ML19241B500

Answer to Skagitonians Concerned About Nuclear Power 790530 Interrogatories & Document Requests.Responds to Questions Re Financial Matters.Certificate of Svc Encl

ML19241B500
Person / Time
Site:	Skagit
Issue date:	06/18/1979
From:	Hastings W PORTLAND GENERAL ELECTRIC CO.
To:
References
NUDOCS 7907180539
Download: ML19241B500 (10)

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I}F,1.ATER CONO!PONIclNtB UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING APPEAL BOARD In the Matter of f C PUBLIC DOCInmur nooy

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PUGET SOUND POWER & LIGHT COMPANY, ) Docket Nos. STN 50-522 et al., ) 50-523

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(Skagit Nuclear Power Project, )

Units 1 and 2) )

ANSWER OF PORTLAND GENERAL ELECTRIC COMPANY TO INTERVENO A SCANP ' S INTERROGATORIES AND REQUESTS FOR PRODUCTION DATED MAY 30, 1979 In accardance with 10 CFR, 52.740B and 10 CFR S2.741, Portland Genercl Electric Company answers SCANPS Interrogatories and responds to its accompanying Requests for Production as follows:

Documents produced will be made available at the offices of Perkins, Coie, Stone, Olsen and Williams, 1900 Washington Building, Seattle, Washington at 9:00 a.m. June 29, 1979, or at such other time and place as may be agreed upon.

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ANSWERS TO SCANP INTERROGATORIES DATED MAY 30, 1979 Interrogatory No. 1 "Troj an 's incremental costs" are these costs incurred for energy produced by the plant over any fixed costs which are incurred whether or not such energy is produced. While Trojan was out of service, its incremental cost of energy would have been approximately 2.6 mils per kilowatt hour, nearly all of which is attributed to fuel consumption.

Interrogatory No. 2 The affect on the Compar~ earnings, cash position, and available capital from the denial of rate relief sought to recover excess power costs due to the Trojan shutdown is already included in the financial staterents included in the prospectus. Increased power costs of approximately $26 million were incurred as a result of the Trojan shutdown. Based on a maximum statutory tax rate of 51.9 percent, PGE estimates that the ef fect on earnings of this additional power cost was about $0.50 / share of common stock. The effect on PGE's cash position was substantially less than $26 million, since replacement power was not all purchased immediately, but rather borrowed for future replacement in some cases. PGE is unable to determine what the term "available capital" in Interrogatory 2 is referring to. It would be pure speculation to attempt to assess the effect of the Trojan shutdown en "available capital" from the myriad sources of funds which make up the capital market.

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Interrogatory No. 3 PGE's "present plans for joint ownership of certain future generating f acilities" are discussed at length beginning on pge 20 of the prospectus under the title " Future Resources".

The specific generating facilities referred to may be found in the table presented on page 20.

Interrogatory No. 4 PGE is able to issue preferred stock on the date hereof. I.e ter in 1979 and beyond the capacity to issue preferred stock will depend upcn power purchase cost, the form of financings selected to raise new capital and the timeliness and amount e --te relief. Other financing alternatives to PGE include the issuance of bonds and common stock, short and intermediate term borrowings, and lease financing.

Interrogatory No. 5 PGE is able to issue additional first mortgage bonds on the date hereof.

Interrogatory No. 6 i'able 2-8 of Applicant's Testimony on Financing Qualifications ,

Note 4, states that Table 2-7 was constructed using a forecasted rate of increase in average sales price of 9.9 percent, which maintains a constant 12.84 percent per year return on common stock equity. This is assumed to be received through future rate relief. Under this forecast, the earnings coverage ratio ,

.for bonds improves through 1990. The coverage ratio for preferred stock would also improve through 1990.

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experience at Troi'" This estimate was put in both a cash ficw format and c PC Account format, both of which are available for review. PGE and Bechtel periodically review and update the estimate. The most recent cost estimate in FPC Account form is available for review.

