ML19317D130

Forwards Findings of Fact,Conclusions of Law & 790306 Order of Wi Public Svc Commission Re Denial of Application for Certificate of Public Convenience, & Necessity for Const Permit.Certificate of Sve Encl

ML19317D130
Person / Time
Site:	05000484
Issue date:	03/09/1979
From:	Baxter T SHAW, PITTMAN, POTTS & TROWBRIDGE
To:	Salzman R, Smith I Atomic Safety and Licensing Board Panel
References
NUDOCS 7904040374
Download: ML19317D130 (55)

Text

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'-.g March 9, 1979

,au t s tac-as 6Emamar Richard S. Salzman, Esquire Ivan W. Smith, Esquire Chairman Chairman Atomic Safety and Licensing Atomic Safety and Licensing Appeal Board Board i U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission' Washington, D.C. 20555 Washington, D.C. 20555 In the Matter of Northern States Power Company, et al.

(Tyrone Energy Park . Unit 1)

Docket No. STN M- 4 8 4 Gentlemen:

Please find enclosed a copy of the Findings of Fact, Conclusions of Law and Order of the Public Service Commission of Wisconsin, dated March 6, 1979, which deny the application of Northern States Power Company, Lake Superior District Power Company, Cooperative Power Association and Dairyland Power Cooperative for a certificate of public convenience and neces-sity to commence the construction of Tyrone Energy Park.  ;-

Applicants are engaged in an intensive effort to p study the imolications of the enclosed decision and the cour co of action wh'ich will be pursued in response to it. Because : as: $ $

certain issues in this docket are pending before the Atomic Safety and Licensing Appeal Board and the Atomic Safety and 8f>-

Licensing Board, Applicants will keep both boards advised of decisions by Applicants whichjaffect your consideration of

E g pending matters. s c>

Respectfully submitted, 8g fk ^

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Thomas A. Baxter Counsel for Applicants l-cc: per Certificate of Service 79 0404 g3y<f,

e 3' UNITED STATES OF RMERICA NUCLEAR REGULATORY COMMISSION In the Matter of )

)

NORTHERN STATES POWER COMPANY, )

ET AL. ) Docket No. STN 50-484

)

(Tyrone Energy Park, Unit 1) )

CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing letter .

from counsel for Applicants to the Chairmen of the Atomic Safety and Licensing Appeal Board and the Atomic Safety and Licensing Board, dated March 9, 1979, were served upon the parties iden-tified on the attached Service List and that copies of the Findings of Fact, Conclusions of Law and Order of the Public Service Commission of Wisconsin, dated March 6, 1979, were served upon those parties identified with an asterisk on attached Service List by deposit in the United States mail, first class, postage prepaid, this 9th day of March, 1979.

Those parties listed but not identified with an asterisk on the attached Service List are parties to the Wisconsin pro-l ceedings and therefore will receive or have received a copy of the decision directly from the Public Service Commission.

/L A/h Thomas A. Baxter e.

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Dated: March 9, 1979 *bbg

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/.*sTel UNITED 4TATES- O .a ERICA NUCLEAR/RIGULATORY  ;. !ISSION 7 .. .

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g7 In the Matter of 1) #+

~s'e sps .s NORTHERN STATES POWER COMPANY, t>s -

- .. M P' /g ET AL. ,

)p ket No. STN 50-484 (Tyrone Energy Park, Unit 1) -

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SERVICE LIST

• Richard S. Sal =an, Escuire, Chaiman

• Peter A. Peshek, Esqui.re Atcraic Safety and Licensing Appeal Ecard State Public Intertenor U.S. Nuclear Pegulatorf Ccmnissicn 114 East, State Capitol Washingten, D.C. 20555 2!adiscn, Wiscensin 53702 Michael C. Farrar, Esquire Atcraic Safety and Licensing Appeal Scard Mr. Thcras Galazen U.S. Nuclear Regulatorf Ccmissicn Route 2, Ecx 64 Washingtcn, D.C. 20555 Turtle Lake, Wiscensin 54389 Dr. W. Reed Jchnsen

• Jocelyn Furtwangler Olsen, Esslire Atcraic Safety and Licensing Appeal Scard Special Assistant Attorney C,aneral U.S. Nuclear Regulatory Ccmission Minnesota Pollution Centrol Agency Washington, D.C. 20555 '

1935 W. Country Read 32 Noseville, Minnescta' 55113 Ivan W. Smith, Esglire, Chairman Atcmic Safety and Licensing Scard Richard Ihrig, Esquire U.S. Nuclear Regulatcry Ccmissicn 400 E:< change Building Washington, D.C. 20555 4th and Center Winena, Minnesota 55987 Dr. Gecrge C. Anderscn Cceanegraphy Cepar=ent, ;G-10 Michael J. Cain, Esquire University of Washingcen Eureau of Legal Serr_ces Seattle, Washingtcn 98195 Cepas Lent of Nacural Rescurces Ecx 7921

• Mr. Lester Ecrnblith, Jr. Madison, Wiscensin 53707 Atcmic Safety and Licensing Scard

U.S. Nuclear Regulatory Ccnmissien Steven M. Schur, Es;uire Washingten, D.C. 20555 Chief Counsel Public Service Cccr.issicn of Wiscensin Stephen H. L ais, Esquire Hill Farms State Office Euilding Office of the E

<ecutive Legal Director 4802 Shebcygan Avenue U.S. Nuclear Regulaccry Ccnmissicn Madiscn, Wisc:nsin 53702 Washi-.gten, D.C. 20555 Mr. Stanley Cider

'

• Cccketing and Serrice Secticn c/o Curand Pos rascer Office of the Secretary ?frene, Wiscensin 54736 U.S. Nuclear Regulatcry Cctr.issica Pashingten, D.C. 20555

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PUBLIC SERVICE CCMMISSICN CF WI?9CNSIN "I u ,. C 1

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Application of Northern States Pcwer Ccmpany, Lake Superior District Pcwer

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Company, Cooperative Pcwer Association, )

and, Oairyland Pcwer Cooperative for a )

Certificate of Public Convenience and ) CA-5447 Necessity to Co==ence the Ccnstructica )

of a Nuclear Electric Generating Plan )

in the Town of Peru, Ounn County, )

Wisconsin, and of Certain Related )

. 345-kV Cutle: Transmission Facilities )

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t FINDINGS CF FACT, CCNCL'JSICNS OF LAW AND CROER l

i l This is an application pursuant to secs. 136.49 and i

196.491, Stats., to construct an 1100 .MW Nuclear generating plant in the Tcwn of Peru, Dunn County, Wisconsin, to be kncwn as Tyrone Energy Park. It is proposed to be co-owned by Northern States Power Ccepany (Wisecnsin) , Dairyland Pcwer Cceperative, C operative Pcwer Associatien (a Minnesata Cecperative) and Lake Superior District Power Cc=pany. The applicatien was filed with the ccanissien en June 16, 1373, and accepted as cc=plete for processing as of September 1, 1973. The project was included in the.1976 advance plan filed by applicants en Februa.ry 1,1973 in decket au=ter 05-EP-1. Pursuant te the order issued in decket no. 05-EP-1 9

en August 17, 1373, which disappreveu the applicants' advance plan, hearings were held beginning Cece==er 11, 1379 to allcw the applicants to make a showing of need for the project. Cral argn=ent was held before the et= mission en February 5, 1379.

Applicatien denied. .

e.

Findings of Tact THE COMMISSICN TINOS:

His to ry This project first came before this ecmmission as a preliminary application for two 1100 MW uni:s which were te i

go en line in 1982 and 1983. This preliminary application

was filed by Northern States Pcwer Company (Wisconsin)

I (NSPW) en May 4, 1973. On September 19, 1975 a " Revised Applicatien" was filed by USPW, which delayed an 1150 MW Unit I until 1935 and indefinikely postponed Unt: II. Cn September 30, 1976, a "Second .$.evised Application" was filed by NSPW and Lake Superier District Power Ccepany (LSOP) which proposed a 1934 ccepletien date for Unit I and a si:e of 1100 MW. This set forth the prepcsed cwnership of Tyrene as fc11cws:

NSPW 36.3%

NSP ttinnesets (NSPM) 31.3%

Ceeperative Power Asscciation (CPA) 17.4%

Dairyland Power Cceperative (DPC) 15.0%

LSDP '

2.GL The ccmmissica issued an order in this docket en february 2 4 - 1973, declaring that CPA and NSPM could ne lawfully own er cperate any part of Tyrene, withcut violating sec. 196.53, Stats. On March 6, 1979 the applicants, NSPW t

and LSOP filed a " Third Revised Applica:icn" which transferred NSPM's share te NSPW, and moved the completien date to 1935.

i Applicants aise showed cause that CPA was exempt frem foreign cerpcratien status by reasen af sec. 135.31, ?:a:s., and t

thus was not prohibited frem cwnership in the prcject. Cn March 29, 1979, the ecmmission issued an Order declining :c dismiss the applica:ica as amended, that is, with jcin:

cwnership in NSPW, CPA, OPC ard LSOP, but with NSPW and LSOP as cc-applicants.

9 e .

Cn Septe=ber 26, 1977, the ec= mission ruled in response to an exceptien taken to a ruling of the hearing examiner in the advance plan preceeding, docket no. 05-EP-1, that the Tyrone project was within the purview of sec. 196.491(2),

Stats., the planning secticn of the power plant siting law, i

Chapter 63 Laws of 1975. On April 25, 1973, the cc=missien

, declared that the Tyrone project was subject to sec. 196.491(3),

the certifica:icn section of the sa=e law, and cedered applicants to file an application which cc= plied with that section.

Appeals of the March 29, 1973 and April 25, 197E orders 1

are currently pending in Cane County Circuit Court. NSPW, LSCP, CPA and CPC filed, under protest, en June 16, 1973, an application which was found to be acceptable for processing under sec. 196.491(3), S tats. , as of Septe=ber 1, 1978.

That is the applicatica under censideration in this crder.

The current on-line date for the proposal is 1386, and the current proposed s$'ia is 1100 MW. The current p.ojected cost of the pecject is 1.36 billica dollars.

