ML20086C547
| ML20086C547 | |
| Person / Time | |
|---|---|
| Site: | Shoreham File:Long Island Lighting Company icon.png |
| Issue date: | 11/18/1991 |
| From: | Mcgranery J DOW, LOHNES & ALBERTSON, SCIENTISTS & ENGINEERS FOR SECURE ENERGY, SHOREHAM-WADING RIVER CENTRAL SCHOOL DISTRICT, NY |
| To: | Atomic Safety and Licensing Board Panel |
| Shared Package | |
| ML20086C543 | List: |
| References | |
| OLA-3, NUDOCS 9111220299 | |
| Download: ML20086C547 (151) | |
Text
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.. ai ; i i-UNITED STATES OF AMERICA U *R:
NUCLEAR REGULATORY COMMISSION p '91 N3V 19 A8 :53 BEFORE THE ATOMIC SAFETY AND LICQEING . QQAM}; 3, oung : n: s , , ,m 4
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In the Matter of ) Docket No. 50-322-OLA-3 LONG ISLAND LIGHTING COMPANY ) ASLBP No. 91-642-OLA-3
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(Shoreham Nuclear Power Station, ) (License Transfer)
Unit 1) )
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) APPENDIX TO JOINT SUPPLEMENTAL PETITION OF SHOREHAM-WADING RIVER CENTRAL SCHOOL DISTRICT
, AND J SCIENTISTS AND ENGINEERS FOR SECURE ENERGY, INC.
D James P. McGranery, Jr.
O Dow, Lohnes & Albertson 1255 Twenty-Third St., NW Washington, D.C. 20037 Counsel for Petitioners Shoreham-Wading River Central
$ School District and Scientists &
November 18, 1991 Engineers for Secure Energy Inc.
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REPAYMENT AGREErtENT By and Between .
4.
THE DIRECTOR OF THE BUDGET i,
OF THE STATE OF NEW YORK and y
i THE-LONG ISLAND POWER AUTHORITY 3 gl41 -
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_,_o_. , su ws w t- v . amsum. e.c.- ,..<,4 E V ' 000002 THIS AGREEMENT, date6 this twentieth day of August, 1987, is
.r nade by and between the Long Island Power Authority (the *
" Authority"), a corporate municipal instrumentality of the state of New York, constituting a body corporate and politic and a political subdivision of the State of New York created by O
Chapter-517 of the-Laws-of 1986 (" Chapter $17") of the State of New York, having an office located at 1515 Eroadway, Urd Floor New York, New York 10036, and the DIRECTOR OF THE o BUDGET OF THE STATE OF NEW YORK, (the " Director"), having an office located in the State Capitol, Albany, New York 12224.
WHEREAS, pursuant to Chapter 517, as amended by section 11 of-Chapter 1 of the Laws of 1987, the State of New York appropriated to the Authority the sum of Eleven Million Dollars ($11,000,000) or so much thereof-as may be necessary
.o.-
(the " Fund Appropriation")from the-Long Island Power Authority creation and contingency l fund-established pursuant to Section 9 of Chapter 517 - (the " Fund"),-.to be used f or costs and-g --
liabilities-incurred'by the Authority in furtherance of-the provisions-of Chapter 5173 and WHEREAS, pursuant to Chapter-517, no' portion of said t o- .
' Fund Appropriation shall-be made available for the purposes.-
designated by Chapter 517 until a certificate of approval shall ,
have.been' issued by the Director with respect to the Fund.
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Appropriation; and l
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v v 000003 WHEREAS, pursuant to Section 9 of Chapter 517, the .
Director shall not issue any certificate of approval with
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respect to the Fund Appropriation until the Authority has entered into a written agreement with the Director providing f or repayment by the Authority to the State o. f. an amount equal
) _
'to the tote
- scount expended by the State f rom said Fund j Approprintsoa, and a copy of such repayment agreement has been filed with the Comptroller of the State of New York and the Chairperson 6 of the Senate Finance and Assembly Ways and Means Com:tittees of the Legislature of the State of Nov York; and WHEREAS, the parties with to enter into this repayment agreement so that the Authority may receive the Fund Appropriation in f urtherance of the provisions of Chapter SD.
NOW, THEREFORE, in consideration of the mutual g
covenants contained herein and other good and valuable consideration exchant ed between the parties, the receipt and y suf ficiency of which is hereby acknowledged, the parties hereby agree as follows:
SECTION 1. Defined Terms.
For purposes of this repaym2nt agreement the follow!.ng b
l terms shall have the meaning set forth below:
I (a) 'Act" means the Long Island Power Authority act, 3
being title 1-A of Article 5 of the State Public Authorities Law, as added by Chapter S17.
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2 l
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m_ # ,1 w , n o m , m s s o y;,, -
,. .. m O v v u00004 (b) " Agreement" shall mean this repayment agreement, together with any duly adopted amendments, modifications of or O
supplements hereto.
(c) " Authority" means the Long Island Power Authority, a corporate municipal instrumentality of the State, o_
c:nsW wting a body corporate art politic rand a political subdivision of the State, cry ' a .Sction 1020-c of the Act, land Power Authority, o or.any corporate subsidiary t. .
established pursuant to the Act
" Bond" or " notes" u
< '" . notes or other (d) o obligations of the Authority issued yarcas;. :o the Act.
(e) " Chapter 517" means Chapter 517 of the Laws of 1986 of the State of New York.
.o (f) " Comptroller" means the Ccmptroller of the state
(
of.New York, his or her officers, employees and agents.
(g) "Direc. tor" means the Director of the Budget of
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the state of New York, his or her officers, employees and l O_-
i agents.
(h) " Excess Revenues" shall mean Authority earnings OI derived from Authority operations and/or investments r.ot required for debt service on Authority bonds, reserve requirements on the bonds, or ongoing or projected expenses as L
approved by the Director to meet the Authority's statutory
! obligations.
(i) " Fund Appropriation" shall mean each
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LEWIS C. GREER, P . "C . . ~ ~ ~
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appropriation from the Fund to the Authority, ao described in .
I b Chapter 517, as amended.
(j)
- Fund" shall mean the Long Island Power Acthoraty creation and contingency fund established by Section 9 of 1 Chapter 517.
(k)
' Repayment Bonds" means duly authorized, issued and executed non-interest bearing Bonds of the Authority, delivered to the state to repay the state as provided in Section 1020-r of.the Act for all or any portion of ar i
appropriation made by the State to the Authority.
(1) " State" means the State of New York.
(m)
- Section 2 Debt
- means the Authority's outstanding repayment obligation arising under Section 2 of b .
this Agreement.
SECTION 2.- Repayment of Fund Appropriations.
The Authority hereby agrees to repay to the State on
)
the terms and conditions and in the manner described in Agreement pursuant to Chapter 517 an ..~..amount
.. . - ~~ . equal to the to amount expended by the stateApp; F.und..Appr.opda_t - .i f.,ons, witho
) ,.
interest. For purposes of this Agreement, the parties hereto
' igieo"that monies disburt,ed to the Authority from.the Fund shall be deemed to be ' expended by the stat'a f rom such appropriation i h , from Fund Appropriations)" within the The parties hereto meaning of Section 9(e) of Chapter 517,,
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" - v mutually-agree and acknowledge that the Authority's obligation
- l f to repay pursuant to this Sectior, , shall be limited to the 3i total original' principal amount expended' by the State f rom Fund-1 I
Appropriations, without interest.
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!OL SECTION 3.- Sources and Timing of- Repayment of Fund Appropriations.-
- . be required to such amounte es the Authority chal
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repay' pursuant to Section 2-of thic Agreement shall be repaid in the order
- by- the Authority f rom the following gources, f(21 specified,.and.from no-other assets of the Authority:
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('a)1First, f ree the proceeds of the first issuance of bonds (other than Repayment l
Bonds) :
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, -( (b)
Second, from the Authority's excess i
revenuess and-l~ (c) ' Third, if suff teient Bond proceeds ~ or excess lO5 revenues-are not available, then1from Repayment Bonds.
~
If the. Authority does_not have sufficient funds- '
f0" available from-the first two1 sources-(either bond proceeds or.
t by delivery of L excess revenues),cand fulfills this Agreemen Ab 'nepayment-Bonds; pursuant to Section 5, the Authority shall be required to make immediate' repayment-from the first two- '
sources, if:they' subsequently _become svailable, regardless of O. ._
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cor_ z_,2 _wu i gn e n u , , , m. m., , , ,,u, ,,,,
v v 000007
'l the length of term of the Repayment Bonds.
J SECTION 4.
Schedule f or_ Repayrnent_ cf Fund Appropriations.
(a) If, as of the first business day of the firct State fiscal year after the Authority first incurs Section 2 Debt, any portion of such Section 2 Debt remains unpaid, then, l
in that event and at that time, pursaant to chapter 517, the Authority shall deliver to the Comptroller, and provide written certification of such delivery to the Director, a Repayment
.g Bond in an amount equal to the unpaid portion of such Section 2 Debt, without interest.
(b) If from time to time the Authority incurs Section 3
2 Debt other than and subsequent to the Section 2 Debt referred 1
to in paragraph (e) of this Section 4, and any portion of such subsequent Section 2 Debt remains unpaid as of the first business day of the first State fiscal year af ter such J
and rubtequent Section 2 Debt was incurred, then, in that event at that time, pursuant to Chapter 517, the Authority shall i g deliver to the Comptroller, and provide written certification of such delivery to the Director, a Repayment Bond in an amount equal to the unpaid portion of such subsequent Section 2 Debt, g
without interest.
(c) Each Repayment Bond delivered to the Comptroller pursuant to paragraph (a) or (b) of this Section 4 shall be for 3
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.a term of five years from the date of issuance, shall be- *
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inon-interest bearing, and'shall be without recourse to the y
assets of. the Authority except as provided by Section 3 of thic.
Agreement. l 3-SECTION 5. Replacement Repayment Bonds. f l
(a) Not less than fif teen (15) business days prior to the date on which the caturity of a Repayment Bond (the h -J
Maturing Repayment Bond *) occurs, the Authority shall deliver !
to the Comptroller, and provide wr.itten certification of such l y delivery to the Director, a newly issued Repayment Bond (the
" Replacement _ Repayment Bond") for the then-outstanding unpaid balance of the Maturing Repayment Bond. The Replacement Repayment B.ond shall have-a term of five years and shall be y (
dated as- of the -date on which the Maturing Repayment Bond
-reaches its maturity.
y .(b) Whenever a partial payment is made by the Authority related to 'a- previously issued Repayment Bond, the Authority shall at the same time deliver to the comptroller, p:- and provide' written certification of such delivery to the
- Director, a newly issued Repayment Bond . (Replacement Repayment
- Bond)-in the amount of the then outstanding unpaid balance and for the remaining term.of the previously issued Repayment Bond.
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y - v v 000009 SECTION 6.- Covenants. '
7 The Authority hereby covenants with the Director as-3 :.
follows: A (a)
The Authority shall establish and maintain a bank /.
[j account at a. banking institution within the State (the
)_
The Account shall be for the purposes of receiving
' Account").
f and holding _all' monies that the State disburses to the Authority from the Fund and for the purpose of making
[ withdrawals therefrom for the purposes permitted by Chapter 517.
The Authority may establish two or more sub-accounts Q ("Sub-accounts") within the Account. '
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' (b)
The monies disbursed by the State from the Fund shall and deposited in the Account (including Sub-account (s))
I :not be commingled with any other monies.
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(c)
The Authority shall use the monies in the Account l-(including Sub-account (s)) solely for the purposes enumerated O in' Chapter 517.
f,
' -(d)_
The Authority _shall take all appropriate action l ller, to authorize,. issue,' execute-and deliver to the Comptro ~
l and provide written certification of such delivery to the 9
u i;
Director, Repayment Bonds and Replacement Repayment-Bonds in proper form and amount when and as required by the: terms of j I'3 this Agreement.
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SECTION 7.
Invalidity of Certain Provisionst '
0-
[_ If any term or provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder 'of this O Agreement,. or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, O and each term and provision of this Agteement shall be valid and be enforced to the fullest extent permitted by law.
sge73og g, pegtees O-All notices that may be given in connection with this Agreement shall be in writing and shall be delivered O personally, or mailed, postage prepaid, by certified mail to
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the parties at the following address:
'O. lIf to the Authority:
Chairman Long Is1 rand Power Authority 1515 Broadway, 53rd Floor New York, New York 10036 ,
0- If to the Director:
Director-Division of the Budget State Capital, Room 113 Albany, NY 12224 from
'.O or to such other addresses as may be designated in writing Simultaneously with the making of any payzent to time to titte. k pursuant the comptroller that the Authority-is required to ma e
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e ' V v 000011 to this Agreement, the Authority shall give notice of such
- paynent to the Director in the form of a written certification
, Unless otherwise setting forth the details of such payment.
provided herein, notices shall be effective from the date of delivery, if delivered personally, or from the date of deposit 3
with the U.S. Hail, if mailed.
Captions _.
SECTION 9.
3 The captions of this Agreement are for convenience of reference only and in no way define, limit or describe the scope or intent of this Agreement or in any way affect this 3
Agreenent.
SECTION 10.
Modification of Agreement.
9 (
No modification, amendment or waiver of any provision of this Agreement, or consent to any departure therefrom, by the Authority shall in any event be effective unless the same g
shall be in the manner described by Chapter S17 and unless the sane shall be in writing and signed by the Director and then such waiver or concent shall be effective only in the specific 9
instance and for the purpose for which given.
Severability.
SECTION 11.
g In case any one or more of the provisions contained in ble in this Agreement should be invalid, illegal or unenforcea D
3
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v 000012 1 any respert, the validity, legality and enforceability of the 7
,0 - remaining provisions contained herein shall not in any way be af f eeted or 1:tpaired hereby.
Succestors and Assigns.
SECTION 12.
This-Agreement shall inura to the benefit of and be binding'upon tho' Director and his or her successors and assign and shall inure to the benefit of and be binding upon the Authority, but shall'not be assigned in full or in part by the Authority, without the prior written consent of the Director.
- The. Director may, to the~ extent not inconsistent with Chapter
~
517, transfer his or her rights under this Agreement in whole or in part-without'the prior consent of the Authority, but
~
f the i shall give prompt written notice of any such trans er to Authority.
All_ agreements, representations and warranties made i r hereunder
.herein sha111 survive the making of any such tranc e
- by the Director.
