fore-cast is 5 percent growth per year. SCA hop. C.1, Puget, p. 3 and Tables 3 and 11 (Tables 3 and 11 are also referred to as Exhs. 3 and 11, and are found at the back of the Puget Sec. of App. C.1).

PNGC - PNGC forecasts that the energy loads of its members will grow an average of 10.8 percent per year between 1976 and 1981, and slow to an average growth rate of 7 percent between 1981 and 1995. The annual average rate of 1255 185

growth for the 1976 through 1995 forecast period is not stated in the record, but it can be determined f rom the megawatt hour data in the record. The forecast period annual growth rate is 7.9 percent. SCA 5-12; SCA App. C.1, PNGC, Table la.

NERA - Dr. Kent Anderson's NERA forecast prasents a range of average annual growth rates between 1976 and 1991 of 3.99 percent to 5.66 percent per year. The midpoint is 4.82 percent per year. SCA App. C.1, NERA, App. B, Table S-1 on

p. 12.

Acolicant Composite - The composite forecast for average annual growth in energy loads of applicant's customers is 5.4 percent per year between 19 75 -76 and 198 9 -9 0 . S CA 5 -14 .

2. Other Forecasts DOE - The DOE forecasts an average energy load growth in Oregon between 1977 and 1997 of 2.6 percent. By customer sectors, the forecasted growth rates are: residential 1.8 percent; commercial, 3.3 percent; industrial, 2.9 percent.6, Ex h . S -3 8 .

NEPP - For the PNW, the original NEPP forecast projected yearly electricity consumption to grow 1.4 3 percent low growth scenario, 2.93 percent moderate growth scenario, and 4.38 percent high growth scenario. The forecast is for the period 1974 -2000. The rates of growth for each state individ-ually deviate very little from the overall rate for the PNW.

The moderate growth forecast was updated in July and September ,

1978, but the forecasted rates of growth changed very little.

The main effect was to move some of the growth to earlier in the forecast period, thereby necessitating energy facility construction earlier. By major customer s3ctor, the moderate growth scenario forecasted rates of yearly growth for the ENW are: residential, 3.9 percent; commercial, 2.18 percent; '

industrial, 2.65 percent. Exh. C-1, pp. 133-159.

McHugh - After revising the NEPP electricity fore-cast, Mr. McHugh projects, for Oregon, an annual energy growtk rate of 3.98 percent under the moderate growth scenario and 5.66 percent under the high growth scenario. For Washington, the corresponding growth rates are 4.09 percent and 5.83 percent per year. Ex h . A-4 3 , pp . 5-6.

6 In Schedule 13F to Exhibit S-30 commercial growth is listed as 3 percent, and industrial growth is listed as 2.6 percent.

The DOE later changed its fcrecast, but did not revise Sched-dule 13 F. The revised growth rates for those two sectors are not in the record. However, Schedule 53F in Exhibit S-35 lists the expected megawatt hours of consumption for 1977 and 1997. By working with those numbers , the average annual rate of growth was calculated.

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PUC - For the 1977-97 period, the PUC forecasts that PGE's commercial and industrial loads will increase an average of 4.8 percent per year. The corresponding growth rate for PP&L's Oregon commercial and industrial loads is 3.7 percent.

Together the average annual growth rate is 4.3 percent. Exh.

I-41, pp. 4-5 ; Exh. I-42, p. 24.

D. Matchina Forecasted Demand to Resources

1. Applicant's Matching of Loads and Resources Assuming critical water conditions, applicant anticipates that it will be 1,386 average megawatts deficient in energy in 1985-86, and 84 5 average megawatts deficient the next year. (Skagit Unit 1 is scheduled to start producing electricity in 1986-87.) That calculation does not include the 600 megawatts applicant can obtain, on a short-term emergency basis, from its oil-fired units such as Beaver, Barborton, and Bethel. Because the expected deficiencies are greater than 600 average megawatts, even using the oil-fired units to obtain the full 500 megawatts will not prevent a deficiency before the earliest possible date for Pebble Springs Unit 1 - 1987.

Assuming that Pebble Springs Unit 1 starts producing electri-city in 1987 and Unit 2 starts producing electricity in 1989, applicant's loads / resources matching produces a deficiency of 560 average megawatts in 1987-88, and fluctuates between a deficiency of 230 to a surplus of 137 average megawatts through 1995-96. Excluding the oil-fired generation, applicant is deficient in peak capacity most years between 198 5-8 6 and 1995-96. The largest peak deficiency is 966 megawatts in 1985-86, and the largest peak deficiency af ter the Pebble Springs Project starts producing electricity is 568 megawatts in 1992-93. If the Pebble Springs Units are not built, appli-cant will be substantially energy and peak capacity deficient during any critical water year between 1986 and 1996. Apnli-cant's matching of leads and resources is for the combineu systems of the four co-owners of the Pebble Springs Project.

S CA Ta ble s 5 -3 , 5 -3a .

In summary, applicant projects an energy deficiency ,

beyond the ability of its own resources, as early as 1985-86, if critical water conditions occur then.7 7 In matching expected demand to generating resources, an im-portant assumption is the amount of hydrogeneration that will be available. Hydrogeneration, in turn, is dependent on the level of streamflows. To assume a critical water period is to assume very adverse streamflows. Applicant, the DOE, the PUC, the NEPP, and Mr. McHugh all assume a critical water period.

The critical period is defined in the PNW Coordination Agree-ment, included as Sch. 3 i n Ex h . S -4 3 .

IZbS 187

2. NEPP Matching of Loads and Resources The NEPP matching of forecasted demand with resources, after the September, 1978, revisions, and assuming the moderate growth scenario materializes, proj ects a demand for the output from Pebble Springs Unit 1 during the 1986-9_0 time period, and a demand for the output f rom Pebble Springs Unit 2 during the 1991-95 time period. The loads / resources matching is for the PNW. The matching assumes the construction of three 500 megawatt plants to serve Idaho's needs, but those plants are not currently scheduled for construction. Ex h . C-4 ,

Table 3; Tr. 6896-99. _

3. McHugh Matching of Loads and Resources Assuming the moderate growth scenario materializes, Mr. McHugh's revisions to the NEPP forecast show a demand for the output from both Pebble Springs Units during the 1986-90 time period. If the high growth scenario comes to pass, the demand date for Pebble Springs Unit 1 moves up to the 1981-8 5 time period, and the demand date for Unit 2 remains in the 1986-90 time period. Exh . A-4 4 , Ta ble WMM-2 (Installation Interval) .

4. PUC Matchino of Loads and Resources PUC Witness Colburn originally suggested that the output from Pebble Springs Unit 1 would be demanded in 1990, and from Unit 2 in 1?9 2. Due to delays in exnected, new generating resources, and a reduction in the extent of parti-cipation in a proposed generating resource, as well as other factors, Mr. Colburn revised his on-line recommendation to 1987 for Unit 1 and 1991 for Unit 2. The PUC recommends flexibility in setting the operating dates so the Siting Council can change the on-line dates if future events show a need to change them.

Exh. I-57, Original Colburn Testimony, p. 2, Second Supple-mental Colburn Testimony, p. 1.

5. Energy Conservation Coalition Matchino of Loads and Resources The ECC did not sponsor a forecast of expected growth rates for applicant's electricity loads. It did, however , through its witness Mr. Robert Murray, match future loads and resources using the NEPP moderate growth scenario.

Mr. Murray calculated a sales figure for the 197 3 -74 base year, then increased that number by 2.93 percent per year throughout the forecast period. The 2.93 percent was the f orecas tr.d growth rate of electricity demand projected by the original NEPP forecast for the PNW. Mr. Murray's matching of loads and resources indicated no need for the Pebble Springs Project in this century. Exh. I-34, pp. 11-14.

1255 18B The NEPP moderate growth forecast was later updated and revised. The forecast .: hanged very little, but greater growth occurs earlier in the t , recast period, causing the demand date for the Pebble Springs Facility to advance. Also, delays and imposed loss of participation have been encountered with planned _

resources. The record does not show what Mr. Murray's matching of loads and resources would reveal if more current information were used.

6. DOE Matching of Loads and Resources During the hearing , the DOE prepared alternauive ~

scenarios, meeting load growth with nuclear-fueled plants in one scenario and meeting load growth with coal-fueled plants in the other scenario. The analysis is for the West Group Area. Under the nuclear scenario, the DOE found a demand for three nuclear plants. The second Plant is Pebble Springs Unit 1, with a demand date of 1995-96. The first and third nuclear plants are Skagit Units 1 and 2 with demand dates of 1993-94 and 1996-97.

Under the coal scenario, a sc ies of six plants would be con- -

structed between 1993-94 and 1996-97. Exh . S-4 3 ; Exh . S-4 6, Sch. 12HN (Revised 11-4 -78).8 The DOE matching of loads and resources, as presented on the record, assumes 4,000 megawatts of electricity could be purchased in an emergency f rom outside the region (but no more than 1,000 average megawatts in one year) , over 900 megawatts could be obtained by curtailing service to BPA interruptible customers, and 250 megawatts could be counted on owing to voluntary reduction in the amount of electricity demanded.

Exh. S-4 3, pp. 44 -4 7 ; Exh. S-4 4 , p. 2 ; Exh. S-4 6, Sch. 7N1 (Revised 11-4 -78) .

In its opening brief on demand issues, the DOE presents other alternative demand dates for consideration. It utilizes its Oregon forecast and the NEPP moderate growth forecast in presenting one alternative. The DOE converts the two forecasts, which encompass the three states of the PNW, to cover the West Group Area. The DOE assumes the same generating resources as applicant, and West Group planning assumptions are used for plant availability. It finds an on-line date for Pebble Springs Unit 1 of 1994-95. Unit 2 is not demanded through 1996-97.

DOE Opening Brief , Demand, pp. 91-93.

In its opening brief on demand issues, the DOE also matches loads and resources for the combined service territory 8 Schedules 7N1,12HN, 13H, 14 N1, 14 N2, and 15H, attached to Exh. S-4 3, were revised in Exh. S-44, and are referred to as Schedule (Revised). All but Schedule 13H were further revised in Exh. S-4 6 and are ref erred to as Schedule (Revised 11-4 -78 ) .

12S5 189

applicant serves. The DOE presents a two-company adjustment case and a four-company case. In the former, adjustments are made to the forecasts of PGE and PP&L only, while in the latter case, adjustments are made in the forecasts of all four project sponsors. In both cases, the adjusted combined loads are com-pared with combined resources and 600 average megawatts are assumed available f rom combustion-turbine plants. The four-company adjustment case shows a demand for the output from Pebble Springs Unit 1 in 1989-90, and for the output f rom Unit 2 in 1993-94. The corresponding demand dates for the two-company adj us tment case are 1988-8 9 and 1991-9 2. DOE Opening Brief, Demand , pp . 13, 16, 17,

7. Uncertainties There are, of course, many uncertainties .1 pre-dicting future events. Uncertainty surrounds other generating resources applicant is counting on. Expected on-line dates for two nuclear power plants in Washington, Skagit Units 1 and 2, have slipped four years, and neither plant has the required licenses and permits. Applicant also relies on the output from two planned coal plants in Montana, Colstrip Units 3 and 4.

The probable on-line dates for those units have already slipped five years, and PGE was required to relinquish half of its interest in them before a Montana state license could be obtained for the proj ect. Also, siting of those coal units is prevented unless judicial reversal is obtained of denial by the Environmental Protection Agency of an Environmental Quality Permit and a state court decision striking down state site certification. Further delays in the Skagit and Colstrip Projects are expected. SCA Table 5-3A; SCA App. D. 1, Table D.

1-1; Tr. 7820, 8237, 8256, 11013, 11631; Exh. A-59, p. 3.

Predicting future demand for electricity also is fraught with uncertainties. Future electricity consumption is dependent on many factors. Predicting how those factors will behave is done with all the skill possible, but still without a great deal of confidence. While each forecaster seems to think the forecast he sponsors is the best available, none expresses much confidence that his forecast will turn out to be exactly correct. Myron Katz reflected that attitude when he testified that all forecasts are primitive and poor, but the NEPP fore-cast is as good as, if not better than, the others. Tr. 6932-33.

E. Analysis of Demand rates Applicant, the PUC, NEPP, and Mr. McHugh all find there will be a cemand for the electricity to be produced by Pebble Springs Unit 1 by the middle or late 1980 's. The earliest date Unit 1 can be built is 1987, coinciding with the demand dates found by the PUC, NEPP, and Mr. McHugh. The DOE sees it differ-ently, however, and presented evidence that the energy from

_29_ i255 i90

Unit 1 will not be demanded until 1995-96. It is necessary, therefore, to choose between the DOE matching of loads and resources and the matching by the applicant, the PUC, NEP P , and Mr. McHugh .

The much later DOE demand date is not entirely due to a lower forecast. The NEPP moderate growth forecast projects electricity demand to grow 3 percent per year in Oregon, while the DOE projects the rate to be 2.6 percent. The DOE then uses the NEPP moderate growth forecast for Washington and Idaho as the basis of its matching of loads and resources. The NEPP finds a demand date for Unit 1 of 1986-90, but the DOE finds the demand date to be 1995-96. The two forecasts are not diff erent enough to explain the significant diff erence in demand dates.

It is not very clear why the DOE demand dates are significantly later than the other demand dates, but sever al identifiable f actors contribute to the difference. The factors either make more resources available to applicant or assume a lower demand under certain circumstances. Several factors will now be discussed individually.

Beyond the resources applicant estimates will be available to it, the DOE assumes electricity can be purchased from outside the region. The DOE assumes 4,000 megawatts of capacity can be purchased in emergencies. The DOE limits the use to no more than 1,000 average megawatts during one year.

Four thousand megawatts is a lot of capacity, but the DOE says it is not as big an item in the determination of demand dates as it may appear. The DOE says that its computer run did not call on outside purchases very much. Exh . S-4 6, Sch. 15E (Revised 11-4 -78) , Plant No. 41 on p. 1.

It is difficult to determine f rom the record just what

• role the 4,000 megawatts plays in the DOE analysis. Origin ally ,

the DOE said it was utilizing 3,000 megawatta of capacity. The 3,000 megawatts was later changed to 4,000 megawatts, and it was explained that instead of treating it as another plant, the 4,000 megawatts of capacity wotid be usri only in emergencies.

Spccifically, it would be used only afte. all other resources had been called into f ull service. Ex h . S -4 3 , p . 4 4 ; Exh . S -4 4 ,

p. 2.

The DOE does not contend that applicant has firm contracts to purchase 4,000 megawatts of capacity. Rather, it assumes that much electricity will be available f rom outside the region in emergencies. It is reasonable to assume scme electricity could be purchased in many emergencies. But to build a system that relies on obtaining a substantial amount of electricity f rom outside the region is risky. If other com-panies were willing to commit themselves to that obligation,

}2hb

they would be willing to sign firm contracts. Whether the 4,000 megawatts of capacity are assumed to be additional plants, or available only after all other resources are in use, they still provide additional capacity when needed most. The addi-tional capacity helps explain the DOE's later demand dates.

General Standard 34 5-75 -0 25 (1) (a) requires a finding that there will be "a demand' for the output from the proposed plants. Relying on purchases f rom outside the region is an implicit statement that demand will exist for the output from the proposed plants, but will be met by some other means. If applicant proposes to meet that demand from its own resources, it has shown there is "a demand" for the output from the proposed facility.

A second additional resource the DOE counts is the interruptible service provided to direct-service customers by BPA. The DOE assumes service to those customers will be interrupted by BPA and the electricity provided to applicant instead. An additional 912 average megawatts is assumed available to applicant. Exh. S-4 6, Sch . 15 H (Revised 11-4 -78) ,

Plant No. 39 on p.1.

