ML20092H106

Forwards BPA Announcing Initiation of Public Involvement Process to Assist in Evaluating Const Schedules for Facilities.Related Correspondence

ML20092H106
Person / Time
Site:	Satsop
Issue date:	06/19/1984
From:	Reynolds N BISHOP, COOK, PURCELL & REYNOLDS, WASHINGTON PUBLIC POWER SUPPLY SYSTEM
To:	Foster R, Margulies M, Shon F Atomic Safety and Licensing Board Panel
References
OL, NUDOCS 8406250354
Download: ML20092H106 (7)

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RELATED CO.EES?CHDENCE 1

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.. , c (3, Yttex amat.7 June 19, 1984 Morton Margulies, Esq. Dr. Richard F. Foster Chairman, Atomic Safety and Administrative Judge Licensing Board Atomic Safety and Licensing U.S. Nuclear Regulatory Board Commission U.S. Nuclear Regulatory Washington, D.C. 20555 Commission Washington, D.C. 20555 Mr. Frederick J. Shon Administrative Judge Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Re: Washington Public Power Supply System (WPPSS Nuclear Project No. 3)

Docket No. 50-508-OL Gentlemen:

Enclosed for your information is a letter'from the Bonneville Power Administration to the. Managing Director. '

of the Washington Public Power Supply System announcing

, the initiation by BPA o2 a "public involvement process" to assist BPA in evaluating'the construction schedules for WNP-l'and WNP-3. The letter indicates that BPA l presently assumes that full construction will resume on WNP-1 and WNP-3 in July-1986 and July 1985, respectively.-

l We are providing copies of this BPA letter to the Board mindful of our obligation to ' apprise the Board of matters which bear on issues before-itL l_ Sincer ly

) J-l 8406250354 840619 Nicholk S Reynolds l PDR ADOCK 05000508 0 Counse fo e Applicant.

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d Department of Energy Bonneville Power Adrninistration omCE OF THE ADeSTUTOR P.O. Box 3621 Ponland, Oregon 97208

%, , JUN 8 - 19e4 BPWP-G-84-19 t

Mr. D. W. Mazur, Managing Director Washington Public Power Supply System P.O. Box 968

, Richland, Washington 99352

Dear Mr. Mazur:

As you know. the Bonneville Power Administration (BPA) is beginning the process of developing its budgets for Fiscal Years 1986 and 1987 and its rates for the period of July 1985 through September 1987. This is especially significant because we must make final decisions before the end of this year on the' assumptions to be used in our budgets and rates for those periods.

During the last few years, BPA has grown increasingly more sensitive-to public concern about major activities ve undertake. Therefore, we are beginning a public involvement process to examine whether we should continue to use our current assumptions about WNP-1 and -3 construction schedules -in our 1986-1987 budgets and rates. Our current assumptions are that full construction will resume on WNP-1 and -3 in July 1986 and July' 1985, respectively, and that they 1

will be in cosamercial operation in June _1991 and December 1989, respectively.

We also assume that construction and fuel costs will be financed through conventional financing.

To review these assumptions, we will conduct analyses similar to our. previous analysis of Supply System projects which led to our recommendations to place i WNP-1 and -3 in preservation status. We want to examine the funding levels we should assume for the two plants for tLe next two years. In this public-process, we will also consider alternative schedule's for plant completion,-

impacts on BPA races, and many other factors.

The.public involvement process will occur in three stages. First, we will ask the public, 'this month, to help us' refine the alternatives and methods we should incorporate in our study. Second, those interested will be kept abreast l> of the progress of the analysis while it,is underway. ' Third, we will solicit I . public response on the completed ~ analysis this fall before . refining = it and .

, incorporating the _ results in our rates, budget and resource planning process

in December'.