SECTJON 13. Term.
e
- o- This Agreement shall.be effective.immediately as of L in effect-the day and year first written above and shall remain i d r
until-all outstanding Section 2 Debt (including but not lim te t Bonds) has 10 .to the-unpaid balance of'all unexpired Repaymen been paid in full, f
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oie T- D-Q1 V D(J U U e VWA N D - v v 000013 SECTION 14. Exculpatory Provisions.
(a) All covenants, stipulations, promises,
)
agreements and obligations of the Director contained herein ,
i shall be deemed to be covenants, stipulations, promises, agreements and obligations of the Director in his or her
)
official capacity only and not of any member, director, officer, employee or agent of the Director in his or her individual capacity, and no recourse chall be had for any claim ,
)
hereunder against the Director individually or against any member, director, officer, employee or agent of the Director.
(b) All covenants, promises, agreementia and 3
obligations of the Authority contained herein shall be deemed to be covenants, r,tipulations, promisen, agreements and
/ obligations of the Authority and not of any member, director, 3
officer, employee or agent of the Authority in his or her individual capacity, and no recourse shall be had for any claim hereunder against any acmber, director, officer, employee or agent of the Authority.
SECTION 15, No Third-Party Beneficiaries.
4 This Agreement shall not be deemed to grant any rights f
to any person, firm or corporation except the parties hereto, l and the terms hereof chall be enforceable only by the parties e
hereto.
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m,- . _ r. r . _ _ . , _ _ _ _ _
v v
' U00014 Entire Agreement.
SEdTION 16.
7 Each party hereto acknowledges its full understanding I of this Agreement, that there are no verbal promises, undertakings or agreements in connection herewith and that this Agre:ement can be modified only by a written agreement signed by the parties hereto. All previous negotiations and agreements between the parties hereto with respect tc the transaction set forth herein are merged into this instrument which fully and completely expresses the entire agreement between the parties setting forth all the parties' rights and obligations.
SECTION 17. Governine Law.
This Agreement shall be construed and enforced in l accordance with the internal laws of the State of New York, without the operation of any presumption favoring construction against the party drafting this Agreement or portion thereof and without giving effect to principles of conflict of laws.
p Counterparts.
SECTION 18.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
I 1
91-14543315 F%GE . 016 IN-- _ _ - - - - _ - - _
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_ , , .. .. eo .s - .. - -mem. ..: e..,c o.. V v 000015
. IN WITNESS WHEREOP, the State of New York has caused
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this: Agreement to be executed in its-name by the Director.of
.O the Budget and his or her official seal to be hereunto affixed:
and the Long Island Power Authority has caused this Agreement to-be executed by its duly authorized officer, all as of-the day and year first written above.
O DIRECTOR OF THE BUDGET O
(S E A L ) BY8 - /? h>
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- o-LONG ISLAND POWER AUTHORITY J
By: ly (S E A L )
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V v 00001C srArt Or New y0ax > ,
1ss.: !
COUNTY OF ALBANY ) .
1987, before me on this ____ day of _,
, to me known to O 1 personally came -
the State of New York, and the be the Director of_the Budget of 1
person described in and who executed the foregoing instrument as Director of the Budget of the State of New York and of the Budget of the State of New York for the uses and C) purposes zentioned herein. .
Notary Public O
STATE OF NEW YORK )
)ss.:
~() COUNTY OF NEW YORK )
1987, before me on this twentieth day of August, personally came William L. Mack, to me known to be and who executed the foregoing instrument as such O Chairman for the uses and purposes mentioned herein.
j Y v Notary Public
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144543315 PAGE.018
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- J 000017 I
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l LQtj U SLA11D_EQMER AUIllOllIl
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- 2. E1ILAlLCIAL_SIATJllEHIS MARCH 31, 1963 M-y..
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Tc!eome 212 3712000 I 153 tatt 53'd Skeet New YM, NY Y 7eirr 666866 i ~! . ' Teiecop'er 212 355 0C83 2126855460 i
i 000018 p Pn.ce 1Ia. terhouse REPORT OF INDEPENDENT ACCOUNTANTS D August 19, 1988, except as to Note 5, which is as of December 2, 1988
- To the Trustees of Long Island Power Authoricy and the D. In our opinion, the accompanying fairly, balance in all material sheetrelated stateme deficit respects, and of cash flows presentthe financial position of Long Isla
~ Authority ("L1PA") at 14 arch 31, operations and its cash 1988, flows in forconformity the period with fromgenerally January 15, 1987 through March 31, accepted accounting principles. These financial our statements are the responsibility of LIPA's management;
" responsibility is to express an opinion We conducted on these ourfinancial audit of statements based on our audit.
these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about
'- whether the financial statements are free of materialincludes examining misstatement. An audit
,,, evidence supporting the amounts and disclosures in the
! assessing the accounting principles and financial statements, estimates made by management, used and significant We evaluating the overall financial statement presentation. for the believe that our audit provides a reasonable basis L
T opinion expressed above.
' a. As described in Note 4 to the financial statements, LIPA may be liable to two consulting firms for amounts which are subject to negotiations between LIPA and these consulting firms. The ultimate outcome of the negotiations As further described incannot Note 4, m ,,
presently be determined. for an amount LIPA will S174,885 totalling be liable to another consultantin the event LIPA acquires LILCO prior April 1, 1989 and the consultant provides professional No
'- se rvice s to LIPA in connection with the acquisition. from the provision for any liability that may resultaforementioned consulti j.ui accompanying financial statements.
As described in Note 1 to the financial statements, the j continuing operations of LIPA are dependent upon receiving future appropriations frem the State of New York.
4 Appropriations of $11 million have been granted However, future for fiscal 1987, 1988 and 1989 operations.
- appropriation amounts cannot be determined.
LQNG ISLAND POW.ILAQIllQ x 000019 LALANCE SH RI LiAE_C1L3L._.19J11
-- h151.T11 Current Assets:
Cash $ 180,783
~
Investm'ents in U.S. Treasury Bills, matu*.ing through May 12, 1988 2.012,067
- g. 6.702 Other current assets i~* 2,199,552 i Total current assets
- Office equipment and furniture, net of accumulated depreciation of $2,305 21,367
!" Security deposit . .L_Q15 h__
$ L2. 2 6 . ~' 8 3 g ~.
hlAll.Lki_IIIEJJiD__AC_CfE"a6I.ED DE.LC.II l
Current liabilities:
0- Accounts payable - legal fees $2,192,718 Accounts payable - consulting fees 2,121,119 Accounts payable and accrued expenses - other 52,982 Due to State of New York, its agencies and authorities _311 dlL9.
3 .
'#' Total current liabilities 4,679,808 State of New Yo k a1 location id.91.9_1.E J.
Total liabilities 9,379,786 g
Commitments and contingencies (Note 4) -
Accumulated deficit ( L 153 , 0 0 2 )
$ M 26.794 The accompanying notes are an integral part of these financial statements.
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w2m a m mio_e m m u u niR L 3 000020 SIATIMEllT OF _oEER6TIOM MnLGMLnIs Ul ACCUtfEJlLnEflf1T ERR- THE PEI1 LOR _JARUMLLib 1962 0- LcomiEltcf MEllT_pI_ tex 86I1qtis ) . TH Paus1LimELOL2.1 19ea O EXPENSES
'~
Legal consultants $3,434,044 Engincering consultants 1,103,181 Consulting - other 1,953,667 Salaries and employee benefits 382,767 O- General and administri:tive 279.313 7- Los for the period and accumu-i,_
lated deficit $?,153.002 O .-
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-1 The accompanying notes are an integral part of these financial
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LQNG ISLAND POWER AUTHOnlIX 00002.1
,, STATEMENT OF CASH FLQWS
- EOR THE PRBIOD JANUARY _l5, 12fL7 v ..
a .
.(CQ1EJERCEMENT OF OPE 8bl.lDESl THROUGH tGli.C.tllL 12fta r_ . Increase (DecrgAse) in Cash and Cash Eguivalents c)
Cash flows from operating activities:
' $(2,539,804)
~
Cash paid to consultants and others Discount receiveo at sale or maturity of
_ investments 41,745 Interest received 1,016 m Net cash used in operating activities L2,497,043) v.-
,, Cash flows from investing activitics:
Capital expenditures -
(23,672)
Proceeds from sale or maturity of investments 9,665,818 Payments for investments (J L 16 1 _?l H) c)
' Cash used in investing activities 12.022,152)
.. Cash flows from financing activities - State of New York allocation 4,612.113
'O ' Cash balance, end of period $ 100,711 1
-- EeConClliAt;iCH_2f_125.s f o r thg_pgIird to net cash _psed in oneIalina activities:
' p s, v ,, Loss for the period $(7,153,002) 1 - Adjustments reconcile to net cash used in operating activities:
Depreciation 2,305 F' Discount accreted on invastments held O'E -
at March 31, 1988 (13,587)
-. Increase in other current assets (5,702)
- Increase in security deposit (5,865)
-- Increase in current liabilities <,679,80a I'
O i..I Net cash _used in operating activities $12.497.043) 7 Ahe accompanying notes are an integral part of these financial
, _,q
- . statements.
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000022 i
LC1LQ LEUMD 2Mh.NZ33:11 y
LiOIIf._.IO_Illia tiCI hh_SIMIMIlil5 e
RGIL.1- QRGhlil;M10lLAllD_11&TMELQLOEIBMlf115 r"
- p. The Long Island Power Authority ("LIPA") was estabiished on January 15, 1987. LIpA is a corporate municipal
-- instrumentality of the State of New 'istk (the " State"),
constituting a body corporate and politic and a political subdia,ision of the State, created by Chapter 517 of the Laws of
,, 1986 (the "LIPA Act").
,8 t - U9 der the LIPA Act, LIPA is authorized to acquire, through negotiated purchase, tender offer, or exercise cf the power of
- eminent domain, all or any part of the securitles or assets of
! I"_ the Long Island Lighting Compac/ ("LILCO"), provided LIPA first i determines that such acquisition would result in raten that h,. would not he higher than the ratt.S that would be charged by LILCO if such acquisition did not occur Under the l'PA Act, LIPA is further authorized to enCertake the following tivitics, among other things, within its carvice area: to .ist in the development and implementation of q conservati and load management programs; to facilitate the
~ - - development af cogeneration and alternate energy production facilities; and to serve as an advocate for utility f- ratepayers. LIIA's service area is comprised of flassou and Suffolk Cauntles and the portion af Queens constituting LILCO's
[" Iranchise area.
~
In addition, in the eveat LIPA were to acquire LILCO's Shoreham
"- nuclear power plant, LIPA is required, as soon as practicable k'~ after such acquisition, to close and decommission the Shoreham plant.
[ LIPA is dependent upon the State for appropriations to meet its requirements. State appropriations are subject to approval each session of the State Legislature and do not constitute a
", legally enforceable obligation of the State; accordingly, LIpA
. J has no assurance that required appropriations will be made beyond the current State appropriations for LIPA's operating qy -
expenses. An amount of $11 million, or so much thereof as may l be necessary, has been appropriated by the State to LIPA for
~~
costs and liabilities incurred by LIPA in furtherance of its 1
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> 000023 statutory purposer. This amount is considered by LIPA to to sufficient to cover its expected costs und liabilities through its fiscal year ending March 31, 1989.
D LIPA's operations are funded notely by allecations of LIPA's
- i. $11 million appropriation. Such allocations are paid by the State from the Long Island Power Authority creation and contingency fund in the miscellaneous special revenue fund -
{ 339CS (the " Fund). The Fund consists of payments made by LILCO to the State pursuant to LILCO's gross receipts tax E' "
obligations.
In accordance with a r e p a yt"e n t agreement between LIPA and the Director of the Budget of the State of New York (" Repayment
Agreement"), LIPA is required to repay to the State the total N, original principal amoJnt dirbursed by the State to LIPA, without interest, pursuant to the LIPA Act. This amount must
-. be repaid by LIPA: a) first, from the proceeds of the first issuance of LIPA Donds, b) second, from any " excess revenues" (as defined) derived f r o") LIPt operations ar.1/or investments, i
'~ s and c) third, if sufficient Bond proceeds or excess revenuen J are not available, then by the delivery to the State of I non-interest bearing bonds which are duly authorized, ir. sued ar.d executed by LIPA (" repayment bonus"). LIPA tepayment bonds are without recourse to the assets of LI ris except to the extent
{-
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that LIPA has sources of funds available from the proceeds of the first issuance of LIPA Bonds or from any excesn revenuen
- 7 derived fccm LI"A operations and/or investments.
liGIL2 .E!?'MLOL11C ILEI C ART E 'l?U EUhu Q L LC I E E
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The financia) statements have been prepared en the accrual basis of accounting.
j Ll 1.IlE."11T'?ILt f.__iB__MElr 'll01KY.__.ft[115 p.
2)
LIPA invests available funds in U.S. Treasury Bills which are carrie6 at amortized cost which approximates market value.
- Under an agreemant between LIPA and the State, all investment income earned by LIPA is payable to the State. As a result,
'" discount earned is recorded as a liability to the State, and no income or expense is recorded in the financial statements.
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S.tAtc. 2L1?ctL'LOLLA112 cat.irn Allocations received from the State are recorded as liabilities O !ince the amounts are required to be repaid to the State in accordance with the provisions of the Repayment Agreement.
RCp1CXiAli.Cn Depreciation of office equipment and furniture is calculated on O a straight-line basis over the estimated useful lives of the assets.
Lucs LIpA is a political subdivision of the State of tiew York and therefore is exempt from federal and state income taxes.
-O RQTE 2- Of_EICE_IOUl&1ERT_1MLfAENIEIRE Office equipment and furnituto and accumulated depreciation at tiarch 31, 1988 are as follows:
O-Office equipment $13,Lla
. Office furniture 11M 23,672
- Less - accumulated copreciation _L.10 'i O.
EE RQ.IC_;1:30M;n:rElw1LMO.lDRII 1W E RCIES LIpA hab entered into two consulting contracts under whAch a portion of the amounts to be paid for consulting services are Such negotiated amounts cannot g- subject to negotiation.
presently be determined. LIpA has also entered into a contract with a consultant under which LIpA will pay the difference
} between the di:: counted . sourly rates at which the consultant has agreed to bill LIpA ca.d the consultant's normal hourly rates,
-- amounting to $174,885 as of !* arch 31, 1988, in the event LIpA acquires LILco prior to April 1, 1989 and the consultant O '! provides professional services to LIpA in connection with.the acquisition. 11 0 provision has been made in the financial statements for any liability res"Iting from the aforementioned
. consulting contracts.