The DOE points out that customers on interruptible service pay less because their service is subject to being interrupted. Additional generating resources should not be constructed to meet their needs unless they are charged for it. That is an appealing argument. However, the record does not show that the BPA direct-service interruptible customers would have their service curtailed and the service transferred to applicant. No showing was made that applicant has authority to compel that result, or that BPA would do it. Service to those customers may be curtailed, but not to provide needed electricity to applicant. For example, service to them may be curtailed when stream flows are very low, but the service curtailed would not be transferred to applicant. Exh . S-4 3,

p. 46.

The standard at issue here requires proof of "a demand" for the output from the proposed facility. Even if that demand is by customers taking interruptible service, it is "a demand." It is consistent with the standard to include demand by interruptible customers. The DOE's addition of 912 average megawatts to applicant's resources helps 2xplain its divergence from the results of loads / resources matching by other parties.

A third difference between the loads / resource matching of the DOE and other parties is the DOE assumption concerning voluntary curtailment. During low water years, the DOE assumes appeals to the general public will reduce demand by 250 average megawatts. The DOE urces caution in estimating future voluntary 1255 192

curtailment because long-term conservation programs and responses to higher prices will make additional voluntary consumption re-ductions more difficult. Ex h . S-4 3 , pp . 4 2, 45.

Applicant argues that voluntary curtailment due to a shortage of electricity is still a demand for the output from the proposed f acility and to treat it as a resource conflicts with the standard. The DOE responds that during low water years appeals for conservation are made and voluntary curtailment does occur; therefore, adding the amount of the curtailment to the resource base is merely a reflection of reality. Applicant's Opening Brief, Demand, p. 40; DOE Reply Brief, p. 8.

Applicant and the DOE both are correct when considered from the perspective each is arguing frem. Tht.t is, if the curtailment is due to a shortage of electricity, it is a demand.

And if appeals and resulting curtailment are a naturally-occurring part of low water years, taking account of the cur-tailment is merely reflecting reality and not in conflict with the standard.

Whether curtailment is an integral part of a low water year or not, the underlying assumption is a lack of electricity.

There would be no particular reason to make special appeals to conserve electricity during low water years unless the lack of water caused a shortage of electricity. The 250 average mega-watts can legitimately be considered to be "a demand."

A fourth difference between the loads / resources matching of the DOE and applicant, the PUC, the NEPP, and Mr. McHugh is the amount of electricity to be expected f rom coal- and oil-fueled generating units. The DOE assumes coal units will

• e available between 81 and 85 percent of the time.

Applicant states that during 1977, when it was generating every possible kilowatt of electricity, its coal plants operated approximately 70 percent of the time. Applicant and the DOE are not talking about the same thing. The DOE assumes the plants will be available 100 percent of the time, less a forced outage rate and time for maintenance. Applicant is talking about actual output data during an historical period. The record does not clearly show which figure should Lc tued in predicting future output. Exh. S-4 6, Sch. 7N1 (Revised 11-4 -78); Exh. A-59, p. 7; Tr. 10,507.

A similar argument prevails concerning the use of oil-fired combustion turbine units. The DOE assumes the units will be available 92 to 93 percent of the time, while applicant expects them to produce electricity between 60 and 65 percent of the time during a critical period. It is urnertain how much applicant should rely on oil-fired generation t; meet future demand for electricity. PGE has an air contaminant discharge permit allowing it to operate Bethel, a combustion unit, no

^

1255 193

mere than 750 hours0.00868 days <br />0.208 hours <br />0.00124 weeks <br />2.85375e-4 months <br /> (out of a possible 17,520) during a two-year period. PGE does not currently have an air contaminant discharge permit to operate another of its oil-fired units ,

Harborton. Puget's oil-fired combustion turbine, Shuf fleton, is nearly 50 years cid. Tr. 7838-40, 10557, 10561, 8201.

The factora just discussed may not explain the entire diff erence between the loads / resources matching of applicant, the PUC, the NEPP, and Mr. McHugh, on the one hand, which indicate a demand for the output f rom Pebble Springs Unit 1 either before or at the earliest date it could be constructed, and the DOE matching, on the other hand, which does not find a demand until 1995-96. But the factors together have a large enough impact to provide a basis on which to choose between the loads / resources matchings. From the comments made in the discussion of the factors, it is obvious thr t the matching done by applicant, the PUC, the NEPP, and Mr. McHugh is preferred.

They allow applicant to rely to a greater extent on its own combined resources to meet demands placed on it; they take a more realistic view of energy likely to be produced by gener-ating resources; and they take a more realistic view of oper-ating constraints o evailing, and likely to prevail, in the region.

Focusing attention on proposed Pebble Springs Unit 2, applicant proposes to have it on-line in 1989, the NEPF projects a demand for its output between 1991-95 (using the moderate growth scenario) , Mr. McHugh finds the demand in the 1986-90 time period (also using the moderate growth scenario) ,

and the PIC finds the demand in 1991. The difference of opinion is basica:.ly between 1989 and 1991, not e significant difference.

Uncertainty in the availability of other generating facilities applicant relies on, and uncertainty in the accuracy of demand f orecasts makes it inadvisable to select a demand date for Unit 2 narrower tFon the period between 1989 and 1991.

If a site certificate issues, Unit 2 may be constructed to start producing electricity in 1989, subject to the Council's author-ity to alter that date between the time the certificate issues and the time construction starts. The Council will do that only if sufficiert cause to reopen the hearing on the demand date for Unit 2 13 presented to the Council to convince it to reopen, and af ter evidence on the matter is presented, the Council is convinced the date should be changed. The flexi-bility this option allows is intended to provide an opportunity to present significant new evidence, not reargue evidence already submitted.

The preferred matchings of loads and resources produce similar demand dates for the proposed plants. These dates are reasonable and are accepted. It, therefore, is unnecessary to make individual decisions about various factors influencing 1255 194

future demand, e.g. , rates of growth of population and energy prices. It also is unnecessary to decide how the costs of overbuilding or underbuilding the system should influence the demand dates.

III. ECCNOMIC PRUDENCE A. Introduction General S tandard 34 5 0 25 (1) (b) and Specific S tan-dards 34 5-76-025, 34 5-76-026, and 34 5-76-127 establish criteria by which to judge the economic prudence of a proposed energy facility and any alternatives to it. The standards require the presentation ot a detailed cost analysis and consideration of alternatives to the proposed facility. In this section of the proposed order, the evidence will be scrutinized to detarmine if the filing requirements of the standards have been met.

Then, if that preliminary requirement is met, the positions of the partias on the merits will be examined and the economic prudence of the preposed plants and possible alternatives will be determined.

B. General Standard 34 5 -7 5 -0 25 ( 1) (b)

General Standard 345-75-025(1) divides need for the proposed f acility into two parts - demand for the energy to be supplied by the f acility, and the ..acility's economic prudence.

Subsection (b) pertains to economic prudence and requires the Council to find that:

The proposed facility is a prudent method of meeting all or a part of the demand from an economic cost standpoint taking into account the energy supply system of which it will be a part and other alternatives reasonably available to the applicant. For the purposes of this rule, alternatives include but are not limi'ted to conservation and energy production and generation methods or racilities not regulated by the Council.

The standard requires the Council to decide whether the proposed plants are a prudent method of meeting future demand for electricity. The standard does not require the Council to find that the proposed plants are the superior economic choice, only that they represent a wise management decision f rom an economic point of view. The proposed facility, or a suggested alternative, will not be judged economically prudent if it suf f ers f rom a substantial cost disadvantage based on an analysis meeting the requirements of

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1255 i95

Specific Standards 345-76-025 through 345-76-027. Order Adopting Standards (Gener al) , p. 8.

The general standard also mandates consideration of alternatives reasonably available to applicant. Conser vation and methods or facilities not regulated by the Council must be included in assessing the prudence of the proposed facility.

C. Cost Analysis and Calculational Technicues

1. Standards Economic Prudence--Cost Analysis 345-76-025 In determining whether a proposed thermal energy facility meets the requirements of OAR 343-75-025 (1) (b) ,

the Council will require a coa c analysis demonstrating the economic prudance of the proposed f acility or its alternative.

The cost analysis must:

(1) Include an analysis of the load characteristics of the applicant and its co-owners' customers using a monthly load duration curve or weekly load duration curves characteristic of a month and of the impact upon load characteristics of the customers of the applicant and co-owners expected to rec ult f rom the following factors during the demand fore-cast period:

(a) Changing end uses of energy, (b) Load management practices, (c) Conservation, (d) Economic and demographic trends, and (e) Impacts of composite West Group load profiles.

(2) Include a demonstration that the resources of the applicant and co-owners including the proposed facility or an alternative are designed to:

(a) Meet the applicant and co-owners' energy requirements during the critical water periods, as defined in Section 2, Part I., of the Agreement for Co-ordination and Operations Among Power Systems of the Pacific Northwest, Contract No. 14-02-4822; and (b) Maintain sufficient peak load capacity so that the planned annual loss of load probability for the system on which the applicant and the co-owners contractually rely shall not be greater than the equivalent of one day in 20 years.

The demonstration must address the following variables:

(A) load characteristics including the impact of factors listed in (1) above r (B) characteristics of existing and proposed generating units, including unit sizes, maintenance schedules, forced out-age rates and other oper ating constraints; (C) the availability of purchases or exchanges oc [ sic] power; (D) possible delays in the proposed facility and other planned generation.

(3) Include incremental production and investment costs attributable to the proposed f acility, or alternative, including:

(a) Incremental fuel, operations and maintenance costs over at least the first ten years of the lif etime of the proposed facility with the following items individ-ually addressed:

(A) fixed and variable t'ael and operating and maintenance costs of indio vidual generating units; (B) purchase and sale of power; (C) availability of hydrogeneration using an historic range of water flow conditions; (D) standard operating constraints; (E) estimated transmission losses; (F) mitigation costs for identifi-able social, he alth , saf ety , and environ-mental impacts.

'\

(b) Incremental capital costs as borne by the applicant and co-owners' ratepayers over at least the first ten years of the facility's lifetime, with the following items individually addressed:

(A) the initial capital cost of the f acility or alternative , including miti-gation costs for identifiable social, health, saf ety and environmental impacts;

(:B) costs of retirement or decommis-sioning; (C) capital costs for transmission facilities.

(c ) Mitigation costs discussed in (a) ( F) and (b) ( A) above shall be consid-ered for the applicants and co-owners' system.

Economic Prudence--Calculational Techniaues 345-76-026 In determining and assigning economic costs as required in preparing the cost analysis required under rule 345-76-025, the method shall contain:

(1) A calculation of the present worth of costs determined under rule 345-76-025 using the standard method of present worthing; (2) A weighting of costs determined under rule 34 5-76-025 (3) (a) by the prob-ability of occurrence of historical stream flow conditions; and (3) A summation of the annual pro-duction and capital costs over at least the first ten years of operation.

2. Must the Analysis of Load Characteristics be Included in the Production Cost Analysis?

The DOE argues that the applicant has failed to meet the requirements of this standard because applicant performed its analysis of load characteristics outside the production 1255 i98

9 cost model used to estimate capital and operating costs. The DOE argues that load characteristics must be included expli-citly in the cost analysis to meet Specific Standard 345-76-025.

The language of that standard does not mandate it, but the DOE argues that the cost analysis cannot be evaluated adequately without consideration of the shape of the loads. The DOE

~

points to page 3 of the Order Adopting Standards (Specific) to support its position. The first two paragraphs of the comment under Specific Standard 345-76-025(1) state:

The word " system" is not used here: the word " system" in the hearings officer's report referred to the service area of the applicant and co-owners, rather than the generating system. Therefore , appro-priate wording changes were made to reflect an intent that the cost analysis reflect the load characteristics of the customers of the applicant and co-owners.

This wording has been amended to allow the applicant to include weekly load duration curves characteristic of a month, to allow for plant maintenance shutdowns which might distort strict monthly curves.

Subsection (1) of Specific Standard 345-76-025 requires an analysis of load characteristics of applicant's custcmers.

The analysis must address the f actors listed in subparts (1) (a) through (1) (e) . Subsection (2) requires a showing that the resources of applicant , including the proposed f acility or an alternative , are designed to meet the applicant's energy requirements during a critical water period, and that the resources will maintain sufficient peak load capability so that the planned annual loss of load probability for the system on which applicant relies will not be greater than the equivalent of one day in 20 years. The energy and peak load reliability demonstration must address the factors set out in subparts (2) (b) ( A) through (D ) . Subsection (3) requires a comparison of the expected capital and production costs of the proposed f acility and its alternative. In the production ecst analysis the items set out in subparts (3) (a) ( A) through (F) must be addressed, and in the capital cost analysis the items set out in subparts ( 3) (b) ( A) through (C) must be addressed. The capital and production costs must be compared for at least the "irst ten years of the lif etime of the proposed f acility.

The standard does not mandate that the requirements of the three subsections be combined into one production cost model. To find such a requirement, a " production cost model"

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cost model used to estimate capital and operating costs. The DOE argues that load characteristics must be included expli-citly in the coat analysis to meet Specific Standard 345-76-025.

The language of that standard does not mandate it, but the DOE argues that the cost analysis cannot be evaluated adequately without consideration of the shape of the loads. The DOE points to page 3 of the Order Adopting Standards (Specific) to support its position. The first two paragraphs of the comment under Specific Standard 345-76-025(1) state:

The word " system" is not used here: the word " system" in the hearings officer's report referred to the service area of the applicant and co-owners, rather than the generating system. Therefore, appro-priate wording changes were made to reflect an intent that the cost analysis reflect the load characteristics of the customera of the applicant and co-owners.

This wording has been amended to allow the applicant to include weekly load duration curves characteristic of a month, to allow for plant maintenance shutdowns which might distort strict monthly curves.

Subsection (1) of Specific S tandard 345-76-025 requires an analysis of load characteristics of applicant's customers.

The analysis must address the factors listed in subparts (1) (a) through (1) (e) . Subsection (2) requires a showing that the resources of applicant, including the proposed f acility or an alternative, are designed to meet the applicant's energy requirements during a critical water period, and that the resources will maintain sufficient peak load capability so that the planned annual loss of load probability f r the system on which applicant relies will not be greater than the equivalent of one day in 20 years. The energy and peak load reliability demonstration must address the factors set out in subparts (2) (b) ( A) through (D ) . Subsection (3) requires a comparison of the expected capital and production costs of the proposed f acility and its alternative. In the production cost analysis the items set out in subparts (3) (a) ( A) through (F) must be addressed, and in the capital cost analysis the items set out in subparts (3) (b) ( A) through (C) must be addressed. The capital and production costs must be compared for at least the first ten years of the lifetime of the proposed facility.

The standard does not mandate that the requirements of the three subsections be combined into one production cost model. To find such a requirement, a " production cost model" i255

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and "a cost analysis" must be assumed to mean the same thing.

But a cost analysis can include a production cost model and other tools of analysis. Also, the comment in the Order Adop-ting Standards (Specific) referred to by the DOE is referring to a change to accommodate the Council's final decision on a definition of " system" and to allow weekly load duration curves.

It is not addressing whether load characteristics must be included in a production cost model.

3. The DOE Cost Analysis Specific Standard 345-76-025(1) requires that the cost analysis address the impact of items (a) through (e ) on load characteristics expected to result from the items during the forecast period. On page 4 of the Order Adopting Standards (Specific) , the Council points out that compliance with that section of the standard "will allow the Council to consider changes during the demand forecast period in the load charac-teristics resulting from anticipated social and economic influences, including the impacts of composite West Group load profiles. It is necessary to have such an analysis in order to determine whether the proposed facility is or will be part of an optimum mix of electrical generation."

