ML19341D492

Forwards Power Supply Planning Study & 810130 Ltr to Ks Gas & Electric & Ks City Power & Light,In Response to NRC 810209 Ltr.Study Available in Central Files Only

ML19341D492
Person / Time
Site:	Wolf Creek
Issue date:	02/23/1981
From:	Hanson G KANSAS MUNICIPAL ENERGY AGENCY
To:	Saltzman J Office of Nuclear Reactor Regulation
Shared Package
ML19250D107	List: ML19341D492
References
ISSUANCES-A, NUDOCS 8103050689
Download: ML19341D492 (3)

Text

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• February 23, 1981 - Q4 /gO pi 2* /

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Docket No. 50-482A s {d//

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Mr. Jerome Saltzman Chief Utility Finance Branch Division of Engineering Office of Nuclear Reactor Regulation Washington, D.C. 20555

Dear Mr. Siltzman:

In re. ponse to your letter of February 9,1981 concerning the status of the Agencies' negotiations with Kansas City Power & Light Co. and Kansas Gas & Electric Co., I have enclosed the following:

1. Letter to both KCP&L and KCSE dated January 30, 1981 affirming Agencies intent tc proceed with negotiations as soon as interim financing has been arranged.

2. A copy of the Power Supply Planning Study prepared for the Agency by R. W. Beck & Associates. This study makes recommendations to the Agency to proceed with negotiations to purchase an ownership interest in Wolf Creek as well as other power plants.

I hope this information will be helpful in bringing you up to date as to where we stand in our negotiations.

Sincerely,

~lhyl '$v1%lQ Gilbert E. Hanson l General Manager GEH/dj Enclosures iv 9i .

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?.O. Box 1026 1106 East 27th Suite 4 6

Hays, Kansas 67601 s l oco soWh M

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p KANSAS MUNICIPAL ENERGY AGENCY E- rg O%

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'% 'I January 30, 1981 s W/

q G Mr. Wilson Cadman Mr. Arthur J. Doyle ,

President & Chainnan of the Board j President Kansas Gas & Electric Co. Kansas City Power & Light Co. ,

201 N. Market 1330 Baltimore Avenue P.O. Box 208 P.O. Box 679 Wichita, Kansas 67201 Kansas City, Missouri 64141  ;

Dear Sirs:

This letter is to inform you of the Agency's present position with regards to your companies power supply offers to the Agency, and outline our near term timetable.

As of this writing, 32 cities have entered into Phase II of the Power Supply Project by approving Installment Purchase Agreements with the Agency. These agreements which total approximately two million four hundred thousand dollars are used as security for our interim financing. The cities are as follows: Augusta, Baldwin City, Burlington, Chanute, Clay Center, Colby, Ellis, Erie, Fredonia, Garnett, Greensburg, Hill City, Hoisington, Iola, Lacrosse, Larned, Lindsborg, Mulvane, Neodesha, Norton, Oakley, Oberlin, Osawatomie, Ottawa, Pratt, Sabetha, St. Francis, Sharon Springs, Sterling, Washington, Wellington and Winfield.

In addition, a couple other cities are still considering the agreements.

The specifics of Pha:,e II include:

1, Negotiation of ownership participation contracts with the appropriate utilities to E.'fectuate as nearly as possible the Preferred Power Supply Program sugoasted by l

l the Beck Study. You both have been supplied copies of this study.

2. Negotiation of necessary participation (non-owned) power f purchase contracts.

3 Negotiation of necessary transmission Agreements.

4. Final feasibility study and report and any necessary related studies and reports.

P.O. Box 1026 1106 East 27th Suite 4 Hays, Kansas 67601

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January 30, 1981 Page 2

5. Application to Kansas Corporation Commission for Certificate of Public Convenience, the preparation q of necessary testimony and related documents, and a the conduct of the related hearings.

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6. Agency management organization study.

7. Mechanics o' dispatching study, o 8 Development of a permanent financing plan,

9. Necessary legal, accounting, financings, engineering and general office services and expenses to accomplish items 1 through 8, At this time, we have agreements with cities that are more than suf-ficient to fund the proposed expenses and are proceeding with borrowing the necessary funds.

Near term chronology:

1. February 2 - Close on one-year note to fund $250,000 of Agency's budget. This money will be used for one-year of general office expenses, 2 February 15 - Deadline for Letters of Intent from the cities concerning base load capacity to be supplied by the Agency, At this time, it is apparent that all the capacity that is being offered from the LaCygne units and Wolf Creek to the Agency will be covered,

3. March 1. Approval from KCC for a two-year second note in an amount of approximately $600,000, The proceeds of thi; note are to be used for professional services leading up to our application for a power supply certificate from the KCC.

4. Other bond anticipation notes would be issued as cash flow would require.

As you can see, we cannot comit the Agency to the expenses of the professional consultants until after the KCC has approved our second note.

We are presently drafting our application for this financing.

We can assure you both, the cities would never have entered into this u comittment if they were not sincere in carrying out the power supply plan as recommended by R. W. Beck.

We hope this letter is sufficient as to the Agency's intent to enter into formal negotiations as soon as interim financing has been completed.

You,rs truly,

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l Gilbert E. Hanson l General Manager GEH/dj