ML18017B477
| ML18017B477 | |
| Person / Time | |
|---|---|
| Site: | Harris, Brunswick  |
| Issue date: | 10/19/1981 |
| From: | Utley E CAROLINA POWER & LIGHT CO. |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| References | |
| NO-81-1713, NO-8101713, NUDOCS 8110260183 | |
| Download: ML18017B477 (41) | |
Text
ACCESSIO,V.
VSR: FACILI 50 32Yl'3 25.0a4 401 50"402 50;403.A UTH<D iV Ai4lKl JTLE Y'P E., E REC IP~VA.'0l""I DENTON'r O', R'0 R 6 UL A 7"JR'Y I N F 0 R Nil A T I 0 iV D I S T R I B U T I 0 IV S Y S T K i" (R I D 8)8110260183 DOC~OATEN': 81/10/19 iVOTARI ZED;NO Brunswick Steami Electric Planti Unit 2P Carolina~owe'runswick Steam Electric*PlantE Unit iP Carolina oowe Snearon Harris Nuclear Power Plantg Unit" 1B Carolina Shearon Harris iVucleati Power Plan:t<Unit 2'<Carolinai S'nearon Harris iVucleari Power Plant<Unit" 3~Carolina Snearon Harris Nucleary power~Plant>, Unit 4P Carolina AUTHOR>AFFILIAT'ION C ar o 1 i nai Power I 5, Lii gh t'o~RKCIPIKN1 AFFILIATION Off ice<of Nuclear Reactor Regulationi Directvri)OCKEIT'05000324 05000325 05000400 05000401 05000402 05000403 SIZE't: 'OTES SUBJECT I Forwards response to VRCi request for addi financial info r el decovpissi one ng.pro j ected (5 yr)ooer ating.costs f ori FY81 FY85~Info required r esul t of r equest for=amends to Ol.s;DISTREBOTION CDDEI: BODES COPIES RECEEVEDliTR I EN'CC 1 TKTLKl:: Ln cense;A>pl i cation AsDTS (Generail Info)RECIPIENT ID<COBE/NAM-"l ACTIION:: ORBS¹2'C: 05 VAIV<VLIET'g Jt 01 COPIES'TTR ENCl.: 1 1 1 1 RECIPIENT ID CODE'/iVAiMK LCC'R¹3i BC 05 L~ICITRAIH'1 COP I=S LTTR~=NCl.1'1 1 1~IN TERNAL': KLO'E,El NRR'/Dl D, IR RE~FILE: SP'1~07 04 1 2 2 1 1 1 1 1 1'i'YD'/GKQ'R 13 LtIC QUAL'R QA BR 09 RUTBERGe Jt~12'T'IN BR'8 2 2'1 1 1 1 1~1 EXTERNALS ACRS iVR'DRI NT'IS 10;0 2I 3 3 1 1 1 1 LPDR VSIC, 03 06-1 1 ,i.~ga ESW T3TAL VUMBKHI OF COPIES:RKQUlRED:.
LiTTR EiVCL' i$)lQg, Carolina Power 8 Light Company October 19, 1981-File: NG-3514 (B)Serial No.: NO-81-1713 Mr.Harold R.Denton, Director Office of Nuclear Reactor Regulation United States Nuclear Regulatory Commission Washington, D."C.20555 BRUNSWICK STEAM ELECTRIC PLANT, UNIT NOS.1&2 DOCKET NOS.50-325 AND 50-324 LICENSE NOS.DPR-71 AND DPR-62 AND SHEARON HARRIS NUCLEAR POWER PLANT, UNIT NOS.1, 2, 3, DOCKET NOS.50-400, 50-401, 50-402, AND 50-403 AND 4~-~~~ADDITION OF CO-OWNER TRANSMITTAL OF ADDITIONAL INFORMATION
Dear Mr.Denton:
Carolina Power&Light Company (CP&L)has submitted an appli-cation (Serial No.: NO-81-1413) requesting amendments to the Operating Licenses for the Brunswick Steam Electric Plant, Units Nos.1 and 2 to add as co-owner of such Units the North Carolina Municipal Power Agency Number 3 (Power Agency).CP&L has also submitted applications requesting amendments to the Construction Perad.ts and the Application for Operating Licenses for the Shearon Harris Nuclear Power Plant (SHNPP), Unit:s Nos.1, 2, 3, and 4 to add Power Agency as a co-owner of the SHNPP Units.In recent telephone conversations with NRC's Office of State Programs, CP&L was requested to provide certain financial information regarding decommissioning, projected (five-year) operating costs for Brunswick Plant for 1981 through 1985, and the ability of Power Agency to meet any obligations, it may have with respect to such costs.A'ttachment I is a description of the cont:ractual arrangements between CP&L and Power Agency and between-Power Agency and the Municipal Participants concerning financial obligations associated with decommissioning.
Attachment II is a CP&L consultant's report which reflects.a decommissioning plan for CP&L's nuclear plants and provides an estimate of its cost.CP&L has submitted this report to the Federal Energy Regulatory Commission for approval and is awaiting a decision by that Commission.
Attachment III is a description of the agreements between CP&L and Power Agency and between Power Agency and the Municipal Participants concerning financial obligations associated with operation of the Joint 8110260183 811019 PDR ADOCK 05000324 I PDR~)Ith w'1rqyr)Q Ops~t J aiejph h Facilities.
Attachment IV is an estimate of projected operating costs for the Brunswick Plant for the five-year period 1981-1985.
These estimates include 06M (Operating and Maintenance) expenditures, fuel costs, and construction expenditures, all of which are based on today's information.
That is, the actual operating costs during the period may vary significantly.from the Attachment IV values due to factors such as new regulatory require-ments and the plant's future operating experience which may change present refueling schedules.