Cn August 17, 1973, the cc= mission issued its order in docket nc. 05-IP-1, the advance plan. In .that order, the l ce==issica fcund that the plan filed rebruary 1,1973 by the applicants in this p cceeding (in conjunctica with Superier 9

i Water, Light and Pcwer Co., kncwn as the h*estern Wisconsin i

Utilities or WWU) did not satisfy the criteria of see.

i 196.491(2), Sta:s., a cng other reasons, because no reliable forecast of need fer power was given. The scle Wisconsin capacity addition prepcsed in the WWU plan was Tyrone. The WWU plan was net approved.

However, as an alternative to denying the Tyrone project cutright, the WWU were permit:ed := censinue planning en a basis of 3-4) average annual growth in coinciden: peak demand in western Wiscensin, and alicwed Oc make a specific showing of need in this decket, as folicws:

i

2. The WWU are diretted to bring in a showing in the Tyrone certification case, decket no. CA-5447, of either: (1) reliable coinciden de=and pro]ections which predict a growth rate in excess of 4 4 per year in western Wisconsin; or (2) reliable coincident demand forecasts for western Wisconsin which predic a growth rate of less than 3% per year and also a convincing de=cnstration of direct substantial econcmic or env:ren= ente l benefi: to the Wisconsin

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consumer f r m continued pa rticipation in the pro-

' ject; or (3) a reliable shewing of a coincident demand gr:w:h rate in western Wisconsin between 3 and 41 per year and of subste- ecencmic or enviren= ental direct benef}tial direct

to the Wisconsin censumer from participating in a system which is shewn to benefit from the pro 3ect. Withcut at least ene of these three showings, the Tyrone appli-cation will be deniFt.

Cn Septe=ber 12, 1973, because of its =cunting concern for the level of precertification expenditures for ihis project, which were at tha: time around $49,000,000 and

~

increasing at an approximate rate of 31,000,000 per month, the co= mission at its cpen =eeting directed applicants to prefile testi=cny directed to this showing and a justifica-tion of reserve =argin by October 12, 1973 with hearing to '

,, follow.

Applicants a.ked for and received an extension date for this filing until Nove=ter 15, 1979, on which date they made a partial filing, and several extensions for further =aterial 1

r were allowed thereafter until Dece=cer 15, Dece=ter 23, and

January 5, 1979. Hearing c ==e.nced in the T

wn of Sey= cur, i

Eau Claire county :n Oece=te: 11, 1979 and continued through January 30, 1979. Testi=cny was offered by applicants, Badger Safe Inergy Alliance, The Sierra Club, and cc==ission staff, as well as nu=ercus =e=bers of the public. Cral argn=ent was held before the c:==issica in Durand, Wisc nsin en February 5, 1779.

Purpcse of the Need Test Set Cut in Ceder Previs:On 2. Acvance P'an Orcer .

As prepcsed, the Tyrone plant would be moro than twice the si:e of any existing unit in Wisconsin, and nearly equal to the total existing capacity in western Wiscensin. It would be a caselead unit.1 With a proposal of this magnitude, 4

the commissicn finds it particularly appropriate to take a e

1 hard icek at the need for the project, the system consiferations, 3 and the financial risk to ne western Wiscensin ratepayer.

i This hard lock is in c mpliance with sec. 19 6. 4 9 ( 4 ) (b) and l (c), Stats., which empower the commission to refuse a certificate i

l to const ct if the project:

l (b) provides facilities unreasonably in 1 excess of probable future requirements; or (c) will, when placed in cperation, add to the cost of service without prepcetionately increasing the value or avail-able quantity thereof...

It also ec= plies with the requirements of sec. 19 6. 491( 3) (d) ( 2)

. requiring a finding that:

2. The proposed facility is necessary to satisfy the reasonable needs of the public for an adequa:a supply of electric energy.

before a permit can issue.

Applicants' first atte=pt in the advance plan pr:ceeding, I

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t decke: no. 35-IP-1, to shew :he requisite level cf need fer the proje:: failed to convince the c=missi:n that th e t

requisite level of need existed. Thus, the projec: .culd not be in substantial compliance with an approved advance plan and would fail the test for approval under sec. 13 6. 491( 2 ) (d) (1) ,

Stats. In view of :he large sums already spent and committed for the projec: and the ti=e already spen: On it, the cc missi:n determined to 111:w the applicant anc:ner chance :: =ake the 1 A caseica: un;; is one which is designed sc OcVer that part of the elect : cal lead which is always Or slees always on line.

Peaking plants are designed :: : ver tha; par: Of the 1:ad waach is demanded at peak, bu: not at c:her times. They tend :: be run less than 15% of the tire and : have high Opera:Ing ::s:s.

3aselcad plants tend : have hign cap;:al : s s and low Operating costs. In te rmedia te load plan:s are usually coal fired plants l which are capable of cycling--: hat is, snu::ing down a: night and en weekends. l 5

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requisite shewing. The prescribed showing is either of sufficient growth in the area to make it reasonabl e - to assume that the Wiscensin censumer will utili:e a substantial portion of the plant's cutput (grcwth at = ore than 4) per year) or growth at a rate less than that, combined with a 3

2 shewing of substantial system envirencental or ecenemic j benefits which will be shared in by the Wisconsin censumer as a member of the system. At a growth rate of 2), Tyrone

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f will not be wholly used in Wisconsin until af ter it is proposed to be retired. In this situation the commissien I

required a shcwing of substantial eccnemic or envirenr. ental direct benefit to the Wisconsin consc er to justify his substantial financial risk in building Tyrene.

The financial risk i,s especially severe fer NSPW. It has beccce apparent in this pr:ceeding that the ecst-sharing agreement (Co-ordinating Agreement) between NSPW and its parent cocpany, NSPM, cannot be relied en to protect the Wisconsin company from pcssible lesses associated with a plant si:ed to acec==edate substantially greater demand than i l

NSPW has. The C:ordinating Agreement and its effect en this j de. cision will be. discussed more fully belcw.

t

, Need for the Tr:dect

. l l Applicants' shcwing en need for the pre;ect :ensisted

' l 1

of three schmissiens, two f:recas:s and a eceparisen of '

economic grcwth in western as against eas:ern Wisconsin.

All of these purported to shcw growth in coincident peak demand in western Wiscensin at an average annual rate,cf greater than 41. The ce=missi:n finds all three shewings insufficient and enconvincing.

2 The

• system' referred to is the applicants' :::al ccmbined systems, plus NSPM. NSPM serves in Minnes::a and the Oakotas,

• SOP serves in "pper Mi:nigan, OPC serves

! in Iowa and Minnesota, and CPA serves wes:ern Minnesota.

All of these areas are included.

.s.

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The commissien finds applicants' Sox-Jenkins statistical forecas performed by Or. Wichern to be insuf ficient to be relied on for the time span in questi:n, increasing in uncertainty over time, inasmuch as the data base was short term and arbitrarily limited and scme of the calculations used to arrive at the basic data were rough. Dr. Wichern admitted under examination that he did not believe his t

. forecast was afeguate by i:Self to base a decision of this magnitude en.

The cceplex econemetric forecas performed for applicants

! by Casa Resources, Inc., was inadequately explained or

!, documented and it relied heavily on na:Lenal medels which t

were not presented. :: did not ecmply with the Notice of Hearing requirements for this pr:ceeding. The rela:icnships between national and 1ccal trends were ef ten obscure, and sometimes inappr:priate. The rela:icnship between forecast energy and forecast peak demand was analy:ed very rcughly.

The cecmission finds this forecast to be insudficient.

The ccmmission finds Or. Christensen's conclusion that coincident peak demand in western Wisconsin will grew at a t

i rate greater than 41 per year based on his c =parisen of l growth in ecencmic parameters in eastern and western Wisconsin i

to be weak and therefore it cannet be :he s le basis for de . ding this case. The two systems were not shewn :: be so I l

similar ecenesically and in their electrical use as to make the c =parisen c mpelling. In fact, the eastern area of the l

state has a very different ecencaic mix and usage pa :ern for electricity than the wes:ern area.

1 i

in additien, none of appli: ants' assesseents of fu:;re l

gr:wth in coincident peak demand pr:perly :cnsidered changes l in use due to lead =anagement, rate structure ref:rs, Or the applicatien of alternative energy scurces and conservatica.

7

The last two fac:ces were extensively testified to by me=hers of the public in this proceeding. The cc= mission considers that proper consideratien of the four facters listed is a condition precedent for any reliable icng-term forecast of peak demand for electricity.

Intervenor Badger Safe Energy Alliance (BS EA) presented an end-use forecast performed by Cr. Sernow, purporting to l predict 9:cwth in ecincident peak demand ranging between t

t, 1.7% and 3.6% per year. The ecmmissien finds this forecast interesting but ac: sufficiently c mplete to be the sole l

j basis for deciding this case.

1 t

, It is clear en the foregoin...g dindings that applic' ants f

l have not carried the burden imposed on them by order paragraph l

2 of the advance plan order. They have not reliably shewn this commission g: wth in ecincident peak demand in western Wisconsin at an average rate greater than 4 % per year. They ,

have not atta=pted :c'shcw the ec= mission forecasted g wth rates less than 41. The ec=missien is not eenvinced by BSEA's forecast. Ecwever, the commission censiders that a range at:und 31 annual average g wth in western Wisconsin

, coincident peak demand is not unreasonable, and will p cceed on that hypothesis to censider the further sucwings wnien t

applicants effered in this p cceeding.

i Direct Econcaic or Environmental Beneil: :: :ne <;tscensin :nsume-This shewing was directed to be =ade if the sh: wing of coincident peak demand g:cw:n was less than 31 per year.

The commissi:n finds tha: the applican =ade no attempt to f

shew direct ecenemic Or envirer. mental benef t: :: :he Wisconsin constmer frem the p:cject, as cppose d := a sucwing of benefi:

frem the proje:: ::chined with benefit f::= bel:nging to the NSP system. Instead, a veiled threa: to break the existir.g Ccordinating Agreemen: was inter:ected to influence this ecmmission. The ec= mission is not inclined :o be se influenced. 1 1

1 yurther, the threat itself points up a maje weak.ess in the i 1

application.