LILCO challenged in Federal District Court and State Supreme U-
- Court, the constitutionality of provisions of the LIpA Act under the United States and flew York State Constitutions,
.- respectively. LILCO also challenged in State Supreme Court, Appellate Division, the constitutionalitl of provisions of the
< LIpA Act relating to LP- indemnification and exculpation of O-O 1
O . (
000025 LIPA Trustees andand The Federal officers Statefor actions Courts takenofunder in each the LIPA the cases upheld Act.
the constitutionality of the LlPA Act, and LILCO has Under appealed a
O the decisions to higher Federal and State Courts.
Setticment Agreement among LILCO, the State, the flew York power Authority ("!JYPA"), LIPA and others (see flote 5), LILCO and LIPA have agreed, contingent upon the effectiveness of the Settlement Agreement, to settle all of their outstanding lionetheless, LIPA believes litigation as soon as practical.
that the ultimate outcome of the litigation, in the event it O were continued, would not have a material effect on its financial condition.
LIPA has a mininum annual tental commitment of $35,000 for its Mineola office, through June 30, 1992. Provision is made in LIpA's lease f r termination of the lease afterRental two years upon expense for
~O' payment of certain lease termination fees.
both the tiew York City and Mineola offices amounted to approximately $81,000 for the period January 15, 1987 to March
- 31, 1966.
O HQTE 5 - SUESEQUERLEVIRIS
[, The following events rave occurred subsequent to March 31, 1988 !
and are not reflected in the accompanying financial statements:
h Entnint o f Emda On May 20, 1988, LIPA received a second allocation of State appropriated funds in the amount of $1,575,000.
On August 17, 1988, LIPA received a third and final allocation rc of the $11 million State appropriated funds in the amount of ,
l
$4,724,999.
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EC11hn2Di_SELROS.ILthC_1tEC_.2LIMLYQMLamLJJLC.Q In June 1988, LILCO, the State, flYPA, LIPA and others entered l
~
into a Settlement Agreement to resolve the controversy over the Shoreham nuclear power plant and power supply and electricity l ,.
rate issues affecting LILCO ond its customers. The Settlement.
l1 Agreement contemplates, among other things, the transfer of the l
Shoreham plant from LILCO to LIPA for $1, and the payment by l "~ LILCO of all costs attributable to LIPA's ownership, l0 l possession, maintenance, deconnissioning and dismantling of the Shoreham plant, including any of LIPA's administrative ar.d
.-- general costs direct 3y related to Shoreham. The Settlement Agreement will become effective upon its appreval by the tJew
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York State Public Service Corraission ("PSC") . its approval by a majority of LILCO shareholders, and approval by the State h.
Legislature og legislation relating to flVPA's construction of certain new power plants on Long Island. In the event such approvals are not provided within 90 days of submission of the Settlement to the PSC (although the PSC may extend the approval date under certain circumstances), each party to the Settlertent Agreement may withdraw Irom the Settlement Agreement. On September 15, 1988, the PSC decided generally to opprove the Settlement Agreement. The PSC also extended the approval date up to and including two weeks after a meeting of LILCD shareholders to vote on the Settlement Agreement. On tiovember 4,
1988, LILCo shareholders approved the Settlertent Agreement.
On November 16, 1988, the PSC issued an Opinion and Order approving the Settlement Agreement. LILCO and the State agreed to extend to December 1, withdraw from the Settlement Agreement. after 1988 the date which parties may The approval of the State Legislature has not been received an of Oecember 1, 1988.
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000028 D_
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l' rice Ithterhouse &
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REPORT OF INDEPENDENT ACCOUNTANTS i
I q.
May 23, 1989 J.. .
To the Trustees of
.,..q .
., Long Island Power Authority
"' In our opinion, the accompanying balance sh'eet and the .
related statements of operations and changes in accumulated
~
deficit and of cash flows present fairly, in all material
,,. respects, the financial position of Long Island Power Authority ("LIPA") at March 31, 1989 and 1988, and the
- results of its operations and its cash flows for the year ended March 31, 1989 and the period from January 15, 1987 through March 31, 1988, in conformity with generally accepted
,. accounting principles. These financial statements are the V responsibi.lity of L1pA's management; our responsibility is to
-- express an opinion on these financial statements based on our audits. We conducted our audits of these financial
' ' " statements in accordance with generally accepted aediting standards which require that we plan and perform the audit to
, lH obtain reasonable assurance aboint whether the financial
- 1 - statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the acccunting principles used and significant la_ estimates made by management, and evaluating the overall
,< financial statement oresentation. We believe that our audits
'],, provide a reasonable basis for the opinion expressed above.
As described in Note 5 to the financial statements, LIPA may a.
be liable to two consulting firms for amounts which are s
a, subject to negotiations between LIPA and these consulting firms. The ultimate outcome of the negotiations cannot presently be determined. No provi.sion for any liability that g ' ',
may result from the aforementioned consulting contracts has
'{ been made in the accompanying financial statements. l
'g4 I As described in Note 1 to the financial statements, the O continuing operations of LIPA are dependent upon receiving future appropriations from the State of New York.
Appropriations of $2.8 million have beenHowever, grantedfuture for LIPA's expenditures beginning April 1, 1989
' g ,j 4.,
appropriation amounts cannot be determined.
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t%NLCE__SHGT Mar h 31, March 31, O '** _1M1._ .19 M__._
b1SIIS
.. Curtent Assets:
$ 172,629/ $ 180,703 Cash
- Invest,ents in u.s. Treasury si is 1,629.483r 2,o12,o67 O- *-
Other current assets 9.16 f 6,7_Q1 1,811,277 2,199,552
- d. Tocal current assets
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Office equipment aad furniture, net of accumulated depreciation ,, c, J ' 3 16,632 3 ?1,367 Security deposit 5,80 J _ JE5 e .
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$ 1.933.77i $ M L.7,11 O . , .
- LIAt!lk211IS_MID ACCLMri4ATIA RTI1Cl2 Current liabilities
, j' Accounts payable - legal fees $ 889,939^ $ 2,192,718
( 7 6, 2 3 3 -f 2,121,119 Accounts payable . consulting fees L Accounts payable and accrued j expenses - other 69,6466 52,982
.. a Due to State of New York, its agencies and authorities RiL_1D / ? lld_H
.O, .
Total current liabilities 1,687,271 4,679,s08 State of New York allocation lLyD J. Mil 3,699,97R 12,687,254 9,379,786 Total liabilities-O commitments ona contingencio, (not, 53 Accumulated deficit (ID & h1LQ)d (7_d53,002) a
$ ,,1 933,774 $ 2,226.784 O!,, <
The acccmpanying notes are an integral part of these finan:ial M- statements.
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ETATDST.HUL2fMAUO!!S AF P_C 1UM ES_l F_ACCnfdLAU D_.E t1 Cl T
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U-JANUARY 15, 1987
~
(COMME!!CEME!TT Or OPER AT10llS )
YEAR E!IDED T!!ROUGit gh"' L4MGL2L_1EQ2 KMCILlL._.1EM 1
mrma Legal consultants $ 025,781 $3,434,044
- Engineering consultants 261,104 1,103,101
- d<
Consulting - other 375,098 1,953,667 Proxy so11 citation 1,751,785 Salaries and er ployee benefits 306,155 382,767 General and administrative __JLQ2J15 -
_.17L 3 4 3 Loss for the period 3,700,47077- 7,153,002
.
- a-Accumulated deficit,
.. ,,4 beginning of period Lli3 J.QI
'-' Accumulated deficit, end of period $10,at3,490 $L 153,002 L.
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f" The accompanying notes are an integral part of these financial 7, atatements.
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dIAID'R!LDLCAEILILRES JAITUARY 15, 1987
) ,,
(COMME!!CEMEliT OF 6, OPERATIC 110 )
YEAR ElrDED THROUGH M P.C L 114._l?.G MEGLll&.1210.
' , . , . ~ , ,Inntent_Gittrinatl_.IIL102
, tL ARL.
5 in11Laqu1YAltnt 3
- Cash flows from operat.*ng activities:
Cash paid to contultants and others $ (5,838,864) $ (2,539,804) i Discount received at sale or
,, ,,) rnaturity of investnents 130,881 41,745 Inte est received
. 3t.Bl2 1. DM Het cash used in operating activ3 ties ILRLl21) LL.i?lM2)
Cash flows from investino activities:
Capital expenditures' Proceeds f ron. sale or maturity of (23,072) i nve s tme nt s 13,C40,529 9,065,818 y'~ Payments for investsents (llELMI) (lL!dbI91)
].I
, ,I,,.
Cash provided by (used lu)
Investing activities 3 BL.915 12EIrlM)
Cash flows from financing activities State of New York allocations LJ h QAi _AML 911 f_,.,
Net (decrease) lucrease in cash for the perled (8,1!4) 380,783 Cash balanco, beginning of period 11LlJ1 Cssh balance, end of period $ 172 3 2 $ 11n g 1,.
l EEEQntillAt19A_0LlhnJr.thtptI191.t Latt EntLRGRIL.lILnt R LAt inLAc.t1YiLit.a t Loss for'the period $ (3,700,478) $ (7,153,002)
'"' Adjustments to reconcile to net cash used in operating activitiest Depreciatien 4,735 2,305 Increase in discount accreted on investraents held at and of period (7,361) (13.5B7) l Increase in other currect assets (2,463) (6,702)
Increase in security deposit (5,86b)
(Decrease; increase in current 4
liabilities (It93L.5J2 ) A dl L EOS l
Het cash used in operating activitics $ (L(ALiO/A) 5 (2 19' 043)
).
1,j_ _ _ _ _ _ _The
- - - accor
- - - - - -panying notes are an integrni par t of there finnucial s*ctements.
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000032
. uDl!GlSLAllD_fQb1H_AUIliCRIIX 7* IIDIES TO FIRh![CIATu_SIATflEllIS
- . , liOTE 1- ORGAllI%AU0lLhlilLlilJURE OF OpEPPAUQJ1S~
4 f*! j The Long Island Power Authority ("LIPA") was established on
,, January 15, 1987. LIPA is a corporate municipal instrumentality l of the State of New York (the " State"), constituting a body
.- corporate and politic and a political subdivision of the State, created by Chapter 517 of the Laws of 1986 (the "LIPA Act").
, Under the LIPA Act, LIPA is authorized to acquire, through negotiated purchase, tender offer, or exercise of the power of
.. eminent domain, all or any part of the securiti.es or assets of the Long Island Lighting Company ("LILCO"), provided LIPA first determines that such acquisition would result in rates that wculd not be higher than the rates that would be charged by LILCO if i such acquisition did not occur.
1 Under the LIPA Act, LIPA is further authorized to undertake the r a following activities, among other things, within its service area: to assist in the development and implementation of L
conservaticn and load management programs; to facilitate the L, , development of cogeneration and alternate energy production
[-.
facilities; and to serve as an advocate for utility ratepayers.
LIPA's service area is comprised of Nassau and Suffolk Countics and the portion of Queens constituting LILCO's franchise area.
In addition, in the event LIPA were to acquire LILCO's Shoreham g nuclear power plant, LIPA is required, as soon as practicable
., after such acquisition, to close and decommission tne Shoreham plant,
- i. y LIPA is dependent upon the State for appropriations to meet its funding requirements. State appropriations are subject to p{i, , ,
approval each session of the State Legislature and do not constitute a legally enforceable obligation of the State; m
accordingly, LIPA has no assurance that required appropriations
~
will be made beyond the current State appropriations for LIPA's operating expenser. An amount of $2.8 million has been appropriated by the State to LIPA for LIPA's expenditures pf, beginning April 1, 1989 in furtherance of its statutory purposes.
This amount is considered by LIPA to be sufficient to cover its expected costs and liabilities through its fiscal year ending March 31, 1990.
p..
0-u00033 LIPA's operations are funded so161y by allocations of LIPA's l
State appropriations, except that LIPA's costs attributable to l * **- its proposed ownership, possession, maintenance, g~" decommissioning or dismantling of the Shoreham nuclear power plant will be reimbursed by LILCO, under the Amended and b./ Restated Asset Transfer Agreement between LILCO and LIPA, which provides for the transfer of Shoreham to LIPA (see flote 6).
r - Such allocations are paid by the State from the Long Island Power Authority creation and contingency fund in the O
{ '
miscellaneous special revenue fund - 339C5 (the " Fund"). The Fund consists of payrnents made by LILCO to the State pursuant t? LILCO's gross receipts tax obligations.
In accordance with a repayment agreement between LIPA and the 1
Director of the Dudget of the State of tiew York ("Repayrnent j Agreement"), LIPA is required to repay to the State the total 07 original principal amount disbursed by the State u LIPA,
) without interest, pursuant to the LIPA Act. This amount must
! be repaid by LIPA: a) first, from the proceeds of the first issuance of LIPA Bonds, b) second, ftorn any " excess revenues"
-) (as defined) derived from LIPA operations and/or investments,
- b and c) third, if sufficient Bond proceeds or excess revenues O are not available, then by the delivery to the State of I,
non-interest bearing bonds which are duly authorized, issued
. , . . and executed by LIPA (" repayment bonds"). LIPA repayment bonds Are without recourse to the assets of LIPA except to the extent
~P that LIPA has sources of funds available from the proceeds of the first issuance of LIPA Bonds or from any excess reve;1ues O -'j'l derived <. rom LIPA operations and/or investments.
,.I HQIX 1._EUJMFL_0L.SJHIREIIANT ACCOUf1TJJJG POLJCIES L. '
hCrmtuiina Bq;iin O "'
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The financial statsants have been prepared on the accrual L '
basis of accounting.
J.nvntmnt s in U . S . Tre a.nu ry Bills
{"
O*' LIPA invests available funds in U.S. Treasury Dills which are
.. . carried at amortized cost which approximates market value.
Under an agreement between LIPA and the State, all investment
~~'
income earned by LIPA is payable to the State. As a result, discount earned is recorded as a liability to the State, and no
'l income or expense is recorded in the financial statements.
O LJ S101e o f ![ew Yo rk A1. loc a t i QlLE
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~') Allocations received from the State are recorded as liabilitice since the amounts are required to be repaid to the State in
.. accordance with the provisions of the Repayment Agreement.
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000034 !
~.' Repreciati2D f" Depreciation of office equipment and furniture is calculated on g" a straight-line basis over the estimated useful lives of the
~.. assets.
