ML19323D180

Compliments Handling of 800325 Meeting in Madison,In.F Hauck Comments Re Safety Matters Encl

ML19323D180
Person / Time
Site:	Marble Hill
Issue date:	03/26/1980
From:	Hauck F SAVE THE VALLEY - SAVE MARBLE HILL
To:	Stello V NRC OFFICE OF INSPECTION & ENFORCEMENT (IE)
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ML19323D130	List: ML19323D163 ML19323D171 ML19323D174 ML19323D180
References
NUDOCS 8005210217
Download: ML19323D180 (8)

Text

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W.i ,1 \CLii & A, pg59 yay (g El {j] Environmental Consultants, ,

^3DL 7 P. O. Box 391, i

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El # *' Route 3, Tower Heights, Shelbyville, Ky. 4D065 March 26, 1980

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Mr. Victor Stello, Director Office of Inspection & Enforcement Nuclear Regulatory Commissi.on Washington, DC 20555

Subject:

The March 25th. Marble Hill Meeting

Dear Mr. Stello:

I must compliment you on your handling of a very difficult sit- l untion last night. I'm sure that you and the NRC are doing your j level best to properly discharge your duties.

J.

In an effort to abide by'your rules, Save-the-Valley's attorney, i Tom Dattilo, persuaded me to omit the heart (I called it the " gut i issues") of the presentation I wanted to make. The complete in- l tended presentation is attached. I hope that you, Mr. Keppler, Mr. Strasma and the others will read it carefully in order to help all of you to understand the problems fully.

PSI's tremendous over-capacity, their current an'd impending slow-er and slower demand growth rate, and the unbearably heavy financial l load if unneeded Marble Hill is ever completed, are the " gut issues"  :

on which we have put carefully weighed numbers. l I will appreci. ate your consideration of my complete statement.

Sincerely,

/ f' Fred Hauck, President S ave-the-Valley P.S. - Sassafras Audubon's written statement, which was handed to me,

,. is also enclosed.

CopyhoMr.Keppler , l 1

Region 3 MAR 2 81980 800521ogt7 l

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Frsd Hcuck's R;merks et Public M2ating - Mrdison, IN - M rch 25, 1980 On Matters of Safety - Decontamination Problems and Costs GPU, 3-Mile Island's owners, is still having decontamination and cold shut-down problems one year later. GPU is fearful that there will be further heat build-up in the reactor core and'is' still unable

td e ase significant amounts of radioactive water and gases, l Further, GPU auditors, Cooper & Lybrand, now list as contingencies,

$1.1 billion capital costs, plus many uninsured clean-up and da:; age claims. They infer that these costs could bankrupt GPU unless they can be passed on to rate-payers. Have PSI'u ratepa'yers' and stock-s holders considered these po'sibilities?

Further On Matters of Safety - Nuclear Waste Storage _ l At a DOE meeting held just last week in Washington, DC, Dr. Dillard i Shipler of Battelle esti5 mated the year 1997, 17 long years away, as f the probable date -for the first commercial waste facility to be ready to receive retrievable nuclear wastes. This is already a

" slippage" of 5 years past the median 1992 date set less than a year ago by the Interagency Review Group. I i

Now the questions that will affect all of us:

1. Will Indiana allow 10 to 15-year on-site storage of spent nuclear fuel?

2. Can PSI design storage pools to safely hold this large amount of spent fuel rods in temporary storage?

3. Will the residents of this entire area, especially those in Hanover and Madison, sleep well during this 10 to 15-year period?

On Matters of Safety - Concrete Repairs STV was informed last Friday that PSI has still not submitted pro-cedures for repairing the hundreds of already-identified honeycomb areas. Fur ther , according to NRC's Jerry Wilson, the NRC is not yet

satisfied that the 95% confidence level for locating these voids has been reached. In view of all this, how can STV be assured that this tedious repair work will be done properly?

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' On Mettsra cf Snfaty - Hnn Nuclorr En9rgy'n Corrosion Probicm Bacn Solvad)

Surry 1 and 2, VEPCO's Westinghouse units at Norfolk, VA, hava recently replaced all steam generators at a cost of about $100 mil-lion. Radiation-caused corroded generator tubing was listed as the probable cause of failure. The nuclear industry knows so little

,about this problem that DOE is shipping a 220-ton radioactive gen-ierator 3000 miles to Battelle Northwest for study. Will Marble Hill, if it is ever finished, supply further education for "DCE?