On page 30 of Exhibit S-43, the DOE acknowledges that it has not performed the required analysis of the impacts of the factors on future load characteristics. Instead , it assumes historical load shapes will continue into the future.

Specific Standard 34 5-76-025 ( 2) (b) (D) requires that possible delays in the proposed f acility and other planned generation be included in the demonstration of energy and peak resources. On page 48 of Exhibit S-43, the DOE acknowledges that it has not included possible delays in its analysis.

Specific Standards 34 5-76 -0 25 ( 3) (a) & (b), and 345-76-026(3) direct that the cost analysis of the proposed f acility, or an alternative, include production and capital costs for at least the first ten years of the proposed f acility's lif etime. On page 70 of Exhibit S-4 3, the DOE states that the costs associated with the proposed Pebble Springs Facility were considered for only two years.

In each instance of failure to perform the cost anal-ysis as directed by the standards, the DOE advances plausible reasons why another method was chosen. The requirements of the standards are not nullified by arguments setting out the reasons for a party's failure to meet those requirements, no matter how appealing the arguments may be. Perhaps the arguments should have been made in the rule-adoption proceeding. In any event, they cannot be used successfully in lieu of satisfying the standards. If the standards are to have meaning , the evidence must be judged against them.

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D. Alternatives General Standard 34 5-75-0 25 (1) (b) requires the economic prudence of the proposed facility to be judged in light of alternatives reasonably available to the applicant. The general standard specifically states that conservation is an alternative that must be considered. Specific Standard 345-76-027 amplifies the general standard, and sections (1) and (2) provide:

(1) An alternative will be con-sidered reasonably available within the terms of General Standards OAR 345-75-025 (1) (b ) if suppliers exist who can provide the necessary materials and equipment to enable construction of the alternative f acility to be completed, and for the alternative to become operational within that time period allotted for construction and commencement of operation of the applicant's and co-owners' proposed facility, and the alternative can meet all or part of the requirements of the applicant's and co-owners' demand fore-cast. If the alternative does not involve construction, it will be considered reasonably available if it can be imple-mented within the time allotted for con-struction and commencement of operations of the applicant's and co-owners' pro-posed facility.

(2) The applicant and co-owners shall discuss in detail in the site certificate application the reason for its determination that an alternative is not reasonably available.

The Council elaborates on the language of subsection (2) in the comments in the Order Adopting Standards (General) .

On page 8 the Council states:

The standard requires that specific atten-tion be directed to conservation efforts that could be initiated by the applicant over and above those included in measuring demand . . .

In section (1) (b) the council is onsid-ering conservation energy resource alter-natives to the proposed f acility that would not be implemented if the site cer-40- 1255 20h

D. Alternatives General Standard 34 5-7 5-0 25 (1) (b) requires the economic prudence of the proposed facility to be judged in light of alternatives reasonably available to the applicant. The general standard specifically states that conservation is an alternative that must be considered. Specific Standard 345-76-027 amplifies the general standard, and sections (1) and (2) provide:

(1) An alternative will be con-sidered reasonably available within the terms of General Standards OAR 345-75-025 (1) (b) if suppliers exist who can provide the necessary materials and equipment to enable construction of the alternative f acility to be completed, and for the alternative to become operational within that time period allotted for construction and commencement of operation of the applicant's and co-owners' proposed facility, and the alternative can meet all or part of the requirements of the applicant's and co-owners' demand fore-cast. If the alternative does not involve construction, it will be considered reasonably available if it can be imple-mented within the time allotted for con-struction and commencement of operations of the applicant's and co-owners' pro-posed facility.

(2) The applicant and co-owners shall discuss in detail in the site .

certificate application the reason for its determination that an alternative is not reasonably available.

The Council elaborates on the language of subsection (2) in the comments in the Order Adopting Standards (General) .

On page 8 the Council states:

The standard requires that specific atten-tion be directed to conservation efforts that could be initiated by the applicant over and above those included in measuring demand . . .

In section (1) (b) the council is consid-ering conservation energy resource alter-natives to the proposed facility that would not be implemented if the site cer-1255 203

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tificate was approved. These alternatives are not the same as those considered in section (1) (a) of the same rule; section (1) (a) considers those alternatives which, based on evidence in the record will be implemented independent of the decision _

on the proposed plant.

The standard clearly calls for a detailed discussion of conservation efforts that could be taken "in lieu of" the proposed Pebble Springs Facility. What conservation efforts could be undertaken instead of going forward with the Pebble Springs Facility? If applicant decides that the proposed facility is preferable to alternative conservation efforts, the Council requires a detailed discussion for that determination.

Applicant relies on two arguments to satisfy the obli-gation of subsection (2). First, it repeats the language on page 8 of the Order Adopting Standards (Gener al) and asserts it has "neither the authority nor the ability" to implement non-gener . ion alternatives. Second, applicant states that it.will undercake all conservation measures that are cost-effective for its customers, whether or not the Pebble Springs Facility is completed, so there is nothing lef t that could be substituted for the Pebble Sprir.gs Facility.

What applicant does not discuss is a separate con-servation effort undertaken in lieu of the Pebble Springs Facility, without regard to whetner the measures are cost-effective. What is lacking is a showing that applicant seriously considered conservation as an alternative to the Pebble Springs Project - beyond its treatment of conservation as a reduction in forecasted demand. The standard and accom-panying order adopting the general standards .iearly spell out the obligation to discuss conservation as an alternative to the proposed facility, not just as a reduction in the forecasted demand. A detailed discussion of conservation as an alter-native is missing.

E. Wind Turbine Generators as an Alternative FOB presented evidence designed to show that a network of wind turbine generators (WTG) could be used as an alternative to the proposed Pebble Springs Facility. Specific Standar'd 345-76-027(3) requires a party who desires to present the case for an alternative to the proposed f acility to present evidence to es".blish that the alternative is reasonably available to the applicant, and using analysis meeting the requirements of Speci-fic Standards 34 5-76 -0 25 and 34 5- is-02 6, that the alternative is economically prudent.

In an effort to show the WTG network alternative is economically prudent, FOB arranged with the DOE for the DOE to 125S 204

perform the economic ana]/ sis of the WTG, using the DOE cost production model. FOB Popplied the description of the system and the data necessary to characterize it. The DOE performed the analysis using the same program it used for its own econ-omic prudence evidence, and supplied a witness to testify about the details of that analysis. Exh. I-53, p. 1: Tr. 10,827-29. .

Since the FOB evidence on the economic prudence of the WTG is just like the DOE evidence on economia prudence, it suffers from the same defects. The analysis the DOE performed for itself f ails to meet the requirements of Specific Standards 34 5-76-02 5 and 34 5-76-026 ; the analysis performed for FOB simi _

larly fails to meet the requirements of those specific standards.

In its prepared testimony, FOB refers to the failure to include costs for at least the first ten years of the proposed plant's lifetime and argues against the standard. During the eviden-tiary phase of this proceeding, the wisdom of the standards will not be addressed; rather, the evidence will be weighed against the requirements of the ctandards. Exh. I-5 3 , pp . 2-4.

F. Conclusions The applicant's economic prudence evidence is defi-cient by failing to discuss in detail in the site certificate application the reason for applicant's determination that conservation is not a reasonably available alternative to the proposed f acility. The DOE's economic prudence evidence is deficient by f ailing to address the impacts expected during the forecast period from the f actors listed in Specific Standard 345-76-025(1), by failing to include possible delays of the proposed f acility and other planned generation in the analysis, and by f ailing to include capital and production costs for the first ten years of the proposed f acility's lif etime. The FOB economic analysis of the WTG has the same deficiencies as the DOE analysis.

No party performed the economic analysis required by Specific Standards 34 5-76-02 5 and 34 5-76-027. Therefore, the requirements of those standards have not been met. As a r es ul t , it is not possible to analyze the proposed facility and any alternatives in the manner mandated by the economic pru-dence standards.

IV. ABILITY TO FINANCE A. The Staridards General Standard 345-75-025(9) requires applicant to posse.3 or have reasonable assurance of obtaining the funds necessary to construct, operate, and retire the facility, including fuel cycle costs. By vi rtue of Council Rule

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perform the economic analysis of the WTG, using the DOE cost production model. FCB supplied the description of the system and the data necessary to characterize it. The DOE performed the analysis using the same program it used for its own econ-omic prudence evidence, and supplied a witness to testify about the details of that analysis. Exh. I-53, p. 1; Tr. 10,827-29.

Since the FOB evidence on the economic prudence of the WTG is just like the DOE evidence on economic prudence, it suffers f rom the same defects. The analysis the DOE performed for itself fails to meet the requirements of Specific Standards 34 5-76-025 and 34 5-76-026 ; the analysis performed for FCB simi-larly fails to meet the requirements of those specific standards.

In its prepared testimony, FOB refers to the failure to include costs for at least the first ten years of the proposed plant's lif etime and argues against the standard. During the eviden-tiary phase of this proceeding, the wisdom of the standards will not be addressed; rather, the evidence will be weighed against the requirements of the standards. Exh. I-5 3 , pp . 2-4.

F. Conclusions The applicant's economic prudence evidence is defi-cient by failing to discuss in detail in the site certificate application the reason for applicant's determination that conservation is not a reasonably available alternative to the proposed f acility. The DOE's economic prudence evidence is deficient by failing to address the impacts expected during the forecast period frem the f actors listed in Specific Standard 345-76-025(1), by failing to include possible delays of the proposed f acility and other planned generation in the analysis, and by f ailing to in-2.ude capital and production costs for the first ten years of he proposed f acility's lif etime. The FCB economic analysis or the WTG has the same deficiencies as the DOE analysis.

No party performed the , economic analysis required by Specific Standards 34 5-76-025 and 34 5-76-027. Therefore, the requirements of those standards have not been met. As a r es ul t , it is not possible to analyze the proposed facility and any alternatives in the manner mandated by the economic pru-dence standards.

IV. ABILITY TO FINANCE A. The Standards General Standard 345-75-025(9) requires applicant to possess or have reasonable assurance of obtaining the funds necessary to construct, operat?, and retire the facility, including fuel cycle costs. By virtue of Council Rule

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345 76-015(3), the general standard is satisfied by proof that the requirements of Specific Standard 345-76-045 have been met. That specific standard is met by proof that:

1. Applicant is capable of providing funds to construct, operate , and retire the facility without violating its bond indenture provisions, articles of incorpor ation, common stock cove-nants, or similar agreements;

2. Investor-owned co-owners of the facility have a capitalization ratio of at least 30 percent equity; and

3. A co-owner organized as a cooperative has loan commitments, Rural Electrification loan guar-antees, or other sources of funds sufficient to pay its share of the costs, and has contracts for the sale of the output f rem the proposed f acility or has rate adjustment provisions in its members' contracts to provide sufficient revenue to retire the debt incurred to construct, aperate, and -

retire the facility.

B. The Need to Finance Applicant expects the two nuclear power plants at issue here to cost approximately 3.063 billion dollars to construct and prepare to operate. This is the estimated investment cost, including money costs, in 1985-1986 dollars.

T r . 10 , 0 64 .

Large expenditures for construction of generating sources are not new to applicant. In the past five years, PGE, PP& L,. a:Id Puget have financed almost 2.4 billion dollars of construction projects. This section deals with applicant's ability to finance the proposed Pebble Springs Project.

SCA 21-5, 21-7, 21-10.

C. The Investor-owned Co-owners Investor-owned co-owners rely primarily on sales of stock, borrowing of money, and internally generated money to provide the funds necessary to construct facilities to generate electricity. Revenue from sales of electricity is used to pay the costs of selling stock and borrowing money, and to pay the expenses of operating the plants.

When construction funds are needed, the investor-owned co-owners review their capital structures, money market condi-tions, and any limitations on the sale of stock or issuance of debt instruments. To issue additional secured debt instruments,

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+

earnings before taxes must be at least two times interest che ws, including the interest to be incurred by the prospective issua .

Also, bonds can be issued for no more than 60 percent of the value of the property provided as security. Pref erred stock can be issued only when income at least equals one-and-one-half times interest charges and annual preferred stock dividend requirements.

There are no specific limitations on selling common stock, but utility companies prefer not to allow the proportion of common stock to total capitalization to get too low or to sell common stock when the market price is below boo % value. SCA 21-5, 21-8, 11- 10 , 21-11, and App. G .

The various sources of additional funds provide utility companies with considerable flexibility. If the coverage ratio for preferred stock is unacceptably low (as it is for PGE and Puget at the present time), debt instruments and common stock can be issued. Of course, short-term credit arrangements also are routinely used. SCA 21-6, 21-9, 21-11.

The determining factors in coverage ratios, ability to finance future construction projects, and in fact the very via-bility of the utility companies, are the prices at which they sell electricity. And electricity prices are set by state and federal regulators. The regulators are, in turn, constrained by statutes and judicial decisions, the most potable judicial -

decision being Federal Power Commission v. Hooe Natural Gas Comoanv, 320 U.S. 591 (1944). In that decision, the United States Supreme Court held that utility companies must be allowed to charge rates sufficient to maintain the financial integrity of the companies and to attract capital. Regulators do not have to utilize any particular method in establishing f air and equitable rates, but they 'must not set rates so low as to con-stitute a confiscation of a utility's assets.

Applicant points out that the investor-owned co-owners have undertaken major construction projects in the past, and the regulators have allowed them rates suf ficieat to success-fully complete them. There is no reason to believe the regu-lators will change their habits and deny adequate rates, but if that were to occur, a co-owner could seek judicial relief.

SCA 21-1, 21-2.

The specific standard requires investor-owned co-owners of the proposed facility to maintain capitalization of at least 30 percent equity. That should not pose a problem.

PGE's target equity capitalization is 50 percent, and its equity capitalization will range between 4 5.6 percent and 53.9 percent between 1978 and 1989. PP&L's equity capital-ization has been at least 42 percent of the t '*.a1 in recent years, and its target equity capitalization is 4 6 percent. The actual ratio will remain aar the target between now and 198 9.

Fuget has maintained an equity dapitalization in recent years

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around 44 percent, and has a target of 4 7.4 percent. It will maintain an equity capitalizrtion between 4 5 percent and 4 9 percent through 1989. LCA "l 2 through 21-12.

Included in the usual. erocess the Oregan Public Utility Commissioner utilizes in deciding what rates are fair and equitable for rep ~.ated utility companies is a determin-ation of an earnings base. The earnings base is multiplied by the cost of capital to find the net operating income. As a general rule, only currently e ating facilities are included in the earnings base, but exc - io nave been made. By the passage of Eallot Measure 9 in .he November, 1978, General Election, Oregon voters told the Commissioner not to include in the earnings base property not presently used for providing utility ser vice. If the Pebble Springs Plants are cor.structed, the Commissioner will not have the option of including part or all of the plants in the earnings base until each plant is declared operational. Therefore, investors will have to bear the full cost of construction throughout the construction period. The ballc measure affects PGE, since PGE serves only in Oregon; the ball . measure affects PP&L's operations in Oregon; Puget is not directly affected by the ballot measure, and PNGC is not regulated by the Commissioner. The measure may make the cost of financing the Pebble Springs Project more expensive. It will increase the over-all cost of the project.

Construction projects which are capital intensive, which have long lead times, or which are beset with significant uncertainty will be affected the most. However, the ability of applicant to finance the Pebble Springs Project should not be signifi-cantly affected. The measure does not change the obligation of the PUC to allow a utility to earn a f air rate of return, when compared to other businesses. The Hope decision held that it is the result reached, not the method employed, which is important. Tr. 11,327-33.