Im LIPA is a political subdivision of the State of New York and O i;F~l therefore is exempt from federal and state income taxes.
HDlE_.3 - l!EESRIERIS ARD._2EPOSITS WIT 1! PINAURAL_lliSIH.UHOSS b-- At March 31, 1969, LIPA had cash deposits with two financial institutions totalling $172,629. The amount of each deposit was v red by federal depository insurance.
0
~
LIPA is authorized under investment guidelines adopted by its
- Board of Trustees to invest available moneys in U.S. government
( securities having maturities not greater than 120 days and in certificates of deposits from banks or trust companies 0 - ** authorized to do busint.ss in the State. LIPA's investments at March 31, 1989, which were held in LIPA's name by its L... authorized a9ene danu, were as fol2ows:
lia. tuli.ty__RA.ts Par V41RC bag.rikeMQ.nt O
U.S. Treasury Bills April 6, 1989 $ 515,000 $ 514,433
, -- U.S. Treasury Bills April 27, 1989 555,000 551,789 U.S. Treasury Bills May 11, 1989 420,000 415,964 r= U.S. Treasury Billn June 15, 1989 150.00Q __1.CJ17, 1
O" $Lf2,4 0,.c o,q $1.629.483,
~~
RQTE 4- OFFTCE 1.QH12EEUL h11D Fil23 MULE
"~
Office equipment and furniture and accumulated depreciation at Oh, March 31, 1989 and 1998 were as follows:
March 31, March 31, 1989 __1933 Op --
office equipment $13,s18 $13,518 Office furniture 10,1 14 10,154 23,672 23,672 Less - accumulated depreciation _. L 3.4.Q _d*2333 L, $16,632 $21.367 (O__
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HQIE._1 _Cfird1THERTE.EiM.0RUA_ "9 1 0 ~ ~'
LIPA has entered into two consulting contracts under which a portion of the amounts to be paid for consulting services are subject to negotiation. Such negotiated amounts cannot presently be determined. No provision has been made in the financial statements for any liability resulting from the aforementioned g] consulting centracts.
LILCO challenged in Federal District Court and State Supreme Court, the constitutionality of provisions of the LIPA Act under
_1 the United States and New York State Constitutions, respectively. LILCO also challenged in State Supreme Court, Appellate Divisi n, pr visi n C the LIPA Act relating to the O
indemnification and exculpation of LIPA Trustees and officers for actions taken under the LIPA Act. The Federal and State Courts in each of the cases upheld the constitutionality of the LIPA Act, and LILCO bas appealed the decisions to higher Federal and
~} -
State Courts. Under a Settlement Agreement between LILCO and the C)
State, dated February 28, 1989 (see Note 6), LILCO and LIPA have agreed, contingent upon the effectiveness of the Settlement
- Agreement, to settle all of their outstanding litigation as soon as practinal. Nonetheless, LIPA believes that the ultimate
,, outcome of the litigation, in the event it were continued, would not have a material effect on its financial condition.
O LIPA has a minimum annual rental commitment of $35,000 for its Mineola office, through June 30, 1992. Provision is made in
,_ LIPA's lease for termination of the lease upon payment of certain lease termination fees. Rental expense for both the New York
.. City and Mineola offices amounted to approximately $92,000 and O' $81,000'for the year ended March 31, 1989 and the period from January 15, 1987 to March 31, 1988, respectively.
". . EQIE 6 - EEIILEMEFTEIHEER_IllE_S.TATIE_ HEE _1REK_hED_L11d O
On February 28, 1989, LILCO and the State, entered into a
" Settlement Agreement to resolve the controversy over the Shoreham nuclear power plant and power supply issues affecting LILCO and
,, its customers. The Settlement Agreement contemplates, among other things, the transfer of the Shoreham plant from LILCO to LIPA for $1; the paymerit by LILCO of all costs attributable to
. O, -
- LIPA's ownership, possession, maintenance, decommissioning or dismantling of the Shoreham plant, including any of LIPA's L. administrative and general costs directly related to Shoreham (including certain costs incurred by LIPA prior to March 31, 1989 l .-
which are included in the accompanying Statement of Operations l
l and Changes in Accumulated Deficit); and the determination by the O New York State Public Service Commission ("PSC") of just and
_ reasonab:e rates for LILCo.
8 L .i l
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l 00003G
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J The Settlement Agrsement will ':ecome ef f ective upon (i) approval I of the Settlement Agreement and the Amended and Restated Asset g Transfer Agreement (" Asset Transfer Agreement") between LILCO and LIpA for the transfer of Shoreham to LIpA by the pSC without modification, and (11) approval of the Settlement Agreement by LIpA's and the New York power Authority's Boards of Trustees, by LILCO's Board of Directors and by LILCO's shareholders. Under the Settlement Agreement, LILCO agreed that if all approvals for O the Settlement Agreement to be effective, except LILCO shareholders' approval, are received by April 15, 1989, LILCO will not operate Shoreham pursuant to any authorization to 1 operate Shoreham that may be or has been granted by the tiuclear Regula to ry Cornmission ("!1RC") , unless the Settlement Agreement is a disapproved by LILCO's shareholders. All approvals required for Og the Settlement Agreement to be effective except LILCO shareholders' approval were received by April 15, 1939.
I A meeting of LILCO shareholders to consider the_ Settlement I Agreement, the A'scet Transf er Agreement and related matters has been scheduled for June 28, 1989.
O On April 26, 1989, litigation was cortmenced against LIpA and others in State Supreme Court seeking to invalidate the Settlemer.t Agreement and the Asset Transfer Agreement. LIPA believes the Settlement Agreement and the Asset Ttansfer Agreement are valid and intends to vigorously defend the litigation, However, due to the preliminary nature of the O proceeding, at this time the ultimate outcome of LIpA the litigation. is unable to predict with certainty 1
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O REPORT OF IllDEPENDENT ACCOUNTANTS May 23, 1990 O
To the Trustees of Long Island Power Authority In our opinion, the accompanying balance sheet and the related statements of operations and changes in accumulated O deficit and of cash flows present fairly, in all material res acets, the financial position of Long Island Power Authority (" LIP 3") at March 31, 1990 and-1989, and- the results of its~ operations and its cash flows for the years then ended in conformity with generally accepted accounting
- arinciples. These financial statements are the responsi-O '3ility of LIPA's management; our responsibility is to express an opinion on these financial statements based on our audits.
We conducted cur audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements O are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Ve believe that our audits provide a O reasonable baris for the opinion expresred above.
As described in Note 3 to the financial statements, in_1990 L1PA adopted retroactively the provisions of Government Accounting cash flows. Standards Board Statement No. 9 in reporting its O
As described in Note 1 to the financial statements, the continuing operations of LIPA are dependent upon receiving future appropriations from the State of New York. Appropria-tions of $990 thousand have been granted for LIPA's expenditures beginning April 1, 1990. However, future O appropriation amounts cannot be determined.
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900039 o
O May 23, 1990 To the Trustees of Long Island Power Authority Page 2 O
As described in Note 8 to the financial statements, LIPA will ;
be reimbursed by Long Island Lighting Company for certain of its salary and general and administrative costs which are costs attributable to Shoreham incurred between LIPAthrough March and Long 31, IslandThe 1990, subject to agreement of such costs.
O Lighting Company regarding the amountamount that may which will be rei No recovery for any reimbursement '
determined.
result has been made in the accompanying ?inanciaT" statements.
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LOfM 15 LAND POWEP AUTPQElll PALANCE SHEC7 t March 31,
) March 31, 1990 1989 l
ASSETE Curront assets:
Cash, including restricted amounts 0 392,252 0 172,629 of 8269,330 in 1990 Investments in U.S. Treasury Dills,
- including restricted amounts of 5,545,23B 1,029,403
$2,630,059 in 1990 1,?Z_5, 9,161 Other current assets 5,930,765 1,011,277 Total current assets
) Office equipment and furniture, not 31,951, 16,632 of accumulated doerpciation ,
5,06E 0,5 th Security deposit ..
o 5,977,2?4 3 1,033,774 LJ ABI LI TIES AND ACCUMULAlED DErggjI Current liabilities:
Advantes from Long Island Lighting Company S 2,230,912 attributable to Shoreham 400,652 '
Accounts payable attributable to Shoreham Accounts payable to New York Power 267,825' Authority attributable to Shoreham s 889,939 Accounts payable - legal fees 476,233 15,378 Accounto payable - consulting fees Accounts payable and accrued 69,646 g expenses -
other 144,594-Due to State of New York, its agencies 344,917' 251,453 and authorities 3,404,298 1,687,271 Total current liabilities 13,799,983 i 10,999,983_
State of New York allocations 17,204,201 12,687,254 Total liabilities Commitments and contingencies (Note 7)
[)- (11,227,057) , 11[L 853,480)
Accumulated deficit s 5,077,224 s 1,833,774 The acecmpanying notes are an integral par t of these financial statements .
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000041 LO!!G 15IJt)D
! 00WER AIITHOf1TX ET1tT JJ1ELLT_AE oP F P AT I ON 5 AND CHANGE? 1N ACCUMULATED DFF1. CIT g
Year ended Year ended tjar c h 3 LJ 900 th r - h 3_L_1X9 J
$ E.EV CiLU_6ft Reimbursement for current year Costa C 370,061 Attributable to Shoreham Reimburnement for prior years' Costs _ 59 5 c0 J3 j
l Attributable to Shoreham ,'
) ?hL&*L2 ' l l
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[E V E U?))2 l 149,777 8 825,781 i Legal consultants 43,004 261,184 l 3 Engineering concultante 667,027 375,098 l Conau.' ting - other 1,751,785 l Prexy solicitatics
.303,7J5 306,155 j Ealaries and employee bener:ta U $all), 189a_475 General and administtative l u.14B&..,
2 31700a4 )).
3 373,577 3.700,478 Det loss for the year Accumulated deficit, beginning .inalL32 410 _
7,153,002 of year 3 $11,227,057 s10,853,480 m- mstammaxaram Accumulated deficit, end of year mmmn-num .rs 9
m s- The accompanying notes are an integral part of these financial statements.
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o 000042 O go::n istArin pourp av:noniTy ST AT EME!1T OF CATH FLOWS O
Year ended Year ended (13.r_cjL.L_19 9 0 !1arr h 3L___19 9 9 Tre maso ( d e_c r t e g n o ) in canh and gavh ca u ty_n 3 e n t s Cash flows from operating activities: c (2 623,340) 0 (6,038,664)
Cash paid to ecnsultants and others Feimbursement by Long Island Lighting 96Sa 079_ _
g Company of amounts paid to consultante
_.J. 1 3: 60,?61) f%3.lbfdS)
Not cash used in operating activities Cash flows from investing Tetivitier.
Proceeds from aale or maturity of 13,040,6 % 13, m ,410 investnnt (16,047,605) (13,250,504)
O Payments for investrrents 3?MJ, .
3;A'1 Interest received Net cash (used in) provided by 0,760 tB511 5 2 ngi investing activities O Cash flows from noncapital financing activities: ?,000 g g 6,322,f21 State of New York allocations
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Cash flows from capital and related financing activities:
g Advances from Long luland Lighting 4,511,216 Company attributable to Shoreham Payments to New York Power Authority (382,396) .
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attributable to Shoreham (1,268,993) c Cash paid to consultants and others (24,592)
Capital expenditures O Proceeds from sale of office equipment 3 , 5 0 0_
a and furniture Net cash provided by capital and 2a 138.dll related financing activities O Net increase (decrease) in cash 219,623 (8,154) for the year 17Lj22_2. 1EO,783 Cash balance, beginning of year s 3QJ5j ] ]hjd9, Cash balance, end of year 1
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], 000043 O
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, Ig1G !S!,A!1D POWEP AUTHOPJ R ST_ATEMENT OF CASH TLOWS 0] (continued)
Year ended Year onded
!1anin_31, 1990 !ia r c h 3 L_19 8 9 O' -
Fa conM 11 a t t o rt_91 ne t lenn ror the year to Lte t c a s h u s e dJ n o p o r a t t n q_a_c_t i v i t i e n :
. !!e t losa for the year 0 (373,577) 0(3,700,470)
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Adjustments to reconcile to not cash used in oper,aying activiticar . --
Deprociation 5,379 4,735 Incroave in discount accreted on
- investments held at end of period (1,300) (7,361)
O Decrease (increase) in other current asaets 7,888 (2,463) 7 Iricrease in security deposit (643)
( ,? Decrease in current operating liabilitien (1,296,394) (3,133,297)
Losa on sale of office equipnent and furniture 394 o-fie t cach used in operating activitica c(1 a=~, 658 gw-2611 o(6.8 _38,864) w-_ _,
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The accompanying notes are an antegral part of these financial statements.
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- 000044
[Ot1G ISI At1D POWFR AUTHORITY I
O 110TEf__TO Fill AtJC Q1a_ ST ATEME!171 i
- 1- ORG A t112 ATI 0 t1 A!!D 14 ATURE OF OPER AT LOjJS_
(iOTE The Long Island Power Authority ('LIPA*) was established on January 15, g{ a corporate municipal instrumentality of the State of flew
- 1907. LIPA. is constituting a body corporato and politic and a Yerk (the " State"),
political subdivision of the State, created by Chapter $17 of the Lawn of 1906 (the *LIPA Act")
Under the LIPA Act, LIPA is authorized to acquire, through negotiated purchase, tender offer, or exercise of the power of eminent domain, all O]- or any part of the securities or assets of the Long Island Lighting C o rn p a n y (
- L I L C O * ) , provided LIPA first determines that such acquisition would result in ratos that would net be higher than the raten that would
- be charaed by LILCO if such acquisition did not occur.
to u n c' e r t a k e the O* Under the LIPA Act, LIPA 13 further authorized following activities, among other things, within its service aren: to assist in the develep~-tt and implementation o f - c o n s e r v e *n o n and load management prograes; to facilitate the development of cogeneratian and alternate energy producticn fac211 ties; and to aerve an an advocate for utility ratepayers. LIPA's service area is comprised of !!assau and g and the portion of Queens constituting LILC0's Suffolk Counties 1 franchise area.
J LIPA is dependent upon the State f or appropriations to meet its fundjng
- requirements. State appropriations are subject to approval each session f the State Legislature and do not constitute a legally enforceable O- obligation of the State; accordingly, LIPA has no assurance that required appropriations will be made beyond the current State appropria-tions for LIPA's operating expenses. An amount of 0990 thousand has
- been appropriated by the State to LIP A f er LIPA's expenditures beginning This amount is April 1, 1990 in f urtherance of its atatutory purposes.