1 1

1

Eroneni er Envirenrentai Benefit to

ne Wiscensia cens;mer ::m eelen'~'nc to a systen .anien is anewn to 3 e ae ~:::

frem :ne Pro:ee:

Applicants offered a shcwing es an hypothetical 3.5%

growth rate (although they did not credict any gr:wth rate lower than 4%) that the western Wisconsin consumer would be econ:mically better off if Tyrone were built and the Coordinating Agreement remained in effect than if both the Tyrone project and the Agreement did not exist. They also presented a comparative ces: analysis of c:a1 and nuclear genera:icn, purpceting to shcw an econcmic advantage to nuclear generation.

The ecmmissi n finds that this cos: ccmparison' analysis is inadequate to show ecencmic benefit to the system of

! ewning the Tyrene nuclear plant. It centained a nunher of assumptiens as :o ecst of capital, capacity f acter, capital ecst of ccal plant, advantage :o Tyrone from participating in the Standardi:ed Nuclear Uni P0wer plan: System (5NUppS),

and discount rate, which the c0mmission considers to be unjustified.

Applicants used an e=hedded cost of espitai figure in 1

i their calculations. The ect ission finds : hat in a study purport-ing .to shcu the incre= ental irpact en the consumer frc= various construction options, the incre= ental ecs: Of capital is the proper figure to use. The capacity facter assumed f:: Tyr:ne in these studies is 754. In the absence of working experience wi:h any pressuri:ed water reacters of a si:e c = parable :: Tyr ne which cpera:e at capacity factors as high as this, the ec==ission 1

finds applican:s' assumptica of a 75% capacity fact:r ur. reasonably  !

cptimistic. The applican:s assumed a 101 capital Oest raducti:n

due to participation in SNUpFS. In view of uncerta.n

fes :esti-fled to as to the a :usi constructica experience and its :en- l c =mitent cos: streams Of the :wo utilities wnich are presently 3

construe:ing SNUPPS units, the ecmmissien finds this 10%

benefit to be i=probably high. Appii: ants used a 10% discount rate for its ce=parison, which is icwer than its cceposite cost of capital. A higher discount rate would be er.re appropriate. The c =missien finds applicants' = cst ce=parison inadequate to disturb the commission's finding in the advance plan order that coal-fired generation is likely to be less

, costly than nuclear generatien.

The shewing of greater revenue requirements for a

. scenaric at 3.5% growth without Tyrene and without the i

Coordinating Agreeeent depends en many of the same a'ssu=ptic.,s 6

listed abcve, as well as others, such as asst =ptions of the i

cost and availability of purchased pcwer, the time necessary to construct a c:al plant, and the ability to sell' excess capacity which the commissi:n finds to be unjustified.

The applicants did not allow for the availability of scenemy energy purchases in its revenue requircrent study.

Consequently, both the a: cunt of tL:e that N52U *.culd be running its oil capacity and the : st.cf purchased energy 4

' are everstated in the no-Tyrone, no-Cecrdinating Agreement scenario. Applicants do net believe coal-fired capacity can '

he brought on line before 1939. The cc= mission finds that a coal project could be brought en line earlier than 1939.

1 The applicants capital cost esti= ate of $1,432/kW for a coal l t1  ; native under this scenario is unreasenably high. The ecmmission also finds applicants' assumpti:n that excess capacity fr m the with-Tyrene scenario wculd be readily saleable :: be unreasenble. l These censideratiens lead the cr--4ssion to the conclusien l l

that, while the NSPW ratepayer would benefit e ncmically l frca the retention of the Cecrdinating Agreerent, he wculd j also share preportionally in the e netic disbenefi: to the system fr:m building Tyrene rather than ::al capacity of an appropriate si:e.

O The applicants attempted no showing that the system needs 1100 MW of capacity in 1986. The commission finds that the applicants have not shewn that the Wisconsin ratepayer will benefit econcmically frem belonging to a system which will benefit frem the Tyrene project.

Applicants updated the environmental analysis.that they i offered in the advance plan ecmparing equivalent coal and I nuclear capacity for envirencental effects in light of coal capacity at the Tyrone site and the preposed New Source Performance Standards. Although the adverse effects en air

.i l quality of a c:al Option are screwhat reduced in the f.ew 6

submission, the c = mission finds that the evidence presented is not adequate to disturb its finding in the advance plan order that coal-fired generation is more likely to cause t

environ = ental damage than nuclear generation.

i The cem=issicn, en weighing these consideratiens, finds that the economic penalty involved in proceeding with the Tyrone project far outweighs the slight environmental advantage particularly in light of the fact that a properly si:ed ::al

, plant for the system would be smaller than 1130 MW.

4 The Effect of the Cecrdinatine Acree ent The c mmission is deeply concerned by applicants' raising the pcssibility of cancellati:n of the Cecrdinating Agree =ent between NSPM and NS7W. The c =missi:n believes such a step would be highly unwise f r bota utilities.

The Coordinating Agreement was approved by th'e (then)

Federal ? wer C:=missicn ' (TPC) in 1971, and is an arrangement l l

for the sharing of costs between the parent ecmpany, NSPM, i 1

and its subsidiary, NS7W. In issuing its March 23, 1973 order alicwing continued expenditures en the Tyr:ne project, I the commission relied en the applicants' assurance that any 4

possible lesses due to the project would be shared by NSPM pursuant to the coordinating Agreement. The Coordinating Agreement contains unilateral cancellation provisions which provide for the possibility of either party's cancelling en four years notice af ter 1981, or on 90 days notice af ter the acquisition of another utility by either party. NSPM is in

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the process of acquiring LSDP.

I The ef fect of the Coordinating Agreement, as applied, j has been that all of the joint system's baseload =apacity has been built cutside Wisconsin, and the Wisconsin company pays its snare of the fixed costs of this capacity without, l

however, acquiring any ownership intersst. As 1

ng as the i

• system remains intact, the Wiscensin ratepayer gets the economic benefit of sharing in lower generation costs.

Ordinarily, if there had been no such agreement, NSPW would have built its cwn baselead capacity. If the Agreement is .

cancelled, N5?W is f aced with owning a system which censists wholly of peaking capacity, necessitating the acquisition er constructi:n of inevitably more expensive new baselcad capacity.

This situatien places NSPW in a positien :: financial jeopardy at any time NSPM =casiders tha t the Wis:ensin I campany is a liability. .: is apparent fr:s this record that NSPM might nsider the denial of the Tyrone application in certain circumstances to constitute a reason for cancellatien.

The commissi n censiders that such an action wculd be whelly unjustified and damaging to both parties. The ::mmission is also concerned that =ther cir::= stances, such as the building of an uneconemic nuclear plant as Tyrene or some other economi: =isiertune :: the Wisconsin ::=pany =1ght i:pel NSPtt to cancel the Agreement.

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These considerations lead the commission to the conclu-sion that NSFW needs scme indigenous baselcad capacity tc lessen the risk to the Wisconsin ratepayer frem these uncertainties.

Such baseload capacity, in the c:= mission's opinion, could be sited and sited cpti=cily for the use of the combined system, if the cc=bined rystem is, as the commissien urges, retained and strengthened. If the system is disintegrated, the appropriate size for such a plant would depend on Wise:nsin

demand. In either case, this baseload capacity should be

, located in Wisconsin. The utilities will be directed herein to bring in an appropriate proposal for such a capacity 1

, addition or additions. Further, in the event the Ccordinating i

1 Agreement is br ken, this capacity must be financially advantageous if it is to be wholly paid for by *disconsin ratepayers.

The L.fect of SNUP7S The Tyrone project was preposed originally as two of six SNUPPS standardized nuclear units. The SNUPPS program consists at present of five units and five participating utilitie s . Engineering and design ecs s for the ;cwer block t

were to be shared between the five participating utilities 4

i in proportion :: the nu=ber of units each utility propcsed to build. The SNU??S agreement centemplates that if any of the units is d:Opped, the re=aining participants will share the remaining SNUPPS-related 00sts c f that unit. At this time, two of the SNUPPS units have been delayed and two are under constructicn. The SNUPPS concept was designed := save licensing time in the Nuclear Regulatory Cer=dssion proceedings, and to save overall engineering 00s s. In order :: d0 thts, it has required the participants :: make earlier than acr=al expenditures and : mit=ents for engineering and pr:curement, since the critical path timing was that of the first plant planned to cete :n line, Callaway (St. Lcuis-Union Electrt:

Co.-Hisscuri) in 1932.

e The ec= mission is concerned abcut the risk to Wisconsin ratepayers fr m these earlier precertificatien expenditures pursuant to a contract cutside it- jurisdiction, and also about the risk of greater than anticipated expsnditures if one of the other SNUp?S projects is dropped. These concerns reinforce the cc= mission's finding that no economic benefit

,i is shown to the Wisconsin ratepayer from belonging to a 1

l system which proceeds with the Tyrone project.

! Reserve Margen

, Order paragraph 4 of the Advance plan order directed i

! the applicants herein to justify their planning reserve i*

margin of 15% cn a noncoincident basis. The applicants pre-i sented a study by Cecision Focus, Inc. (DFI) purporting to I

do this for the NSP system. The cc=missien finds that the DFI study is inadequate to establish the reasenableness of a 15% ncncoincident reserve =argin. This study depends on a number of assumptions which are speculative and otherwise inadequate, including its assumption of a one dollar per kilowatt-hcur consumer cost of unserved energy (outage cost) and a 10% censu=er disecent rate.

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The OFI study depends on the same assumed nuclear cost i advantage that the revenue requirement scenarics utili:e, and that the c = mission finds to be unreascnable. It internali:es {

1 sc=e costs to the ccnst=er usually externali:ed, that is, cutage and envir:n= ental costs, but not others such as tax subsidies and cppertunity costs, which =akes for inconsistency. Applicants' planner adaited under exa i.atien r that he would not fully rely on this study for future generati n plans. The questi 6. O f appropriate planning reserve margin for the Western i?isconsin Utilities will be left cpen for further analysis in future advance plan and certificate of public convenience and l l

necessity (CpC:i) proceedings.

l l

e e

o Envircnmental Ccnsideration The instant order dces not authorize any construction.