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Department of Energy g .,

Bonneville Power Administration Publicinvolvement P.O. Box 12999 l Portland, Oregon 97212 JU:l 0 g my

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• ALP OPPORTUNITY FOR INVOLVEMENT l Issue: Washington Nuclear Plants (WNP) 1 and 3. '

Action: BPA is reviewing its assumptions about the schedules for WNP 1 and 3.

Public Directly Affected: Northwest citizens.

Background:

Construction work on Washington Public Power Supply System's Washington Nuclear Plant 1 (WNP 1) and 3 (WNP 3) is now delayed. BPA has assumed construction of WNP 1 will resume on July 1,1986, and construction of WNP 3 will resume on July 1, 1985. BPA is now reviewing these assumptions to see if they should continue to be used for BPA's 1985 rates and 1986-7 budgets.

Opportunities for Involvement: The enclosed Issue Alert describes the study BPA intends to undertake, the issues we intend to address, and the process we will follow.

This month, we would like the public to comument on our Study Plan: our i proposed approach our study, including the methodology and variables we intend to address. We will accept comments on the Study Plan through July 2, 1984.

The draft Studf Plan is enclosed.

On June 20 - 29, we will hold public meetings throughout the region to describe the Study Plan and accept cosament. Meeting dates and locations are listed en the back of this letter.

In each city, we will hold two different forums. First', we will hold a " town hall" meeting, at which we will describe our Study Plan and accept general public coseent. Second, we will hold a technical workshop, where we will ask participants to give us more detailed commer.t on our methodology, variables, and treatment of issues wnich cannot be handled through quantitative analysis. You are welcome to attend either meeting, or both.

We will perform our_ analysis this summer. This September, we will issue our analysis for public review..

For Further Information

Contact:

BPA Area'or District Manager in your-locality, or the Public Involvement office in Portland, 503-230-3478.

Toll-free lines: 800-452-8429 for Oregon outside of Portland; 800-547-6048 for Washington, Idato, Montana, Utah, Nevada, Wyoming, and California.

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Donna L. Geiger Public Involvement Manager Enclosures _ _

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1,1986 resumption of construction on Consauccon of Washeg!on NucJear Pfant (WNP) 3 at Sa: sop r'as been & sece 1981 it a 75%

WNP 1 at Hanford in eastern compJees.

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s e= - ,wp;.zt g WNP 1. at Hantora. wasnm; ton. a 63% compete anc is currency screcuec to cegm cceratmg m 1991.

Northwest Electnc Power Planning  ; sufficient to pay all of its own costs Forecasting: Anything But and Conservation Act of 1980 (the and to repay the Treasury, with Regional Act), gave lead interest, the lion's share of the cost an EXaCf Science responsibility for planning the of the region's Federal multi-purpose region's power future. dams. These included all of the costs i

associated with power production The forecasts that led to construction Hydro Base pius a large part of tne costs f the expensive =ciear and coat

, I associated with irngation. projects in this region had to be i There was a day when hydropower - , made 10 years or more before those cheap hydrepower - alone was units could be brought on line. It -

The original BPA wholesale rate of 2  : takes a long time to get such units

, sufficient to meet the regions power ms!!s (two. tenths of 1 cent) per need5- licensed and built.

kilowatthour was enough for 8PA to i

Grand Coulee and Bonneville and 28 pay its way - with some left over -

for many years. It turned out that the region's power other big Federal multi-purpose dams

- built not just for power, but for annem were woMng we a clou@

flood control and navigation and By 1965, BPA rates had to be crystal ball. They failed to foresee the

. irrigation as well- produced the increased, slowly at first, dramatically impact of higher costs on usage.