The Beginnings of Our Problems With PSI One of our first contacts with a PSI Chief Executive Officer came' in 197 7, more than 3 years ago. In reply to an "Open Letter" ,

critical of 'the need for Marble Hill, where we said:

Although the total impact of these (high, es on the cost of electricity is minor, the figures seem to illustrate the relative importance of the executive ego drive. Such salaries certainly must spuf the executive to "put together" such " big deals" as the $1.4 billion Marble Hill nuclear plant in order to justify the salary. The necessity of the " big deal" to the consumer would scarcely be considered. Had the utility's quality of leadership been proportional to the salary level, such project failures as that of the $3.5 billion Kaiparowits generation plant would not have been blamed on legal roadblocks set up by environ-mentalists. The leadership would have already known that the reduced demand fog,glectricity was occasioned by . rapidly and reduced demand would long continue. . . .

rising costs, 4 the PSI CEO replied to that statement . . .

I can assure you that the planned construction of our nuclear f acility at Marble Hill is not *the result of " executive ego drive" but is tied solidly to conservative and realistic energy load growth forecasts.

You may judge from this presentation and tho.se of others how

" solidly tied to conservative and realistic energy load growth "

PSI has been wit > their forecasts. Further, be sure to listen for our further comments on " executive ego drive" and nr documented references to generous executive stock purchase plans using public funds.

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. During the NRC hearings in Madison in 1977 and 1978, S ave-th e-Valley repeatedly stressed the lack of need for Marble Hill. While PSI .

1 sought to prove 8.6% demand growth, STV used the attached set of I curves to emphasize that growth would not be exponential, but would be linear or straight-line at best. STV's estimated dinear growth lof 157 megawatts ;~r year, we said, could not possibly justify Marble Hill's 2260 Mw nuclear ' o .j before 1995 at the earliest. STV's logic at that time gave an equivalent percentage growth of ,less than 3%/yr to the 1995 date. This was only 1/3 of PSI's 8.6% pos' ulated t demand growth rate. _

PSI is still unrealistically forecasting a 6% peak demand growth in spite of Midwest population growth, including Indiana and all surrounding states, being much less than national growth. With today's price-induced conservation, J.

PSI's annual sales growth has already dropped to 3.1%,, and peak demand growth to 4.8% per year over the last two years. Based on slow population and GNP growth and new rate structures, STV is currently forecasting 2% kwh growth and 1% annual peak growth for PSI over the next 20 years.

During just the next 5-year period, three important impacts not yet properly considered by PSI, are certain to occur quite rapidly.

These are, that:

1. The real-dollar price of electricity will continue to rise more than 5% annually, steadily constraining sales growth.

2. The Public Utility Regulatory Policy Act (PURPA) will.soon begin l to affect rate struc cures because of time-of-day pricing and l other innovations. The effect will be to constrain peak growth I

still further.

3. The impact of more-than-ample natural gas supplies will cause many electric heat customers to revert to gas space heat, because gas qqst will b9 about 2/3 less than resistance and 1/3 less than37 eat pump energy costs. 94% of all gas utilities, including Indiana Gas, are actively soliciting new customers! l The combined impact could well postpone the need for Marble Hill's capacity from PSI's " urgent" 1982-1984 dates, until at least 20 years into a very cloudy future. STV wonders if the NRC is ignorant of PSI's current 60%+ reserve ratio, and if they know that PSI is cur-rently building still another 650 megawatt coal-fired plant!

We promised you more on" executive ego drive". Here it is: ,

The Ohio River Basin Energy Study (ORBES) commissioned Dr. Duane ,

, Chapman of Cornell to do a $31,000 study on electric utility " subsidies i iHere are several verbatim excerpts from the draf t ofl that work:

1. The timing of tax credits and deductions promotes the premature construction of new plants and the premature retirement of existing plants.(S7-V e.ezL G-;zA4 pat:26Me# p h[

2. Because nuclear power is more capital intensive than coal power, it receives a tax subsidy nearly 3-times greater than coal generation. .

3. Natural gas space and water heating is always less costly than any other alternative. This is the case even if natural gas prices rise to parity with fuel oil prices at $123/ Bbl.

(s e n u c M t m ~ ,v u .4 A r)

4. Under present Fedezil tax law, the last lh% of the 11 % in the 1 investment tax credit may be used directly to finance employee stock ownership plans. . . Put in its simplist terms, this portion of the investment tax credit uses public funds to increase compensation of utility managers who choose to construct a new plant. . .