Please advise my staff if you require any additional information to complete your review.Yours very truly, E.E.Utley Executive Vice President Power Supply and Engineering 6 Construction JAM/lr (8824)Attachments cc: Messrs.D.T;M.E.F.J.G.Eisenhut A.Xppolito L.Karlowicz A.Licitra J.Miraglia, Jr.Van Vliet Attachment I Carolina Power&Light Company NRC RE UEST FOR ADDITIONAL FINANCIAL INFORMATION
SUBJECT:
Decommissioning Costs Pursuant to the Project Agreements between CP&L and Power Agency, Power Agency will pay its proportionate share of all costs associated with the cancellation, retirement or decommissioning of the Joint Units.Section 25.3 of the Purchase, Construction and Ownership Agreement (submitted as.Exhibit F to this Application) requires Power Agency to bear its share of the costs of cancellation or decommissioning of any Joint Unit which is cancelled or decommissioned prior to the date of Commercial Operation of such Unit.Section 22.2 of the Operating and Fuel Agreement (submitted as Exhibit E to this Application) requires Power Agency to bear its share of the costs of retirement or decommis-sioning of any Joint Unit which is retired or decommissioned after the date of Commercial Operation of such Unit.These commitments extend for whatever period of time is necessary to complete the cancellation, retirement or decommissioning process so that no further expendituxe of funds is required.Power Agency will include in its Monthly Project Power Costs to be charged its Participants pursuant to the Initial Project Power Sales Agreements (the form of which has been submitted as Exhibit B.l to this Application) charges sufficient to enable Power Agency to meet its commitment to bear its share of the costs of cancellation, retirement or decommissioning of the Joint Units.Each Participant agrees in the Initial Project Power Sales Agreement to pay its Participant's Shax'e of such Monthly Project Power Costs.Such costs are defined in Section 1(t)of the Initial Project Power Sales Agreement as including all costs incurred by Power Agency resulting from the retirement or decommis-sioning of the Initial Project, and.the providing of reserves for such purposes.The Initial Project Power Sales, Agreement.
imposes an unconditional"take or pay" commitment, thereby obligating each Participant to pay its Participant's Share of Monthly Project Power Costs whether or not the Joint Facilities are completed, operable, operating, or retired or decommissioned and notwithstanding the suspension, interruption, interference, reduction or curtailment of the output, of the Joint Facilities, or the power and energy contracted for, in whole or in part, for any reason whatsoever.
Power Agency will establish a reserve for such costs in the Decommissioning Fund established pursuant to Sec-tion 5.5 of the Bond Resolution proposed to be adopted by Power Agency's Board of Commissioners (submitted as Exhibit 0 to this Application).
Attachment II Caroiina Power 8 Light Company Determination of Depreciation P.rovisions for Nuclear Production Plant for implementation the First Quarter of 1981-FERC Basis Osiltts Haskins+Salis One Main Place Dallas, Texas 75250 (214)748-6601 Telex 732648 Carolina Power 6 Light Company P.0.Box 1551 Raleigh, North Carolina 27602 November 15, 1980 Attention of Nr.Paul S.Bradshaw Vice President and Controller In accordance with your request, we have completed a study of the capital recovery requirements, on a Federal Energy Regulatory Commission (FERC)basis, for the Company's three nuclear generating units.The study results in recommended depreciation rates for each account and recommended annual depreciation provisions for decommissioning each plant.Presented herein are the bases for the determination of the depreciation rates, the determination of the estimated cost for accomplishing decommissioning, discussion of methods of capital recovery consistent with the framework of depre-ciation accounting principles and regulatory rules, our recommendation of the capital recovery method to be used for decommissioning, and calculation of the annual decom-missioning depreciation provision for each unit foe the recommended method.As a result of the Final Order in FERC Docket No.ER76-495, the Company has been authorized by its Federal and state regul'atory bodies to use different depreciation rates for Nuclear Production Plant.The Final Order authorized a depreciation rate of 4.0X based on an average service life of 25 years and zero net salvage.The rates authorized by the state regulatory bodies are based on 25 years and 7.3X nega-tive net salvage.In adopting a zero net salvage factor, the Final Order in Docket No.ER76-495 states that it was"without prejudice to a redetermination of this item when information becomes.available." (Order page 5).This study provides the basis for redetermination of salvage, and recognizes that portion of'the existing book depreciation reserve applicable to net salvage.For Federal regulatory purposes the existing depre-ciation reserve applicable to net salvage is zero, while for state regulatory purposes it is positive.This distinction requires a unique determination for FERC purposes of the depreciation provisions for decommissioning the nuclear units.
The study reported here confirms that the 4.0X depreciation rate is lower than can be justified and determines the annual depreciation provisions required to cover net salvage (decommissioning)
.Schedule 1 shows the average service lives, net salvage factors, and previously approved annual depreciation rates for each account in Columns 4, 5 and 6, respectively.
Column 7 shows the average service lives that are justifiable.
As a result of our study, we recommend that the Internal Sinking Fund Depreciation method of capital recovery be used for providing for the decommissioning costs of the nuclear units.A summary of the annual and total revenue require-ments, total depreciation expense and ultimate cash expen-diture for decommissioning each unit is shown on Schedule 2.Because of the negative impact of the book depreciation reserve, total revenue requirements are much less than total depreciation expense, amounting to only$1 0,686,000 annually, as shown on Schedule 2.The annual depreciation provisions, anticipated to commence the first quarter of 1981, for each unit are shown on Schedule 3.The accumulated depreciation provision for decommissioning is zero as of December 31, 1980 as a result of the zero net salvage component in the existing depreciation rates.The depreciation provision we recommend for the first year is$10,686,000, as shown on Schedule 3.A major purpose of the nuclear decommissioning section of this report is to provide a procedure for calculating the required capital recovery amounts.The Company has a policy of periodic review of the adequacy of its depreciation rates used for capital recovery.The reasons for this policy also require its application to the capital recovery for decom-missioning the nuclear units..The criteria used for this study are outlined on Schedule 4 and illustrate the need to periodically review the bases for capital recovery.The calculations of the actual cash expenditures for decom-missioning, annual and total depreciation provisions, and annual revenue requirements for Robinson No.2 appear on Schedule 5, for Brunswick No.2 on Schedule 6, and for Brunswick No.1 on Schedule 7.The remainder of this report discusses the bases for the study, how it was accomplished.and our recommendations for present and future actions relative to the depreciation rates and the capital recovery of the decommissioning costs for the nuclear generating units.
PURPOSE OF DEPRECIATION The purpose of depreciation is to provide for the recovery of invested capital and net salvage over the life of the facili-ties constructed with that capital from those customers receiving benefits from the facilities in a pattern that matches the pattern of customer benefit.The Uniform System of Accounts prescribed for electric utilities by the Federal Energy Regulatory Commission (FERC)states that depreciation"as applied to depreciable electric plant, means the loss in service value not restored by current maintenance, incurred in connection with the consumption or prospective retirement of electric plant in the course of service from causes which are known-to be in current operation and against which the utility is not protected by insurance.
Among the causes to be given consideration are wear and tear, decay, action of the elements, inadequacy, obsolescence, changes in the are, changes in demand and requirements of public authorities.
Service value means the difference between original cost and net salvage value of electric plant." Depreciation accounting is an allocation process whereby con-sumption of physical assets is recognized in the income statement of a business enterprise.
The purpose of depre-ciation expense is to provide full recovery of invested capital adjusted for net salvage to be incurred at the time the facilities are decommissioned, over the expected life of the facilities constructed with that'apital from those customers receiving benefits from the facilities.