Consequently it will have no ef fect en the human envircnment.

However, the commission has taken a hard icek at the environmental i=plications of this decision both in the hearing re:ctd in this docket and in its Environ = ental Assessment and hearing record in the advance plan decket. The ccmmission reccyni:es

{ its responsibill:y to balance ecencaic and environmental factors in decisiens under secs. 196.49, 196.491, and 1.11, Stats. The ecmmission centinues to be of the opinien that I

cn an equivalent capacity basis, nuclear generation is less i

! harmful tc the enviren=en: than ccal-fired genera:icn. ,

I However, in view of its primary respcnsibilities to the ratepayer, and the statutory requirements that capacity not be authorized in excess of probable needs, and its findings on the ecenc=ic risks of centinuing with the Tyrone project, this ccenissica finds that the possible short-term environmental benefits do not outweigh the prcbable eccccmic lesses in this case. Further, the cc= mission finds that in the absence of an adequate shewing of need fer this pregect, even at the

level required to justify continued planning, the risk to 4

the Wiscensin ratepayer and : the utility s:cckhcider of continuing the prccess of deliberatica en this prcject with its attendant heavy precertifica:ica expenses in order :

elaborate on the enviren=entai assess =en: dcne to da:e would be unwarran:ed.

Additicnal Baselcad Cacacity in Wiscensin It is apparent en this record that the present situatica in which NS7W Owns no baselcad capacity presents an unacceptable risk to the :!SPW ratepayer. The cc= mission inil crder the filing of and give expadited licensing treatrent to, an applicati:n from NSPW, with or withcut the other applicants herein, to build an appropriate base or intermediate load c:al unit in Wisconsin.

The c0= mission urges NSFW to present it with such an application as seen as practicable. It is the ccmmission's determination that such a unit should be sized optimally for the needs of the NSP system as a whole, as well as the needs of western Wiscensin, in the intarests of continuing the benefits of coordinated system planning and cperation if the coordinating agreement persists and is strengthened.

The commission will also expedite its considerstica of the correspondingly necessary ad;ustment to applicants' 1973 advance plan.

Ultima:e Findings of Fact THE COMMISSION FIS::S

1. The applicants have not sucwn reliable forecasts of coincident peak demand in western Wisconsin at an average annual growth rate of =cre than 41.

1

, 2. The applicants have no: shown substantial ecenc=i: '

1 benefit to the Wiscensin ratepayer frc= belonging := a l l

l system which is shewn to benefi: fres the Tyrone pr ;ect. l l

3. The environ = ental benefi:s of the Tyr:ne pro;ec-l are cutweighed by :he ecencei: risks. l

4. The Tyr:ne project will provide f acilities unreas:nably in excess of future needs.

5. The Tyrone project is not necessary to satisfy t.te reasonable needs of the pcblic f:r an adequate supply f electric energy.

6. The Tyrone applica:ica is not in substantial ecmpliance wi:h any approved advance plan.

7. The ratepayers of Northern States Power Cc=pany of t8isconsin would be harmed by a cancellation of the Ccordinating Agreement.

8. The addition of appropriately sized base or inter-1 mediate lead capacity to the Northern States Pcwer Ccepany of Wisconsin system would be beneficial to the NSPW ratepayer.

9. That the current rate of precertification expenditures 4 on the Tyrone project creates a significant risk to the I

. Wisconsin censumer and to the utility steckholder, and that such expenditures should stop as soon as possible.

i 10. The public ccnvenience and necessity do nom. require the Tyrone proje:t.

Conclusion of Law THE COMMISSICN CONCLL'OES:

That it has jurisdiction under secs. 196.32, 196.49 and 196.491, Stats., to issue the folicwing crder, and that the follcwing crder shculd issue.

Order THE COMMISSICN THEREyCPI CROERS:

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l.

That the applicatica for the Tyrd'ne Energy Park consisting of ene 1100 MW nuclear generating unit shall be, and'it hereby is, dr.ni ed .

2. That, as of the effective date of this crder, all expenditures connected with the Tyrene project shall cease.

3. That Nc thern States Pcwer Ocepany of Wiscensin he directed te submit an a:plicatien to this cc= mission to construct a coal-fired base er intermediate lead generating unit as described herein.

4. That this order shall tecc=e effective ir, mediately upon issuance.

5. That jurisdictten is retained.

~

Cerrissicner Jchn C,. Cestreicher dissents.

Cencurring opiniens of Chairman Charles J. Cicchetti and Cersissioner Edward : . Pa::scas , Jr. , and dissenting epinion of Cornissicner John C. Cestreicher are attached.

Da ted a t Madison, Wisconsin, $3 6 1973 By the Cermissicn. ,/)

f f:llsss

/-a neC K3 /Y-_ .- C C . .'a L-a Execut ve secretary i

D 1

I I

l.

i 4

t b

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CHARI.E5 J. CICOMETTI, CHAInJtAN, CO::CU RRING : CA-5447

1. Intreduction and tecisien Cn one level the.Tyrone decision is quite easy for me.

If I take a narrow legal view of this case, I can cast a no vote for the cecposed Tyrone nuclear plant. In =y opinien the applicants have not passed Uith reasonable certainty any of the tests noticed in this preceeding, or cutlined in the advance flan.

4 As such, the proposed Tyrone nuclear plant cannot be censider ed

! since it is not part of an approved advance plan for western 1 -

i' Wisconsin. Under such a finding the Ccamission is rec _uired tt substitute its cwn plan for electric power expansica for western Wisconsin.

While I could write such an opinien and cast my vote using such a narr:w standard, I will net. Such a decision fo.r me veuld be tantancunt to insulting the applicants, intervencrs and the public alike. Additionally, ! think cf myself as sc=ething of #an exper: en -t' matters addressed in this case: forecasting, I

benefit / cost analysis, the e:0nemi: viabili:7 of alternatives, I

and the ecen =1: meaning of interchange agreements. Ac:Ordingly, 1

1 believe these tests shculd be used by me to explain ry vote. ,

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For the applicants the meaning is the same because I j l

still vote no for Tyrone as =repcsed. Sc=e improvecents in the  :

1 application ::cid be made, but additional delays in reaching i. .

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decisien will increase : sts,' add to pre-decisi:nal expenditures l and their at:endant risks, and restri:: the pcssibility of sub- l stituting alternatives. Therefore, I reject the pr cesi:i:n that an amended Tyrone nuclear plant application should be cen.=idered.

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Nevertheless, I shall identify those features in the proposal that centinue to trouble me, since these matters, as well as the narrew legal issue discussed at the outset, undcubtedly have 3 had seme effect on my decision. After stating the cuestion l addressed in this pecceeding, I will take each issue in turn.

. 2. Framine the cuestiens l

l The Ccemission's decision criteria for the Tyrene plant t

f. have been misunderstood by many parties in this prceeeding. In 1

, order to grant a Certificate of Authority for a plant that bas a

been found to be environmentally acceptable. the Commission must consider both the need for the additional capacity and the prospect of additional net benefits for the system frem the plant's additien relative to cther alternatives, including not building the plant. Under the state's Pcwer plant Siting Act, it is necessary for a utility to have an advance plan apprcved before an appli:ation for a plant consistent with such an approved plan

nay even be accepted.

4

• 1 The western Wisconsin utilities failed ec = resent a .clan I

i l

that the 0:mcissicn could appr:ve. Ratha- than approve an I 1

1 alternative plan at that time the C:mmissien decided :: review l l

l specific growth rate and benefits /c:s: cc=parisons *with* and "without" the Tyrone plant. Confusien has arisen over ebe actual meaning of any such sh: wings or findings. This discussion is intended to clarify my meaning, which I also believe to be identical 0 the full C = mission's finding.

Case A Assume the annual gr:wth in femand f:: peak capacity exceeds 4 percent and the I:= mission makes such a finding in this phase of the Tyrene preceeding. This does get =ean a CA will be granted. Instead it means that the decision made las: August to continue to pe= mis pre-certifica:ica expenditures in the face of uncertain demand was a gecd one. The Ccamission must still i

determine whether Tyrene should be built instead of alternative I generation, ::ansmission, and lead management investments. To

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make such a determination it is necessary ec ccmplete an in-depth i

ecenemic, engineering and environmental review of these matters.

e

f. A finding of 4 percent growth simply means that it is somewhat t

r I

, safer than it was last Augus: to go forward with additional pre-certifica:ica expenditures. It is important te note that, even with a finding of 4 percent g:cwth, it is cuite possible that the sica, timing and type of plan: prcposed at the site will milita:e against a final CA. With findings of growth greater than 4 percent, rejecting Tyrene en eccccmic g:cunds beccmes less likely, if, as seems reascnable, we believe NSP is primarily interested in minimicing its expansica ccs:s systemwide.

I j Casa.3 1 Suppose the g:cwth ra:e is fcund te be between 3 and 4 percent. If this were the case, the Ccamissicn required an additional showing relating the benefits tc the full system ::

the ecs:s in. ceder to justify a centinuatica cf pre-certifica icn expenditures. This is an exclicit reccgni:icn of t.ke joint demand and system benefit /ces: censideratien that the PSC must undertake before granting a CA. As a criteria it bridges the advance plan pecceeding and the applicants' views en its ul:imate shewing fer the CA in ceder :c decide whether (a) the plant shculd be s:cpped 4

at this point; (b) an alternative advance plan should be approved by the Commission; (c) the CA should proceed with new limits On pre-certification expendi ures; or (d) the CA should proceed

, under the normal pcwer plant siting schedule.

t Case C I

Suppose the growth is found Oc he below 3 percent.

! Here we must still consider the benefits and costs of granting the i

l CA. At icwer growth rates system benefits fer fuel savings, reliability, fuel diversity, etc., must generally'te greater to i

expect that a CA will be ultimately granted. Further, the cecperative agreement and the allecation of benefits and costs among Wisconsin and other states outside our regula:Ory umbrella start to pese potential threats. Suppose a CA is granted, the project is built and the c:cperative agreement is broken. This could produce major econceic and reliability pr blems fc Wisconsin and the utilities we regulate. While this concern may be unlikely, j it is f ar f:cm impessible. Accordingly, the Commissica posed h ancther threshold test recuiring an even grea:e shewing of benefits ever ces s and/cr their ultimate alloca:ica : Wisconsin utility censumers, if the CA precedure and/cr pre-certifica:ica expenditures were to centinue.