As an illustration with data used in this study, the investment tax credit reduces the company's tax liability by a sum of $275 million.(per 1000 Mw unit.). Of this 93unt,

$36 million is c ntributed to the stock ownership plan. (, amounts to about $81 million for the Marble Hill installation). . .

5. Within the pool of participants, stock contributions are based upon salary up to a $100,000 limit. (I have a letter from Dr.

Chapman indicating that a theoretical $100,000 executive would be likely to benefit to the tune of approximately $111,000 of

" free" stock in his utility.)

We would mention, further, that PSI's current 54-year old CEO, an l ex-accountant, already owns more than 5000 shares of PSI stock worth more than $100,000 even at today's low $19 price. Further, he is being paid almost $150,000/yr. after less than 3 years in office.

The current mess at Marble Hill attests to his executive ability.

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On PSI'o Pcor Conccption of the Casts of Mnrble Hill PSI wants desperatly to salvage the $500 million already expended on construction. However, if PSI will think one small step further, the sacrificing of this $500 million hopelessly sunk, might save more than 10-times that amount in financing costs alone that will attend ,

,the completed structures. STV's estimate follows:

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'The current total cost of a Westinghouse 2300 Mw nuclear facility is

$4.5 billion, not $1.8 or $2.3 billion as often mentioned by PSI.

The accompanying Wall St. Journal news LW item relates thisw current cost (origina ly $1.5 billion) for anWestinghouse a

2300 4 nit proposed by Long Island Lighting in New York State. Since t'otal costs are usually split 50-50 between bonds and stock, a conservative average  ;

of 12\% represents the approximate median of the 11% bond and 14%

return on equity costs. These costs to PSI are now rapidly escalat-

_ng to $562 million additional for each and every year that 1.

the Marble Hill facility,is completed before actual need. .

1 Since last years total PSI sales were only $628 million, it is easy to see that all PSI rates would 4 tYf be increased much more than 50% merely to recoup financing costs over the many intervening years.

I STV urges PSI to cut their losses now. Abandon what has clearly J become an albatross around PSI's rinancial ne,ck and an impending danger to cll the residents of this entire region!

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MARBLE HILL'S REAL COST

                                                       $1.8 Billion                                                  .

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                                                       $4.5 Billion?

A New York Utility had planned a duplicate of Marble Hill, a 2300 megawatt plant (HH is 2260), also with Westinghouse equipment. The Public Service Commission turned them down, . because the cost has risen from - - - -

                                                           $1.5 billion J.          to
                                                         -$4.5 billion HO*d CAN PSI STILL SAY THAT E\RBLE HILL WILL COST ONLY $1.8 BILLION?

THE WALL Jan. Wednesday, STREET 30, 1980 JOUkNAI,13 suppIIed by West'-*"w 8"e** N-I I New YorkState Unit a m,= ute, -es.onmn  :

                                    *            ,       ,        ,          said the company, which would have oper-        t ROfbb,pg }ff[Mg stad the nuclear plant, was "obviously dis appointed by the decision. However, she i

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                                                                  .          added, the board did." recognize the need to For Nuclear Proiect                 J
                                                                             ==tdere=de=ce==reeeine ati Ariorre=r Island Ughting's electric power is currently i

i supplfed by oil. ' ar e w4u. srazzrJoca.vu. sentt Jtero,,,, She said the company would have to re-NEW YORK-In another setback to nu. view the board s action and then decide clear power in New York, state regulators whether to seek a rehearing or pmc.eed wim ., reject ' - *lication by two utihties to be coal-tred pmMt. IAng Islam U@t'.ng ] at abut $80 million on the nuclear {

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a nudear pmject on leng There has been gmwing opposition.to cu- - While the five member Board on Electric dear projects in New York. Gov. Hugh !* Generacon Sinng and the Environment Carey has been critical of new plants ar.d unanimously turned down the nuclear pe the state's energy planniig seems emed at pasal from Iocg Island Ughting Co. and relying on ccal for add tional future power New York State Electne le Gas Corp., the generation. board did grant permission to build an $00,- 000 k11owatt coal fired plant at or near the Pp. -

                                                                                              **a W * **W dev- t-appucation for a.acear mew . -              v +

proposed site of Jamesport. The nuclear p.,, plan envisioned construcung two 1.150.000-et u: state r*' - The Iong Island j pmas the last acuve nuclear plant s kilowatt reactors, which wNs nave m , ,,.W before state rtgtlators. ' . :Just the $500 million annual cost of f ' i fincncing this unneeded facility will n , , , .e\ rnian all user rates more than 50%.) 3

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