Information with respect to the Boardman coal plant is based in part on estimates by PGE engineers and Bechtel, but also en actual costs incurred in constructing this plant. The most recent construction cost studies by PGE and Bechtel are available for review.

Information with respect to the Skagit, Colstrip and WPPSS No. 3 projects has been obtained from the respective project sponsors.

The direct construction cost estimates used by the co-owners of any given plant are identical. However each co-owner may choose its own form of presentation for various disclosure documents required by regulatory agencies. The " dis crepan cy" between the cost /kw figure as presented by Puget Sound and PGE is attributable to a) a difference in the capital; ~.ed cost of money which accures on direct construction costs between the two companies, b) a difference in certain overhead cost items, c) the capitalization of property taxes by Puget on its share and the deletion of this by PGE, and

, d) the election by PGE to treat both units of a project separately and the combined treatment by Puget. t 9 004 Interrogatory No. 7 The " future generating units" referred to are those in the table on page 20 of the prospectus. The specific plants subject to partial sale or delay would be selected after consideration of a number of factors, including licensing status, cos t projections, load forecasts, financing capability and other factors. Prospective purchasers of 2 partial interest in a future generating f acility include investor-owned and publicly-owned utilities in the Pacific Northwest and California.

Interrogatory No. 8 PGE has not predicted with assurance that the regional power -

legislation will in fact be passed, and if it does pass , what the form will be. Why the currently prcposed regional power legislation would "give assurance to the Company that the cost of construction and operation of its new thermal plants would be recovered" is explained in paragraph 3 under the heading

" Proposals for Reallocation of Federal Power" on page 18 of the prospectus. The only document relevant to the answer of this interrogatory is the regional power bill itself which is Senate Bill 885 - Pacific Northwest Electric Power Planning and Conservation Act.

Interrogatory No. 9 Cost information in the table on page 20 of the prospectus pertaining to the Pebble Springs Project has been produced by PGE engineers and Bechtel, the engineering firm employed on the construction of Trojan and Pebble Springs. An original estimate was made by Bechtel based on the consey46]LionOboht Interrogatory No. 10 Agreement, dated January 23, 1976, among the four utilities participating in the Skagit and Pebble Springs projects, which has previously been made a part of the record in this proceeding.

Interrogatory No. 11 Puget will supply you a copy of the letter from the U.S.

Geological Survey confirming the adequacy of the Skagit site.

Interrogatory No. 12 The coal contract for Boardman was entered into during 1974 during a market when commercial bargaining position of supplies and users was substantially different than today. Therefore the contract, and any provisions thereof pertaining to prica, are not relevant to any matter in controversy, particularly the ecst of alternate sources of energy such as coal fired generating plants.

Information as to actual current coal prices which is relevant and not confidential proprietary may be found in a number of

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coal industry per odicals, including Coal Week, published by McGraw-Hill. A copy of prices from this publication is available for review.

The most definitive current railroad tariff for coal transportation tc the Boardman plant has been published by the Burlington

, Northern (copy available for review). The parties are attempting to negotiate lower tariffs. This may be subj<ct th hhnte efore the nterstate Commerce Commission. There is no assurance that the r ablished tariff will not become the actual tariff.

Interrogatory No. 13 a) no b) no c) no Interrogrtory No. 14 PGE's principal lines of credit are under three agreements :

a) The Boardman Power Company Loan Agreement, dated as of November 15, 1977.

b) Credit Agreement, dated July 31, 1978.

c) Revolving Facility, dated July 20, 1978.

The banks participating in such lines of credit and the conditions or circumstances under which such lines of credit may be cancelled, terminated, or reviewed, are stated in the respective agreements.

Respectfully submitted, i,/ )l,

1Y.9% 4MD Warren Hasbings Attorney for Applicants Dated at Portland, Oregon this 18th day of June, 1979.