The ultimate choices under C are identical :: 3. Further, while not explicitly stated in cur decision criteria, i is even possible that failing := pass the benefit /c:s: analysis expli:itly suggested by cases'3 and C, the Ocmaission under Case A, a shewing of scre than 4 percen gr:wth, could aise exercise the identical cptions suggested by Case 3. 3 4

3. Forecasti.mc (Tes: :)

4 l

None of the experts who under:cck to quantify the future electric pcwer and energy needs of westers *disconsin were without fault.

Let me first take the two which, in my cpinion, should

! be given the greatest censideration: applicants' forecast by i Dr. Christensen and intervenors' ferecast by Dr. Bernow.

i. Dr. Christensen appeared for the applicants. His published econc=e:ric work is of the highes quality and appears I in only the mest prestivi:Ud Ecientific journals. It is, there-i fore, quite surprising that the forecasts provided by professer Christensen are the =cs: rudimentary, and overly simplistic, that I have ever seen; and, as Laitially filed, totally withcut statisti-cal confidence bands. Knowing ne high standards of professor Christensen, I was surprised. Further, I believe that he would probably flunk any graduate student that prepared such an analysis.

First, let us examine what he did. He accepted the Commission's approval of eastern '41scensin's 3.2 percent ::

3.9 rercent rer .year forecasts as reliable apparently without any independent evaluatica or critique cf that analysis. IIe then ecmpared recent trends in pcpulati:n, au=bers cf electric cus ccers and employ =ent for eastern and western Wisconsin.

His trends were simple ec=parisons of the implied change, f=und by ce= paring two sets of annual data, usually less than ten years apart. After questions about c:nfidence inscrvals, simple

regressions were fitted for sece of these data in creer to calculate a standard error fer the time based co-ef ficient.

Professor Christensen concluded that all forces i

, indicated faster growth in the West versus the East based f , upon his forecasting by analegy method. He was the most lucid

] forecasting witness in the preceeding, and very responsive to j questions from the chair that resulted in much additional work t for him. On the negativa side the approach is presented in a i

l vay to suggest it is far more scientifically hased than it really is. Several calcula:icas are shcwn to support the fundamental premise, namely, tha: there appears to be higher growth in recent years in western Wisconsin when ::mpared to the eastern parts of the state. Shcwing the same thing several times dces nct add to the scientific cr legal value of a basic shewing. Further= ore, there is little, if any, regard for the relative maturities of I

the eastern and western econcmies and the pcssible significance cf: (1) the.recessica, (ll.the cil.embarge, (3) greater experience with censervati n and lead =anagemen:-based tariffs in the east. (4) the very different ecencmic mix in the east:

and (5) finally, because of their quite different electric use, the relative imper:ance of vacatica, retirement and rental uni:s in the west's greweh.

Civen the time constraint, the C:mmissi:n directive to be simple and to avcid Over-dependence On =athematically cemplex models, Professor Christensen's effort is understandable, but I was fisappointed by the scientific quality of his effort.

11. The second useful forecast previded in this case was prepared by Dr. Bernew for the envircemental intervences, Badger Safe Energy Alliance. Dr. Bernow operated on a tight time and financial budget. At times this shows, but it is certainly understandable. My biggest finding of fault in this o

1

case is that his efforts were overly ambiticus and semewhat

! incomplete.

t I '

In evaluating Dr. Bernew I will re;ect the 4cademically l

l narrow-minded criticism of scme of the econcmists, e.g., CSPE, i

i NERA and our cwn SPERCA. For ecencaists to critici:e an engineering and use model because it is not based upon econcmetrics hangs between the petulant and the stupid. End use medels are not statistical models in the same way that marginal ecst calculations are not production functica models. Furthermore, end use scdels are extremely subjective because they are based upcn the fere-casters' subjective view of what the future structural relatica-ship between ccmplex social and econcmic facters will be. However, a gecd end use medel will be clearly descr: bed and capable of being easily used by others who may wan: to change the var:cus underlying assump:icns. Gced end use ferecas:s reflect a 'cread, if not extreme, range of subjective cpinion about the future.

Good end use ferecasters knew frc= repeated sensitivity experience, which fac:crs and/or assumpticas, if modified, will have the most significant effect.

Dr. Eernew's familiarity with western Wiscensin was less 25 -

than Professer Christensen's, but his forecasting methcd is

=cre widely accepted by practitioners. Or. Bernew in his icw case sc: ally igncred the conservation, lead management, tarif f refo rms, and the increased availability of gas adopted by the C mmission. Each of these electricity demand reducing policies is currently bein' more actively applied in the scre i populous eastern par: cf the sta:e. I was mes: impressed by I

Cr. Bernew's cenment on the significance of these impce: ant

.! cmissions. He stated that such conservation omissions were I

1 probably effset by some of the other assump:icas that he made, l

thus he would stick by his 1:w case. In my epinicn the rela:ive weight that should be given by the Cecaissien to his 2.4 percent per year icw case scared dramatically after this respcase of Dr.

Bernew. Given everything, I place its meri: in : ughly the same category as Professor Christensen.

iii. Professor Wichern also appeared f:: the applicant.

While find his efforts and especially his discussion of their

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relative importance and meaning : be cf high academi: quality, t his clients ::: ally misundersteed eitner what he did :: hew it shculd be interpreted. Mcwever, either Or. Wichern did not explain :he li=itati ns of his analysis 0: his a:: rneys did net understand him. I must underscore the fae: that under cross-examinaticn Or. Wichern put his efforts and their limitation in a mcst c:rre:: and lucid perspective. These :califications were too conveniently evericcked by the applican s. However, if Dr. Wichern's testimeny is to be viewed al:ne as a f:re:ast in this case, I would place a weight f: usefulness a: ci:se to zero.

Let us review the limitations On Or. Wichern's forecasts, most of which he conceded en cross. 'First, through our public utterances, we virtually told the applicants not te bother to submit a acx-Jenkins forecast in this stage of the proceeding. Second, the applicant teck Dr. Wichern's forecasts too far into the future. The Box-Jenkins method is expected to be accurate for maybe a year or three, not for a decade or three. Third. the analysis is dependent upcn the length and

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specific period selected. Fourth, while the model is statistical, l it dces net permit one to examine and statistically test for pes-i i sible causal relationships. It simply is based upon the belief 1

that the future will be like ene past, especially the most recent past. Forecasts ten or mere years into the future for which several billien ratepayer dellars are involved cannet be reliably based on such analysis. Dr. Wichern freely discussed such limita-tions, but apparently these were igacred by his clients. Finally, Dr. Wichern perfor=ed, from a regulatory policy standpoint, a

( rather weak intervention analys,s. i His ncrmali:ing of peak demand

, . data was.xterly s.implistic.and other. data adjustments were dismissed i

s as the work Of Others. Fcr all the above reasons, in my opinien, the Ccesission should give little weight to Or. Wichern's evidence in this case.

iv. Three Other forecasts, er at least discussi:ns Of the forecasts were provided as evidence in this case. I believe, we should give them little weight, and cutline my reascns.

a. Oata Rescur:es Inc0rperated (CRI) provided us with a forecast and mcdificatiens which were in my Opinten an C

" intellectual Tower of Babel." They pectly explained their methods, they were at times unresponsive to questions, and often were incoherent. Worse yet they appeared to be

" learning-by-doing" their forecasts in this case. Finally, I believe that DR incorrectly misapplied their Monte Carlo i analysis.

b. National Econcmic Resear:h Asscciates (NFRA) really did not provide a forecast. They examined Dr. Bernew's i

j medel and found his assumptions to be weak and declared that i

if they were : use his =cdel with their ass ~.mptions they would l

have found much- higher growth. NERA did not, however, run Or.

l Bernow's =cdel. Their testimony is opinion, not fact. NERA produced a slick critique, but they everstated and restated their principal criti=ue to make it appear scre negative, withcut adding substantively to their evidence.

c. The Office of State Planning and Energy did not provide a f: recast, cut cencluded the grew h wculd exceed four

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] percent. Thei Ocnclusions were not justified in the record, 4

I or any analysis they chose to file. Their reascning simply

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1 was based upon ecencaists sticking tcgether; as su:h, their i I

effort lacked both ingenuity and relevance.

v. Summari:ing the Felicy As=ects Of Fcretasting.

Prebably to nc one's surprise I find that the Ccamission, as we did in the advance plan, must make a sub;ective fcrecasting decision based upcn an in::edibly 1:ng and sometimes bcth ccnfused l l

l and confusing re:Ord. I have indicated what I think Of each l

- IS -

expert's es:imony. ::cw I will describe wna: I will use in reaching my decision.

(a) Given the continued uncertainty ever demand, the extra flexibility and system reliability of two baseload coal uni:s may be more beneficial than a single 1100 .':W nuclear unit.

i (b) If, instead of passively asking the ceteris paribus cuestion: "What will demand be?", we cheese to be t

active regulators: the Ccmmissica's willingness to apply time of use pricing, lead management and conservation increase in relative impc :ance.

l*

(c) Normally, it is far worse to build capacity based upcn what -may turn cut to be 1:w forecasts. Recent Commission decisicas for eastern Nisconsin, namely, Weston ::: and Pleasant Prairie :: are examples of over-expanding to reduce the negative consequences of forecasting sco icw. The Tyrone case is qui:e different from the standard case. :f Tyrone is everbuilt and

, the gr:wth in use turns cut c be icw, the centinued,albeit icw, probability that NSP, :tinnesota may break its Ceeperative Agreemen: with NSP, Wisconsin in either 90 days or f ur years increases in impc :ance. The as~m=etry

between expansion peli:v.

in the eastern part of the state, where we regulate all the utilities involved, and the west where from two thirds 0: three fourths of the Octal cutput of Ty:One nuclear may be ex:c::ed subject : the buyers' calculati:n, weighs heavily on P.y v :e.