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considered by LIPA to be suffacient to cover its expected costs and liabilities through its fiscal year ending tiarch 31, 1991.
- LIPA's operations are funded solely by allocations of LIPS's State appropriations, except that LIPA's co,sts attributable to the maintenance, tr'ansf er of LIPA and to its ownership, possession, Shoreham to Q., decommissioning or dismantling of the Shoreham nuclear power plant will be reimbursed by LILCO, unaer the Amended and Restated Asset Transfer
- Agreement between LILCO and LIPA, which provides for the transfer of Shoreham to LIPA (see flote 2). Such allocations of LIPA's Stato
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appropriations represent advancen from the State paid from the Long Island Power Authority creation and contingency fund in the miscella-noous special revenue f une - 339C5 <the " Fund"). The Fund consists of O
- payments made by LILCO to the State pursuant to LILCO's gross receipts tax obligations.
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O < 000045 l
In accordance with a Pepayment Agreenent between LIPA and the Director O of the Budget of the State of tie w York (*Fepay"ont Agreement"), LIPA is required to repay to the State the total original princiral amount disbursed by the State to LIPA, without interent, purnuant to the LIPA Act. This amount must be repaid by LIPAt a) first, from the proceeds of the first issuance of LIPA Bonds, b) second, from any " excess revenuen*
(as defined in the Repayment Agreerent) derived from LIPA operations O and/or inventments, and c) third, if sufficient Bond proceeda or excess revenues are not available, then by the delivery to the State of non-
- interest bearing bonds which are duly authorized, isnund and executed by LIPA (* repayment bonda"). LIPA ropayment bonds are without recoutan to
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the ansets of LIPA except to the extent that LIPA has sourcou of funda available frcm the proccodo of the firnt inouance of LIPA Bondo or from
.O any excean revenues derived from LIRA operation, and/or investmenta.
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Un_IJ 2 - EE TT LX11.E,fl.TEEEI!: THE _ST ATE nr flew YnFE AtlD LILCo AflD TP AflSFEF OF SHOFEHAM Tn tlpA u O. On February 20, 1989, LILCO and the State of !ie w York, er. . e r ed into a Settlement Agreement to resolve the controversy over the Shoreham
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nuclear power plant ir.yl power supply issues a f.f e e.t i ng LI LC O and its custmmera. The Sett1? ment Agreement contemplates, among cther thinga, the transfer of the Shoreham plant from LILCO to LIPA for ol; the
- payment by LILCO of all costo attributable to LIPA'c ownerchip, O possounion, maintenance, dncowissionina er dismantling of the Shoreham
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plant, including any c f lip A 's administrative and gnneral cos ta directly related to Shoreham; and the deter ~inaticn by the !J e w York Sta te Public Service Comm1calon ("PSC") of ;ust and reaaonable raten for LILCO.
On April 14, 1999, LILCO and LIPA antered into the Amended and Festated O Asset Transfer Agrooment (" Asset Transf er Agreement") under which LILCO reiterated its aqreement never to operate Shoreham and to transfer the plant to L7PA. Both the Settlement Agreement and the Asset Tranoler
] Agreement have been approved by LIPA's Board of Trustees and LILCO's The agreements became effective on June 28, 1999, Board of Directors.
when LILCO's shareholders voted to approve them.
In accordance with the Asset Transfer Agreement, LIPA and LILCO have also entered into a Site Cooperation and Feimbursement Agreement (*Dite Agreement") on January 24, 1990. Amcng other things, the Site Agreement establishes the specif c mechanism for LILCO to provide payment for all Costa Attributable to Shoreham (as defined in the Site Agreement),
including such costs incurred prior to January 24, 1990. LIPA has also Oj entered into a Management Servicen Agreement with the tie w York Power Authority ("l1YPA") en January 24, 1990, which specifies the management y and technical tervices fiYPA will provide to LIPA in ccnnection with the l license trar.s f er, malnrenance and decommisaioning of Shoreham. Both the E
Site Agreement and tne Management Services Agreement are in effect and O are currently beinc implemented by LIPA.
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+ u00046 As required by the Site Agreement. LIPA has established two rolmburae-
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ment funde, one fcr Costa Attributable to Shorehar. incurred c: to be
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incurred by LITA and one fe: Costa Attributable to chereham incurred or te be incurred by !!Y P A and Dy LIPA Third party Supplie: J. LI!'O in
- required to advance te LIPA frr deperit into the reimbursement funds amounts equal to three months' projected costs. LIPA han ; ole authority
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to invest and to make disbursementn from the reimburcoment funda, y
- NOTE 1- SUMMAFY mF C IO!1? Ti r A!1T A C O U !! T I !1 r. POLICIES Accountinq basin The financial statements have tmen preparod on the accrual banin of
),. accounting.
invostronts in U.S. Trnanury Billo LIPA invectn available Ftate npptopriatir.no and Choreham-related fundo in U.S. Treasur" l!1lls which are estried at amortirnd cost which apptoximaten mar value. Under an acreement between LIPA and the State, all inve,tment income earned by LIPA on its Etate anpropriated funda is payable t o t hr;, S t a t e . As a reuult, discount c a r&d in roccrded as a liability to the State, and no income er expenne ir rec,rded in the financial s t a t e r. e n t e . Under t r. o Site Aareement and the Mana;ement Services Agrennent, all invent ent income earned on Shoreham-related funds in credited against LILCO's f utur e remittance and derovlt obligationa, and no income cr expence la recorded in the financial statements.
Pnamburnement f or C rt o Attributab2n *o Fhoreha- and advancon frem LILCO 1
I Primbursement of Ccatc Attributable to Sh?reham incurred by L:PA pricr j to January 1, 1990 ar, reflected as revenues in the financial state-J ments. Fundo received from LILCD pursuant to the site Agreement fer Ccata Attributable to Shoreham incurred nfter Decem!'er 31, 1989 are classified as advances frcm LILCO, Ccata Attributable to Shoreham incurred by LIPA cr paid by flYPA are charged a g a 1. n n t thane advancos.
State of fle w York allocationn I Allocations received from the State are recorded as 11abil1Uien since the amounts are required to be repaid to tne State in accordance with the provisions of the Repaytent Agreement.
m _1 m m Depreciation of office eculpment and furniture in calculated on a straight-line baals ov?r the estimated useful liven of the assets.
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+ tl00047 Taxes O LIFA lo a political subdivinien of the State o f fi r= w York and therefore is exempt from federal and state income taxen.
Statement of Canh Flown _
For the year ended tiarch 31, 1990, LIPA adopted Statement 11 o . 9 of the of
& Governmental Accounting Standards Board, ' Reporting Cash Flown Proprietary and !1onexpendable Trust Funds and Governmental Entities That Use Proprietarj rund Accounting * ("GASD !!o . Q*),. which requires a otatement of cash flown be precented in place of a statement of changes in financial position, GASB !10. 9 requires dif f erent clasnifications of
, certain canh flows from those used by LIpA in prior years. The C
- previolons of CASB tio . 9 have been retroactively applied to the 1909 financial statemento.
' < U,OTE 4 - 1[lVT S TiiFf1TF A,t D D E p M : T.~ WITH FIN AtJCI AL I!!STITUTIOfG At lia r c h 31, 1990, LipA had cach deposits with two financial institu-lC The cach deposita include C269,330 of funds l .
tions totalling $392,252.
restricted fcr Shorehaggrelated actavities. The amount cl oach deposit was covered by federal depository 2nourance or by collateral held in LIPA's name by the piede;1ng banR'n trust division.
O LIPA is authorized under investment guidelines adopted by ita Board of Trustees tc invest available menien i n U . S . g ove r nn.en t securities having i - naturitien not greater than 120 days and in certificates of deposits from banks or truct companina authorized to do business in the State.
LIPA's investments include 02,630.059 of f unda restricted for Shoreham-related activities. LITA'n investments at tiarch 31, 1990, which were O held in LIPA's name by its authorized bank, were as follows:
Maturity -! w r on Pir "nlue Amertined cont, Unrentricted investmenta (non-Shoreham related funds'
&l U.S. Treasury Billa April 5, 1990
-June 20, 1990 $2,960,000 $2,915,179 I
Restricted investments (Shoreham-related funds)
U.S. Treasury Billa April 5, 1990 2,630,OL9_
-Jur.e 20, 1990 2,655,000 l
.L - t$ $ ? -. *k l1 l0 b
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B 000048 5
D FOTE 5- OTFIC E_ERIPMENT AND TUP!11**UF E Office sq a pment and furniturn and accumulated depreciation at March 31 I. 1990 and 1969 were ao follows: March 31, March 31, 1990___ 199.2 017,653 813,518 Office aquipment 22,947_ 10,154 Office furniture 40,500 23,672
_ 7,0M Lees - accumulated depreciation ,, _ 9 , 5 4 9_
2156%
93_L o21 -
) llOTE 6 - REFO{.MTIO!1 OF PRIC M EAFS' U f!C ER T A I NTY During pric.r years, L1DA entered into two congulting gentracts for corvices under which a portion of the amounts to be paid for consulting As ':he a m o u n t:; to be paid under
-?rvices were subje:t to negotiation.
these consulting contracts were not determinable, noinliability relating years'
) these consulting centracts had been recorded prior to During the year ended March 3), 1990, LIPA financial statements.
resolved the uncertainty and paid a total of approximately S441,000 to the consultants. Such anount has been recorded as consulting expenses -
other during the year ended March 31, 1990.
)
' DOT E 7 - COMMITMENTS A!1D C ON T I NG EMIM1 Under the Tebruary 29, 1969 Settlement Agreement between LILCO and the State of New York, LJLCO has settled all outstanding litigation against LIPA. One appeal is still pending, however, in the StDepartment Second preme Court of the
("Second
)j State of New York, Appel.7. ate Division --
,1 litigant has chosen to pursue the matter Departrnent"i beca ie a litigation. LILCO notwithstanding LILCO's and LIP A's settlement of thatThe matter:1s still and Herbert.Jaffe v. LIPA, et al 2 (No. 20$05/07).
pending in the Second Department, although no date has been set for 5
hearing of the appeal. LIPA believes tha; the outcome of this litiga-tion will not have a material effect on 1to financial condition.
On April 26, 1999, a petition, styled C_,titens for an Orderly Ener_g.y.
Loliev, Inc., et al. v. Cuomo et al. (
- C O 'P ' ) , was filed in the Supreme l Court of the State of New York, Albany Ccanty, challenging the Settle-
.3 ment Agreement and the Asset Transf er Agre ment on a variety of grounds .
On July 25, 1989, the court dismissed the C OEP petition and specificall y found that th- Settlement Agreement and the Asset Transfer Agreement The COIP p e t i t ic r.e r e subsequently were a u t h c r i t.e d by the LIPA Act.
appealed the dismissal of their petition tv the Supreme Court of the State of New York, Appellate Division < hlrd Department (the ' Third Department").
4 000049 I , et al. v The Long On July 14, 1989, another petition, styled Dollard was filed in the Supreme l al. (*Dollard*),
) LQa nd Pever Authority et The Dollard Petition Court of tne State of N c .< York, Albany County.
repeated the came claims accerted in t% CnEP petition and added a claim that the Settlement Agreement violates1989, the New the York court Stat e Environmental denied the Dollard On October 4, Cuality Review Act.
petitioners' motion for a preliminary injunction to bar implementation of the Settlement Agreement, ruling that petitioners had failed to demenntrate a p r o b a b ! '. i t y of succecs on the merits or that they would suffer irreparable harm absent the granting of the rt o t i o n .
The court subsequently ordered the Dollard case tr ansf erred to the Third Department, and en November 21, 1989, the Third DepartmentBoth ordered that Dollard S the COEP appeal and the Dollard case be heard together.
and COEP were argued before the Third Department on April 16, 1990, and are currently awaitina dinposition. LIPA believen that the outcome of not have a material effect en its financial
.this litigation will cendition.
D Beginning in October 1999, LIPA discontinued its monthly lease of its New York City effice and consolidated its cperations in LIPA's Mineola office. In February 1990, LIPA relecated its operations to larger office opace located in' -M r d e n City. LIPA han mimimum annual-rental commitmente of approximately $151,000 with annual increases ofInapprox February 1-mately 3 5,000 per year through May 31, 1995 in Garden City The sub-tenancy b 1990, LIPA sublet their leased premisen in Minecia.
) agreement requires the sub tenant to pay what LIPA would otherwise have to pay (approximately $25,000 per annum) with six month option perieds beginning January 1, 1991 for the sub-tenant to continue in the premisca until the end of the lease (June 1992). Provision Is made in LIPA's Mineola lease for cancellation upon payr.nt of cartain declining lease S t e r ra n a t i o n fees. Rental expenses for LIPA's office space amounted to approximately 088,000 and 092,000 for the year s ended " arch 31, 1990 and 1989, respectively. -
NOTE A - COSTT A T._T.P_I_P U T A P LF_T O 9HOREHAM---
Coste Attributable to 3horeham, which may include LIP A and NYPA salaries and general and administrative costs, incurred by LIPA and submitted f or reimbursement by NYPA through March 31, 1990 were as fo31own: .
NYPA Total Li tA l
31,687,177 3300,920 $1,987,997 Legal consultants 11,071 202,362 Engineering consultants 191,291 722,312 722,312 Consulting - other 299,898 298,898 l
- Salarien and employee benefits 3pg a g io 7 3,;L Z General and administrative f beZg; gyn.ano c L;j ug i
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u00050 7,
h In addition, LIPA has not detornined the amount of its total salary and general and administrative costs which are Costs Attributable to Shoreham incurred through MaIch 31, 1990 for which it will seek 1 reimbursement from LILCC. As this amount has not been determined and will be subject to agreement Oy LILCO, no reimbursement for such costs hac been recorded in the finar ial statements. Thede costs have been
') recorded as expenses in L I ?!. ~ t: current and prior years' financial statements.