5\ 007 State of Oregon )

) ss County of Multnoman )

I, WARREN HASTINGS, being first duly sworn, depose and say that I am Assistant Secretary and Associate Corporate Counsel of Portland General ) .ectric Company. The foregoing Portland General Electric Company's Answers to SCANP Interrogatories dated May 30, 1979 were prepared under my supervision and direction and are true as I verily believe.

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Warren Hasti,ngs Subscribed and sworn to before me this 18th day of June, 1979.

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Nogary Public for Oregon My Commission expires: April 11, 1980 519 008 e- se p Sb

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l' JUN21 1979 > T h w ag gggr i UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING APPEAL B In the Matter of )

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PUGET SOUND POWER & LIGHT COMPANY, )

et al. Docket Nos. 50-522

)

)

50-523 (Skagit Nuclear Power Proj ect, )

Units 1 and 2) )

CERTIFICATE OF SERVICE I hereby certify that the following:

ANSWER OF PORTLAND GENERAL ELECTRIC COMPANY TO PRODUCTION DATED MAY 1979 30,INTERVENOR SCANP 'S INT in the above-captioned proceeding have been served upon e th persons shown on the attached lis t by depositing copies th ereof in the United States mail on June 18, 1979 with proper postage affixed for first class mail.

Dated: June 18, 1979

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Warren'Hastgngs Attorney for Portland 121 S. W.General Electric Company Salmon Street Portland, Oregon 97204 Si9 009

Valentine B. Deale, Chairman Thomas F. Carr, Esq.

Atomic Jafety and Licensing Board Assistant Attorney General 1001 Connecticut Avenue, N.W. Temple of Justice Washington, D.C. 20036 Olympia, WA 9E504 ,

Dr. Frank F. Hooper, Member Robert C. Schofield, Director Atomic Safety and Licensing Board Skagit County Planning Department School of Natural Resources 218 County Administration Building University of M' Sigan Maunt Vernon, WA 98273 Ann Arbor, MI  %.09 Richard M. Sandvik, Esq.

Gustave A. Linenberger, Member Assistant Attorney General Atomic Safety and Licensing Bc?rd 500 Pacific Building U.S. Nuclear Regulatory Commission 520 S. W. Yamhill Washington, D.C. ~7555 Portland, OR 97204 Alan S. Rosenthal, 'hai rman Roger M. Leed, Esq.

Atomic Safety and L censing Room 610 Appeal Board 1411 Fourth Avenue Building U.S. Nuclear Regulatory Commission Seattle, WA 98101 Washington, D.C. 20555 CFSP and FOB Dr. John H. Buck, Member E. Stachon & L. Marbet Atomic Safety and Licensing 19142 S. Bakers Ferry Road Appeal Board Bcring, OR 97009 U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Robert Lowenstein , Esq.

Lowenstein, Newman, Reis, Axelrad Michael C. Farrar, Member & Toll Atomic Safety and Licensing 102 5 Connecticut Avenue , N.W.

Appeal Board Washington, D.C. 20036 U.S. Nuclear Regulatory Commission Washington, D.C. 20555 F. Theodore Thomsen, Esq.

Perkins, Coie, Stone, Olsen &

Docketing and Service Section Williams Office of the Secretary 1900 Washington Building U.S. Nuclear Regulatory Commission Seattle, WA "3101 Washington, D.C. 20555 Richard D. Bach, Esq.

Richard L. Black, Esq. Rives , Bonyhadi, Drummond & Smith Counsel for NRC Staff 1400 Public Service Building U.S. Nuclear Regulatory Commission 920 S. W. 6th Avenue Office of the Executive Legal Portland, OR 97204 Director Washington, D.C. 20555 Canadian Consultate General Donald Martens, Consul Nicholas D. Lewis, Chairman 412 Plaza 600 Energy Facility Site Evaluation 6th and Stewart Street Council Seattle, WA 98101 820 East Fifth Avenue Olympia, WA 98504 519 010