Various entities rate the risk of bonds issued by corporations. Two widely-used rating companies are Standard and Poor's Corp., and Moody's Investors Service, Inc. In its rating of public offerings of debt instruments in effect at the time of taking testimony in this proceeding, Moody's gave all three investor-owned co-owners a Baa rating. Standard and Poor's gave Puget and PP&L a Bbb and PGE a Bbb- in its rating of applicant's bonds. All are considered medium-grade ratings.

S tandard and Poor 's considers PGE 's bonds to be borderline betwean medium-grade obligations and obligations with specula-tive elements. PGE, PP&L, and Puget have been financing pro-jects in recent years with similar ratings and should be able to continue to do so. Tr. 11,381-86 D. Co-owner Organized as Cooperative PNGC plans to borrow from the Rural Electrification

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Administration (REA) for its share of the Pebble Springs construction costs. PNGC has started the process of applying for a loan guarantee, but does not have the guarantee now.

Before REA approval can be obtained, an environmental impact st at ement , contractual arrangements between PMGC and PGE, and a power cost study all must be approved. Then, the REA says, it will be in position to make a loan guarantee, but will not disburse funds until all permits, licenses, and approvals have been obtained. S CA 21-3 ; S CA App . G , PNGC , Exhs. 2, 3; Tr . 11,318-20 , 11,4 76 -8 0.

Specific Standard 34 5-76 -04 5 ( 3) (a) also requires a co-owner which is a cooperative to have contracts for the sale of the output f rom the proposed f acility, or have rate adjust-ment provisions in its members' contracts to provide sufficient revenue to retire the debt incurred in constructing, operating, and retiring the plant. PNGC has apparently elected to meet the first option because it says it has negotiated, or is in the process of negotiating, wholesale power contracts with its members for all of PNGC's share of the output from the Pebble Springs Facility. But the standard says the cooperative must have the contracts, not just be in the process of negotiating them. SCA 21-17.

E. Decommissioning Decommissioning the plants will cost five percent of total project costs, according to the investor-owned owners.

Their computation of costs of the proposed f acilities include a net salvage value of minus five percent. They will recover that amount by setting depreciation rates at 105 percent of construction costs. That is the method currently used for the Trojan Nuclear Plant, and five percent is the industry average.

PNGC says it will establish a reserve account to cover its share of retirement costs. Retirement costs are legitimate expenses of nuclear power plants, and the plans presented by applicant to fund that expense are accepted as reasonable.

SCA 21-18 ; Tr . 11,4 33-76.

Applicant has not committed itself to a specific plan for decommissioning the plants. One possibility is to mothball the plants for 100 years af ter operation ceases, then dismantle.

An applicant witness suggested that when plant operation ceases, applicant be required to establish a fund sufficient to dismantle.

The f und would be maintained until dismantling started. If a site certificate issues, such a condition should be included in the site certificate agreement. T r . 11,4 58 -5 9 .

F. Conclu sions PNGC does not have the required loan guarantee, nor does it have sales contracts for its share of the output from

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the proposed plants. It has not met the requirements of Specific Standard 345-76-045(3). PGE, PP&L, and Puget have shown that they have the ability to finance their shares of the proposed facility. Applicant has shown compliance with sub-sections (1) and (2), but not (3), of Specific Standard 345-76-045.

V. ABILITY TO CONSTRUCT, OPERATE, AND RETIRE A. The Standards General Standard 345-75-025(8) requires the applicant to prove it has the organizational, managerial, and technical expertise to construct, operate, and retire the proposed facility. By virtue of Council Rule 345-76-015(3), General Standard 345-75-025(8) is satisfied by proof of compliance with Specific Standard 345-76-040. This section discusses the six subsections of Specific Standard 345-76-040.

B. Employment of Architect-Engineer To prove it has the ability to construct, operate, and retire a proposed f acility, applicant must:

(1) In those instances where the appli-cant has not previously designed and constructed a nuclear facility, demon-strate to the Council that it will employ an architect-engineer that has design and construction experience with a similar facility to design and construct the proposed facility.

The Troj an Nuclear Power Plant, near Rainier , Oregon, is a similar facility. PGE operates Troj an and owns 67.5 per-cent of it. PP&L owns 2.5 percent. PGE had the overall respon-sibility to design and construct Troj an. Applicant has selected Bechtel Power Corporation (Bechtel) as the architect-engineer f or the Pebble Springs Project. Bechtel has experience in the design and construction of nuclear facilities, including the Troj an Plant. SCA 22-3.

Applicant has shown compliance with subsection (1) by proof of PGE's design and construction experience, and by demonstrating that it will employ an architect-engineer with design and construction experience with a similar f acility.

C. Deviations To prove it has the ability to construct, operate, and retire a proposed f acility, applicant must:

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(2) Demonstrate that it will establish and implement a formal procedure that will document deviations f rom normal written operating procedure and classify those deviations as procedural, design, or per-sonnel related, and that will require corrective action to be identified and reviewed by appropriate off-site engi-neering and management personnel.

PGE, scheduled to be the operator at the proposed Pebble Springs Facility, has a deviations procedure at Trojan -

set out in Administrative Order AO-4-2. Deviations are defined as preplanned but temporary changes or deviations from written procedures. PGE plans to institute a similar procedure at the Pebble Springs Facility, modifying it to classify deviations as procedural, design, or personnel-related, and to include unin-tentional departures. Deviations will be reviewed by the Plant Review Board and the Nuclear Operations Board (NOB) . SCA 22-9; Exh. A-34 ' , p. 3 ; Tr . 18 67 -6 8 , 18 76 -77, 66 98 -6 70 0.

The Plant Review Board is on-site at Troj~an and con-sists of the plant superintendent, the assistant superintendent, the operations supervisor, the engineering supervisor, the main-tenance supervisor, and the quality assurance supervisor. The NCB is off-site and consists of the assistant vice president for thermal plant operation and maintenance, ~the plant superin-tendent, several engineers, and others. Its nine members review and audit the policies, practices, and procedures of the nuclear plant. The principal review of minor deviations is by the Plant Review Board, and its minutes are reviewed by the NOB. Repeated minor deviations, and any major deviations, trigger closer scrutiny by the NOB. Exh. A-34, p. 3, and Att. 5.

It is concluded that PGE's similar procedure at Trojan, coupled with its description of intended changes to comply with this standard, satisfies the requirements of this su bsection.

D. On-Site and Off-Site Orcanizations To prove it has the ability to construct, operate, and retire a proposed f acility, applicant must:

(3) Demonstrate that it will establish and implement on-site radiological and quality control organizations which report directly to the plant superintendent and an off-site organization, independent of personnel responsible for power produc-tion, with authority to compel any

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e changes at the facility it determines necessary f or its operational saf ety, including shutdcwn of the facility.

At the Troj an Nuclear Power Plant there are on-site radiological and quality assurance organizations reporting directly to the plant superintendent, and PGE will institute a similar arrangement at Pebble Springs. Two of the seven opera-ting organizations planned for Pebble Springs are quality assur-ance, and chemical and radiation protection. SCA 22-9.

In its prefiled testimony, PGE indicates the NCB is the of f-site organization it is relying on to meet the requirements of the second part of subsection (3). During cross examination, however, the quality assurance department, the radiation protec-tion committee, and the chairman of the board were suggested as possible entities meeting the requirement. Whether these enti-ties meet the other requirements of the second part of subsec-tion (3) was not discussed, and PGE made it clear it considered the NOB to be the organization that meets the standard. SCA Sec. 22. 2.2; Exh. A-34, p. 4, and Att. 5; Tr. 1905, 6712-13.

For Trojan, Standard Practice Instruction No. 200-4 establishes the NOB. PGE plans a similar organization for Pebble Springs. The chairman of the NOB is the assistant vice president, thermal plant operation and maintenance. Other members are the plant superintendent, a nuclear engineer frcm the nuclear project branch of the engineering-construction department, a mechanical, civil, or nuclear engineer f rom the generation engineering-construction department, an electrical engineer from the generation engineering-construction depart-ment, a chemist, a quality assurance specialist, a health physicist, and a biologist. The assistant vice president for thermal plant operation and maintenance and the plant superin-tendent have direct responsibility for power production, while the other members do not. Standard Practice Instruction No. 200-4 requires a minority of NCB members to have respon-sibility for power production. The NOB reviews and audits plant operation and reports to the PGE executive vice president. The NOB operates by majority vote. Exh . A-3 4 ,

Att. 5; Tr. 1996, 6706.

The off-site organization is required to have authority to compel changes necessary for operational safety, including shutdown. The standard practice instruction estab-lishing the NOB at Trojan does not give authority to the NOB to shut down the facility. In its application to build the Pebble Springs Facility, PGE says the NOB will have authority to compel any changes necessary, including shutdown of the plant.

Whetbet that authority is unfettered becomes unclear as one searcnes further into the record. In Exhibit A-34, PGE says the findings of the NOB, "because of its membership and

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reporting level, constitute compelling reasons to implement any changes at the f acility it determines necessary f or its opera-tional safety, including shutdown of the facility." (Page 5.)

During cross-examinati 7n on that statement , the PGE witness responded to a questien about whether the NOB could be overruled

- if the NOB decided the plant should be shut down. He said it was possible, but unlikely. Later he said the executive vice president could overrule the NOB, but he did not think that would occur. It appears the NOB could probably shut the plant down, but could not compel shutdown if there were disagreement.

SCA 22-9 ; Tr. 674 5.

Subsection (3) requires the off-site organization to be " independent of personnel responsible for power production."

Is an organization independent of personnel responsible for power production when its chairman and another member are directly recponsible for power production? Merely posing the question suagests a negative answer. There undoubtedly are reasons PGE desires power production personnel on the NCB, but doing so necessarily makes the organization something other than independent f rom them.

Applicant argues that it is the functions, not the employees, of the NOB which must be independent. It argues that the NRC uses the criteria of the American National Stan-dards Institute quality assurance program, and that the Insti-tute specifically allows a minority of the independent review group to be involved in power production. But the EFSC stan-dard is clear. It requires the organization to be " independent of personnel responsible for power production." The word

" personnel" means people, not functions. Applicant Brief, Site-Specific Standards, p. 96; Exh. A-34, Att. 7, p. 6.

It is concluded that the requirement for an off-site organization independent of personnel responsible for power production, with authority to compel changes, including shut-down, has not been met.

E. Traininc Procram for Manacement To prove it has the ability to construct, operate, and retire a proposed facility, applicant mus t:

(4) Demonstrare that it will establish and implement a training program for all company personnel who possess authority to override recommendations by the plant superintendent relating to safety of a nuclear f acility, which consists of in-plant training or its equivalent, and relates to specific subject matter areas such as system design, operation and 1255 214

maintenance and safety related require-ments and their bases.

Who has authority to override the recommendations of the plant superintendent? In its prefiled testimony, PGE does not directly answer that question. It says it will train members and alternates of the NOB. It is inferred from that statement that the NOB can override the plant superintendent.

During the hearing PGE witnesses were asked about who could overrule the plant superintendent. The answer was unclear, but apparently senior management, including the chairman of the board, the president, and the executive vice president of PGE, in addition to the NCB, can override the plant superintendent.

SCA 22-10; Tr. 1913, 6712.

PGE does not plan to train senior management in nuclear safety. Yet they have authority to override the plant superin-tendent. One PGE witness said he suspected PGE would endeavor to train them if it were determined the standard required it.

In the Order adopting this standard, the Siting Council com-mented that it requires more than a promise that the standard will be satisfied. A demonstration of how applicant intends to comply is required. A statement that applicant may endeavor to do what is required is not a demonstration of how it will comply. Tr. 1918, 6713, 6754, 6758.

For alembers and alternates of the NOB, planned training covers the subjects mentioned in the standard, and other matters as well.

Applicant has not demonstrated it will establish and implement a training program for all who have authority to over-ride the recommendations of the plant superintendent.

F. Training Program for Operators and Supervisors To prove it has the ability to construct, operate, and retire a proposed f acility, applicant must:

(5) Demonstrate it will establish and implement a training program for facility operators and their supervisory personnel, which will include in-plant training in the subjects of system design, operation and maintenance, effluent control and safety related requirements and their bases. Operators partaking in initial facility startup and testing shall have operating experience in a similar facility.

1255 215 PGE will institute a training program for operators and their supervisors similar to what is employed at Tro3an. The mmount of training required will depend on the previous exper-ience of individual operators. For duty during initial f acility start-up, PGE will employ operators who have experience in a to obtain operators with prior similar f acility and will experience in another pressurtry'ized water reactor plant. SCA 22-11.

Applicant has demonstrated that it will establish and implement a proper training program for f acility operators and their supervisory personnel.

G. Written Agreement Among Owners To prove it has the ability to construct, operate, and retire a proposed f acility, applicant must:

(6) Demonstrate that it possesses or will execute a binding written agreement, in those instances where the applicant will share ownership of the f acility, which commits each owner to:

(a) Comply with ORS Chapter 469, all applicable rules of the Council and all conditions and warranties in the site certificate authorizing siting of the particular f acility, (b) Ansign responsibility for facility operatiert to a designated organization or group, (c) Abide by a designated procedure for arbitrating disagreements among the co-owners that concern facility operation and management, and (d) Notify the Council when arbitra-tion is required for disputer relating to facility safety.

The co-owners in_ the Pebble Springs Proj ect have be6n negotiating the tecas of such an agreement, but it has not been completed. There will be an operating committee composed of members from each co-owner, but PGE will be responsible for facility operation. The committee will make recommendations to the nuclear operations staf f , which will be comprised of the PGE employees actually operating the facility. The final decision on operating procedure will be PGE's, and the other co-owners have agreed to this arrangement. SCA 22-4; Tr. 1923, 1939.

12S5 216

PGE promises to execute the proper written agreement, and is willing to submit it to the Siting Council for approval. PGE has co-owners of the Troj an Facility and has an executed contract with them for the plant's operation. Exh.

A-34, Att. 9; Tr. 1940.

Applicant has demonstrated that it will execute a binding written agreement which commits each owner to the provisions of Specific Standard 345-76-040(6).

H. Conclusions Applicant has proved compliance with subsections (1) ,

(2), (5) , and (6) of Specific Standard 345-76-040, and has not shown compliance with subsections (3) and (4).

VI. LAND-USE PLANNING A. The, Standard Before the Council is authorized to approve a site certificate application, it must find that:

With ref erence to any site certificate application filed prior to J uly 1,197 3, siting, construction, and operation of the proposed facility will be carried out in conf ormance with state-wide planning goals and in conformance with comprehen-sive land use plans and zoning ordinances of political subdivisions in which the facility is to be located in effect on the effective date of this r ule. General Standard 345-75-025 ( 5) (b) .

The application in this proceeding was filed on December 14, 1973. General Standard 345-75-025 became effective on December 30, 1977.

B. Discussion and Findinos The proposed f acility is planned for Gilliam County, and a ten-mile radius drawn f rom the proposed site would include land within Morrow County in Oregon and Klickitat County in Washington. The land surrounding the proposed site is primarily agricultural, being used for grazing of cattle and sheep and growing wheat and alf alf a. SCA 2-1, 13-4.

Gilliam County has adopted a comprehensive land-use plan, and on July 8,1977, became the first Oregon County to receive approval for its comprehensive plan from the Land 1255 217 Conservation and Development Commission. The Gilliam County zoning ordinance carries out the policies of the comprehensive plan and assigns a zone of "A-E, exclusive f arm use zone" to the proposed site and surrounding area. Morrow and Klickitat Counties have prepared comprehensive land-use plans which pro-joct agriculture and agribusiness to be the primary uses for the land near the Pebble Springs Site. SCA 13-5, 13-6, 13-17.