The study reported here is consistent with this purpose.The capital recovery requirements for decommissioning dis-cussed in this report cover only the net salvage component of depreciation.
The FERC Uniform System of Accounts defines net salvage value as"the salvage value of property retired less the cost of removal.Salvage value means the amount received for the property retired," and"cost of removal means the cost of demolishing, dismantling, tearing down or otherwise removing the, electrical plant, including the cost of transportation and handling incidental thereto." Thus, it is the decommissioning cost that will actually be incurred that is requi,red to be recognized by the Company through capital recovery.For Nuclear Production Plant, cost of removal and decommissioning cost are synonymous terms.LIFE ANALYSTS The remaining service life of each nuclear generating unit was based on the term of the operating license granted by the Nuclear Regulatory Commission.
The lives of Robinson 2 and Brunswick Units 1 and 2 were adjusted downward from those indicated by the license in order to recognize the uncer-tainty as to whether such installations will be permitted to operate for the full term-of their license.The existence of this uncertainty and the need to reflect it in the depre-ciation rates are unquestioned.
This rational method of life adjustment for recognizing the uncertainty surrounding the continued operation of Carolina Power&Light's nuclear units is considered to be the most reasonable procedure for doing so~An additional reason for the downward adjustment of the capital recovery period is the fact that totals of the already elapsed operating lives of the three nuclear units and their remaining lives is either equal to or less than the 25 year average service life determined applicable to these units by the FERC in Docket No.ER76-495, as illustrated by the table below.Unit Elapsed Life Years Remaining Period Years Total Years Robinson No.2 Brunswick No.1 Brunswick No.2 16 19 19 25 22 24 The approach for recognizing retirement dispersion is through the development of an interim activity factor applicable to each primary account.An analysis of past retirements iden-tifies activity which is not true interim retirements.
The analysis results in the determination of the annual depre-ciation rate that would have provided an amount sufficient to cover past interim retirements.
The interim activity factors selected for use as a result of an evaluation of the signifi-cance of past retirement experience reflect the fact that some existing plants are mature and some are not, and also the fact that historical experience may or may not be a reasonable indication of what will happen to the new modern generating plants.The analysis included the experience of both steam and nuclear generating units.CALCULATION OF AVERAGE SERVICE LIFE The average service lives for each account are determined from depreciation rates calculated using the following f ormula: ASL Vhere: Base Rate ASL PB BR ARL 100 Base Rate+Interim Activity Factor PB-BR ARL X 100 PB Average Service Life, years Depreciable Plant Balance, Book Reserve, Average Remaining Life, years The resulting average service lives vary from 20 to 23 years.
t t ESTIMATES OF DECOMMISSIONING COSTS Decommissioning cost estimates were made by Nuclear Energy Services, Inc.(NES), for three different decommissioning processes:
immediate removal, entombment with removal after a 30 year delay and entombment with removal after a 100 year delay.Costs were estimated at mid 1979 price levels for each of the three units.For example, the costs from the NES report for engineering and preparation, entombment," sur-veillance (annual), and removal are shown on Line 1, Page 1 of Schedule 5 for Robinson No.2.Column 1 of the Schedule shows that the preparation process.takes 12 months, the entombment process takes 22 months, and the removal process takes 61 months.The same data for the Brunswick units are shown on Page 1 of Schedules 6 and 7.DECOMMISSIONING PROCEDURE The NES report estimated costs for three decommissioning pro-cesses.Entombment with removal after a delay of 100 years was not considered by the Company to be a reasonable basis for calculating capital recovery requirements.
Company stud-ies indicate that entombed property will not require signi-ficant maintenance for 30 years, thus the 30 year delay option'will allow taking advantage of the"state of the art" developed by other utilities which will have decommissioned units during the 30 year dormancy period.The delay period will result in decreased exposure of personnel to radiation.
It has been determined that the Company will use the 30 year delay process, therefore, this report covers only the entomb-ment process with a 30 year delay in removal.CAPITAL RECOVERY METHOD Two basic capital recovery methods exist: Internal Sinking Fund Depreciation and Straight-Line Depreciation, both of which meet the required accounting and regulatory framework of depreciation.
Two external methods of providing for decommissioning cost exist: Prepaid Invested Fund and Progressively Paid Invested Fund.The total revenue require-ments for the external methods are significantly higher than for the capital recovery methods, therefore, the external methods are not covered by this report.Of the two basic capital recovery methods available, the Internal Sinking Fund Depreciation approach was selected as providing the most reasonable balance between the interest of investors and customers, especially during periods of high or uncertain inflation.
This method has significantly lower annual revenue requirements in the early years than Straight-Line Depreciation.
Total revenue requirements are lowest for Straight-Line Depreciation, but because of the high annual revenue requirements in early years this method was not used.
The utility regulatory process allows the sinking fund con-cept of depreciation to be applied with either a depreciated or an undepreciated rate base.The correct terminology for an undepreciated rate base is Sinking Fund and for a depre-ciated rate base is'ifodified Sinking Fund.Either way, the book reserve is the accumulation of the annual annuity amount collected from customers plus the annual interest on the reserve.If the annual interest is not included in revenue requirements, the accumulated provision is not a deduction for the determination of rate base.If the annual interest is included in revenue requirements, the accumulated provi-sion is a deduction for the determination of rate base.The discussion in this report relates to Modified Sinking Fund, as the regulatory process most often deals with depre-ciation provisions that affect rate base.However, it should be noted that use of the after-tax rate of return as the sinking fund interest rate makes the revenue requirements for Modified Sinking Fund identical to those for Sinking Fund, with tax normalization.
DECOMMISSIONING STUDY CRITERIA The study criteria are listed on Schedule 4.As discussed above, this report covers only entombment with a 30 year delay in removal.In order to recognize the uncertainty as to whether nuclear units will be permitted to operate for the full term of their license, the remaining lives for depre-ciation rate calculation purposes were adjusted downward ten years from those indicated by the license termination dates.The license termination dates for the units are as follows: UNIT OPERATING LICENSE TERMINATION Robinson No.2 Brunswick No.1 Brunswick No.2 April 13, 2007 February 7, 2010 February 6, 2010 In order to be consistent with the basis for the calculation of depreciation rates, the capital recovery period for Robinson No.2.ends April 13, 1997 and for Brunswick No.1 and No.2 February 7 and February 6, 2000, respectively., Costs for each component of the decommissioning process at these dates for each unit are shown on Page 1, Line 5 of Schedules 5, 6, and 7.In order to eliminate revenue requirements beyond the end.of unit life, it was assumed that the accumulated fund would be turned into cash and invested at the end of life.The ear-nings on the investment were assumed to be 1.5 percentage points above the inflation'rate and not subject to income tax.6
Cost of removal was assumed to be a tax deduction at the time the accumulated fund was turned into cash and invested.Revenue requirements are calculated assuming tax normalization.