' cheapest power. But many non. in recent years. The increases came They failed to foresee the rapid Federal, poweronly dams produced partly because of higher costs I growth of the conservation ethic, or l inexpensive power, too. This made associated with hydro additions and l all of the potential for cost-effective  ;

I slectricity cheap for customers of expansion of the BPA transmission conservation and fuel substitution

' i l public and pnvate power alike in the system, but mainly because of l (e.g. wood stoves). They failed to l

Northwest. increasingly expensive nuclear I foresee the recent nationwide

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additiccs to the region's power  ! downturn m the economy, a downturn BPA was created by Act of Congress supply.  ! that hit the Northwest harder than i in 1937 to sell the Federal power. other regions. So their forecasts -

8PA built none of the dams -just Low-cost hydro nevertheless stil! 8 '**Y' S * * " " * '

the transmission lines and related provides 80 percent of the region's facilities needed to bring the Federal power supply, and this hydro base i fd power to market. But BPA was keeps Northwest power costs well percent - turned out to be too high.

required to sell the power at rates below the national average. l  !

y soeve we As==g w so mm sr we , *am Forecasts If not all, what part? BPA has studied three basic scenanos, in which zero ,

SPA Wholesale Rates percent,50 percent or 100 percent of Preference Customers.to We are now forecasting three levels investor-owned utility load growth is

, of growth - base (the level we think placed on BPA. For planning Date A most likely to occur), low and high, '

purposes, we currently assume 50 im and we study alternatives to cover all percent. I three levels at lowest economic cost.  !

We have developed a resource Financing i i

12r2045 32sl strategy which was presented to the  !

region in May 1984, describing the Financing opportunities can change. i 12r2or74 sai actions BPA proposes to take on new Long-term conventional financing i

' stretches out payments over the 12r20r7s conservation and renewable ,

.72e l resources to respond to these eWed life of the projects, much conditions of uncertainty. An issue like a home mortgage. That kind of Alert on that subject is among those financing dned up for the Supply i

! ioms2 is Ii listed on the last page. System as a result legal challenges related to its nuclear projects.

nmes 2.2 l Will long term conventional financing '

be available when construction I

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resumes on WNP 1 and 3 or will i

,,a _ a m Vanables and Uncertainties financing have to be accomplished underlies all power planning. tnrougn other methods? A second method, financing directly from Current BPA revenues, would SPA rates rose espety n 1979-83 as Sucoty Sysem and other new cosa were Wded nio 'he rate casa P' ***'Y ***" "'8 h*' ' ' * "

i l Unoer current assumprom BPA expe: s to hoe D8Pene m on m years, followed by lower rates once future ram neresses near the rate of effarai. the projects were completed. A third The Regional Act gave BPA possibility would spread out responsibility for acquiring all the payments longer than direct revenue The Mam. issues financing, but not ,iong ,

power nece.a,y to su,,,y on,s ,,,

new loads the utilities of the region - conventional bond financing. That We would like the public involvement investor-owned and publicly owned - would be for the Supply System to program to focus on some major apply for. There are current go into the short-term bond markpt. A issues related to these two r.uclear indications the region's utilities will key question here is whether BPA plants. But we recognize that some not place the full amount of future can promise to pay off Supply members of the public will also wish load growth on BPA. System debts if legal problems

, to discuss the Supply System or ,

nuclear energy in general, and we .

Average Residential Retail Rates by Region *

(Cents perkWh Propocad for 1984) .

An imposing array of variables and I uncertainties underlie all power planning. As we have seen trora recent history, all utilities including <

h 10.17 10.98 BPA are vulnerable to events which ) 4.4 change the forecasted demand for /

power. Forecasts cannot be counted k upon with the certainty they once couid. ( 7 95 i l

6.50 ' 7.54 More flexibility to meet various levels __

of growth has become necessary in ,

SPA's planning for the future's 8 31 7.97 uncertain outiook. 6.70 10,07, 8.34 ,

in its WNP 1 and 3 studies, BPA will -

c;nsider a large number of uncertainties and vanables, including

! forecasts, dependence on BPA for *locludes Newen power supply, financing options and

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Public Involvement Steps: . ; -  : f .,; =~