The Gilliam County Planning Commission granted PGE conditional use permit to build the proposed nuclear facility.

That decision was appealed to the Gilliam County Court (Gilliam County's governing body), and on January 7,1978, was affirmed.

Tr. 1307.

Gilliam, Morrow, Umatilla, Wheeler, and Grant Counties make up Oregon Administrative District 12. An interim land-use plan for 1995 has been prepared for the District, and it projects that the land will continue to be used primarily for irrigable crops.

C. Conclusions The proposed facility conforms to state-wide planning goals and local comprehensive land use plans and zoning ordinances. The requirements of General Standard 34 5-75-025 (5) (b) have been satisfied.

VII. HISTORIC OR ARCHAEOLOGICAL SITES A. The Standard The Council is not authorized to approve a site certificate application unless it finds that "(c]onstruction and operation of the proposed f acility will be conducted in a manner to avoid adverse impacts upon historic or archaeological sites, to the extent that relocation of the facility on the site can be accomplished consistent with the Council's other standards." General Standard 345-75-025(6).

B. Discussion and Findinas The University of Oregon, Museum of Natural History, under the direction of David Cole, evaluated the historic, archaeologic, and paleontologic significance of the Pebble Springs Site. The final report of the study was received into evidence. SCA 13 -8 ; Exh. A-4 .

The Pebble Springs Site has no locations of historic interest, and no locations listed in the National Reaister of Historic Places. The closest historic location is the Old Oregon Trail, which passes five miles south of the site.

S CA 13 -8 . .

I255 218

One archaeologic site was found in the Pebble Springs Area. It yielded a stone cluster. The site is badly weathered and little, if any, archaelogic data remains. The site will not be affected by construction. Five locations of possible paleontologic significance were discovered, called locations 7, 10, 12, 13 and 17. The locations are not likely to produce significant findings. Location 17 will be inundated, but not otherwise disturbed. The other locations are not in the con-struction area and applicant does not intend to disturb any of them. Tr. 235 -237 ; SCA 13-8 .

Construction activities may uncover sites of possible historic or archaeologic significance. Applicant's contracts with construction contractors provide that if anything known or suspected to be of historic or archaeologic significance is discovered, work is to cease in that area and applicant is to be notified. Applicant will then evaluate the find, or will obtain an evaluation, before work is resumed. Tr. 247.

No evidence was presented to show construction or operation of the proposed f acility will adversely impact historic or archaeologic sites.

C. Conclusions Construction and operation of the proposed Pebble Springs Facility will be conducted without adverse impacts on historic or archaeologic sites. The requirements of General Standard 345-75-025(6) have been satisfied.

VIII. BENEFICIAL USE OF WASTES AND BY-PRODUCTS A. The Standard Before the Siting Council is authorized to approve a '

site certificate application, it must find that " applicant will make beneficial use of wastes and by-products produced by construction and operation of the proposed f acility , including but not limited to heat, to the extent that such beneficial use is reasonably practicable." General Standard 345-75-025(4).

B. Waste Heat Water heated during the process of cooling the reactor cores will be discharged into a cooling reservoir. PGE, PP& L, and the Boeing Company sponsored a study, performed in 1972-73, of utilizing waste heat produced by thermal praer plants.

Economic utilization of waste heat was f ound ' ' ;sible if certain conditions were met. Utilization would havn .;> be near the power plant , and backup heating systems would be necessary to replace the heat lost when the power plant is shut down.

S CA 12-4 .

1255 219

Most of the soil near the Pebble Springs Site is unsuitable for cultivation, diminishing the possibility of using waste heat for greenhouses or soil heating to increase agricultural producti< n. Use of waste heat to warm space in buildings in urban areas is not practical because the proposed site is too f ar f rom major population centers. Also, the uncertainty of approval of the proposed plants and the time it takes to get a decision on the plants create barriers to joint ventures. SCA 12-5, 12-6.

C. Water Withdrawn from Reservoir To maintain the quality of the water in the reservoir, 2,880 acre-feet per year will be withdrawn and replaced with fresh water. Applicant will make beneficial use of the withdrawn water by making it available for irrigation and livestock watering. SCA 2-3, 10-7, 13-4; Tr. 350.

D. Chemicals Columbia River water contains many chemicals, including baron, cadmium, and zinc. In treating the water withdrawn f rom the river, applicant will add chlorine, sodium, and sulphate to combat the growth of algae, inhibit corrosion, and minimize f ouling. The concentration of chemicals will be low and their recovery is either not f easible or more expensive than pur-chasing them at market prices. SCA 11-2, 11-3; Exh. S-10, p. 6; Exh. S-ll; Tr. 352-63.

E. Radioactivity Radioactivity will be in the form of high-level radio-active spent f uel and low-level radioactive gaseous , liquid, and solid wastes. Spent fuel has energy value which could be recovered and utilized. However, federal policy precludes that possibility at the present time . The costs of recovering low-level radioactivity, coupled with the limited market for any recovered matter, makes beneficial use of it uneconomic.

SCA 15-20; Exh. S-10, Att. I, p. A-4.

F. Conclusions Applicant's past efforts and f uture plans for the beneficial use of wastes and by-products are adequate. Appli-cant will make beneficial use of wastes and by-products produced by construction and operation of the proposed f acility to che extent that such beneficial use is reasonably practicable. It is concluded that the requirements of General Standard 345-75-025(4) have been satisfied.

1255 220 IX. WATER REQUIREMENTS A. The Standard Before the Council is authoriz;d to approve a site certificate application, it must find that " requirements for water used in construction and operation of the f acility can be met without inf ringing upon the existing water rights of other persons." General Standard 345-75-025(7).

B. Withdrawal of River Water Applicant plans to pump water f rom the Columbia ~ River to a reservoir at the Pebble Springs Site. The reservoir will be 1,900 acres in size and have capacity to hold 60,000 acre-feet of water. Water will be drawn from the reservoir to cool the reactor cores of the proposed power plants. After cooling the plants, the water will be returned to the reservoir, creating a closed-cycle cooling syster. , with no discharges to any other surf ace body of water during normal operation. A divider dike will separate the intake channel f rcm the dis-charge channel of the reservoir. SCA 10-5.

Seepage and evaporation will claim a small portion of the water in the reservoir. In addition, applicant has agreed to make 2,880 acre-feet available each year for a neighbor to use for irrigation and livestock watering. That withdrawal of water for farming uses will help reduce the natural concentra-tion of chemicals in the reservoir. If the neighbor does not use the water, applicant will withdraw approximately the same amount to reduce the chemical build-up. Rainfall will par-tially offset those 1csses. The remainder of the losses sill be replaced by water pumped f rom the Columbia River. SCA 10-7, 10-8.

A spray pond will serve as a reserve cooling system for each power plant. Each spray pond will cover six acres and have capacity to store 15.5 million gallons of water. Each will be excavated below grade and lined to minimize seepage.

The spray ponds will provide cooling in case the reservoir system fails, and will be sufficient to cool the reactor cores for 30 days. Water to keep the ponds f ull will normally come from the reservoir or the Columbia River, depending on avail-ability. SCA 12-3, 12-4 ; Tr . 589.

Applicant will install five pumps to get water from the Columbia River to the reservoir. The pumps will be capable of withdrawing water at the rate of 118 cubic feet per second (cf s) , with average withdrawal expected to be 77 cf s. The average annual water flow in the Columbia River where the water will be withdrawn is 185,000 cf s, so applicant 's withdr awal will be less than 1/20th of 1 percent of the average flow.

1255 221

Withdrawal of Columbia River water between the Pebble Springs point of appropriation and the Pacific Ocean is estimated to be less than 1,000 cfs. The Deschutes and Willamette Rivers empty into the Columbit River downstream from Arlington, as do other tributaries. making the average flow at the mouth of the Columbia -

River approximately 60,000 cfs greater than at Arlington.

SCA 10-8, App. B, p. 2; Tr . 451, 645.

C. Withdrawal of Well Water There are two wells at the Pebble Springs Site, each -

capable of releasing 900 gallons of water per minute. During construction they will be used for construction activities, f or dcmestic purposes, and for fire protection. During operation of the plants, well water will be used for domestic uses such as drinking and sanitation. The wells also will be a reserve source of water for fire protection. Applicane's usage will average no more than 50 gallons per minute. Tr. 437-38.

Mr. and Mrs. Hulden f arm west of the Pebble Springs -

Site. Mrs. Hulden testified in opposition to the plant. She argued that sharing ground water with applicant could adversely impact the Huldens. One of the Hulden wells is between 1-1/2 and 2 miles from the proposed plant site. Higher river levels behind the John Day Dam have raised the water level in that well 55 feet in recent years. Tr. 115, 442.

The two wells at the Pebble Springs Site are about 1,800 feet apart. Applicant withdrew water from one at between 600 and 900 gallons per minute for 12 hours1.388889e-4 days <br />0.00333 hours <br />1.984127e-5 weeks <br />4.566e-6 months <br />. The resultant drawdown of the water level in the other well was less than

0. 2 f eet maximum. There are 15 usable wells within a six-mile radius of the Pebble Springs Site, and they withdraw approximately 2,200 acre-f eet of water per year. SCA App. B,

p. 5; Tr. 441.

D. Permits to Withdraw Water Applicant applied to the Water Resources Department of Oregon for a permit to withdraw 118 cfs of water from the Columbia River. It also filed with the same agency information about the two wells at the site. The Water Resources Department contemplates no problems in issuing the appropriate. permits if applicant gains siting authority. The application to appropri-ate river water is being held in abeyance now because an appli-cant mest begin work to utilize the water within one year of issuance of a permit. SCA Fig. 4-2; Tr. 431.

E. Conclusions Applicant's appropriation of ground water through two wells will not infringe on the existing water rights of others.

l2h 2

Applicant's usage will average no tore than 50 gallons per minute, and even sustained withdrawal of more than 600 gallons per minute had a minimal impact on a well much closer than the closest off-site usable well.

          .;pplicant's proposed usage of river and well water is snall when compared to the total available to it and other users.

It is concluded that applicant can meet its water requirements without infringing on the existing water rights of other persons. The requirements of General Standard 345-75-025(7) have been satisfied. X. ENVIRONMENTAL IMPACTS A. General Standards Before the Siting Council is authorized to approve a site :ertificate application. it must find that: Reasonably foreseeable disruption to and adverse impacts upon the environment in Oregon, or in adjacent areas that might be directly impacted, including, but not limited to, those caused by discharges of chemicals, waste, heat, moisture, sanitary wastes, and radioactivity from the construction, operation, and retirement of the facility will be reduced to that extent which is reasonably practicable. General Standard 345-75-025(3). General Standard 34 5-75-015 (1) (b) elaborates on the meaning of " reasonably practicable:" For the purposes of sections 345-75-025(2), (3), and (4), in determining what is "rea-sonsbly practicable", the Council will reach a conclusion in most cases by finding whether a proposed facility com-plies with the requirement of other agencies, such as the Federal Nuclear Regulatory Commission of [ sic] the Oregon Department of Environmental Quality. See ORS 469.400. B. Chemicals Water in the reservoir will contain chemicals present when the water is pumped from the rive. as well as chemicals added by applicant to counteract the growth of algae, inhibit corrosion, and minimize fouling. Corrosion products also will accumulate in the reservoir. Loss of water through evaporation

                                                              ~

1255 223

and seepage will cause an increase in the concentration of chemicals in the reservoir. If no measures are taken to reduce the buildup of chemicals, in approximately 40 years an equilibrium level will be reached at which the concentration will be almost six times the level of concentration when the reservoir is first filled. ine concentracion would approximate five times the beginning concentration af ter ten years of operation. SCA 11-2, 11-3, Fig, 11-1. The concentration of chemicals in the reservoir is potentially a problem because livestock and wildlif e may drink from it, and crops may be irrigated with water f rom the reservoir. SCA 11-2. The equilibrium level of chemicals in the reservoir will not exceed the recommendations of the Federal Environmental Protection Agency for livestock watering and irrigation, and will be within human drinking water standards. The Federal Environmental Protection Agency recommendations are considered applicable to wildlife as well. The expected chemical concen-tration in the reservoir will be less than that of some wells now used to irrigate crops. Having determined there was reasonable assurance that water quality standards will not be violated, the Oregon Department of Environmental Quality issued a permit for the proposed uses of the reservoir. If a problem develops, applicant will take steps to reduce the concentration of chemicals. SCA 11-3; SCA Fig. 4-10. Exh. A-10; Tr. 2271, 2308, 2266. Any environmental impacts f rom the discharge of chemicals into the cooling reservoir during operation of the proposed Pebble Springs Facility will be reduced to that extent which is reasonably practicable. C. Waste Heat and Moisture Water heated during the process of cooling the reactor cores will be discharged into the cooling reservoir. Except on hot days, the temperature at the surf ace of the reservcir will be higher than that of the ambient air, causing heat and water vapor to flow into the air. SCA 9-25. On average, ice storms occur approximately once a year in the Pebble Springs Vicinity. Additional icing due to the existence of the cooling reservoir is expected an average of 370 hours a year. The reservoir will cause additional fogging. The additional icing and fogging will largely be within the boundaries of the proposed f acility. SCA 9-4, 9-11, 9-26 through 9-30. A cooling tower is an alternative to the planned reservoir. The cooling towers also can cause fogging and icing. SCA 19-2, 19-23. The formation of blue-green algae in the reservoir may be accelcrated due to the waste heat discharges. A few strains of the algae can beccme toxic if they reach bloem proportions. Livestock or waterfowl could possibly be harmed by contacting the algae. SCA 16-12a through 16-12c. Toxic strains of algae have not been found in Oregon and no known instances of inj ury to livestock or waterf owl f rom toxic algae have been reported here. Applicant will monitor the reservoir f or algae f ormation, and measures are available to prevent adverse effects. Tr. 1588, 1593, 1597-99. The environmental impacts of waste heat and moisture f rom the proposed Pebble Springs Facility will be insignificant and will be reduced to that extent which is reasonably pr actica ble . D. Sanitarv Wastes During construction, portable toilets will be used. Disposal will be at a municipal sewage facility. SCA 14-1; Tr. 1452-53. During operation of the plants, sanitary wastes will be treated in a system that will include a lined lagoon and an evaporation pond. City of Arlington officials foresee no problems with the use of the planned system. SCA 14-1 through 14-3; Exh. S-10, Att. I, pp. A-13, A-14. Treatment and disposal of sanitary wastes will be performed in a normal manner, and will cause no foreseeable disruption to or adverse impacts on the environment. E. Radioactive Wastes The main issue of contention concerns applicant's plans to discharge radioactive liquid ef fluents into the cooling reservoir. Applicant has designed the facility to discharge water to the reservcir when the water contains radioactivity of not more than one picocurie per milliliter.9 The DOE contends that only water containing a much lower con-centration of radioactivity should be discharged. The one picocurie per milliliter amount is a design-basis discharge guide, not a regulatory limit. The concen-tration could be exceeded on occasion without violating NRC limits. The design limit is calculated to allow occasional 9In addition to " milliliter," parties also referred to the quantity of water being measured as " cubic centimeter" and

    " gram." All three describe the same volume of water.

l255 225 discharges of greater concentration without having to shut down the plant. Tr. 1702. The DOE contended in its prepared testimony and at the hearing that the liquid discharged to the reservoir should have no more than 1/100 of a picocurie of radiation per milliliter of water. The DOE also recommended that concentration as a regulatory limit rather than merely as a design objective. In its opening 'brief submitted af ter the close of the hearing, the DOE suggests that the Council adopt a regulatory limit of 1/10 of a picocurie per milliliter as a compromise between applicant and the DOE. Exh. S-14, p. E-7; DOE Opening Brief, Sec. V. A.,

p. 11.