4. 3enefit/00st Analvsis (Tes: ::)

Sc:h the applicant and Sierra Club pr:vided testimony On this secend test. Applicants' analysis ef ten reads like the apples-plus-bananas-equals-cherries app::ach :: systems O

analysis. Their expert's analysis of the cost of an cutage is exaggerated nonsense. Under questioning it was found to be further flawed because the applicants' consultants have developed a new use of terms and they were generally unable to relate them to standard use and terminology.

4 6

i The biggest problem I had with the applicants' benefit /

t cost analyses is that the assumptions =ade for the "with" and "withcut" analysis were extremely truncated. This results in a 4

very biased analysis and, therefore, they failed to pass the 1

i burden of prcof test. icr exa=ple, the applicant ignores in I

the "with" case the possibility that more capacity than is needed I

by the system er western Wisconsin could result. Further, no consideration of the ef fect of breaking the coordinating agreemert, if Tyrone is built, is considered. In the "withcut* case the type of alternatives that will be adopted, as well as continued retention of the Cecrdinating Agreement, are also treated inadequately. Simply stated, applicants fcund what they had

, decided before they went searching.

Sierra Club's witness provided seme interesting testimeny.

But it was act all : the point, er very practical.

5. Cverall Tenclusien In my Opinion there are two choices. 3cth begin with l rejection of the Tyrene applica:icn. The first adds ecndi:icns that would make it pessible to censide- '"--wer ec:ncmic and l environmental questions in an amended Tyr:ne nuclear application.

The second substitutes a western Wis:Onsin advance plan based upon sccewhat smaller One er two baseload ::al uni:s. The l

differences between these two choices may net in the final analysis l

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1 1

be great. Let me describe each choice.

I. The Amended Tvrene Muclear Plant Four basic restrictions must be applied to the curren Tyrene applicatien for it to be censidered f urther.

A. The Cceperative Agreement =ust be scrapped and i replaced by an "all-events" tariff. Such a tariff would be i,

written so that it could not be broken by any Minnesota entity and

would centinue through ultimate waste disposal and s:crage, regard-I j less of future conditiens. Apprcval by the Minnesc a PSC and Federal Ener77 Regulatcry Ccamission may be necessary. Ter ces:

allocation and regulatory purposes Minnesota utilities engaged in the Tyrone project would also have to file infermation with, and previde access to, the Public Service Cc= mission of Wisconsin.

B. Any additional constructicn engineering risk caused by further cancellation cf SNUPPS units f cm the five new planned are the applicant's risk, ne: Wisconsin ratepayers. Further, never having apprcved the SNUPPS participation, the P.blic Service 1

, Cc=missica of Wisccasin will insist en a full ex_ =cs: evaluatien

{ before a Tyrene nuclear plant will be permanently made par cf the rate base of Northern States Pcwer.

C. Any Lake Superier Oistrict Water and Pcwer acquisi-l tien by Northern States Pcwer, Minnescta cannet affect the amended '

Cceperative Agreement with Northern States Pcwer, Wiscensin.

1 D. Until certified, no further pre-certificatica 1 expenses may be charged agains: Wiscensin ratepayers, ner shall any additicnal a: cunts be placed in Ccnstructicn Ncek in Prcgress in Wiscensin.

II. A Substitute Advar.ce Plan A. Reject the western Wisconsin advance plan which includes an 1100 MW nuclear unit for Tyrone.

3. Substitute a coal uni cf most likely between 400 and 800 MW for the Tyrone site to be cperational in 1986, and direct i

Northern States Power, Wisconsin to submit such an application, C. Seek information on the timing of such a coal unit 4

at Tyrone, vis-a-vis Alma 7.

i I

D. And while I do not encourage it, I would not vote to

! preclude at this time the filing of a Tyrone nuclear uni: at Tyr:ne l as one of the alternatives to be considered under *7 EPA for the i

new coal alternative that is to be provided by the applicant.

III. My vote Considering the evidence in this case, the subtle differences in emphasis between what I think are the two choices, and the ti=e delays of I, I am prepared to use my f 11 regulatory authority and vc t for the coal apprcach in II, and totally reject the application for the 1100 MW Tyrene Nuclear unit in Durand, Wisconsin in either its cresent

- er an amended form. Aside fr:m l

editing, the abcVe opinica was written before I had any kncwledge of the final cute me. Scme have urged me to rewrite my opini:n.

I' reject that advice in the belief that hcw One decides a case is important. Crders should explain hcw the Oc= mission finds and orders. I, therefere, will let the order and Opinien stand for the=selves.

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Charles J. Cic: net:1 l Chairman l l

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C WARD M. PAPSCNS. JR., CCP.*t:SSICNER CCNCURRING CPINICM - CA-5447 Cn August 17, 1978, this Cetmission issued its first Advance Plan order in decket 05-EP-1 pursuant to the Pcwer Plant Sitin.g Act.

In that Crder, the Cc= mission disapproved the Plan i, of i e Western Wisconsin Utilities because of the lack of f

4, reliabill:y of the ferecasts submitted to supcort the need for I

a nuclear generating plant at Tyrene.

}'

In the nu=ercus forecasts of coincident peak de=and

, submitted, a range of 1 Oc 4% average annual gr wth through 1998 resulted. The Cetsissica determined that these results were -

deficient for planning curposes. This determination folicwed from the disparities ameng the various forecasts which =ade it impossible to select one as more reascnable than the others.

Forecast methodology and data accuracy and acplicability were as hotly contested in the present preceeding as they were in the Advance Plan proceeding.

i Applican:s had a substantial burden to ces in thic j proceeding. I have determined : hat Applicants failed to make J,

k the required shewing. The applicatica for an llCC-zegawatt Tyrene nuclear unit is ac lenger viable and should he, and is, i

denied at this point in the regulatory process.

In censidering the forecasts submitted by Acclicants I find that they all essentially ecce in at ever 44. Intervencrs' forecasts essentially ec=e in under 31. These ccvious disparities result notwithstanding the fact that the forecasts derive frca experts with significant professional reputaticas. Such an cutecce lends credence to the action :nat if one has the time, money and diligence, he or she can find an exper: who cculd credibly and convincingly argue the flatness' cf the carth.

Yet I must cc= mend the parties for tneir diligent efforts in providing forecast infor=ation in this. proceeding.

Their efforts are particularly appreciated hy this ccmmissicner considering the time constraints faced by the parties.

I will not discus's here at length the details and n

nuances of each forecast upon which my determination turned.

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1 The majcrity opinion herein specifically addresses each fore-1 t

t cast. I do stress the fcilewing general cc==ents to support I

my decision.

t i ~

I am troubled that the forecast studies did not i.

! sufficiently treat the impact of current and possible future l

econcmic conditiens. Secondly, and equally significant, the forecast studies did not sufficiently address-the effects of conservation, i= proved lead manage =ent, rate structure refers and improved end use efficiency.

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Th._e hearings in this proccedine have documented an l

enthusiasm in Wiscensin for the development and utilitatica of alternative eners.v techniques. believe that A.cc.licants' studies fail to account for the potential to reduce energy i

( costs and environmental damage thrcugh the use of alternative l I

energy systems.

T.y.e foregoing critique of the Applicants' showings is made with the acknowledgment that I de not profess expert i

status as a forecaster, as do those whose submittals are fcund in the record of this preceeding. Mcwever, I am obligated in =y regulatery capacity to censider each ferecast, its methedclsgy, my ptreeptien of its reliability, and the expertise cf its devel;per; then I an to censciencicusly and chiectively assi:n l

1

relative weight to each forecast. I claim sufficient professienal training and experience to r.ake suen an assessment.

Accordingly, my assess. ment leads =e to conclude that the annual growth rate in coincide at peak demand will be in the vicinity of 31. This determinatien presents the question of whether or not Applicants have made a shewi q that there is a direct and substantial econcmic or envircnmental benef t: to Wisconsin censuners from participating in a system which includes the Tyrone nuclear unit.

I-I find that Applicants' attempted showing of signifi-cant environmental benefit to Wisconsin consumers is al=ost entirely lacking.

Applicants' submittals on econcaic benefit questions deserved and received my further scrutiny. I nevertheless found the record to be incenclusive.

I must turn to a =atter'of scne irritation to me. It should be made clear that I am no: threatened by the mistaken socion that a denial of the present Tyrone applica ion wculd i

constitute. regulatory frustration--which.wculd allecedly incede 4

l coordina:icn betueen the :innesc:a and Wiscensin ::cpanies.

l.

. These =cmpanies are in business. As such, there exists the responsibill:y for gced =anagement. Gced management practi:e dces not dictate tha: :he parent c==pany deter the progress of the holding c =peny, simply because this 00mmission did net concur in the desire to add a certain level of nuclear generating capacity.

In the nex Advance Plan pr:ceeding, the C: missi:n will address the ::sts and benefits of ::crdina:ed :lanning Of fu:ure 4

generation addition between Eastern and Western Wiscensin utilities. In this arena, I believe,will ccee the answer to scme of the problems which may be posed by Northern States Pcwer of Minnesota shculd it decide that the Coordinating Agreement l be terminated.

t Teday's decision does not represent anyone's victory, or for that =atter anyone's loss. It is simply the regulatory l process going forward to meet and then decide a particularly i

difficult energy issue. Equally difficult decisiens face us l

l in the days ahead.

To all those concerned with the significant energy questions of these times, I point cut unhesitatingly that the process which addresses these cuestions is a participatory one.

All viewpoints are censidered. Such was the case here.

Let no one suggest that this was not an accessible process. Ask the small fa=ily farm owners who testified. Ask the pin-striped *dashingten lawyers. .

And let no one suggest this was not an cbjective 1 prccess. Ask each cc==issioner who diligently studied a volumincus r

j record in this preceeding.

I have tried to caintain an open nind furing this preceeding. Rhetoric and e=ctions ran hich. Irrelevancies, innuendo and thinly veiled threats are fcund throughout the record. Facts and exnert testineny are als: fcund there; they are what : relied on.