Inflation rates of 9.6%from mid-1979 to mid-1980, 8%from mid-1980 thru 1990 and 6%beyond were used in all calcula-tions.The capital structure and costs are as shown by Item (9)on Schedule 4.The resulting composite rate of return is 10.18%.The sinking fund interest rate of 7.936%is calcu-lated from this capital structure and the effective tax rate of 49.24%.The existing amount of book reserve is zero, as the FERC has authorized depreciation rates based on zero net salvage.Use by the Company of the calculated depreciation provisions is anticipated to commence the first quarter of 1981.CALCULATION OF CAPITAL RECOVERY REQUIREMENT The capital recovery requirement for Robinson No.2 is calcu-lated on Page 1 of Schedule 5, for Brunswick No.2 on Page 1, Schedule 6, and for Brunswick No.1 on Page 1, Schedule 7.The ultimate cash expenditures for each unit are also calcu-lated on Page 1 for everything but surveillance; and for sur-veillance on Page 2.This discussion will cover only Schedule 5 for Robinson, a's the calculations are identical for Brunswick.
As discussed above, the figures on Page 1, Line 1 and the decommissioning process timing in Column 1 are from the NES report.Actual inflation of 9.6%is used to update the costs to a mid 1980 price level.The future value factor for inflation occurring thru 1990 is calculated on Line 3 and from 1990 to the life termination point on Line 4.The fac-tor for the entire period since mid 1980 is shown on Line.5, Column 4 and is applied to the mid 1980 costs on Line 2 to calculate the costs at the price level anticipated at the life termination point shown in Columns 5 through 8, Line 5.The ultimate cash expenditures are assumed to be made at the midpoint of each period, therefore, the 12 month preparation process has an expenditure point a half-year beyond life ter-mination, as shown on Line 6, Column 3.The future value factor shown on Line 6, Column 4 is applied to the engi-neering and preparation cost shown on Line 5, Column 5 to determine the ultimate cash expenditure.
The ultimate cash expenditures for entombment, surveillance, and removal are calculated in a similar manner in Columns 6, 7, and 8.For surveillance, the figure calculated is the amount that would be expended during the first year of surveillance.
This figure is also shown for year one on Page 2 of Schedule 5.7
Page 2 shows the expenditures that would be made in each of the thirty years and the total.The ultimate cash expen-ditures for decommissioning shown on Schedule 2 for each unit are taken from Pages 1 and 2 of Schedules 5, 6, and 7.The calculations for Brunswick Ho.1 anticipate its decom-missioning process will start one year after that for No.2.The fund required at the end of life for Robinson No.2 is calculated on Lines 14 through 18 on Page 1 of Schedule 5.As shown in Column 2, the rate of earnings on the investments made at the end of plant life is 7.5%;1.5%above the infla-tion rate.The present value factors for preparation, entombment and removal are calculated in Column 4, Lines 14, 15, and 1.6, respectively.
The present value of the expen-diture for engineering and preparation is calculated on Line 14, Column 5 by applying the factor in Column 4 to the expen-diture shown in Column 5, Line 6.The present value for entombment and removal are calculated in a similar manner.The fund required at the end of plant life to provide for annual surveillance payments is calculated on Line 17, and amounts to$10,384,435.
Recognizing earnings at 7.5%from the end of life to the first year of expenditures results in a present value of$8,161,927 as shown in Column 7, Line 18.The total capital recovery amount of$112,910,970 appears in Column 9, Line 1.9.ANNUAL REVENUE REQUIREMENTS The annual revenue requirements for each unit are calculated on Page-4 of Schedules 5, 6, and 7.The calculations assume the capital recovery we recommend will commence the first quarter of 1981.The annuity amounts for the units are calculated on Page 3 of Schedules 5, 6, and 7.The capital recovery period is 16.28 years for Robinson No.2 and 19.10 years for each Brunswick unit.As shown, the required annual annuity amount for Robinson is$3,632,263.
As the revenue requirements are calculated in thousands, the annuity amount is rounded to$3,632, and appears in Column 6, Page 4 of Schedule 5.The revenue requirements consist of the annuity amount, fund interest and impact of the book reserve and deferred taxes on return and income taxes.The determination of the annuity amounts in Column 6 has already been discussed.
The interest in Column 7 is calculated on the reserve at the end of the prior year in Column 4, using a rate of 7.936%.Return in Column 8 is calculated on the reduced outstanding capital in Column 3, using the rate of return of 10.18%.The income taxes calculated in Column 9 recognize that the debt portion of capital is a deduction for tax purposes and the composite tax rate of 49.24%.As is obvious from the calculation, return is generated from reduced outstanding capital;the net of book reserve and the reserve for deferred income taxes.
The annual depreciation provisions for each unit shown on Schedule 3 are the total of Columns 6 and 7 on Page 4 of Schedules 5, 6, and 7.The discussion in this report relates to Modified Sinking Fund, but the inclusion of the revenue requirements for nuclear decommissioning in a revenue rate case could be on either the basis of Sinking Fund or Modified Sinking Fund.The subcaptions for the income statement accounts on Page 4 of Schedules 5, 6, and 7 are for Sinking Fund.Under Sinking Fund the only component of revenue requirements is the annuity amount in Column 6.Under Modified Sinking Fund, the revenue requirements are those in Column 5;the total of Columns 6 through 9.Use of the internal after-tax rate of return as-the interest rate makes the revenue requirements identical for, Sinking Fund and.Modified Sinking Fund.The minor differences between Columns 5 and 6 are due to rounding.Thus, the Company has the option of using either Sinking Fund or Modified Sinking Fund in determining revenue requirements for a revenue rate case.Care should be taken when using Sinking Fund to ensure all parties understand the distinction between Sinking Fund and Modified Sinking Fund.RESULTS In order to give recognition to the uncertainty surrounding the continued operation of nuclear units in service due to political and regulatory constraints, the remaining service life of each unit was de'creased ten years from that indicated by the termination date of the operating license granted by the Nuclear Regulatory Commission for life calculation pur-poses.The resulting remaining lives were used in the test of the validity of the existing 4.OX rate and in determining the depreciation provisions for decommissioning.
4 I The average service life, net salvage factor, and recommended depreciation rate for each account is shown on Schedule 1, Columns 4, 5, and 6, respectively.