Applicant strenuously resists DOE's suggestion that the radioactive content of liquid discharges be reduced.' Applicant points out that the total of liquid and gaseous discharges will not change; if the liguid discharges are reduced the gaseous discharges will rise by an equivalent amo unt. Applicant argues that plant reliability would suff er if the DOE limits were adopted. Applicant also contends that the monitors to be installed in the plants cannot detect radioactivity in liquid effluents at concentrations less than one picoeurie per millilicer. Radioactivity levels down to 1/100 picacurie per mfililiter can be detected by analyzing samples in a laboratory. SCA 15-6; Tr. 1685-87, 1704, 1707, 1711-12, 1714. Applicant ecnnits to meet NRC regulations for radio-active emissions. The one picocurie per milliliter design objective was set in light of current NRC regulations. The design objective could change if NRC regulations change. The DOE finds that applicant would meet the requirements of General Standard 345-75-025(3) if applicant discharges liquid effluents containing no more radioactivity than 1/100 or 1/10 of a pico-curie per milliliter. Applicant does not say it will limit radioactive liquid discharges to either of those limits. The DOE does not express an opinion as to whether discharges designed to meet NRC regulations also meet the requirements of Siting Council General Standard 345-75-025(3). No other party filed a brief expressing an opinion on that issue either. Consistent with Section I.D. of this document, the task here is to determine if applicant's plans meet the requirements of the standard. The task is not to determine if the Council can devise restrictions on applicant that insure compliance with the standard. Would liquid discharges containing radioactivity of one picocurie per milliliter disrupt or adversely impact the environment? Applicant says "No," pointing out that biota routinely receive up to 1,000 rems of radioactivity natur ally per year. Biota that will be in or on the cooling reservoir at l 2b 5 _? -

the Pebble Springs Facility are expected to receive up to 3.6 additional millirems of radioactivity f rom operation of the facility. Applicant contends that smaller lif e-forms are less sensitive to radiation, and that protection of humans is more than adequate protection of other lif e-forms. SCA Table 15-4; Tr. 1719-20, 1722-23. The DOE is impressed by the fact that any increase in radioactivity to biota from the proposed facility will be a very small percentage of what the biota receive naturally, but believes in the linear theory of radiation effects. That theory suggests that all radiation exposure, of all concentra-tions , is harmf ul. The record does not show how the environ-mental impacts of discharges of radioactivity would be reduced if radioactive discharges in liquid form were reduced and gaseous discharges were increased by an equivalent amount. Presumably the linear theory of radiation effects applies to radioactivity in gaseous as well as liquid form. If so, the linear theory does not support the argument that liquid dis-charges should be substituted for gaseous discharges. Perhaps the radioactivity in liquid form would concentrate in certain biota, such as aquatic biota, and gaseous discharges would be distributed more evenly in the environment. But the environ-mental impacts of increasing gaseous discharges to reduce liquid discharges were not shown. Tr. 1814-15, 1819. It would, however, be more expensive to reduce radio-active discharges below what is necessary to meet NRC require-ments, and the f acility would be less reliable. SCA 15-6; Ex h . S-13, Ta ble 2 ; Tr. 1685-87, 1704-13. The record does not show that there will be disrup-tions to or adverse impacts upon the environment from discharges of radioactivity as planned by applicant from the proposed Pebble Springs Facility. By meeting the discharge regulations of the NRC, applicant will reduce environmental impacts to the extent which is reasonably practicable. F. Miscellaneous Environmental Impacts

1. Water Intake Structure Applicant plans to construct an intake structure on the Columbia River to provide a means for supplying the facility with water. To minimize environmental impacts, appli-cant will use traveling screens and artificial currents to avoid trapping fish. As a res ult, there should be no loss of fish, although loss of some organisms living at the river bottom is expected. Also, the intake structure is planned for a location of lot fish density as compared to upriver and downriver areas.

SCA 16-10; Exh. A-9, pp. 3, 37; Tr. 1432. 1255 227

2. Soil Eresion As vegetation is disturbed during construction, the soil will L9 more vulnerable to erosion. Applicant will minimize soil erosion by minimizing the extent of vegetation disturbance, by applying gravel, water, or paving to heavily used surf aces, and by reseeding, landscaping, and restoring disturbed areas according to guidelines of the U.S. Soil Conservation Service. SCA 13-7, 13-8; Tr. 1451.

3. Transmission Lines To provide an auxiliary off-site power source, applicant will tap into one of the BPA 230-kilovolt (kV) lines running approximately 3,000 f eet north of the proposed f acility.

The 230-kV tap line will also be extended approximately 3-1/2 miles north and west to the Columbia River to provide electricity for the pumping plant. During construction, a temporary substation will be installed at the location of the tap to the BPA 230-kV line, and a temporary 12.5-kV trans-mission line will be constructed to the plant site. To convey the electrical output frcm the proposed facility, applicant will construct two 500-kV transmission lines f rem the f acility approximately one mile west to a switching station. Cons tr uc-tion of any additional transmission lines will be on existing rights-of-way. SCA 13-9, 13-10. Transmission lines associated with the Pebble Springs Facility will be constructed on low-growth range land. Some short-term soil erosion is expected. The use of herbicides is not anticipated. The lines will create noise that will be audible under and alongside the lines, but the noise will be within acceptable limits. The lines will be routed in accordance with the guidelines of the Federal Departments of Interior and Agriculture incorporated in "The Environmental Criteria for Electric Transmission Systems." SCA 13-10 through 13-12. G. Retirement In Volume II of this Proposed Order, decommissioning of the proposed facility will be addressed, including the environmental impacts of decommissioning. In this subsection the impacts on land use af ter the f acility ceases producing electricity will be addressed. Scme noncontaminated building rubble f rom demolition of structures will be buried on-site and some will be disposed of in landfills off-site. If the Facility is entombed for 100 years af ter operations cease, approximately 12 acres of land will not be usable for other activities during that time. I25S 228

To the extent the remainder of the site will be used for other activities, the environmental impact then will be less than during operation. After dismantlement and removal of all structures, applicant will restore the site ro unrestricted use. SCA App. I, p. 12-1. The environmental impacts from retirement of the facility will be reduced to that extent which is reasonably practicable. H. Endancered Soecies

1. The Standard In addition to the other environmental considera-tions, the proposed site must not be "the location of an endan-gered plant or animal species, as defined in 50 CFR Part 17 as of the effective date of these rules, whose continued existence would be significantly threatened by construction on the site."

Specific Standard 345-76-037.

2. Findings and Discussion The definitional reference in the standard is to the federal lists of endangered wildlife and plants. The lists are amended as additional data become available, and those updated lists are published in the Federal Register. Specific Standard 345-76-037 became effective on January 20, 1978. The July 14, 1977 issue of the Federal Register contains the list of endangered wildlife effective on January 20, 1978. The 1976 Federal Register contains the list of endangered plants effective on January 20, 1978.

Ecological baseline studies were performed by Battelle-Northwest Laboratories, and Beak Consultants, Inc. to identify and describe the distribution and habitats of biota at the Pebble Springs Site. Particular attention was directed to rare or endangered species. SCA 16-4; Exh. A-9. No plants listed in 1976 Federal Register or in the Oregon Rare and Endangered Species Task Force Report as endangered or threatened were found at the site of the proposed Pebble Springs Facility. No terrestrial vertebrates classified by the Oregon Department of Fish and Wildlife or listed in the Federal Register as threatened or endangered reside at the proposed site. No species classified as threatened or endangered on state or federal lists were found at the proposed site. The endangered peregrine falcon may visit the site as a rare migrant. The threatened northern bald eagle may be attracted to the cooling reservoir area if the area becomes important to waterfowl, a major food source for eagles. 1255 229

Neither bird will be harmed by the proposed energy f acility. SCA 16-12; Exh. A-9, p. 3; Exh. A-33, p. 3; Tr. 2278-80. 2319-20.10 No evidence was presented to show that a plant or animal listed as endangered in the Federal Register is located at the Pebble Springs Site.

3. Conclusion The proposed Pebble Springs Site is not the location of an endangered plant or animal species, as defined in 50 CF217 as of January 20, 1978, whose continued existence would be significantly threatened by construction on the site.

I. Conclusions Applicant's studies and plans to deal with environ-mental impacts f rom the proposed f acility are reasonable. Reasonably f oreseeable disruption to and adverse impacts on the environment f rom construction, operation, and retirement of the proposed f acility will be reduced to that extent which is reasonably practicable. The proposed site is not the location of an endangered plant or species as defined in 50 CFR Part 17 as of January 20, 1978. The requirements of General Standard 345-75-025(3) and Specific Standard 345-76-037 have been satisfied. 10The standard ref ers to the definitions found in 50 CFR Part 17 cs of January 20, 1978. 50 CFR was not offered into evidence. A reading of 50 CFR Part 17 reveals that the list of endangered species is amended f rom time to time, and the amended lists are published in the Federal Register. No portions of the Federal Register were off ered into evidence. In testimony filed prior to the hearing, applicant discussed endangered plants and terrestrial vertebrates. But the standard is concerned about endangered plants and wildlif e. Presumably, "wildlif e" is a broader term than " terrestrial vertebrates." Only on cross-examination does evidence emerge that allows sufficient findings of f act to be made, but even here the evidence is unspecific. 15e relevant date is January 20, 1978, but the 1975 and 1976 Federal Register are referred to as the most recent plant species lists. The Federal Register is published frequently, perhaps daily, so a reference to a year seems general. The witness did not specify whether he was referring to a yearly compilation or the Federal Register published on a specific date. l2SS 230

XI . SOCIO-ECONOMIC IMPACTS A. Statute anc' Standard ORS 469.510 directs the Council to " set standards and construction and operation of promulgate thermal plants rules and for the siting,llations nuclear insta which shall take into account the following: ...(8) Ability of the affected area to absorb the industrial and population growth resulting f rcm operation of the facility." A prerequisite to approval of a site certificate application is a finding that: (10) (a) The applicant has identified the major and reasonably f oreseeable socio-economic impacts on individuals and communities located in the vicinity of the proposed f acility resulting f rom construction and operation, including, but not limited to, anticipated need for increased governmental services or capital expenditures. (b) The affected area can absorb the proj ected industrial and population growth resulting f rom construction and operation of the facility. General Standard 345-75-025(10). B. Discussion and Findings Approximately 250 people will be required to operate the two power plants , but during peak construction,1,400 workers are expected to labor on the plants. The construction workers will bring dependents and cause an increase in servic-personnel. During the peak, area population is expected to increase by 8,849. That population will locate in urban growth areas in and adj acent to Arlington, Boardman, Condon, Heppner, Umatilla, Stanfield, Hermiston, Irrigon, Pendleton, and Echo. SCA 13-18 , 13- 22, 13-23 ; SCA Fig. 13-4. Applicant identifies 20 social and economic aspects of community lif e tha* could potentially be impacted by an indus-trial development such as a nuclear power f acility. Applicant further identifies seven community needs as the major and reasonably f oreseeable socio-economic impacts that would result f rom building and operating the Pebble Springs Plants. Those seven impacts are: increased demand for housing, water, sewage trea tment f acilities , medical services and f acilities, r ecr e a-tional f acilities, a change in public safety requirements, and increased strains on educational systems. SCA Sec. 13.7; SCA App. A, p. A-15; Tr. 717. bb 23)

Applicant retained the consulting firm of Skidmore, . Owings, and Merrill (SOM) to analyze the housing and community f acilities requirements of the area surrounding the proposed plants. SOM used a computer model of the development process and issued a report in May, 1975. SOM updated the report periodically thereaf ter, including one dated October,1977. The Battelle Memorial Institute performed a study f or the Nuclear Regulatory Commission on social and economic impacts resulting f rom nuclear power plants, and performed a case study of the socio-economic impacts of the Pebble Springs Plants. The East Central Oregon Association of Counties and other governmental organizations have also studied potential area growth. SCA 13-16, 13-18; SCA App. A, pp. A-4, A-12, A-17. The exact number of new people each city will receive is not known, but SOM studied the nearby communities and included in its report an estimate of the total imported popu-lation each community would receive. The estimate is based primarily on analysis of the amenities each community of f ers and of each community's distance to the Pebble Springs Site. The unadjusted results are shown in the SOM print-outs under the heading Gravity Percent Distribution. Arlington would get 81.7 percent of the new population, Boardman would receive 4.4 percent, and other cities would receive even smaller per-centages. However, the percentage of new population assigned to each city is then changed by limitations that prevent the normal distribution f rom occurring. The most pronounced limitation is in Arlington where a lack of mobile home capacity allows that city to accept only 31.8 percent of the new popula-tion at the peak of construction, rather than the unadj usted 81.7 percent. The percentage of the new population other cities receive increases accordingly, with Boardman receiving 21.7 percent. The SOM projections are reasonable and are accepted. SCA App. A, pp. A-19 through A-24; Tr. 743 et seq., 854, 887, 898. Arlington and Boardman prepared comprehensive land-use plans in the early 1960's when the John Day Dam was built. Both cities were then relocated. The passage of the Land Conserve.- tion and Development Act in 1973 stimulated further long-term planning. On July 8,1977, Gilliam County became the first Oregon county to receive approval of its comprehensive plan from the Land Conservation and Development Commission. Arlington hired J. Val Toronto and Associates to study the city's addi-tional needs for sewer and water systems. It also hired David Rowe as a consultant to help prepare its comprehensive plan. Mr. Rowe previously played a major role in helping Gilliam County prepare its own comprehensive plan. Arlington has a preliminary draf t of a comprehensive plan, but not a final plan. SCA 13-5,13-17; Exh. I-10, pp. 1-3; Exh. I-13, p. 5. The site of the proposed f acility is within the Arlington School District. PGE has been paying property taxes l255 232