The majority has deternined that the acplication f:: an 110 0-ce gawatt Tyrene nuclear unit is no icnger viable and should he denied at this point in the reg"1atory process. This is not the time for Applicants to squander ratepayer or stockholder dollars by causing protracted legal obfuscation on this application.

j Now is the time for all parties and this C:= mission to i

go forward in selecting a reasonable and prudent alternative I to meet the energy needs of Western Wisconsin.

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.% 0)M A _.

Edward M. Parsons, Jr ff Commissioner i

y DISSENTING CP:NICN CC.TCSSICNER JCHN C. CESTREICHER - CA-54 4 7 This decision cemes almost six years after Northern States Pcwer of Minnesota filed a preliminary application for two 1100 M/W nuclear generating units for service in 1982 and 1993.

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'ight different individuals have served en the Public Service l

Cc= mission since that filing en May 1, 1973. The bistory of this application constitutes a regulatory nightmare.

I have a few observations about the bumpy trail which has led to the rajcrity decisien.

In fact the Public Service C mmission of Wisconsin never has had regulatcry centrol over this applicati:n. The nebulous state of the law did not permit greater centrol at an earlier date.

Even new that centrol has been exercised, cur action is subject to challenge that the C = mission acted precipitously.

The applicant utilities have at all times pursued the allegation that this application was necessary and in the best interest of their custc=crs. The C ==ission and its staff have labored diligently to meet : heir responsibility to regulatt the a

applicati:n. The i=petus for Tyrone Enerpy Park resulted fr:s an i

era of unprecedented electrical gr:wth.

1 A new era in electricity censumption began some time between the filing of the application for this plant and the enact-ment of the power plant siting law in 1975, which resulted from dissatisfacticn with electric utility expansien. Increased enviren-mental concern, escalating electrical prices, innevative rate Orders frem this C:mmission, and nc=ercus other factors have centributed l

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1 to reduced growth in electrical demand. The new law made this Commission an active participant in advance planning of generation and transmissicn additions to meet future need.

If the joint applicants were filing an application for

, generating capacity today they would not ask for a single 1100 M/W f unit. If such a request were filed the Ccemission could and wculd i

j deny the application expeditiously. I am concerned that the action i of the majority in denying the Tyrene application will have adverse effects en the Western Miscensin Utilities. Though the action of f.

t the majority is defensible, I believe it would be preferable to j

v ermit this application to go forward. In the event the applicatica gained approval en other grounds, as my review of the record indicates likely, I would authorize the construction of a single 1100 :O/F plant at the Tyrone site.

I am concerned about three aspects of denying this application:

1. The applicants have =et the burden we placed upcn them in the advance plan crder.

, 2. 'The order entered herein ignores the advantages

} of coordinated planning, constructicn and Operation t

of peeling for bulk pcwer supply.

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3. Cenial of Tyrone will feree the joint applicants to rescrt to adept hurried alternate plans; alternatives appear Oc have questionable future.

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. l The Burden of Preef In the advance plan order the Cc=missien reccgnized that nuclear generation has enviren= ental advantages ever any coal alter-native. That order further recognized that significant predecisional commitments have been =ade en the Tyrone plant. Irretrievable icsses en the project will probably exceed 60 millien dollars.

Given these facts what reasonable iurden of -Orccf remains to 1,

establish public convenience and necessity for the plant?

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In the advance plan order the Ccemission set forth the folicwing criteria to establish need. Either:

(1) reliatie crincident demand projects which I predict a 7

0. . rate in excess of 4) per year in Western Wiscensin; l

j ((2) cmitted)

(3) a reliable shewing of a coincident demand growth rate in western Wisconsin between 3 and 41 per year and of substantial direct ecencaic or environmental direct benefit'to the Wisconsib.

censumer from participating in a system which is shewn to benefit frem the project.

. The prependerance of evidence in the record indicates a gr:wth rate in excess cf 4% per year in Western Wisconsin. G :wth i in those areas served by Cairyland or where natural gas is not avail-able will exceed 5 percent during winter peak. :n the ucrthern States P0wer Wiscensin and lake Superior Oistrict service areas, growth will exceed 4 percent. Admittedly there is testimony to refute the prependerant evidence. A review cf c=ndlicting testimony causes me to believe it is less reliable and cannot be acecrded the weight of the prependerant evidence.

The ma3crity have chosen to substitute th'eir expertise for that of the expert witnesses. Having done so the majority criticizes =ethedolog; and assu=ptions included in f:::clae devel: ped

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by the experts. After having convinced themselves that the formulae and assceptions are imperfect the majority has disregarded the evidence it disagrees with. The grading exercise undertaken by the Chaarman reflects this fact.

Though this Ccemission has expertise : do not believe an objective review of the record will permit the Ccemissicn to disregard the preponderance of the evidence. Having accepted the i credentials of the expert witnesses their testimony is entitled to

! censideratien. By any objective standard the applicants have met j the burden established at 2 :em (1) of the advance plan.

Assuming demand gr:wth to have been shewn at between 3 I

and 4 per:ent, have the applicants established a substantial and I

direct economic cr enviren= ental direct benefit to the Wisconsin censumer? The C:mmission has fcund that the enviren= ental benefit exists in the advance plan order. Is there ecencmic benefitj I frankly don't knew and neither does anyone else.

The Ccmmissica found in the advance plan 'that nuclear generation is likely to be =cre costly than c:al." Still the C:mmis-

{

sien agreed to censider Tyrone en the merits. T::s my assessment j cf this record it appears the Ty:Sne nuclear plant will pr:bably f

provide electricity marginally less expensive than a ::a1 alter-native. This finding assu=es exce:s capacity of approximately 400 M/W in 1996 which

• assu=e : uld be sold.

Capacity costs in the :ecord are set forth en Exnibit A attached herste.

There are other ee:ncaic benefits to the Wisetnsin censumer l

. l which appear in the ree::d. Clearly the Wiscensin ::nsumers benefit I frem the relatively 1:w cost existing :apacity (two hundred dellars per kW) th: ugh the c ctdinating agreecent. The ::crdinating agreement, 41 -

previously reviewed by the presently constituted Cc=missien, is fair to Wisconsin censumers. There has never been,any suggestion that the Minnesota corporation even considered cancelling that agreement to force the approval for Tyrene. I think the majority are obfuscating the issue.

The Wiscensin constner does new and will continue to i benefit frem the system which includes NSP Minnesota. Joint appli-k I

I cants seek authority to build a plant for the system, including C

l sales under the agreement to NSP Minnesota. It is the Ccemission majority, and their narrow view of benefit to the Wisconsin consumer, I

a who seem to be censidering secessien frem the system. It, to this point at least, is not the NSP system censidering expulsien.

The best objective standard of whether the Wisconsin cen-sc=er will benefit "frem participating in a system which is shcwn to benefit frca the project," is to recogni:e that NSP Wiscensin is part of the NSP system. Then apply that test whien this Ccemissien has applied for years. Nill this project censidering the needs of 1

the NSP system and other joint applica'nts: l 1

A. Schstantially impair the efficiency cf the service of such public utility; t

. 3. ~ Provide facilities unreascnably in excess of the l .

I p;cbable future requirements; cr C. When placed in cperation, add to the ecs: of service withcut prcpertienately increasing the r

value or available quantity thersef.

If the majority is unable to make such a finding it shculd not dismiss the applicatica at this time.

e The order entered herein tenores the advantsees of ceerdinated plannine, : nstruction and cperstien of ecoline fer bulk =cwer supply.

The foregoing is a concern en two levels. First, with regard to Northern States Power of Wisconsin and its relationship to the Northern States Power System. Second, with regard to the

,i Western Wisconsin Utilities' relationship to the M.A.R,C.A. power i pool.

I. The Northern States Power System.

Cne of the unique problems in this pr:ceeding is the abnor=al generating profile of th'e combined Northern Sta:es Power System. The current generating capability t:taling 6,116 egawatts is' adequate. Wisconsin's contritutica to that capability consists of 137 M/W hydro and 648 M/W oil fired peaking during winter peak.

There is no baselcad generating capacity in the NSP Wiscensin System.

Everycne recogni:es this to be an undesirable situati n. The deficiencies in the pr file of these two cecpanies has been ec=-

pensated for by a ecordinating agreement between the two c:=panies.

NSP Minnesota receives the benefit Of peaking capability in Wisconsin and NSP Wisconsin the benefit of the baseload units located in a

l :tinnesota.

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For =any years Public Service C:= mission staf f has attempicd i

to c:nvince the ce=bined sys:e=s : locate basel:ad genera:ica in Wiscensin to improve the profile of the NSP Niscensin system.

Apparently tax censiderations and the histeri ease of eb:aining I

regulatory approval in Minnesota caused staf f rec =nendations :=

be igncred for many years.

The Tyrone applicati:n was conceived in part as necessary to meet the 1:ng range need of NSP's ::=bined systen. One of those needs was to establish reascnable basel:ad generating :apacity in O

o Wisconsin. If Tyrone is not built and NSP WJscensin is unable to locate a ccal plant in Wisconsin to meet 1986 demand, what is new recognized to be a bad situatien will bec =e much worse. In effect the majority in refusing to censider NSP system wide need is heping that additional cap'acity will be available west of the '

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Mississippi. The only alternate sites menti:ned in the record are

, located in Minnesota.

I i II. The ? tid-Centinent Area Reliability O cedinatien Aereement.

The Wiscensin Cem=ission has long supported the partie-t

, ipation of Wiscensin utilities in regional pcwer pcols. The policy li of this 00mmission is succinctly set forth in a staff memoranda to I

l the Ccamissi:n dated Cet:ber 20, 1975 l

A formal pcwer pool is an association of two er more electric systems which coordinate the planning and/cr cperation of their tulk power facilities for the purpose of achieving greater economy and reliability in accordance with a centractual agree =ent that establishes each = ember's respcnsibilities. Individual members usually are able to obtain the ecencmies and other advan ages available to much larger systees while retaining their separa:e : rporate identities. Iffective functioning of a pcwer pool requires organi:ational =echanisms to esta.blish reliability criteria and respo.mibilities of each me=her for designing, construct-ing, and operating bulk pcwer supply facilities. Generally these tasks are ace mplished :hreugh functi:nal : mmittees.