As discussed above, average service lives were calculated for each account.The calculated lives shown in Column 7 vary from 20 to 23 years, compared to the 25 years approved by the FERC.The determination of the depreciation provisions for decom-missioning was discussed above.RECOMMENDATIONS Our recommendations for your future action in regard to book depreciation for the nuclear units are as follows: 1.The annual depreciation rates calculated on Schedule 1, are lower than can be justified, but we recommend they continue to be used for the t'me being.
2.The Internal Sinking Fund Depreciation method of capi-tal recovery should be used for decommissioning.
3.The annual depreciation provisions shown on Schedule 3 are applicable to each unit and should be adopted.The cri teria shown on Schedule 4 for the determination of decommissioning capital recovery requirements will likely change over time, and actual experience for cer-tain criteria probably will not be identical to that estimated.
Therefore, future capital recovery require-ments should be recalculated periodically, using the calculation procedures illustrated on Schedules 5, 6, and 7 Ne appreciate this opportunity to serve Carolina Power&Light Company, and would be pleased to meet with you to discuss further the matters presented in this report, if you desire.10 CAROLINA POWER 6 LIGlIT COMPANY (1)(2)(3)FERC Basis Summary of Mortality Characteristics and Recommended Depreciation Rates (4)(5)(6)FERC Approved Rates Docket No.ER76-495 (7).ine FERC Wo.Zcc L-.Descri tion Nuclear Production Plant (a)Average Service Life Years Net Salvage Factor Rate Average Servi Life Justifiable Years 1 2 3 5 320 321 322 323 324 325 Land and Land Rights (Rights-of-Way)
Structures and Improvements Reactor Plant Equipment Turbogenerator Units Accessory.Electric Equipment'iscellaneous Power Plant Equipment 25 25 25 25 25 25 4.000 4.000 4.000 4.000 4.000 4.000 20 23 21 23 23 21 ote: (a)The effect of decommissioning cost is treated separately.
Sechedule 2 CAROLlNA PQTiR&LIGHT C(RPAHY PIC Basis Revenue Requirem nts, Depreciation Expense and Ultimate Cash Expenditure
-30 Year Delay Line Particulars (2)Robinson No.2 (~)Brunswick No.2 (4)Brunswick No.1 (5)Total Revenue Reauirements a-"ter'Decembe 31, 1980 Annual Total 3,632~000 4,038~000 3,016,000 10,686,000 59~137 000 77'39~000 57>614 F000 193 090 000 Total Depreciation Expense 112,911,000 167,905,000 125,410,000 406,&~6,000 Ultimate Cash Expenditu e Engineering
&Preparation 13,887,794 16,355,322 15, 695,443 6 Entombment 28 i 250 t 873 34 s 6 10 s 875 39,182,505 1 446.921 762 1 Surveillance (30 years)'3,303,418 861 933 096 26,810,219 16,258,474 128 834.365 Total Expendi,ture 937.375 181 1.537 070 464 1,187.598.501 3,662,044,146 Schedule 3 CAROLS POWER Ec LIGHT COMPANY FWC Basis Depreciation Provisions
@or Internal Sinking Fund Method oz Capital Recove y 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Total Robinson No-2 (000)3,632 37920 47231 4,567 4,930 5 7321 5,743 6,199 6,691 7 7 222 7,795 8,414 97081 9,802 10,580'1,419 3,364 S112 911 Brunswick No.2 (000)4,038 47358 4,704 5,078 57481 5,916 67385 6,892 7,439 8,029 8,666 9,354 10,096 10,898 11,762 12,696 13,703 14,791 15, 965 1,686 S 167.905 Brunswick No.1 (000)3,016 3, 255 3,514 3,793 4,094 47418 4',769 5,148 5,556 5,997 6;473 6,987 7,54K.8,139'8,785 9,483 10,235 U.7047 11, 924 1.226$125,410 206al (000)10,686 11,533 3.2,449 13,438 14,505 15,655 16,897 18,239 3.9,686 21,248 22,934 24,755 26,7KB 28,839 31 127 33,598 27,302 25,838 27,809 2.890 8606.226 Schedule 4 CAROLZHA POQER&LICaa.'APABLY FERC Basis Criteria for Determination of Decommissioning Revenue Requi ements (1)Removal 30 Years after entombment (2)Capital recovery period 10 years less than the termination date of the operating license (3)Accumulated fund invested at end or life with earnings 1 1/27.ove inflation and not taxed (4)Effect ve tax rate-49.247.(5)Cost of removal's a tax deduction at the time the accumulated fund is invested (6)Deferred taxes includ d in revenue requirements (7)Revenue requirement
'oasis (8)Inflation:
9.67.Pid-1979-i6d 1980 (Actual experience) 8.0/Mid-1980 through 1990 6.07, Beyond 1990 (9)Capital structure (3 year average)and cost rates (9-30-80):
Debt Prefer ed Equity 49.867.x 9.14'/~4.567.13.30 x 8.50~1.13 36.84 a 11.19 4.49 Composite~100.007.10.187.(10)Annuity interest.rate~R-TTB 10.18-(0.4924 x 0.4986 x 9.14)~7.9367.(11)Timing and magnitude of emenditures zbr decommissioning per MES Report (12)Start'ng date for depreciation provisions for D/C based upon internal siaking und method of capital recovery<<January 1, 1981 ChROI.1tlh PNIER 6 I.ICIIT COHPhIIY FE(C Basis Calculation of Ultl9uace Cosl4 Exllcndl cures and Total Capital Recovery for Robinson No.2 I.Inc Porc I cul ars Cosc ut HIJ-1979 hccual Inflation-Hld'79-HIJ'80 (2)(3)(4)Race 2 Period Years Factor 9,6 1.0 1.096 (5)Engineer lng and~vr rlv$3,802,300 4,167,321 (6)Entoudlmcnc