9 to Gilliam County for several years, with the current valuation being about $50,000,000 - 35 percent of the total assessed value of the county. The taxes paid by PGE directly benefit the county and the Arlington School District, and indirectly benefit other taxing authorities within the county. The property taxes PGE pays can be used to mitigate community impacts caused by the power plants, or used to reduce collections from other property owners, or a combination of the two options. SCA 13-21. Arlington's population is expected to increase from its present 580 to approximately 3,400 during peak construction activity. The city has capacity to provide water service to 4,000 people, and sewer service to 2,500 people. Arlington has applied to the federal government for a grant to expand its sewer capacity. The significant growth in pop;1ation will create substantial demands for housing. Applicant and Arlington plan to rely on private developers and contractors to fill the need for temporary and permanent housing. Applicant feels there is inadequate temporary housing in Arlington and has discussed engaging in a joint venture to alleviate that situation. The Arlington School District currently has excess capacity and a fund to finance capital improvements without requiring a new levy or bond. The residents and school board have completed plans to accommodate the new population occasioned by construc-tion of the power plants. SCA 13-31, and App. A, pp. A-24, A-39; Tr. 831, 856. Arlington has a part-time nurse and is buying an ambu-lance. For other medical services, residents rely on hospitals and doctors available in other communities, including The Dalles, Hermiston, and Pendleton. The city could use additional medical services, particularly during peak construction activities. Arlington has a one-person police force. Personnel from the offices of the State Police and County Sheriff also patrol the area. Arlington and the surrounding area has protection from a volunteer fire department. In the Arlington-Boardman area there are boat launching, camping, and picnicking facilities, and they are not utilized to their full capacities. Also, the Gilliam County Planning Commission has proposed additional recreational facilities adjacent to regional bodies of water. SCA 13-6, 13-7, 13-19, and App. A, p. A-38. Arlington Mayor Foster A. Odom testified in favor of the proposed power plants. He sponsored a joint resolution of the City of Arlington and Gilliam County acknowledging the expected increases in population, and accepting and assigning responsibility for mitigating resulting impacts. Developers,of subdivisions must provide streets, water, and sewage facilities for new developments. The city will utilize grants and its taxing powers to provide adequate water and sewage system capacity. The city and county jointly will provide adequ:.te detention and emergency facilities. Commercial recreatic.tal 1255 233

facilities will be provided by private entrepreneurs. The county will provide supplementary recreational facilities as needed. Tri-County Health Services, representing Gilliam, Morrow, and Wheeler Counties, is planning to construct an out-patient clinic in Arlington if the power plants are approved. Exh. I-10 ; E xh. I-11; Tr. 826-899. Currently there are approximately 700 residents in Boardman. During peak construction activity on the proposed power plants, that population is expected to grow to 2,690, an increase of over 280 percent. A newly expanded water system can supply the water needs of 7,000 people. The city is under-taking improvement of its sewer system to accommodate the needs of 4,000 people. Regional agribusiness developments and the Boardman Coal Plant have spurred recent building construction in Boardman. Private developers and PGE have been able to keep ahead of the rising demand. PGE invested $2,000,000 in an apartment development for workers at the Boardman Coal Site, and purchased other land for development into residential living quarters. SCA App. A, pp. A-42, A-43. Of the 2,566 new elementary and secondary students expected during construction of the proposed power plants, 20 percent, or 513, are expected to attend school in the Morrow County School District, which encompasses Boardman. At present, the schools are crowded, so substantial expansion is needed before the adfed strains of new students can be accommodated. A $165,000 expansion program has been started at the Boardman High Scncol. Other plans include an elementary school in Boardman (3aardman's elementary students now attend school in Irrigen) and a junior high school in the north end of the district. The enhanced tax base created by the Boardman Coal Plant and area agribusiness developments should help provide funds to finance the planned expansion. SCA 13-22. Recently, a medical-dental clinic was established in Boardman, and federal funds were obtained for an outpatient clinic. Local ambulance service has been available since 1976. The County Sheriff and State Police provide protection, and fire protection is provided by a volunteer department. The city intends to hire an officer to work in both the police and fire departments. SCA App. A, pp. A-42, A-43. Irrigon, located adjacent to the Columbia River, is a 55 minute. drive from the proposed facility. Its present popu-lation is 370, and 695 additional people are expected to reside in Irrigon during peak construction activities, for a total of 1,065. The city's water system can supply 2,400 people, but sewage disposal is a problem. Individual septic tanks are used, but an application for a grant to construct a sewage treatment facility has been filed. Another problem is the overcrowding in the Irrigon Elementary School. High school students attend 12SS 234

school in Boardman. It is assumed Irrigon is in the Morrow County School District mentioned in the discussion about the educational needs of Toardman residents. SCA App. A, pp. A-19, A-43, A-60, A-62. Construction of the proposed power plants will cause population increases in seven other communities, all substan-tial distances from the proposed site. They are: Condon in Gilliam County; Heppner in Morrow County; and Umatilla, Hermiston, Stanfield, Echo, and Pendleton in Umatilla County, In driving time from the Pebble Springs Site, Condon is the closest at 51 minutes, and Pendleton the farthest at 86 minutes. The popu-lation increase each of these communities will experience will be less substantial relative to its present population than at Arlington, Boardman, and Irrigon. Hermiston's population has recently increased dramatically, straining the city's services. A water bond issue was passed in 1977, and an application has been made for a grant to expand its sewer system capacity. Classrooms in Hermiston are crowded, and a bond issue was passed in 1976 to build new classrocms. Hermiston's present population is about 6,000, and primary and secondary population increases due to the proposed power plants will increase that to over 6,800 during peak construct?v.T activity, a 15 percent increase. The City of Umatilla needs additional housing and school rooms. SCA App. A, pp. A-19, A-24, A-57, A-59. PG2 has maintained an office in Arlington since late 1974 to facilitate the flow the information to rid cooperation with local communities. A PGE representative has attended council, planning commmission, port, and county court meetings; he has met with developers, builders, and government officials; he has distributed reports and assessments, and discussed prob-lems and plans with various people and groups. Local government officials, PGC representatives, and other interested persons have discussed and planned for impacts expected f rom the Pebble Springs Plants since the plans were first made public. Exh. I-10, p. 3; I-13, p. 5; Tr. 1118. PGE has paid or obligated itself to pay several hundred thousand dollars to mitigate the impac'; of the Boardman Coal Plant and the proposed Pebble Springs Facility. The payments and promises are to local governments and are in addition to tax payments. It has also participated in property development to ease the housing shortage in Boardman. PGE promises it will i mon *nr community needs as the Pebble Springs Project develops an6 will make additional payments if needed to help communities deal with the impacts from the proposed project. SCA App. A.,

p. A-169; Tr. 760 et seq., 782, 815, 1111.

C. Conclusions Exact impacts resulting from construction and operation of the proposed facility can only be projected, not known with 97g

                                                            ,7g,,

Im Ja t. s s

precision. Requested or planned funding may not materialize, requiring aid in unexpected areas. The north central part of the state is 3 owing from activities not related to Pebble Springs, creating and satisfying demands different from pro-jected demands from the proposed power plants. Applicant's ef forts to identify the impacts f rom the proposed f acility and possible resources to mitigate them, coupled with its monetary commitments , are reasonable. Applicant identifies the major and reasonably foresee-able socio-economic impacts resulting from construction and operation of the proposed facility. Potential proolems have been identified for which definite solutions have not been detailed. It is not possible to resolve all potential problems substantially in advance of their happening. The standard does not require such an impossibility. Enough has been done to conclude that the affected area can absorb the projected indus-trial and population growth resulting f rom construction and operation of the proposed facility. Applicant has satisfied the requirements of General Standard 345-75-025(10). XII. Safety A. Emissions Durinc Normal Ocerations

1. Standard Before finding that the general standard on public health and safety, 345-75-025(2), has been satisfied, the Council must find that:

During normal cperations of the facility the radiation dose to any individual in an unrestricted area f rom all pathways will not exceed 3 millirem per year, total body dose, frcm liquid effluents; 5 millirem per year, total body dose, frem gaseous effluents; or 15 millirem per year to any organ f rom radioactive iodine or particulate releases in gaseous effluents. Specific Standard 345-76-030(1).

2. Discussion and Findings The standard does not explicitly state whether the numerical limits 'are per reactor, or per site regardless of the number of reactors. Applicant argues that it means per reactor because the NRC limits are on that basis. The comment to the specific standard says the standard is not incended to be more restrictive than the NRC requirements. The standard _ applies co "the facility." Facility is defined in rule 345-76-020(3) as "a l?bb 236

thermal power plant and its related or supporting facilities." Order Adopting Standard (Specific), p. 6; Tr. 5509. The standard apparently sets limits per reactor, but a decision on that issue is not necessary here. The radiation expected from the pebble Springs Facility is substantially below the limits set in the standard, even if the amounts are doubled.ll During normal operation of the proposed f acility, radiation from two sources may be available for release to the environment. Fission products f rom the nuclear fission process may be released to the reactor coolant system f rom a small number of def ective f uel elements . Also, small quantities of impurities will appear in the reactor coolant system as a result of neutron activation of coolant water impurities and other material in contact with the coolant. The reactor coolant system water will be recirculated and there will be treatment systems f or it, but some radioactivity will be released as gaseous or liquid ef fluent. SCA 14-2; Tr. 5486. The amounts to be discharged were estimated according to models and assumptions consistent with NRC regulations. The estimates are of doses to a person continuously located at a residence close to the proposed f acility at which a person would receive the highest concentration of radiation. The estimates also assume that: those people will use the cooling reservoir for recreation such as boating, water skiing, swimming, and sun-bathing; that they will eat ducks, geese, and livestock which drink from the reservoir; that the reservoir water will be used to irrigate vegetables and pasture in the vicinity; and that 0.1 percent of the fuel elements will leak. Actual experience indicates that estimating f uel element failure at 0.1 percent may be too high by a factor of 20. Tr. 5486-97. During normal operation, a person in an unrestricted area close to the prop osed f acility could receive up to .49 millirem of radiation per year to the whole body frcm liquid affluents frcm each proposed reactor. SCA Table 15-3. In the narrative portion of the SCA, applicant does not state the quantities of gaseous and iodine / particulate effluents the proposed f acility is expected to discharge, only saying the dose level limits will not be exceeded. Applicant 11 Doubling the radiation expected from one reactor is con-servative because exposure to man f rom two identical reactors is apparently less than two times what one reactor emits. Certainly doubling the single dosage would not yield a number that is too low. Tr. 5508-11.

relies on SCA Table 15-7 to show compliance with the quanti-tative limits in the standard. Unfortunately, the table is not self-explanatory, and no one explained it during the hearing. No quantitative amounts were stated on cross-examination. SCA 15-11, 15-12. Citing Table 15-7 as authority, applicant says the estimated average annual dose to the whole body f rom gaseous effluents during normal operation will be .13 millirem, and the dose from radioactive iodine or particulate gaseous effluents will be .43 millirem to any organ. Citing the same table, the DOE lists the dose from gaseous discharges as .C4 millirem per year from both plants, and says the radioactive iodine and particulate discharges will be a small f ractior of the total radiation exposure listed. Appifcant Brief on Site Specific. Standards, p. 6; DOE Opening Brief, Sec. VI. B., p. 4. No evidence was of fered to show that the, discharge limits of the standard will be exceeded by the proposed facility. It appears that applicant's interpret ation of Table 15-7 is correct. Applicant's estimates are higher than the DOE's, and are adopted here. Both estimates are well below the limits set in the standard.

3. Conclusions The quantitative limits set in the standard will not be exceeded during normal operation of the proposed Pebble Springs Facility. The requirements of Specific Standard 345-76-030(1) have been met.

XII. SAFETY B. Plant Security In order to find that a proposed nuclear facility satisfies the requirements of the general standard on public health and safety, the Council must find that: (2) Security measures at the facility will be capable of providing protection against industrial sabotage, which could result in uncontrolled release of radio-activity, by a determined violent e: tended assault, attack by stealth, or decepcion of several persons with the following attributes, assistance, and equipment: (a) Well-trained and dedicated individuals, (b) Inside assistance, libb 238 (c) Automatic weapons , (d) Hand-held equipment , including incapacitating agents and explosives. Specific Standard 345-76-030(2). Applicant says the security measures at the Pebble Springs Facility will meet the requirements of the Nuclear Regu-latory Commission and the Siting Council. The scecifics of those measures are still in the planning stage. Even if the plans were final, applicant would not make them public out of concern that doing so would impair or destroy their effectiveness. Tr. 2080, 2085-2102, 2152-2154, 2383-2388, 4019-4028. - Applicant discusses access control, personnel screening, guards, physical barriers, alarms, and other security measures under consideration. But the evidence does not tell how deter-mined saboteurs will be repelled. Applicant promises to meet the standard, but does not demonstrate how. The record cannot support a finding that the security measures at the proposed Pebble Springs Facility will be capable of protecting against determined sabotage of the type specified in Specific Standard 345-76-030(2).12 12 Independent of the process of approving or rejecting a site cer tificate application, the Siting Council has author _ty, undet ORS 4 69. 530 (3) , to review and approve nuclear poier plant security programs. Infc;mation on plant securit/ suppli ed to the Council for its review and approval is con-fidenti al , and the Council's reviews are exempt from the Oregon Public Meetings Law. The Council currently reviews , in closed executive sessions, the security programs at the Troj an Nuclear Power Plant. ORS 192. 500 (2) (j ) , 192.690(2); OAR 345-70-020. The Council did not want the specifics of the security plans f or Troj an or Pebble Springs to be presented on the record in this proceeding. Siting Council Minutes of August 8, 1978, meeting; Tr. 4024. Perhaps the Council, in adopting the plant security standard at issue here, wanted to give intervenors an oppor-tunity to present substantive evidence on plant security, or intended to condition a site certificate, if approved, on satisf actory proof of an adequate security plan presented to the Council in closed executive session. Or perhaps it wanted to rely on its own intimate knowledge of nuclear power plant security to satisfy the standard. In any event, the conclusion reached on this standard, as on all the standards, isfroma weighing of the evidence presented on the record with the requirements of the standard. I255-239

C. Scent Fuel Storage

1. The Standard Before the Council is authorized to find that General Standard 345-75-02S(2) is satisfied, the Council must find that:

(6) Spent fuel storage systems will be designed to: (a) Prevent loss of water _ from the fue? pool that would uncover fuel, (b) Protect fuel from mechanical damage, (c) Provide the capability for limiting the potential off-site exposure so that an individual continuously located at any point on the outer boundary of the low-population zone will not receive a whole-body dose in excess of 25 rem or a dose to the thyroid in excess of 300 rem, _ due to iodine exposure, assuming all the activity in the fuel rod gaps has been released from one fuel assembly. Specific Standard 345-75-030(6).

2. On-Site Storage of Spent Fuel Applicant plans to replace one-third of the fuel assemblies in each unit each year. Before shipping them off-site for permanent disposal, the spent fuel assemblies will be stored underwater on-site in the fuel building. This section deals with that on-site storage.

For each nuclear unit, applicant plans to have a water-filled pool for storing the spent fuel assemblies. The ~ water level will be at least ten feet above the top of the active portion of the spent fuel elemen's. Each pool will have capacity to hold the fuel from ten ar.nual refuelings. The pools will be constructed of reinforced concrete and lined with stainless steel. SCA 3-11 through 3-13, 15-14; Tr. 5354.

3. Prevention of Loss of Water Water for the pools will come frem the makeup and purification system, with reserve capability prmvided by the spray ponds. Redundant monitoring equipment w.ll alarm locally and in the control room if the water level falls belew predeter-mined levels. A separa.te leak detection system will be iastalled behind the stainless steel liner. All piping connections are designed to prevent siphoning of pool water. The spent tuel pools are designed to withstand the effects of a " safe shutdown earthquake" - a seismic event producing ground acceleration of 0.25g. SCA 3-10, 3-11, 3-13; Tr. 1387, 5362.

                                                         )25S 240

4. Protection from Mechanical Damage The storage racks for the spent fuel assemblies will be designed to withstand a " safe shutdown earthquake."

Heavy obj ects will not be allowed to f all on the spent fuel, and crane stops will. be used to preclude heavy loads from traveling over the top of stored fuel. Projectile protection will be provided by a reinforced concrete pool cover, by rein-forcing the fuel building walls, or by other measures providing similar protection. SCA 3-10 through 3-15; Tr. 5363.

5. Capability for Limiting Radiation Exposure Radiation detectors will be provided in the pool area to sound alarms if conditions become abnormal. The alarms will be sounded in the pool area and in the control room. Two independent vent systems will have filters and absorbers to remove radioactive particles and iodines. If an accident involving spent fuel occurs and all the activity in the fuel rod gaps from one fuel assembly is released, the radiation exposure at the outer boundary of the low population zone will be 1.5 rem to the thyroid, and 0.4 rem whale body dose. SCA 3-13, 3-16, 3-17, and App. E, pp. H-2 through H-4.

6. Other Evidence The staff of the NRC reviewed the planned storage facilities for spent fuel at the proposed Pebble Springs Facility and concluded that the design criteria meet 2he requirements of the NRC. SCA 3-13; SCA Exh. 1, Sec. 9.1.2.

No parties presented evidence that the spent fuel storage plans for Pebble Springs are not designed to meet the requirements of the standard.

