ML19282A166

Forwards Response to NRC Inquiries Re Need for Power & Cost of 3-year Delay in Operation.Response Based on NRC Load Forecast.Starting Point Not Conceded to Be Appropriete by Util.Facility Will Be Needed in 1985

ML19282A166
Person / Time
Site:	05000471
Issue date:	05/08/1979
From:	Rhonda Butler BOSTON EDISON CO.
To:	Regan W Office of Nuclear Reactor Regulation
References
NUDOCS 7905140435
Download: ML19282A166 (6)

Text

.,-w BOSTON EOlsON COMPANY GENERAL CmCEs 800 SovLaTON STREET B o sTO N. M Ass ACHusETTs 0 219 9 4

RostmT M. BurtEn NUCLEAR PRO.J CTS DEPARTMENT May 8, 1979 Mr. Mm. H. Regan, Jr. , Chief Environmental Projects Branch 2 Division of Site Safety and Environmental Analysis U.S. Nuclear Regulatory Conmission Washington, D. C. 20555 Responses to Inquiries from NRC Cost-Benefit Analvsis Branch Regarding Need for Power

Dear Sir:

On April 23, 1979, the NRC Staff requested data from Boston Edison Company regarding the subject of need for power. We have prepared a response, and it is set forth in detail in the attachment. This response, which is based on the NRC Staff forecast and starting points, contains an estimate of the cost of a 3-year delay in Pilgrim 2. In providing this information, however, the Company does not concede the appropriateness of the load fore-cast and starting points provided by you. Most recent NEP00L forecast recently forwarded to the Staff, indicates that New England will need Pilgrim 2 in 1985.

Very truly yours,

/O. .k_

Enclosures

/cac 7905140435 p, \

1

. ... I PILGRIM STATION UNIT 2 BECO COMPARISON OF THE COST OF A 3-YEAR DELAY IN COMMERCIAL OPERATION BASED UP0fl THE NRC 3.4% FORECAST May 3, 1979

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Upon a request from NRC Staff, BECo undertook to detennine the economic impact of a 3-year delay in commercial operation of Pilgrim 2. The NRC Staff provided the principal starting parameters for the analysis. BECo also employed certain assumptions and methods in conducting the analysis.

The NRC provided the following parameters for use in the analysis.

A. Conditions

1. All units coming on-line as presented in the April 1,1979 "New England Load and Capacity Report."

2. The same as above, except Pilgrim 2 coming on-line in December 1988; i.e. , all units built and operated on schedule except Pilgrim 2, which is delayed three years.

B. Assumptions

1. 1985 energy requirements-104,254 GWH* growing at 3.4%

per year.

2. 1985/86 winter peak load-19,510 MW* growing at 3.4% per year.

• These indicate a load factor of 61%. The load shapes of the model used for the study show a load factor of 59%, thus BECo opted to use the assigned peak load as a starting peint, not the energy requirements. A conservative analysis results.

The following items were requested by NRC or are otherwise of interest. The present Mass. DPU case is referrca to as DPU 19494.

A. Assumptions

1. General f aflation rate = 6%/ year

2. BECo cost of money (discount rate): 10.83% (same as DPU 19494).

3. Fossil fuel forecast: May 1978 A.D. Little report (same as DPU 19494) except the inflation is assumed to remain constant at 6%

instead of dipping to 4% after 1989.

4. Nuclear fuel forecast: same as DPU 19494 except as indicated above in 3; 1990 in-service costs used for the 1/89 case; all post 1980 units were given 1/86 Pilgrim costs.

$1,895 million in 1985, $2.5 billion in 1988

5. Capital costs:

(consistent with DPU 19494).

2. ,

6. Property taxes at Pilgrim 2: same as DPU 19494 for a 1/86 unit; interpolated from 11/87 and 11/90 cases for a 1/89 unit.

7. Load model: 3.4% growth each year as specified by NRC Staff, but 3% less energy than specified by the Staff; tnis is a conservative consequence of the model's load shapes.

8. A different computer, model, and perhaps different assumptions were used to generate this output than was the case with the NEP example supplied. This was necessary because the short time available did not pennit use of the NEP00L program and computer facilities. The model used was a BECo model which was adjusted to encompass the entire NEP00L system.

The results indicate that a substantial savings can be achieved by installa-tion of the unit in 1985. A table of results is attached. The following remarks are also relevant.

1. While the significant fuel savings to New England with Pilgrim 2 available for 1986-1988 were quantified for presentation, the applicant believes that further fuel savings from 1989 to 1994 are available due to the difference in maturity levels achieved by any given year for the two in-service dates under study.

2. The fuel saved with Pilgrim 2 on line 3 years earlier than required by the Oak Ridge model is as follows:

1986 (59% C.F.): 9,906,100 bbl 1987 (59% C.F. ): 9,906,100 bbl 1988 (62% C.F.): 10,409,800 bbl 3 year total savings: 30,222,000 bbl, mostly resiuual oil.

Fuel savings would continue after 1988, but would not be as large.

3. 0&M cost differences have not been included in the analysis as the BEco assumed 0&M costs for Pilgrim 2 are not very different from the 0&M costs of its better fossil capacity. If it is assumed that other NEP00L members' O&M costs are comparable to the applicant's, any O&M savings due to the early installation of Pilgrim 2 would not sig-nificantly alter the analysis.

4. A 28-year book life is assumed. Therefore, after both units are fully depreciated by 2016, both carrying charges and, under current Massachusetts law, property taxes are assumed to be zero. At any rate, no basis for a differential due to in-service date exists after 2016. The cost of money is assumed to be 10.83%.

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5. Fuel costs:

$/bb1 1985 1990

1. 61% sulfur oil 28.34 49.90 2.2% sulfur oil 26.70 46.76

1. 2 oil 32.14 55.21

6. Capacity factors assumed for Pilgrim 2 1st year 59%

2nd year 59%

3rd year 62%

4th year 67%

5th year 67%

6th year on 70%

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NRC 3.4% GROWTH CASE SAVINGS ASSOCIATED WITH INSTALLING PILGRIM 2 IN 1985 VS 1988 (5000) 1986 Dollars CAPITAL FUEL TOTAL ACC. PW. (10.83%)

1986 (409,125) 247,578 (161,547) (161,547) 1987 (397,989) 278,568 (119,421) (269,298) 1988 (384,241) 300,361 ( 83,880) (337,586) 1989 170,882 170,882 (212,063) 1990 173,752 173,752 ( 96,903) 1991 166,472 166,472 2,650 1992 162,858 162,858 90,525 1993 157,040 157,040 166,980 1994 151,554 151,554 233,555 1995 145,932 145,932 291,395 1996 139,262 139,262 341,198 1997 137,570 137,570 385,589 1998 136,791 136,791 425,416 1999 135,518 135,518 461,016 2000 131,319 131,319 492,143 2001 130,917 130,917 520,142 2002 128,859 128,859 545,008 2003 121,599 121,599 566,179 2004 116,188 116,188 584,433 2005 108,684 108,684 599,839 2006 108,041 108,041 613,656 2007 106,526 106,526 625,949 2008 104,634 104,634 636,843 2009 101,370 101,370 646,367 2010 99,076 99,076 654,766 2011 96,954 96,954 662,181 2012 94,069 94,069 668,673 2013 91,312 91,312 674,359 2014 169,815 169,815 683,898 2015 154,385 154,385 691,725 2016 139,895 139,895 698,123

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