$7,120,500 7'040068 (7)Bur vel 1 lance 97,800/yr, 107, 189/yr.(8)ReuVovu 1$30,936,500 33,906,404 (9)Factor-1980-1990 1990-hprll 13, 1997 HIJ-1980-hprll 13, 1997 8.0 6.0 10 5 6.29 16.79 2.243621 1.442693 3.236856 13,4890018 25~260~644 3466~955/yr0 109'50, ll7 9 10 ll 12 13 l2 Hontl2 I'reparation 12 Hunch I'reparation 22 Huncl5 E27to74II7623cnc 34 H>nch I'reparation and Entocabu6ent 12 H4567C12 Props ra I.lon 34 IIonch Prcparotlon ond Ento276I7u6cnt 30 Your Belay 61 Honth Rcu2oval 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 0.5 Z.8a]2.83 30.00 2.54 1.029563 13 9117 794 1.118375 1.214139 7.853594 28 250 073 421~252/yr.861 933 096 Present Value Present Value Present 9 I Present 9 I Total Present V I 15 16 I'rcpuratl un Ew C o666I7666c n C Rculovul Swrv<<l 1 lance Fund ut hugust, 2000 7.5 0,5 0.964486 13 39'83 7.5 1.92 0.870354 24,588,260 7.5 35'7 0.077461 66,766 F 200$13,394~583 24,588,260 66,766,200 17 18 19 o.06-o.o75 hlulual Coo t, F622'ld X 1 075 (24~65 1361)X (42 1 0252)100 384 0435 ,7.5 3.33.785977 80161'27 8016l0927 1120~910 970 Schedule 5 Page 2 of 4 CAROLZHA PGvrZ 6 LjGEV CCW'ANY~C Basis Annual Surveillance Cost for Robinson No.2 Annual Surveillance Cost Year Afte Entcnrhnent Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Total 421,252 446,527 473,319 501,718 531,821 563,730 597,554 633,407 671,4 12 711,696 7545398 799,662 847,642 898,500 952,410 J.,009,555 1,070,128 1, 134,336 1,202,396 1,274,540 1,351,012 1,432,073 1,517,997 1,609,077 1,705,622 1,807,959 1,916,437 2,031,423 2,153,308 2 282 507 33 303 418 Schedule 5 Page 3 of 4 CAROLXIK POD.R&LXGHT COMPANY C Basis Sinking Fund Reauirements fo-Robinson No.2 Return=10.187.A ter tax inte est (R-~B)=7.9367.30-year delay Recovery pe iod January 1, 1981-April 13, 1997 16.28 yrs.Cost at the end of plant life$112,910,970 (1.07936 16.28 112,910,970
.07936.0321692671 112,910,970 Annu ty 3,632,263$3.632 8 8 CAIIOLINA POWER (>I.lCIff COIIPAIIY FERC Uouls Cslculotlon of Annual Revenue Requlrc)2)ento for Robinson No.2 (000's)(2)(3)UAI.AIICE SUEEI'CClMtffS (4)(5)(6)(7)(6)1ttCOtIE STATEttEttT ACCHIIITS (9)(10)YEAR UEFERIIED TAXES.DR IIFDUCED OUTSTAUIIINO CAPITAL D/C RESERVE IIEVEttUE Alt ttttl TY ltITEREST It E'Ill IUI COST OF SEIIVICE NON COS OF SFRVICE~88~>X aiSS INCONE TAXF.S I I IF I AT I ON htt JUS'fttD CII It It I'.Ifl'OST IIESEIIVE IIATIO 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 I 996 4/13/1997'IYf fbi.$1~788 3,719 5,802 8,051 10,478 13,098 15,926 18,979 22 F 273 25,829 29,668 33,811 38,282 43,109 488,316 53,941 55,597$1,644 3,833 5,981 8,299 10,802 13,503 16,418 19~56(i 22,961 26,627 30,583 34i,854 39,464 44,(i 39 49,810 55,606 57,314 (3,632)(7'52)(11,783)(16,350)(21,260)(26,601)(32,344)(38,543)(45,234)(52,456)(60,251)(68,6G5)(77,746)(87,5(ie)(9'28)(109,547)(112>911)$(3'32)(3,631)(3'32)(3,63'2)(3,632)(3,632)(3,632)(3,633)(3,632)(3,633)(3,632)(3'34)(3'33)(3>634)(3,633)(3,632)~)>le)2>I~59>137)$3,632 3,632 3,632 3,632 3,632 3,632 3,632 3,632 3,632 3,632 3,632 3,632 3,632 3,632 3,632 3>632 I 017~59>129$-0-288 599 935 1,298 1~689 2>111 2,567 3,059 3'90 4, 163 4,782 5,449 6,170 6,948 7,787 2~347-0-(188)(390)(609)(84i5)(1,100)(I~375)(1,671)(1~992)(2,337)(2,711)(3,113)(3,5(ie)((i,017)(4,524i)(5,071)~)528)IL35,828)$-0-(101)(209)(326)(453)(589)(736)(695)(I~067)(1,252)(1,452)(1,6G7)(1.900)(2,151)(2'23)(2,716)~8)8)~Ie~75S)$39,161 42,29(i (i5,677 49,331 53,278 57,5(iO 62,143 67,1I4 72,463 78,282 82,979 87~958 93,236 98,830 104,759 111,045 112,911.0927.1786.2580.3314.3994.4623.5205.5743.6241.6701.7261.9367.9665 1.0000%f(I a n fe ID I3~C 0 ID
ChROLlkkh POWER 6 LICIIT COHI'hIIY FERC Saslu Calculation of Ikltlmste Cssli Expenditures and Total Capital Recovery for Ikrunsulck Iko.2 I.I>>epartli:>>lars 1 Cost at HI J-1979 2 hctual I>>f lotion-klld'79-kkld'80 (2)(3)(4)Factor 9.6 1.00 1.096 Period Rate Years 7 (5)E>>8lnccrl>>8 a>>d~rr r 11$3,806,000 4, 171,376 (6)(7)$7,414,600 8,126,402$97,800/yr.
107, 189/yr.Entombment Survcl lla>>ce (8)Removal$44,243,700 48,491,095 (9)Factor-1980-1990 1990-Feb', 2000 IIIJ-1980-Fi.b.6~2000 8.0 6.0 10,50 9.08 19.58 2.243621 1.697373 3~808262 15~885 6693 30~9476468 4083204/yr.
1 84,666, 794 6 12 Huntli Preparation 7 12 Huntb Prcpuratloii 8 22 klontli Entoubmcnt 9 34 kkonkli Pi'operation siid Entombment 10 12 klontb I'reparation 11 34i tDnkki Preparation and Entombment 12 30 Year I)clay 13-60 klo>>tb Rciaoval Fu>>J Reiulrcd at Feb.6 2000 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6,0 0.50 1.029563 16~355 322 1.118375 1 214139 7'35311 Present V 1 34 610 613 Present Value*495,616/yr.