7. Conclusions The spent fuel storage systems for the Pebble Springs Facility are designed to prevent the loss of water, protect the fuel from mechanical damage, and limit potential radiation exposure as specified in Specific Standard 345-76-030(6). The requirements of that standard have been met, XII. SAFETY D. Scent Fuel Transportation

1. The Standard Specific Standard 345-76-030(7) mandates that:

1255 241 Spent fuel will be shipped in a container such that, if the following hypothetical accident occurs, radiation levels 3 feet from the external surface of the container will not exceed 1 rem per hour, no more than 0.1 percent of the total radioactivity of the container will be released, no more than 1000 curies of inert gases will be released, and the contents cf the container will remain subcritical: (a) A free drop of 30 feet onto a flat unyielding surf aca , striking the surf ace in a position for which maximum damage is expected, (b) A free drop of 40 inches onto a vertical six-inch diameter rod which is at least 8 inches long, (c) Exposed to a heat e uivalent of an oil fire (defined to be 1475c F. for at least 30 minutes), then, (d) All portions immersed under at least 3 feet of water for at least eight hours. The Siting Council standard is a paraphrase of the NRC standard on transportation of spent fuel.

2. Shipment of Spent Fuel Assemblies Applicant plans to replace a third of the fuel assemblies in the core of each plant each year. The fuvl assemblies removed will be temporarily stored under water at the plant in a spent fuel pool. Then the fuel assemblies will '

be placed into special casks for shipment to an off-site storage facility or reprocessing plant. The two lebble Springs Plants will generate approximately 136 spent fuel assemblies per year, requiring 14 rail car shipments or between 45 and 136 truck shipments per year. The spent fuel assemblies will be radio-active, requiring special handling. SCA 15-14. The NRC has licensed five different models of shipping casks to transport spent fuel assemblies. Applicant will ship spent fuel assemblies from the Pebble Springs Facility in casks licensed by the NRC. SCA 15-15, 15-18; Tr. 5295. One of the five approved casks is the General Electric IF-300 fuel shipping cask. Applicant does not have a contract to ship spent fuel from the Pebble Springs Facility in IF-300 casks, but offered the evidence about the IF-300 cask because it is representative of available shipping containers. Exh. A-27; Tr. 5220. I2SS 242 A typical shipping cask has a thick, leak-tight corrosion-resistant stainless steel liner, a central heat trans-fer medium such as water or helium, and shielding for gamma radiation of steel, lead, and uranium several inches thick. Protection against impact, puncture, and fire is provided by thick outer plates, protective impact-absorbing crash frames, or other protective overpacks. Heat is dissipated through surface fins; and pressure-relief valves or rupture disks are provided to prevent overpressurization. SCA 15-16; Tr. 5330.

3. Ability of Shipping Casks to Withstand Accidents General Electric submitted a safety analysis report to the NRC along with its application for licensing approval for the IF-300 cask. The report analyzed cask per-formance if subjected '1 the free drop of 30 feet, the 40-inch drop onto a rod, the f.;e of at least 1,475 degrees F. for at least 30 minutes, and then immersion in three feet of water for at least eight hours. The analysis showed radiation levels three feet f rom the container to be less than one rem per hour.

No more than a tenth of one percent of the total radioactivity in the container was relea" a. In addition, no more than 1000 curies of inert gases were released ad the contents of the container remained subcritical. The values shown by the analy-sis were acceptad by the NRC, and are accepted here. Tr. 5251. In addition to analysis showing that nuclear fuel ship-ping casks can successfully withstand the specified accident sequence, spent fuel shipping casks have been tested in accident situations at Sandia Laboratory in New Mexico. The tests were performed on casks that had been licensed by the NRC, but had become obsolete because they were not long enough to transport current spent fuel assemblies. In one test, a truck-mounted spent fuel cask was crashed head-on into a rigid concrete barrier at 60 miles per hour. Only superficial damage to the fins and external piping resulted, with no cask leakage. The test was repeated with the impact increased to 85 miles per hour. There was slight bulging of the forward end of the cask, buckling in the fuel pins close to the impact end, and inconsequential seepage from the cask head. In a third test, a 109-ton locomotive crashed broadside into a truck-mounted spent fuel cask at 81 miles per hour. Some fins were damaged, but the structural integrity of the cask was not compromised. In a fourth test, a cask mounted on a rail car was put in a fire pit and burned for about 100 min-utes with the heat much greater than specified in the Siting Council standard. Integrity of the cask was not compromised. The 30-foot free fall specified in the sitinq Council standard corresponds to a crash velocity of 30 miles per hour, much less than that used in the successful Sandia tests. Testimony was received concerning additional tests performed at Oak Ridge 1255 243

National Laboratory in Tennessee. The tests involved the 30-foot f all and the 40-inch drop onto a rod. Test results were not stated. Tr. 5287-88. The design or current spent fuel shipping casks is better than of those used in the Sandia tests, and the current casks are considered to be superior to the crash-tested casks. Tr. 5332-33.

4. Pressure Release System In the analysis and tests presented by applicant,

                                                               .l.

the pressure Pressure release r? lease mechanism valves on the casks are designed didand to open notrel

                                                      - . ..'; e pressure when the pressure reaches a pre-set value, .uch as 375 psig. (at 4500 F.) on the IF-300 cask. When the pressure drops below that value, the valve closes. The DOE raised the possibility of a pressure release valve failing to open or reseat as designed. After an accident severe enough to create excessive internal pressure, failure of a pressure release valve could lead to emissions greater than allowed by the standard. Exh. S-18, p. 7-2.

DOE witness Godard calculated the probabilities connected with a pressure release valve failure. He used the equipment f ailure rate f rem the Rasmussen study, WASH-1400, to estimate the f ailure probability of the pressure release system. He also conservatively assumed that no corrective action would be taken after the accident, and that the accident would cause a loss of cooling capibility. He estimated the probability of a severe accident followed by failure of the pressure release system to be about one chance in a billion per year. Exh. S-18, Table 7-1. Applicant responded that the pressure release system on an NRC-approved cask would be of nuclear quality. The NRC would require initial inspection under accident conditions and quarterly retesting. The pressure release valve on the IF-300 cask is housed in a protective structure capable of with-standing the specified drop tests without collapse. Analysis presented to the NRC would have to show proper operation of the valves, and the NRC would have to agree with those values before issuing a license. Exh. A-27, pp. 3,4; Tr. 5317. Even the conservative analysis done by Mr. Godard does not indicate a danger to the public f rom transportation of spent fuel. No other evidence was presented to shcw a danger, and a one in one billion chance that the standard will be exceeded is not undue. The DOE concludes that the standard has been met. DOE Opening Brief, Sec. IV. H. 12S5 244

Rupture disks can also be used to prevent the buildup of excessive pressure. No evidence was presented regarding rupture disk failure.

5. Summary and Conclusions Evidence supporting an affirmative finding on the standard at issue includes the following:

a. Applicant will use a shipping cask that has been approved by the NRC. The standard at issue here is a para-phrase of the NRC standard;

b. Analysis of the IF-300 cask shows it can endure the specified accident sequence and not exceed the emission limits of the standard;

c. The Sandia tests show the casks can withstand severe crashes, and a fire as specified in the standard, without significant structural damage.

It is concluded that applicant will ship the spent fuel from the Pebble Springs Facility in containers that can withstand the accident sequence specified in the standard with-out emitting more radiation than allowed in the standard. The requirements of Specific Standard 345-76-030(7) have been satisfied. XII. SAFETY E. Dam Safety and Dewaterino

1. Dam Safety Before the Council is authorized to conclude that a proposed facility meets the requirements of the general stan-dard on public health and safety, Specific Ctandard 345-76-035(2) requires the Council to find that any earth-filled dams to be built at an energy f acility are capable of " withstanding, with-out failure, reasonably expected loads."

Applicant intends to construct a reservoir at the Pebble Springs Facility to store water used to cool the reactors. The reservoir will be 1,900 acres in surface area, and hold approxi-mately 60,000 acre-ft. of water. The reservoir will be formed by damming both ends of a shallow depression. SCA 10-5. The foundation on which the dams will be constructed is comprised of pomona basalt, a lava layer. The core of the dams will consist of compacted clay material; the shells sur-rounding the core will be composed of sand, silt, and gravel. The slopes on either side of the core will be inclined at three horizontal feet to one foot vertical. SCA 10-6; Tr. 1342, 1362. 1255 245

PGE is constructing a coal-fired energy f acility near Boar dman , also in northeastern Oregon. It has constructed a reservoir there and was filling the reservoir at the time oral testimcay was taken regarding the Pebble Springs Dams. The f oundation material at the Boardman Coal Plant is similar to that at Pebble Springs, and the design of the two reservoirs is similar. Tr. 1346, 6771. Because earth-filled dams seep water, a drainage collection system will be constructed. It will consist of permeable gravels and. piping to collect and carry away the water that seeps through the core of the dams. The drainage collection system is needed to prevent undue saturation of the shell around the core of the dams, to preclude erosion of dam material, and to prevent excassive pressures within the dams. Exh . A-3 5, p. 2; Tr . 13 4 4. When the reservoir is filled and in operation, a substantial wind could cause waves, putting additional stress on the dams. Applicant hired Meteorological Research Incor-porated to recommend design criteria for wind speed strength, using historical records of the area, including data frcm the Boardman and Pebble Springs Weather Stations. Meteorological Research recommended that a maximum wind speed of 100 miles per hour be assumed. Applicant adopted that recommendation and utilizes it in its reservoir plans. A tornaco could possibly have a wind force greater than 100 miles per hour. But it is unlikely to cause as much hazard to the dams as a regular 100 mile per hour wind speed because it probably would not encompass the entire reservoir area and would draw water up as it passed, thereby reducing the pressure on the dams. SCA 9-14; Tr. 1328-29. The maximum reported 1-minute wind speed at Arlington is 'O mph. That may be exceeded in the future, and the Pebble Springs Site may get wind speeds greater than at Arlington, but designing the dams to withstand the stresses caused by a 100 mph wind is reasonable. SCA 9-16. An earthquake could damage the dcms. The dams will be designed to withstand ground acceleration of .15g. That value was adopted after a geologic and seismic study of the Pebble Springs Region, including the plant site, was performed by the consulting firm of Shannon and Wilson. Maximum historical ground acceleration at the site is estimated to have been between .05g and .07g. Exh. A-35, p. 4; Tr. 1330. Dams on the Columbia River are typically designed to withstand seismic events creating ground act_lerations of up to

.109    The Pebble Springs Facility itself is designed to shut-down safely if ground acceleration reaches .25g. If ground acceleration exceeds .15g, the spray ponds, which are designed 255 246

to withstand ground acceleration of .25g, will be relied upon to provide cooling water for the facility. Tr. 1331-1332. The seismic design of the dams provides a substantial margin of safety beyond estimated historical seismic events, and is reasonable. The design plans of the dams were analyzed for adequacy by slip circle analysis, called the Bishop Method. Estimates of margins of safety greater than needed to just meet design criteria were computed for the Pebble Springs Dams. The analy-sis showed that the greatest margin of safety would be during normal conditions when the reservoir is filled, when the safety factor would be 2.6. The least margin of safety would be during an earthquake creating ground acceleration of .15g, when the margin of safety would be 1.1. That is, the dams would have ten percent reserve strength during such an earthquake. Exh. A-35,

p. 2; Tr. 6773.

Various materials were subjected to about a thousand tests to determine their suitability for use in the dams. Shear strength, permeability, and compacted weights of the materials were determined. Tr. 1343, 1386; Exh. A-35, p.4. No affirmative evidence was presented to show that the proposed dams will not be capable of successfully withstanding expected loads. The Pebble Springs Dams, if constructed as proposed, will be capable of withstanding, without failure, reasonably expected loads.

2. Dewatering Specific Standard 345-76-03 5 (2) (b) requires the dams to be capable of "being dewatered and refilled to permit any needed repairs to it or related cooling water sy7tems in a manner consistent with the safety of persons and prcperty interests downstream." The standard is interpreted to mean that the reservoir the dams will be built to create can be drained and refilled without undue damage to property interests or injury to persons downstream. Downstream is interpreted to mean the path the water will take when released from the reservoir.

Applicant does not expect to drain the reservoir during the service life of the plant. Nevertheless, it has designed a dewatering structure in the east dam. The dewatering structure will be manually operated, requiring someone to get in a boat, go to the outlet structure, and perform a physical task which will open a gate and allow the water to escape. SCA 10-6; Tr. 1350. The water would go from the spillway in the east dam to an unnamed gulch, then to Eight-Mile Canyon, then to Willow Creek, and then to the Columbia River. The banks of the unnamed gulch and Eight-Mile Canyon will overflow during dewatering. Applicant will give notice in surrounding areas prior to dewatering. The surrounding areas contain no human habitation or agricultural lands. Any grazing livestock will be moved to higher ground prior to dewatering. Any scouring of land will be restored by applicant. Willow Creek can accommodate the flow f rom dewatering the reservoir, assuming it is not already f ull . Applicant will regulate the flow of water fram the reservoir so the banks of Willow Creek will not overflow. The reservoir could be drained at up to 410 cubic feet per second (cfs). It would take 88 days to drain the reservoir, assuming a f ull reservoir and discharge at 410 cf s. SCA 10-12; Exh. A-35, p. 5; Tr. 1353. Refilling the reservoir would be accomplished through the piping system f rom the Columbia River used initially to fill the reservoir. Refilling would occur without adverse impacts on persons or property downstream. Exh. A-35, p. 5. No affirmative evidence was presented to show that the proposed dams would not be capable of being dewatered and refilled consistent with personal saf ety and property interests downstream. The Pebble Springs Dams, if constructed as proposed, will be capable of being dewatered and refilled in a manner consistent with the saf ety of persons and property interests downstream.

3. Conclusion It is concluded that applicant has met the requirements of Specific Standard 345-76-035(2).

I2b5 248 APPENDIX A FOR APPLICANT: Richard D. Bach John G. Crawford, Jr. James W. Durham, Jr. Rockne Gill Warren G. Hastings Richard A. Hayden, Jr. Dale M. Hermann Roland A. Johnson Dallas A. Marckx Thomas H. Nelson W. A. Jerry North H ull H . Phillips Hugh Smitn James T. Waldron Marcus A. Wood Attorneys at Law Portland, Oregon James R. Lisbakken F. Theordore Thomsen Attorneys at Law Seattle, Washington FOR ENERGY FACILITY SITING COUNCIL: J ames C . Rhodes Assistant Attorney General Salem, Oregon FOR NUCLEAR AND THERMAL ENERGY COUNCIL STAFF and OREGON DEPARTMENT OF ENERGY: Richard M. Sandvik Assistant Attorney General Portland, Oregon FOR PUBLIC UTILITY COMMISSIONER OF OREGON: Robert M. Johnson Timothy Wood Assistant Attorneys General Salem, Oregon I255 249

-s , APPENDIX A (continued) FOR U.S. DEPARTMENT OF ENERGY, BONNEVILLE POWER ADMINISTRATION: William W. Kinsey* Attorney, Office of General Counsel Portland, Oregon FOR ENERGY CONSERVATION COALITION: David Hupp Yachats, Oregon FOR FORELAWS ON BOARD: James Carl Freedman Lloyd K. Mar bet Boring, Oregon FOR OREGON CITIZENS FOR ECONOMIC AND ENVIRONMENTAL BALANCE, INC.: Paul R. Duden Paul G. Lorenzini Attorneys at Law Portland, Oregon FOR U.S. LABOR PARTY and FUSION ENERGY FOUNDATION: Martin Simon Portland, Oregon FOR THEI1SELVES: Harold C. Christiansen Lincoln City, Oregon Lionel V. Topaz Beaverton, Oregon

      *The Bonneville Power Administration (BPA) was not a party to this proceeding, but Mr. Kinsey represented BPA employees who testified at the request of the parties.

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