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The public invokement program for be sent in aavance to individuals and We excect to complete evaluacon of WNP 1 and 3 wrH stuctve sental stecs. groups we know to be it'terested in au commens and announce our First will come meeangs and technical matters, and to anyone else conclusions by November 15, scrkshops to review the assumptions who requests one. Requests should 1 and the methodology we are Ussng to be directed to your nearest BPA area 1 update the studres on which current office or the Publoc Invokement Office BM rs not now proposing any cnange schedules for resuming construccon at BPAk Portland headquanets. A Ist in me current schedules for WNP 1 were based. of these offices is incluoed on page8. eM 1 Should N current imw iead to proposals for change, the Workshops wsH be held in the following in early July we wtli evaluate 5, ,7,ent ic may be csties at specific Dmes and places to comments from this first round of ggggg,gg_

b2 announced: meetings, along with wntten comments recened by that time. Work to update Portland. Oregon: June 20 21 the studies will be done dunng the At mis time, se are only reviewing ana Eugene. Oregon: June 21-22 summet By late August, we will offer updaang the studies on wnscn current Missoula. Mcntana: June 25 bnefings on the intenm results of these ccnstruction schedules for WNP 1 and Burley. Idaho: June 26 new studies. In Septembei: we wrH 3 were based. We are doing this so Richland. Washington: June 27-28 publictze the results and request that when we make budget and rates Seattle Washington: June 28-29 further public comments Thus, the cec:ssons we can be sure they are public sont simply be presented with based on the best possible Most of the meetngs wiH include our conclusions relatne to WNP 1 and int:rmation. Our review also will evening sessions for the consentence 3, but will have a chan'ce to parDcipate evaluate the costs of terminaDon of of those who cannot attend cunng the at an stages. The public will be etmer or both WNP 1 and 3 compared day Daytsme workshops, for aH who evolved in determining the to compienon on the current or some wish to attend, wsH be soecsaHy methodology to be used, the studies otner schedule. We wsH keen the dssigned for those planning to provide to be performed. and the interpretation pubhc fully informed of new technicalinformation. A study plan wsU that may be placed on results. onbrmacon as at is developed.

Financial StudI83 We also will do an analysis of BPA's i Other Topics debt coverage - the ratio of revenues We will assess the availability and to interest costs - and other factors Our primary need in this public debt service costs for three kinds of that affect bond ratings given by the rating agencies. involvement undertaking is to get financing (conventional bonds, short- comments specific to the WNP 1 and term bonds, revenue financing). We 3 costs and schedule assumptions will link each to the scenarios related The buoget impact for each scenario will be assessed anew, as will the for our rates and budget 12 timing of the projects. We currently determinations in the near term. But plan to make a variety of other impact on owners (the participating as notec, we also will listen to -

financial assessments including one investor. owned utilities).

3 that identifies BPA's fixed and .

System or nuclear energy in general.

discretionary costs. Our last such Finally, the potential impact on BPA l assessment showed about 87 percent fmances from altemative outcomg of j These broader concerns may include of BPA's annual obligations to be current litigation will get a fresh look.

matters such as the institutional norWiscretionary or fixed. There are a number of lawsuits currently involving WNP 3 and the nature of the Supply System, the i i

licensing process and

• We will do a cash flow analysis to terminated projects WNP 4 and 5 that necessarily complicate the decommissioning theories and costs, show BPA's ability to handle WNP 1  ;

and 3 payments for each scenario financial assessment of both WNP 1 and 3. socio/ economic impacts of project while at the same time getting ,

repayments to the U.S. Treasury back i on schedule. SPA has fallen behind Uncertainty surrounding possible And if anyone wishes to comment on and is making major efforts to catch liabilites of BPA and other project up on these overdue payments. sponsors also must be taken into h WM5 W me m M l Regional Plan and the Fish and Timeliness, risk, and other pertinent account in determining a prudent

• WJdlife Plan, we will be listening.

characteristics of each potential couca for the two protects, financing mechanism will be reviewed.