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P- ,- 000059 K Urbach Kahn&%rlin rc I&.W csaTirise rt st:c accasTaNTs o : REPORT CN INVESTMENTS 1 i c Buard of Trustees O, Long Island Power Authority l We have audhed the financial statements cf tne Long Island Power Authority (the 'Authorrty') for the year ended March 31,1991 and have issued our report thereon dated July 12.1991. We conducted our audit in accordance with generally accepted auching standarcs and Govemment Audding Standards, issued by the Comptroller General of the United Sts:es, inctucing additional procedures as required under the n ; V applicable provisions cf the Pub!ic Authorrties Law cf the State of New York and the provisions of the investment Guidelines for Pub!ic Authon*ies published by the Office of the State Comptroner. .Those j standards require that we clan and perform the aud:t to obtain reasonable assurance about whether the financial statements are free cf material misstatement. ; a ., The management of the Authority is responsible for the Authorrty's compliance with the Investment V Guidelines for Public Authorities. In connec*ica with the cudit referred to above, we selected and tes:ed transactions and records re!ated to the Investment Guidebnes fnt Public Authorities. The purpose cf cu- j testing of transactions and records was to obtain reasonable assurance that the Authon*y had in, a!! , material respects ccnducted their investment policies and practices in comp!iance with laws and regulations, including those penaining to the financial reporting and acministration of investments. C' In this- regard, we reviewe-1 the Authonty's investment po!!cies and practices fcr the pur;cses of determining, in all rnaterial respects, that:
- 1. The Authonr/ has compfiec with the Investment Guidelines !ct Public Authonties, as applicable:
V,
- 2. The Authority has compIIed with tneir investment policies, as applicable;
- 3. Investment assets were adequatery safeguarded; g
4 Acequae acccun:s and recceds were maintained which accurately reflect transactions. V including the reporting on dispositions of investment assets; and that
. 5. A system cf adequate internal control was maintained. ,,, in our opinion, for the year ended March 31, 1991, the Authority administered its investments in
~V compliance, in all material respects, wrth applicab:e laws and guide!;nes inc!uding those pertaining to financial reports and investment administration. Our tes ing was more lim:ted than would be necessary to express an opinion on whemer the Authonty administered those programs in comp!!ance in all matenal respects with laws and guiceiines noncome!iance with which we believe could have a matenal effect on the financial s atements. However, with respect to the transac*;ons tha were not tested by us, noming came to our at ention to incicate inat the Aumori'y had not complied mth such taws and guide!ines. g O
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,' . 000053
- g' This report is intended for the information of the Authonty and the Office of the State Comptrol:er, the Division of the Budget of ine State of New York, the Senate Finance Comminee and the Assembly Ways and Means Comm: nee. This recinction in nct intended to lim:t the distnbution of this report, which may be a matter of pub!i rec 0rd.
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I V RU CU/WT 4 ( kWVTi[L New York, New York July 12,1991
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i ) Urbach Kahn &%rlin rc Mc, csTe rac Accm;TANTs 000054 )= l PEPORT ON INTERNAL CONTRCLS CVER INVESTMENTS Board of Trustees Long Istand Powe' Authority We have aud!ted the financial statements of the Long Island Power Authonty (the 'Auth0rfy') as cf and for the year endec March 31,1991, and have issued our repcrt thereon dated Juif 12,1991, We conducted our audit in ac crdance with genera!1y accepted audemg standaids and Go<emment Audrting Standards, issued by the ComptrNier General cf the United States. Those standards require that we plan and perf orm the aud:t to obtain reasonat'e assurance about whether the financial statements are
- free of materia l misstatement In planning and performing cur aud! cf the financial state-r a^ts cf the Authcrity, for the year ended March 31,1991, we considered its internal centrol structure, inc!uding intema! controls over investments (under thq applicable crovisions of the Pubhc Authonties Law of the State of New York, and investment Guidelines for Public Authenties pub (ished My the Office of the State Ccmptrol:er) in crder to determine our audting procedures for the purpcsc cf egressing our epinico en the f;nancial statements and net to provide assurance on the internai control structure for investments.
The management of the Authon'y is respcnLib!c for estabhshing and maintaining an internal contret strucure over investments. In fulfiMing inis reso^nsibiSty, estimates and jud;;ments by muagement are required to assess the excected cenef:ts and related costs of intema! control strucure po!ic;es and procedures The cojectives cf an internal contral stru=ure over inve=ments are to pecade manageme t w:th rEasonac'e, but not a0 solute, assurance that investment assets are safeguarded against less ficm unauthonzed use or dispcsition, and that investment Pansa=>cns are executed in acccrdancE with management's authon. at:en and recorded property to permit the preparation cf financial statements in accordance with the pr0visicns of the vanous bond *esolutions Because cf inherent lim tatiors in any interna! control structure. errcrs or irregular: ties may nevertheiess occur and not be detected. Also, projection of any evaluation cf the intemal control strucure to future penods is subject to the nsk that piocedurES may beCOme inadequate because of Changes in Conditions Or that the effeCMVeness Of the desigr' and operation of polic:es and precedures mar detericrate. For the internal control strucure over investmerts, we ctta:ned an understanding Of the dMign of relevant polic:es and procedures and whether they have been placed in Operation, We also assessed control nsx over investments. Our censideration of tne internal control structure ever investments wou!d net necessarily disclose all maners in the internal control strucure over investments that mignt be matenal weaknesses under standards established by the Amencan Insutute cf Certified Public Accountants. A material weakness is a reportable concition in which the design or operation Of one or more of the scecific intemal control structure elements over investments does not reduce to a relative!y Icw tevel the risk that errors er irregulanties (in amounts that would be materialin re!aticn to the financial staternents being aucited) may occur and not be deteced within a timely penod by employees in the normal course of perfctming their assigned funct:Ons. We noted no matters, hcwever. involvmg the intemal control structure over p investments and u coetancn tPE we consider 10 te a matenal weakness as defined so ve.
1 0 ' j
- 000055 1 O This report is intended for the information of the Authority and the Off;ce of the State Comptrolier the Division of the Budget of the State of New York, the Senate Finance Commrttee and the Assemuy Ways and Means Comm;ttee. This restr;cted is not intence to Em:t the distributton of this report, wnich may be a matter of public record.
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N $ ' \ - [N i New York, New York July 12,1931 O O lO O , 'O i l O L U _K
l I 00005G 3 CONTENTS Pace INCEPENDENT AUDITOR'S REPORT O CN THE FINANCIAL STATEMENTS 1 FINANCIAL STATEMENTS Salance snects : Statements of cpermions anc changes in ascumulated cefic:t 3 O Statements of casn ficws , 4 Notes to financial stmemems 5 11 INCE ENDENT AU0iTOR'S REPORT ON THE SUPPLEMENTARY INFORM ATiCN 12 9 SUPPLEMENTARY INFORMAT:ON Statment c.f cpermiens information: Censutt:ng costs and general and administrative excenses 13 3 0 -
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O i I O ! i ____________________________ -_ - i.
glllm g l 6 WWIII E I l0
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000057
' Urbach Kahn &Werlin rc
- m\X/ csaTiriso rtstic AccouxTANTs O
INDEPENDENT AUDITOR'S REPORT O To the Board of Trustees Long Islanc Power Authomy O we have audded tne acccmpanying balance snee: cf Lens istand Power Aumomy as of Maren 31,1991, and tne retmed somements of opermions and accumutmed ce'10: and cash ficws f or the year then enced. These financ;al s:mements are tne rescons:biMy of ne AU:nomy's managemert Our responWbill:y ts to express an epirion on these finan:W s memems cased on cut audd The Snancial s:memems of Long Island Power Aumormj for the yea enced Maren 31, 1990, tefore iney were restmec for the mc:er discussed in Note 9 to the financial s a:emerits, were audited by c'ner aud: tors whose report. cated May O 23, 1990, crpressed an uncuaPfled opinion on nese financial s atemems bu: inctudec explana:Ory paragmons desenting tha: me con:inuing opermons cf the AU:nomy are deoendem ucen fu*ure appropnatons from :ne Stme c' New York and tne unce ta:my of :ne cmnunt cf reimoursement cf cer:a:n salary anc general anc admintsthe ecs:s mmbutable to Shorenam, subjec: to me ten".s of an agreemen Oe: ween :ne Autnemy and Long Island lJgnnng Company. O we eencue:ec cur auer: in accoreance wrm generaiy accen:ec auef::ng :ancarcs. Tnese s:ancares requim nm we plan and perterm me auc:t to ec:aan reasenacie assurance aDout whemer me financ:al s:memen s are free of ma:enal mtss:memert An auci: inctuces examaning, on t test tas:s, evicence surocmng me amoun's and cisclosures in me financ:a! c:a:emer% An aucit a'sc inctuces assessang me account:ng pnno: Dies used and sign.fic.a : estmmes mace Oy managemer':. as well as evajunung the cvera!! financ:al s:memem ;,reserranOn. We beliWe ina: Our audr* provides a reascnacle tas:s for cur O ceinion > In our coinion, :ne 1991 financ:a! s c:emeres referred !O above cresent fa:rty, in all mmena) rescec:s, Ine finane:s! ocsmen cf L0ng !s:anc Pcwer Aumomy as of Maren 31,1991, anc rese::s cf its coe rons anc its casn flows !cr me yea men enced in con *cmmy wtm genera 1y acccetec acccurmng ennc:cles. O As desenbed in Note 1 to the financial s atemems, :ne centnuing coermions cf the Long Island Power Aumor::y are cecencent uoen recerving fu:ure a::proonanons from me State of New York, No accrepnations nave been grcnted for tne Aumomy's excenc::ures teginn:ng Apal 1,1991 and future acpreonm:en amoun:s canne: ce cc:erminec.
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O New York. New Yory Ju!y 12,1991 0 1
) . LONG ISLAND PCWER AUTHORIT/ (jQQQQ BALANCE SHEETS Maren 31.1991 and 1990 ) ASSETS 1991 1990 CURRENT ASSETS Cash, inctucing restnr;ted amounts cf ) S26.061 in 1991 and $269.330 in 1990 $ 155.S75 $ 392.252 Investments in U S. Treasur/ Bills. inc!ucing rectncted amounts of S3,351,003 in 1991 ! and 52.S30.059 in 1990 5,984.568 5.545.238 Cther current assets 8 716 1 ??5 Tctal current assets 6.149 159 5 C39?5 CFFICE ECUlPMENT AND FURNfTURE Net of accumulated deprec'ation of
$19,577 in 1991 and S8,549 in 1990 53,182 31,95 t
) OTHER ASSETS Securrty deposits 7 172 6 508 5 6 709 513 S 5 9T* 224 UABluT!ES AND ACCUMULATED DEFICIT ) CURRENT UA811171ES AttnbutaDie to Shoreham:
/c/ances from Lcog Is:and Ugnting Comcany 5 2,118.845 5 2.261,943 Oue to New York Power Authenty and UPA Third Patr/ Sucpliers 373.452 257 S25
) Accrued expenses, other 883,412 400.652 Accrued censu: ting ccs:s 27T,624 15.378 Accrued expenses, ciner 98.505 56,572 Due to the State cf New Yort its agenc:es and autnorities 144 648 344937 Tctal current liatiiities 3.896.486 3,347,307 STATE OF NEW YCRK ALLOCATiCNS 14.203,300 13,799.933 ACCUMULATED DEFIC'T (11 990 273) E170 066) ) S 6 209 513 5 5 977 224 See Notes to financial statements. D 2 m
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tCnc isuNo ecwen AuTxCnm 000059 STATEMENTS CF CPERATCNS AND CHANGES IN ACCUMUuTED OEFIC'T t' ears Ended MarCn 31,1991 and 1990 ) 1991 1990 CFERATING DPENSES: Censu.tng cc = 324.370 859,808 ) Gener?J and acrntnts:m :ve 5
~~8 9 57 3
4AS 242 1503.12 iOCS050 Less reimeucemert et Ccs:s M:nbuttso to Shercham: Curmnt year 323,47S 358.566 I Pncr year 3 549 544 695018 883 020 953 581 Nc:lacs p;c,;o-) (35;;c5) AC0umulated de5ct, beginn:rg cf year (11.t70 CEE) (10817.500)
' Accumula:ed de$c.t encing cf year $(,1; egn ;~p 5(13173 ogg See Notas to Anancal Sta:emen=.