Present V 1 1 446 611 161 Present Value Total Present Value 14 15 16 17 18 19 Prcliarat koii E>>tombmcnt Rcaioval Survellls>>cc F>>>>d at J46>>e6 2003 7.5 7.5 7.5 0.5 1.92 35.33 0.964486 0.870354i 0.077685 0.06-0.075 h>>nua1 X 1 075 (24~651364)(4956616)12~217~610 7.5 3.33 0.785977 15,774,479 30,123,713 9,602,760 Total 3 9 602 760~167 9U5aOG9$156774,479 30,123,713 1 12~404~117 1 12 404~1 17 itk M IU n (8 (0 I3 g 0 III Schedule 6 Page 2 of 4 CAROLYN POWER&LiGET COMPANY.""RC Basis Annual Survei llance Cost for Brunsvick No.2 Annual Surveillance Cost Year A-ter Entcnnbment 1 2 3 5 6 7 8 9 10 13 14.15 16 17 18 19 20 21 22 23 24 27 28 29 30 Total 495,616 525,353 556,874 590,287 6H~, 704 663,246 703,041 745,223 789,937 837,333 887,573 940,827 997,277 1,057,113 1,120,540 1,187,773 1,259,039 1,334,581 1,414,656 1,499,536 1,589,508 1,684,878 1,785,971 1,893,129 2,006,717 2,127,120 2,254,747 2,390,032 2,533,434 2 685 440 39.182.505 Schedule 6 Page 3 of 4 CAROLZHA PCNER&LZGET CO~ANY PERC Basis Sinking>>und Require nts zo Brunswick No.2 Return~10.187, A"ter taz inta estl,'R-TZB)~7.9367, 30-year delay Recove~pe iod January 1, 1981-February 6, 2000~19.10 yrs.Cost at the end o" plant lize,$167,905,069 1.07936)-1.07936.0240478898 167,905,069 167,905,069 Annuity 4,037,762 8 4,038 CAROL1UA POIIER&LICIIT COIB'AIIY FERC Reels Cele>>latlon of Annual Revenue Bcctutrements for Brans>>ick No.2 (000'e)(2)(3)DAIAIICE SIIEFT ACCOUtlTS (4)(5)(6)(7)(8)1ttCOHE STATEIIEtlT ACC(l)trfS (9)(10)YEhR 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2/06/2000 DEFLBBED'I'AXES-DR
$1,988 ti, 134 6,450 8,951 Ill 650 14,563 17'07 2 I,100 24,763 28,717 32,98ti 37,590 42,561 ti7,927 53,719 59,970 66,718 74 F 001 Ol>BG2 82,676 REDUCED OUTSTABUltlU CAPITAL$2,050 4,262 6,650 9,227 12,009 15,012 18,253 21,752 25,528 29,603 34,002 38,750 43'75 49,ti07 55,377 61,822 68>777 76,285 Sti~389 85,229 0/C RESERVL't>,038)
(8,396)(13'00)(IB~178)(23'59)(29,575)(35,960)(42,852)(50,291)(58>320)(66,986)(76,3tiO)(86,436)(97,334)(109>096)(121,792)(135,ti95)
(150,286)(166,251)(167'05)n/C EXI EIISE llill>IIII>
$(4>038)(ti,037)(4,038)(4,038)(4,039)(4,038)(ti,039)(4,039)(4,039)(4,038)(ti,038)(4,040)(ti>038)(4,040)(4,038)(4,0ti0)(4,04>0)(4>041)(4,040)~401)Atl IIU I'I'4,038 t>,038 4,038 4,038 4,038 4,038 4>038 ti,038 ti,038 ti,038 4,038 4,038 4'38 4,038 4,038 4,038 4>038 4,038 4,038 40ti I tlTE RL'ST$-0-320 666 I>Ot>0 1,4ti3 1,878 2,347 2,854 3,401 3,991~ti,628 5,316 6,058 6,860 7,724 8'58 9,665 10,753 llew 927 I 210 Ci)ST OF SERVICE IIOtl (X)ST OF SERVICE B 8'lll Btl$-0-(209)(434)(677)(939)(I~223)(1~528)(1,858)(2,214)(2'99)(3.014)(3,461)(3,945)(4,ti66)(5,030)(5,637)(6~293)(7,001)(7,766)~0)6)IIICOtlE TAXES$-0-(112)(232)(363)(503)(655)(BIB)(995)(I~186)(1,392)(1,6lti)(1,853)(2, 113)(2~392)(2,69ti)(3,019)(3,370)(3, 749)(4, 159)(437)I IIFI.AT<otl Al)JUSTI'.0 CllBBEIIT, COS r$49>ti20 53,373 57,6ti3 G2,25ti 67'35 72,61t>>78,423 St>,697 9l,ti 72 98'90 10ti,717 111,000 117,660 12ti, 720 132,203 140'35 lti8,54ti 157,ti56 166,904 167,905 Rl'.Sl BV I'.RATIO.0817.1573.2273.3519.ti073.4585.5059.5ti98.5903.G397.6877.73ti6.7804.8252.BG91.9122.95t,5.99GI.1000 TfrrhL LL(77~139)
~77 F 126~90 779@~59 110)Q(31~656)w rt)IU n ID ID I3 Mg I 0 ID Ih l
CAROLIOh POMER 6 1:lC98T CQ'8'hW FERC Basis Calculation of Ultimate Cash Expenditures snd Total Capital Recovery for Drunsulck No.1 I.l lie Particulars Cost st llld-1979 hctual lnflntlon-Old 79" tlld'80 (2)(3)(4)Rate 2 Period Years Factor 9.6 1.00 1.096 (5)Kll g l lice I l I 1 g slid~rr 11$3,Ii61,,800 3,794,133 (6)(7)0 5,539,700 G,071,511 8 39,600/yr.
43,402/yr.
Entombment Surveillance (8)Rclllova 1 338GU28800 36,916,3Ii9 (9)Factor-1980-1990 1990-Feb.7~2000 tlld-1980-Feb.7, 2000 8.0 6.0 10.50 9.08 19.58 2'43621 1.697373 3 808262 lIi 4Ii9 053 23 121 905 165 286/yr 140,587,128 6 7 8 9 10 ll 12 13 14 12 kloiith Delay 10 llnnth Preparation 12 llontli Delay 10 tbintli Propsratlon 17 tlo>>tli EiitoakIsent 45 Hoiitli Delay, 1'reparation snd Entombsent 39 llunth Delay, Preparation snd Entombment 30 Year Delay 60 llonth Removal 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 3.75 3.25 30,00 2 50 1.886261 15 695 443 1.159516 1.2IiIi220 8.029429 26 818 219 205,652/yr.