The ce= position, respcasibilities, and authert:y of the j c mmittees are usually cut 11ned in the pcoling agreement.

Me hership in a f0r=al peel i==cses specific respcnsibilities

, upon each participant am:ng which are the fell wing:

a

1. Providing capacity, either fr:m its cwn system

' or by purchase, equal to the maximum demand Of its system plus sece additional a: cunt for system reserve.

2. Providing s==e pcrtien of the cperating reserve requirements Of the peci either fr:m its cwn rescur:es I or by pur:hase.

1

3. Maintaining its bulk pcwer supply system in l gced cperating condition.

4. Providing, cperatiaq, maintaining, and prete :ing the transmission and in:er:ennecting fa:ilities for its own system. l l

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5. Turnishing, cperating, and maintaining at its expense regulating facilities adequate to control fre-quency and inter:ennecti:n 1:ading within e::ablished limits. Eacn of the parties must also furnisa and maintain such communication and telemetering facilities as may be necessary.

While each utility, system, or pool mus: meet its individual responsibilities fer an ade uate and reliable system, individual systems no lenger ata independent of each other and the installa:icn of generating units of larger rating and extra high voltage (IHV) transmission lines of greater transfer capability have increased this I inter-dependence requiring the necessity for cocedinatica j of planning and cperation to assure reliability on an area

wide or regicnal basis. Major generating plant and IE7

transmission line projects of Wisconsin utilities must be

justified to a degree to satisfy local needs, however, they are also importan

Oc a degree to regional system concerns. It is correct that many cf these major projects would involve regional aspects, for example, that a trans-mission line or transmission system expansica in cennection with a new pcwer plant =eet the established reliability criteri'a of WUMS or MAIN. Also, to the extent that a project or plan may be mcdified, fer example, by routing changes, this could influence system reliability.

I noted above the need for NSP Wisconsin to have baselcad capacity to balance its generating profile within the NSP system.

That need is even more dramatic when considering the respcnsibility of NSp Wiscensin and the other jcint applicants to the Mid America

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Pcwer P:cl. If the joint applicants, including the NSP system, are i to meet the Mid America Power pool contract based upcn staff adjusted 4

demands they must have 3,462 M/W in 1395. Withcu: Tyrone there will i

be 7,738 M/W available, a 465 M/W deficit. With Tyrone 3,517 M/W would be available and the excess capacity would total 444 M/W. l Dy 1933 the excess capacity wculd be cocpletely gene.

If Tyrone is not constructed this Ccmmissi'bn rec gni:es the need to construct approximately 300 M/W coal fired capacity in Wiscensin in a similar time frame.

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Tental of Tyrene will force the joint amplicants te resert_lo adcot hurried alternate plans; alternatives appear to nave a questionable future.

.i

s it possible to select a site, acquire the land, gain regulatory approval and build a large (400-900 M/W) coal fired generating plant, in Wiscensin, by January 1986? I don't s

think so. The Cc==ission majority "will order tne filing of and give expedited licensing treat =ent to, an applicatien," etc. See page 15 6

! of Findings and Order. Is the majority being realistic? No t

Based upon the record of this docket, the advance plan and all of the reecrds of this C0==ission, NSP has no alternate coal site in Wiscensin. There are a couple of tentative sites.

This Cc= mission should knew that tentative sites are unreliable i

at best. With the exception of Pleasant Prairie, no virgin gener-ating sites have gained c == unity acceptance since the revision of the shared tax for=ula in 1971. The Pleasant Prairie site had broad suppcrt fr = the nearby industrialized ce== unity and had been cwned by the applicant utility as a p cposed site for =any years prior to application. It teck extraordinary action by this Cc==ission, ' (which

, I cpposed), to per=it that project to go ferward en an emergency basis.

' Tentative sites at Xcshkoneng, Port Washington, and new i

Tyrone have been shelved after years of planning and milli:ns of dollars expended. The =entien of a preposed plant in Grant and Weed Counties resulted in c == unity furor and strategi: retreat by the l

utilities. Albeit, in sc=e cases the cppositien to pr:pesed sites was articulated in ter=s of opposition to nuclear generation, j l

Realistically the Opposition is to large central generating stati:ns l in "my"neightcrhced. Another signift: ant pr:cle= with a virgin site is the locatien =f transmissien facilities. If the plant is scmehew built will there be f acilities to transmit the pcwer?

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1 The cpposition to the Tyr:ne project is ostensibly anti-nuclear. Such is the case more ,hecause of shallow media perception and reporting than the recorded cpposition to the project. In fact, opposition to Tyrone is support f r alternate or soft technology and opposition to large electrical generating stations be they nuclear or coal. Since the Tyrone application involves a nuclear plant, cpposition takes the posture of radiological safety and I, nuclear fuel cycle concerns.

l If the coal alternative is proposed at this site the same i

goed folks will just as earnestly remind us of c

al related problems.

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! Sulphur and nitrate emissiens and the greenhouse effect for starters; I

1 trace emissions, including arsenic, lead, mercury and radicactivity, are there too; and most difficult are the solid waste disposal prob-lems. Change the site and =any of the principals change but not the arguments or the agents or attorneys.

I'm not making light of the arguments c disdaining the parties. The arguments are real and all have seme merit. The parties are all earnest and contribute to the pr: cess.

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The law guarantees that the parties shall be heard, that j alternatives shall be investigated, and that due process be afforded.

f The law directs that the C mmissien then make decisi:ns to assure adequate service at just and reasonable rates.

In this instance, the Ocamission being aware of the pr:b-less involved in nuclear generati:n, told *he joint appli: ants that they would have a chance to make their case for Tyrone. The C:mmissien has determined it is in the best interest of the Miscensin censumer that appr ximately 300 M/W be c nstructed .n Wisconsin in the time frame around 1336. The Commissi n has reccgni:ed that : cal gener-ation is envir:nmentally inferi : to the ; reposed pro ect. The Ccemission has afforded due process. The project has met all environmental tests to date. The project has gained approval by the Nuclear Regulatory Ccamission. Approximately 60 million dellars have been spent to obtain a site, conduct envir:n= ental studies, respond to due process requirements and centract for a project 4

1 that appears to be econcmic.

I i After nine years of planning, develep=ent, jumping through I

regulatory hecps and 60 millien dollars expended, the majority is 4

, telling the applicants, "Sorry, it's too big." The sajority has i

l cited dissatisfaction with the coordinating agreement as a basis 1

for denial. It would be reasonable for the Commission to work for i

t i

a revision of the centract. It would be reasonable for the Commissien to inquire about the prospect for sale of excess capacity. It is unreasonable to reject the project en the basis of this record.

I reccgnize that to permit this project to go forward at the going rate of expenditures is a de facto appr: val of the project.

I would accept the responsibility for permitting the project to go forwa ' '

'elieve the affected utili*les and this C m=ission are

. /

e capable of dealing with what may tura cut to be excess capacity in i the best interest of the tonst=er.

, I began this section with a series of questions. : have i

supported the 'disconsin Inviren= ental Policy A :, the Pcwer Plant Siting law, Due Pr: cess, litersi third party interventi:n, conser-

, vation and soft technology. Given the current intarest in participation in our proceedings, a realisti: assess =ent of con-servation and soft technelegy, I cannet agree with the majority of this Cecmissi:n. : net caly believe it te be in the best interest of the *disconsin censumer to go ahead with the Tyr:ne project; I

don't think it will be possible to build any ccal alternative in Wisconsin in the time frame centemplated.

Any si.milarity between ny position and that of the Executive Administration is purely coincidental and regretted.

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John C. Cestreic.ter Cc missioner I,

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EXHISIT A - Capacity Costs Per Kilcwatt for 1996 in service Dates Tyrone without stansmission lines and without (1) Euel load and assuming all interest during construction is capitalized at 7 percent $1,081 per kit (2) Northern Statcs Power estimate of two 400-megawatt coal plants en ec= parable basis 1,057 per kW (3) Staff estimate of two 400-megawatt coal l units on eccparable basis 952 per kW (4) Northern States Power estimate of two 300-megawatt coal plants on comparable basis 866 per ki l (5) Staff estimate of two SCO-megawatt coal units en ec= parable basis S12 per kW

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Appendix a

Appearances:

' Applicants by Gerald Charnoff, A::ceney Thomas A. Baxter, Atterney Washington, D.C.

• Full Intervenor in Supports Cairyland Pcwer Cooperative by William c. Harvey, Attorney Madison

• Full Interveners in Cppcsition:

Badger Safe Inergy Alliance, Inc. , by Richard Ihrig, Attorney Winena Minnescta and j Robert H. Owen, Jr., Attorney

Madison i,

8 Sierra Club by l

Thomas Ocnovan, Attorney l

Minneapolis, Minnesc:a I

e Citi: ens for a Setter Inviren=ent by David Merrit:

Madisen Stanley Cider

, Tyrone Illery Fester Winona, Minnesota Ted Miner Il= weed

• Full Intervence as Interes: May Appear:

Office cd State Planning and Energy by Jacek Cianciara, Ixecutive Planning officer Kadison Limited Intervencra in Cppositien:

David Hewit:

Prairie Farm Tom Gala:en Turtle Lake Wiscensin's Invizcamental Oecade, Inc. by Peter Andersen, Public Affairs Officer Madisen

• Oenctes full intervencrs for purpcses of secticn PSC 2. 32, Wis.

Adm. Ccde or principal parties. See Wis. Envirenrental Oecade v.

Public Service Oc .m., 34 Wis. d 504.

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Apeearancess (cent.)

Of the Ocmmission Staff:

Barbara J. (fillard, Assistant Chief Counsel Virgil Endres, Engineering Division j Jerry E. Mendl, Systems Planning

, A. Ravindran, Systems Planning Oennis Ray, Staff Icencaist M. Reinbergs, Chief Economist David A. Scacengeld, Systems Planning

, Oeborah Seniff, Consumer Analysis i Rod Shaughnessy, Assistant te Chairman j Lanny L. Smith, Engineering Division In addition to the appearances listed ateve, approximately 750 persons registered as favoring er opposing the preposed project.

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