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LONG ISLAND POWER AUTHORIT( STATEMENTS OF CASH FLOWS Years Encec Maren 31,1991 and 1990 1991 1990 RECONCIL!ATION CF NET LCSS TO NET CASH USED IN CPERATING ACTIVmES Net loss S (720,20~) S (352.466) Adjustments to recOnc:le net loss to net cash used in operating actutties: Depreciatica 11,029 5,379 Reimournement of cffice equipment 44,243 - Less on sate of effice ecuicment - 394 Disccent en investment securmes - (1,308) Change in: } Other curTent assets (49,829) ,7.888 Secun y decosas (664) (S43) Accrued consuning c;sts 262,24S (1,486,297) Accrued expenses, cther 41,934 75.303 Due to New Ycrk State Agencies I253Z) 93 484 } Net cash used in coersting activities 5(406376 S(16:^ ?st) SUPPLEMENTAL SCHECULE CF NCNCASH FINANC NG ACTNGES Trans'er cf liac!!!ty from Cue to the State of New York to State cf New YoA AL:ccaticns 3 313 E09 $ . 3 See Notes to Fina!-da! Sta'ements. M o O O
. LONG ISLAND POWER AUTHORlW QQQQ${
STATEMENTS OF CASH FLOWS Years Enced Maten 31,1991 and 1990
'991 1990_
CASH FLOWS FRCM CPERATING ACTWmES Casn recer<ed frem Long tstanc Ugnung Comcany O for reimeursement of ces:s incurrec I as4.s73 s 965 c79 Casn paid to consu:: ants and einer (1 321 240) (2.6~3 34c) Net cash used in coermmg ace.raes (c6 376) (1.858 251) CASH FLCWS FFCM INVESTING ACTWmES O proceecs t-cm saae and mmurmes of irTvestment secuntes 18,043,757 , 13,04S,695 (18,477,449) (16,847,505) Purenasa cf investment secur:tes Purchase cf of$ce equement (76,504) (24.592) Proceeds from saje of of3ce equicment - 3.500 333,566 37,059 Interes recerved
/50 9,121 -
O Interest repaid to New Yom Sta:e Ne: cash used in irrvectng acddes (2^2 ' 51) f3 701943)
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CASH FLCWS r nCM NCN.CAFi AL riNANCINv % .ivi o:S 2.500,C00 P~oceecs from Sta:e cf New Ycrx Allocm:cns O Interec: receNec frem Long is:and Ug ang Company c ed::ed to New Yorx Sta:o AJioccecns 83 ECB . Net casa pre /ided by non. cap @J financ:ng ac:Ntties ~3. 503 2.800 000 9 CASH P.CWS FRCM CAPITAL CINANC NG ACTIVmES Casn aciances recer<ed trem Long Istanc Ug-Jng Company, a: n0u:able to Shorenam 7,%S.200 4,511,216 Paymerns to New Yen < Power Au:norcy, annbutatte to Shorehara (3,908.319) (3a2,396) Cash paid to consunare: and etners I2 c93 739) (1 268 993) 9 Net Oash provced by cact:a1 Snr.nc:ng ac:mtes _ 338 342 2.859 827 (236,377) 219.623 Net increase (decrease) in ~th O Casm Segnning cf year 392 252 2 329 Encing cf year 5 135 9'5 5 392.252 9 9
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L t LONG ISLAND POWER AUTHORITY 000082 NOTES TO FINAf4CIAL STAT 1?MENTS
) Note 1, Organization and Nature cf Operations The Long Istanc Power Au:ncrry ('UPA') was es::.0Esned on January 15, 1987. UPA is a corporate municipalinstrumentality cf tne Sthte of New York (the ' State'), consutut:ng a 00cy cercorate and cohtic and a pclitical subcivision of tne State, created by Chaoter 517 of me Laws cf 1985 (the 'UP A Act),
)
Under the UPA AC:, UP A is author:ced to acquire, tnrougn neg0tiated purchase, tender ctfer, er exerc:se of the power of em:nent comain, all or any part of the secunt:es or asse:s of the Long Island Ugnting Comcany ('ULCO*), provided UPA first determines that su;,n as;u:sition would resurt in rates that would no: De nigner than tne rates ifmt wou!d te enarged by ULCO il Such acquisition d:0 COI cCeur. ') Under the UP A Act, UPA is further authonzed to undertake the fcuowing ac ivities, amcag c ner things, within its service area: to assist in tne development and implementa:icn of 00nservat'en and Icad management cr grams: to facec:e tne development of cogeneration and attemate " energy production fac.iities; and to serve as an advocate for unl;ty ratepayers. UPA's service area is composad of Nassau and S 2rfolk Counties and the perton of Queens censn:unng g ULCO's francnise area. UPA is decenden: ucen the State for apprepnaticns to meet its tuac;ng requirements. Sta:e accropria:icns are subject to acproval eacn session of the State Legista:ure and do net cons:rtu:e a legacy en'creeacre cc:iganon of the State: Eccording:y, UPA has no assurance Ina: rec;uired a:preeria:,cns will be made beycnd the current State accropnanens for UPA's y ct:enating expenses. An amcunt of 5990.000 was accroanated by the State to UP A in the State Budget for U?A's expenc'tures ceg nning Aon! 1,1990 in furtherance cf fts statu ory purOcses. However, the funds wera nct aHocated to UPA and, merefore, no remittances were recetved. O n J aty 17,1900, :ne Orvis:cn cf the Budget of the State of New Yorx ins:ructed UPA to use interest earned and cctiected as cf Maren 31, 1990 in the same manner, and for tne same put:0: es as acercona:ad funds of the State. Cumu: awe in:erest eamed and cred-:Od to New g Ycrk State acccatscns amounted to 5400,3t 7. No amount has been accroonated for _ i 6 excenc:tures beginning Acnl 1,1991. UPA's cperanens are funded safely by a30cenons of L'PA's State accropriations, excect tha: UPA'e Costs Ann 0utable t0 the trans'er of Shorenam to JP A dd to as cv nersnio, pcssession, maintenance. decommiss;on;ng Or cismanthng of the S'10renam Nuc9ar Power P! ant will be g reimcursed t.y ULCC, uncer the Amenced and Aesta:ed Asset Tramfer Agreement ter,veen - ULCO and UOA, whicn provides for Ine t an fer of Storeham to UPA (see Note 2L Such anncanons of UP A's State apercoriacons recrosent advances from tne Sta:e paid trem tne Long l tstand Power Au:honty creation and centngency fund in t90 m:scellaneous spec:al revenue fund - 339C5 (the 'Punc'). The Fund consists of payments made by ULCO to tre State pursunni t0 ULCO's gross receipts tax cohgannns. I In accordance with a Recayment Agreement between UPA and the Direc :r cf the Budget cf the State cf New York ('Fecayment Agreement *), UPA is reagired to repay to Ine Stato (De total
' eng:nal pnnc: cal amount aiscursed by the Sta:e to UPA, without interest. pursuant to tne UPA t Act. This amount must be repaid by UPA: a) first, from the proceeds of the first issuance of UP A Senda 0; second, from any ' excess revenues
- fas dehned in the Repayment Agreement) denved from UP A coeraaens anc/cr investments, and c) Ini*d, ;f suffic:en: band proceec: cr excess revenues are not avadatie men Dy the dehverv to tne State of non.interes: beanng bcnds wMn are du!y quinariced, issued and executed by JPA ('recayment bcnds'). UPA f recayment ^cenes are achcut recoursa to !ne assets of UP A except to the ex' tent tha' UPA nas scurCes Cf funOs avadaO!e frOm :ne croceed3 cf tne first :ssuance of UPA bencs c 'rtm any excess revenues denved from UP A CceratiOns and/Cr inves*ments.
o . 000083
, NOTES TO FINANCIAL STATEMENTS I
Note 2. Settlement Setween the State of New York and ULCO and Transfer of Shorenam to LlPA O On February 23,1989, ULSO and me State of New York, entered into a Sen ement Agreement to resolve the controversy ever the Shorehart. Nuc! ear Power ?! ant and power suce;y issues affect:ng ULCO and its customers. The Sen!ement Agreement contemplates, among other things, the transfer of the Shoreham plant from ULCO to UPA for $1.00; the payment cy ULCO of au Costs Attnbutat;e to UPA's ownersnic, possessicn, maintenance decommissioning or cismamling of me Sherenam pfant, inc!ucing any of UPA's admin:stratwo and general cesis O cirect:y related to Shorenam: anc the determination by the New York State Puo!!c Service Commission (*PSC") cf just and reasonacte rates for ULCO. On Acn! 14,1989. ULCO and UPA entered into the Amended and Res ated Asse! Transfer Agreement (* Asset Transfer Agreement *) under unich ULCO rederated its agreement never to cperate Shcreham anc to transfer the p! ant to UPA. Seth the Settlement Agreement and the O Asset Transter Agreement have been accroved by UPA's Scard of Trustees ano ULCO's Scard of Directcrs. The Agreements becarre effectNe on June 23,1989, when ULTO's sharencicers voted to approve tnem. ln accordance vn h tne Asset Transfer Agreement. UPA and ULCO have also entered into a Tia. Coooeration and Reimoursement Agreement CSite /sgreement*) en January 24.1990. AmOng O cmcr inings, tne Site Agreement estactisnes me soecs: mechanism for utCO to ocevide payment for a!! Cests Attnbutade to Sncreham (as defined in tne Site Agreemem), inc!ucing such cests incurred prict to January 24. 1990. UPA has a so entered inic a Mcnagement Services Agreement wen me New Ycrk Power Authomy (*NYPA') en January 24,1990, which specifies the manOgement and technical seraces NYPA will provide to UPA in connection wrth the license transfer, maintenance and deccmmiss:cning cf Shorenam. Scth tne Site Agreement Q and the Management Services Agreemei.t are in eMec . As recuired by me Site Agreement, UPA nas es actisned two reimtur;ement funds, ene fcr Costs Atmbutac'e ;c Shoreham incurred cr to t:e incurred by UT'A and one for Ccsis Armbutaale to Sherenam :ncurred er to be incurred by NYPA and by U? A Third party Succliers. ULCO is recuired to acvance to UPA for deces:t into the reimbursement 'uncs amounts ecual O to mree memns' crejec:ed costs. U?A has sete autncnty to invest and to cake disbursements ficm the reimbursement funds, a Note 3. Summary cf SignJeant Acce,Jnting Poiicies Q Acccunting bas:s: The financial statements have teen precared en tne accrJai basis Of accounting. Investments in U.S. Treasury Sips: O UPA invests avadab!e State accrecnat:cns and Sherenam-related funds in U.S. Treasury Eli!s whicn are camec at amcrit:cd cost which apercx mates market value. Under an agreement between UPA and me State, allinvestment inccme eamed by UPA cn cs State accreenated funcs. (except as dsc:csed in Ncte 1), is cavacle to me State. As a resu:t. disccunt eamed is recorced as a tiab&ty to tne State, acc cc income er excense is recorded in tne nnanc:a! statements. Uncer me Site Agreemer' and me Management SerAces Agreement an O trr'es ment inccme eamed en Shcrenamse'ated funcs is enceed aganst utCO s future remrnance and depesc cmigaticns. anc nc encome er excense is recorded in the financ:a: statements. O 6-
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O . NOTES TO FINANCIAL STATEMENTS Note 3. Summar/ ci Significant Accounting Pcilcies, (Continued) ' O Reimbursement fer Costs Attnbuincie to Shorenam and awances from L!LCO: Ccsts Annbutatie 10 Shoreham incurred by UPA cncr to January 1,1990 were subsequentr/ ruimburno ey ULCO and have been recogn::ed as reimtursement of expenses cunng tne year ended Maren 31, 1991 After January 1,1990, ULCO orovided for these costs in O at?vance based ucen estimates c' excencitures. The related funds received from ULCO are c!aAT.ed as advances from ULCO. Certain Costs Attnbutabte to Shorenam incurred by UP A or NWA are charged aga7ns tnesr advances. Other Costs Artnbutante to Shorenam, pnne:ca!ry cperating excense a!!ccations, are also reimtursed, but are reccgnized in the sta:ement cf coeratens.
~~
O State of New Ycrk A!!ccanons: Al!ccations recetved from the State are recorded as liatiliJes since the amoun:s are recuired to be repaid to the State in accordance with the provisions of the Repaymen Agre ement. Cepreciat:co: O Decreciation cf of' ice equ:pment and fum.ture is ca!cutated on a straign:.!ine tasis over the estimated useful lives of the as.se:s, Taxes: g UPA is a pc:Mical sutdivisien cf the Sta:e cf New York and, therefore is exemp: from federa! and s: ate income taxes. Statement of casn fic.w s: For the year ended March 31,1990, UPA adected Statement No. 9 of the Gevemmental e Accoun9ng Standards Scard, 'Recorting Cash Flows of Prcpnetary and Nccexpencatie
- Trust Funds and Governmental Enutes Tnat Use Preonetary Fund Acccuntng CGASS No. 9'), wmen requires a statement cf cash ficus be cresentec in p! ace of a statement of enanges in financ:a! ces: tion. GASS No. 9 requires d:fferent c! ass 5 cat: ens of certain casn flows from incse used cy UPA in pncr years, g Retirement Plan:
The pension plan for UPA emp!cyees is part rf the New York State Emcicyees Reurerr'ent System. The plan tenefits are provicec under :he provisions of tne New York Sta:e Retirement and Scc:al Secumy Law and are guaranteed by the State Consciut:en. The Autnerny's electen 'O participate in the plan is irrevocacte, 9 ROClassificatien: Certain amounts in the Maren 31, 1990 firancial statements have teen rec assfied to confonn to the cunent year presentation. 9 i e 1 7
g _ _ __ __
'l5-r4CTES TO FINANCIAL STATEMENTS 000065
?- it,te 4 Investments and Depositn with Financial Institutions O
At March 31,199*, UPA had cash ceposits sith ruo financ:al inst!vtjons total!ing $155.375, The cash cecesrts inc ude 526,061 cf funds restncted for Shoreham related ac:rwtjes. The amount of each depes:t was covered by federal depcsitory insurance er by collateral held in UPA's name by the pledging bank's trust civrsion. UPA is author' red uncer investment guideUnes adcoted by its Scard of Trustees to invest avanac!c monies in U.S. govemment securrties having matunties not gretter than 120 days and
- in cen:ficates cf dec0 sits trem banks or trust com0anies authonzed to co business in the state.
UPA's investments inc!uce 53.361.003 of funds restnced for Shoreham-re!ated acuvities. UPA's investments at March 31,1991, which were held in UPA's name by its authonzed bank, O were as fcirews: Maturity Amonized Dates par Vafue Ccst j_ Unrestnced investments I ;. (ncn4horeham-related funds): April 18,1991-lO U.S. Treasury cins Ju!y 1e,1991 s2.eso,000 s2.505.619 !" Accrued interest 17,946 Restricted investrnents (Shoreham related funds): April 4,1991-U.S. Treasury Sins June 13,1991 _3 375 0C0 3.334.661
.O Accrued interest 29 342 56 C25 000 55 9M 568 Note 5. Offico Equipment and Furnrture
- O- Ct5ce equicment and fumiture consists Of the fo!!owing:
March 31 March 31 1991 1990 OfSca equicment S 68.274 5 17,653 O Cfnce fumrture 48.72s 22.e47 Less, reim0ursements ( 4 243) - 72.759 40,500 Less, accumula*ed depreciaticn (19 577) I8 549) S 53 182 S 31 951 O= Note 6. Resciution cf Prfer Years' Uncertainties Dunng the years ended Maren 31.1999 and 1988, UPA entered into two consu ting contracs for services under when a porticr. cf tne amounts to be paid for censu! ting services were subiec to negettation. As the amounts to be pa:d under these censult:ng contracts were not
- O. cererminae:e. no liacility relating to tnese consumng contrac s nad been recorcec in pner yearr Snancial statements. During the year ended March 31, 1990, UPA rescNec the uncer'a:nty and caid a total cf acproximate!y $441,0C0 to tne censu!! ants. Such amounts were
! reccrced as censumng costs cunng me year ended Maren 31,1990.. l o
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.s . . . . .