~1 128~8348365 Fund Required st Feb.7~2000 Present 9 I Present Value Present Value Present Va lue Totol l'resent Value 15 16 17 Prcparatlon Kn tomb iaen t Rcmove 1 Surveillance Fund at IIovcmbcr 2003 7.5 7.5 7.5 1.42 2.54 35.75 0.902402 0.832190 0.075361 14'638599 22,311, 196 8 14,163,599 22,311,196 85,070,086 85,070,08G 18*19 20 0.06-0.075 hnnIial Cost Fund X 1.075'(24,651364)
(205,652)5,069,602 7.5 3'5 0.762462 3,865,379 Total 3 865,329~125 410~260%CO Ri 0 (8 ID A W g 0 ID F/
Schedule 7 Page 2 of 4 CAROLiNA PORE&L1GRT CO~ANY FERC Basis Annual Suzveillance Cost for Brunswick No.1 Annual Su~eillance Cost Year After Entombment Year 1 2 3 5 6 7 8 9 10 ll 12 13 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 205,652 217,991 231,070 244,935 259,631 275,209 291,721 309,224 3270778 347,445 368,291 390,389 413,812 438,641 464,959 492,857 522,428 553,774 587,001 622,221 659,554 699,127 741,075 785,539 832,672 882,632 935,5 90 991,725 1,051,229 1 114 302 Total 16 258 474 Schedule 7 Page 3 of 4 CAROLTHA H)Vr.R cx LIGET COMPANY~rC Basis Sinking Fund Requirements for Brunswick No.1 Return=10.18",.After tax interest (R-TZB)=7.936%30-yea-delay Recovery pe.od January L, 1981-February 7, 2000~19.10 yrs.Cost at the end of plant Life$125,410,260 1.07936)-1.07936 125,410,260
.024 04 78898 1 5,410,260~v 3j015,852 Annuity S 3 016 CAIIOL)tth I'OIIEII 6, I.)CIIT Cnts'AIIT I'ERC Sue la Calcu)ation of An<<uaj Revenue ttequjre<2>cute for Qrunaulck lto.1 (noo'a)(2)(3)i<At.httCE SIIEI T ACCOUtITS (4)(5)(6)(7)(8)ttcottE sTATEIIEIIT hcccotrrs (9)()0)Yah-I<R I<EI<IICEII OIITSThttnl tin CAP I Thl.It/C RRRRIIIIR ItEVEI<tt 8 Rlllllll'IT cour of 8 Rv cE IIITRIIRRT ttntl COST Of SEINICR IIE'lllfol I tlCOtta TAXES I IIFI.ATI Ott hl<JOSTL'0 c~tattslrc COST RESERVE RATIO 1981 1982 1983 1984 1985 1986)987 1988 1989 1990 1991 1992 l99'l)994 1995 1996 1997 1998 1999 2/nz/zono rOTAI.$1,485 3,088 4,aja 6,686 8,702 10,877 13,225)5,760)8,49G 21,449 24,636 28,077 31,790 35,797 4U,123 44,793 49,832 55,272 61,143 61,152$1,531 3,183 4,967 6,892 8,910 11,213 13,634 16,247 19,067 22,111 25,397 28,943 32,771)6,903 41, 362 46,175 5 I, 311 s6,'978 63,031 63,658$3,016 6,271 9,785.13,578 17,672 22,090 26'59 32,007 37,5G3 43,560 50,033 57,020 64,561 72,7on 81,485 90,968 101,203 112,250 124,174 125,410$(3,016)(3,015)(3,016)(3,016)(3,016)(3,016)(3,017)(3,017)(3,016)(3,011)(3,017)(3,018)(3,017){3>016)(3,016)(3,017)(3,016)(3,016)(3,018)~57~614}$3,016 3,016 3,016 3,016 3,016 3,016 3,016 3,016 3,016 3,016 3,016 3,016 3,016 3,016 3,0)6 3,0)G 3,016 3,016 3,016 302~57~606$-0-239 498 771 1,078 1,402 1,753 21132 2,540 2,981 3,457 3,971 4,525 s,i23 5.769 6,467 7,219 8,03)8,908 934~67,8OC-n-(156)(324)(50G)(702)(9i3)(1,141)(1,388)(1,654)(1,941)(2,251)(2,585)(2,946){3,336)(3,157)(4,21 t)(4,701)(S,Z)o)(s,ano)+44~)SI$-0-(84)(174)(271)(376)(489)(611)(14i 3)(886)(1,039)(1,205)(1,3tl4)(1,518)(1,187)(2,012)(2,255)(z,sls)(2,801)(3,106)~32 J6$~23 645}36,9I2 39,865 43',054 46 498 50,218 541,23G 58,574 63,260 68,321 13,787 78,214 82,901 87>882 93,155 98,744i)04,669 110 949 II7,606 124,662 125,410.OBI 7.1573.2273.2920.3519.4073.4585.5060.5498.5903.6391.6tl78.734i6.7804.>2.9122.9545.99G1 1.0000<2 M It<0 Is rs I3>CR g 0 IB Attachment III Carolina Power&Light Company NRC RE UEST FOR ADDITIONAL FINANCIAL INFORMATION
SUBJECT:
Five-Year Operating Costs Pursuant to the Project Agreements between CP&L and Power Agency, Power Agency will pay its proportionate share of all costs associated with the operation, maintenance and fueling of the Joint Units.Section 9.1 of the Operating and Fuel Agreement (submitted as Exhibit E,to this Application) requires Power Agency to advance to CP&L by the first business day of each month Power Agency's share of the costs expected to be incurred by CP&L in that month for operation and maintenance of the Joint Facilities.
Similarly, Section 9.2 of the Operating and Fuel Agreement requires Power Agency to advance to CP&L by the first business day of each month Power Agency's share of the costs expected to be incurred in that month for Nuclear and Fossil Fuel Material and Nuclear and Fossil Fuel Services for the Joint Facilities.
Power Agency will include in its Monthly Project Power Costs to be charged its Participants pursuant to the Initial Project Power Sales Agreements (the form of which has been submitted as Exhibit B.l to this Application) charges sufficient to enable Power Agency to meet its commitment to bear its share of the costs of operation, maintenance and fueling of the Joint Units.Each Participant agrees in the Initial Project Power Sales Agreement to pay its Participant's share of such Monthly Project Power Costs.Such costs are defined in Section 1(t)of the Initial Project Power Sales Agreement as including all costs to Power Agency under the Operating and Fuel Agreement resulting from the operation, maintenance and'fueling of the Joint Facilities.
The Initial Project Power Sales Agreement imposes an unconditional"take or pay" commitment, thereby obligating each Participant to pay its Participant'.s Share of Monthly Project Power Costs whether or not the Joint Facilities are completed, operable, operating, or retired or decommissioned and notwithstanding the suspension, interruption, interference, reduction or curtailment of the output of the Joint Facilities, or the power and energy contracted for, in whole or in part, for any reason whatsoever.
Attachment IV Carolina Power&Light Company NRC RE VEST FOR ADDITIONAL FINANCIAL INFORMATION Brunswick Steam Electric Plant Estimated Operating Costs 1981-1985 Year 1981 1982 1983 1984 1985 Estimated Annual Operating Cost$(000)145,893 217,259 179,648 1505207 155,371