.O l- NOTES TO FINANCIAL STATEMENTS 000066 l
! Note 6. Resciutlen of Priu Years' Uncertaintles, (Continued)
O In addition, dunng the year enced March 31, 1991, a tctal cf $99,544 of general and
-l acministranve excenses related to enor yea's was cetermmed te be annbutab!e tc Shorenam.
l This amount has been recerced as pncr years reimbursement of Costs Annbutacte te Shoreham for the year ended March 31,1991 O Note 7. Commftments and Contingencies i Uncer the February 2a,1989 Sen!ement Agreement be' ween ULCO and the State of New York, ULCO has ser,ted au cutstancing litiganen against UP A. One accea! is st!! pending, however, in the Sucreme Ccun cf tne State of New York, Appellate Division - Second Cepartment o ('Second Depanment) because a litigant has cncsen te pursue the maner norwitnstanding ULCO's and UPA's senfement cf that lit ganon, QCO and Werben Jade vs. UP A et al On Aen! 26,1989, a petruen, syled Citizens for an Orcerfv Enemy Poiim. Inc.. e' at v Cuomo et al. ('COEo'), was filed in the Sucrerr$ Court cf the Ctate of New Yor. , A!bany Ceumy, cnalleng;ng the Se ilement Agreement and the Assat Transfer Agreement on a variety cf O gr unds, On Juif 25.1989. the ccuq dismissed the COEP pention and spectf'caMy found inat the Sen!cment Agreement and the Asset Trans'er Agreement were authorized by the L!PA Ac*. The COED pethaners subsequemfy acpea:cd the dismissal cf their peution to the Supreme Court cf the State cf New York, AppeRate 0; vision Third Department (" Third Decartment'). Cn July 14,19E9, a pemien, styled Oc!!ard at al v h Lena ! stand ccwar Aumen'v at at O ('Conarc'), was fi ed in the Sucreme Ccun of the State of New York Albany County, cnal:e ig:ng tne Sen!ement Agreemem and the Asset Transfer Agreement cn a vanery cf grounds and added a c: aim that tne Senlement Agreement vic!ates the New York State Envircr, mental Cuairry Fewew Act, On Octccer ,1989, tne court cenied the Ocnarc pemicners' metico for a preliminarf injunction te bar implementaten of the Sentement Agreement, runng tnat pemioners had faded to cemonst* ate a predabiftty of success on the ments cr tnat they would suffer O irrecarnb!e nann accent tne grant:ng of the monen. The ccun subsecuency creered the Ocdarc case trans' erred to the Riird Cepartment, and en Ncvemcer 21 t 989, the Thirc Cecanment orcered inat tne COE3 acpeal and tne Oceard case be heard together. Scth Ocdard and COEP were argued before the Thirc Depanment on Acnl 15,1990. Cn Ju:y 12,1990, ine coun issued its dec: sic, uphcl ding UPA's autncmy to ac ;u:re O Sh0"^"' '0' 'h* ?"'0CS* C' d*CO** 3Si "'ng. C narn et a! v UPa at at,159 A.D.141 (3d Dect. 1990). On February 19, 1991, the court of acceafs grantec tne COED and OcPara pentioners' leave te acceat Oral argurnent en the acpeal ;s schedujed for September 11, 1991, UPA De!! eves that the cutccme cf the above iitiganons will not have a matenal e"ect on !!s O 'I" "Oi ' C 0"0'tiO"- Beginning in October 1989, UP A c! scent:nued es monthly ! ease of !:s New Ycrk C;y effico and consclicated its ccerations in UPA's Minecta cffice, in Fecruary 1990, UPA retccated its operaucns to larger Of*;ce scace !ccated in Garcen C;ty. O O 9
1 g ._ v
, . NOTES TO FINANCIAL STATEMENTS 000087 4
Note 7 Commftments and Contingencies, (Continue.d) O in Febrt.:ary 1990. UPA subiet their leased cremises in Minec'a. The sub-tenancy agreement requires the sub. tenant to pay what UPA would otherwise hr.ve to pay (accroximately 535.000 per annum) with six month option penocs beginning Jarvary 1,1091 for th'e sub-tenant to continue in the premises until the end of the lease (Junr; 1992). Provision is mace in UPA's Minecla lease for canceifation ucon payment cf certain declining lease termination fees, In p)
- s. January 1991. the suttanant octed not to continue its the premises after June 30,1991 In June 1991, UPA paid the lease cancellation fee cf 50.250 for the Mineola premises. The lease for these premises will therefore expire on Decemter 31,1991 Minimum annual rental expense for the terms of ine leases are as fo!!cws:
Maren 31,1992 S 190,12S d7 Maren 31,1993 162 7B3 - March 31,1994 167,934 March 31,1995 173,083 March 31,1996 44 2M U $_728165 Rental escense for UPNs c!'~ce scare amcunted to accroximate!y 5110,000 and 529,000 for ' the years ended March 31,1991 and 1990, respectivety. o. Ncte 8. Costs Attributable to Shoreham v ln connection with the Management Services Agreemen' and the She Agreement, as cesenbec in Note 2, Costs Attr:butable to Shorenarn are tuity reimbursed and suciect to audit cy ULCO, Current and cumulat:ve costs incurred thecugn March 31,1991 are as forows: 'O Pnct Year Ended A oni 1 1990 Maren 31 1991 Comutative UPA and ~hird Pany Succ!!ers:
.n Legal consu'tants $ 1,667,177 v 5 702.02S S 2.3S9.203 Engineenng consu!tants 191,291 -
191,291 Censu:: ants, other 722.312 .J,499 1,575,811 Third pany succNers - 101,846 101.B46 - Salanes and emo:oyee benents - 618,467 518.467 f General and administrative 33 SES _ 382 423 416 291 1 O.s 21534 538 2.758 251 5 392.899 ; NYPA: Legal censuttants
- 300.i20 t 18.013 418,633 Engineenng consur ants 11.C71 1,321.403 Censultants, other 1.332.474 i O.
g77,135 9 7,135 l Sa! anes anc emercyee benerks 298.898 1,153.724 1.452.s :.2 Genera! and acm:nisitanve ! 39 519 4441 Fa 483 637 j 65030S 4 014 444 _4 E64 752 ; I 53 234 946 56 7 2.705 510 C57 65 : ? 'O I, 10 - l l
3 . 000068 NOTES TO FINANCIAL STATEMENTS Note 8. Costs Attributable to Shoreham, (Continued) ) As cf March 21,1990. UPA had not determined the amount of its total sa: arf and general and a0ministratue cocis wnich are Costs AttnbutaD!e to Shoreham incurred through Maren 31,1990 for wnich rt seeked reimbursement from ULCO The amount was determ:ned and remittanco was recetved from ULCO and recognized as a reimbursement dunng the year ended March 31,199t, These costs were recorded as expenses in UPA's pnor yeant finant:al stataments. D Note 9. Restatement of Prior Years Accumulated dent:t at March 31,1990 and 1989 has been restmed by $21,111 and S35 680 rescectrvely cue to the over accrual in those years of certain emoloyee innge benefits. The effects of this restatement on the accumulated defic:t were not matena!, I . D I l i S
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t - . . 3 , 000069 UK Urbach Kahn &Werlin ec [ LN CERTIFIED PUBLIC ACCOUNTANTS t l lNDEPENDENT AUDITOR'S REPCRT ON THE SUPPLEMENTARY INFORMATiON D To tne Scard cf Tnsees Long Iswid Power Aumcrity g Our audit was made for me pumose of forming an opinion on me basic f.nanc:a! ::a:em taken as a wnola. The supplemorr:nry irformanon for me yea.* enced Mac 31,1991 is presented for purposes of addb0nal a,WJ and is not a requ:rted part cf me tmc finarcal s::rements. Sucn treem~ won has been subjec:ed to the aud:tng procecures applied in me aud:t cf t+1e basic financial sta:eme.~s and, in our ocinion is ' air */ s:med in El mzenal respc in retron to the tutsic fr.ancial sta:ements taken as a wtcle. D v hs /h k- dbjY'T V New York, New York Jufy 12,1991 R D l I 8 l I
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- 000070 $$,
LONG ISLAND POWER AUTHCRITY l COf4SULTING COSTS AND GENERAL AND ADMititSTRATIVE EXPENSES ' l; Year Enced March 31,1991 i Current Net !k Cems c oimnorsomnnt. Costs i J 7 Consu! ting costs: { D {' Engineering 5 455.322 5 - S 455.322 , Energy conservation 327,079 - 327.079 l : Accountng 40,840 - 40.S40 l !, Legal 1.129 . 1 129 !I 1
$ '324 370 Ib I
$ B24 370 5 -
- t 1(
General and administrative expenses' (p if Payto!! S 449,722 5 198.637 5 251.CE5 p Employee benefits 79.635 34.252 45,0S3 i' Rent, current 159,214 68,854 90,360 I,b , g Rent, pnor (10,692) - (10,592) !@ Telephone 12.335 - 12,335 !i insurance 6,736 2,950 3.756 jh Ot' ice expenses 13,939 6,6C3 7,336 ii Festage and messengers 7,888 3.628 4.260 (( Equipmem rental 6,685 - 6,685 (i E Repairs and maintenance 3.823 1,075 1,853 !( Dues and subsenpitens 1.214 662 552 !' ' Clencal assistance 1,323 609 714 i ', Travel and entertainment 4.784 2.952 1 B32 ;j Auto rental 8.542 5,481 3,161 ll Acvert: sing and pr mOtten 5.097 2.344 2.753 U ~ E- Moving costs 6,7SS - 6.785 i Scard meetings and trzee extenses 2.041 . 2,041 l Court reportng services 7,557 4.499 3.058 j' Interest and tank charges 1,096 - 1, CSS ti! Ceprec:ation expense 11028 - t1029 D $ 7e es7 : r3 47e s 4as 3s, j, i B i L i h c I E 13 -
il z . k .- 000071 .[; $
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. SUPPLEMENTARY INFORMATION .
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b/ v 0 ' 000072 O s. O O LONG ISLAND POWER AUTHORIU EXPENDITURE PLAN FOR O Apg:L 1, 1969 - MARCH al, 1990 O O O O Revised
'O November 17, 1969 O
~~6dT E4 '91 10:36 9144543315 PAGE.002
LEW10 & GREER, Wisa y .. o o
- D O T - 2 4 - 9 1- -.T H U 10341 Y
g 000073 q EXPEND 2TURE. PLAN 4 _I n_t r oduc tion
.The State has appropriated-$2.8 million to.LIPA for the fiscal year- 1989-1990, to carry _ out its responsibilities under the LIPA'Act. l LIPA's f ocus- and activities will change significantly as a result of the February 28, 1989 settlement Agreement and the 7
-Asset.TransfersAgreement.
LIPA's ef f orts will now be directed _ primarily at ensuring. that Shorsham~ is transf erred to LIPA and decommissioned by NYPA as soon as' practicable, and_ that LILCO complies with the .
}} settlement - Agreement and the Asset-Transfer Agreement.
-In_ addition, LIPA'will- study siternative- uses, if any, f or shoreham - encourage _ increased energy conservation y as well as
. greater development of cogeneration, alternate energ 4 production f acilities and other: least cost- energy supp
)L generally. monitor LILCO operations to ensure the company is cea ng properly managed.-
LIPA's programs and activities;for-the 1989-1990 fiscal yearfare discussed more fully in the summary that follows: l Program'and Activ(ties Shoreham-
- The - Asset:Transf er Agreement _ contemplates d
that' NYP which LIPA-and A NYPA1will enter into a definitive agreement un er will pr ovide managetnent services to; LIPAlwith - respect - to - the It ir ,' closure, maintenance andL decommissioning of Shoreham. necessary-for -LIPA to reach such an agreement-w l j E , to transfer Shoreham's licenses to LIPA. > The" AssetLTransfer Agreement;provides thatLLIPA and LILCO-shall? enter into a Site Cooperation and ~ Reimbursement Agreement, which will detail the nature and scope of LILCo's cooperation lin shoreham's closure, saintenance and-t for all
. decommissioning and provide for LILCO's reimbursemen It is
;) .cf: LIPA's and NYPA's costs- attributable transfer to Shoreh
.to LIPA's and LILCO's1 joint Shoreham license F . applica tio n.
' "' ' ~ ^ - - - - - - - - _ _ . . _ _ _ _
o e r _ 2 _ s. mam o ema, , _ ,,,, v v 400074 D LIPA and LILCO have agreed in the Asset Transf er Agreement promptly ef ter LILCO shareholders' approval of the Settlement, to apply jointly to the NRC for cpproval to transfer LILCO'aSuch NRC npprov Shoreham licences to LIPA. f.ccordingly, LIPA will work with LIPA to acquire Shoreham. LILCO and NYPA in connection With the preparation of such an B application, and participate in the NRC proceeding concerning the license transf er application. In addition, LIPA will monitor LILCO's activities relating to Shoreham to ensure the company compli's with the Settlement Agreement and the Asset Transfer Agreemer.t. 8 LIPA will also conf er with NYPA concerning NYPA's plans with respect to the closure and maintenance of Shoreham, as well as its preparation of a Shoreham decommissioning plen. Finally, under the LIPA Act, LIPA is required if any, for to . 8 investigate and develop alternative uses,any possible cost-effectsve Shoreham. LIPA intends to examina and environmentally sensitive alternative uses f or Shoreham, conservation / Load Manacement e Under the LIPA Act, LIPAisempoberedtoimplement programs and policies designed to increase the ef ficiency to low demand. 9 LIPA will prepare a comprehensive Conservation /LoadPlan fo Management guidance load manegement. to LILCO and others regarding energy conservation andTh programs that LIPA believes conservation should be and load managementimplemen'ted on Long Island as well the amou 4 funding that should be allocated to each program, LIPA will also examine LILCO's In that regard, ownVill LIPA conservation review the / lead management programs. reasonableness of the conservation / load nanagement programs proposed f and undertaken) by LILCO, LILCO's proposed (and
.# current) tunding of such programs, its management of such programb and the appropriateness of any incentive payments to LILCO to implement conservation programs as provided for under the Settlement Agreement or otherwise authorized by the PSC.
regard, LIPA vill meet with Department oflocal Public In that Service (DPS) staff, State Energy Office (SEO),
- governments and others to discuss LILCO's conservation /loadLIPA w management programs.
various PSC conservation proceedings involving LILCO, including 2 3
-..-m,- w, u ~n
V v 000075 the Energy Conservbtion and Load Management Investment Program Flan e and Bidding PIoctedings /.with respect to bidding f or demand-side management projects), to present LIPA's views and recommendations.
' LIPA will also examine the many other conservation / load e
nanagement programs implemented in the LILCO/LIPA and Development Authority (ERDA , and assist SEO and ERDA with conservation / load management program implementation to the extentI funds f or LIPA areassistance available. in the financing of conservation measures, particularly in local governmental and school buildings. G Another f ocus of LIPA's ef f orts to encourage conserva- h tion / load management measures will be in the area of public outreac LIFA will initiate an outreach and and technical assistance. assistance program, providing informa-technical tien to all categories of end users regarding availetle con-servation/ load management programs and other opportunities to save e energy e nd mone y. n nall y, LIPA will implere nt conservation / load management pregrams to deconstrate their ef f ectiveness and te enabic a comparisen with LILCO programs. ,, e Coceneration and Alternate Enetcy Production Facilities the LIP A is f urther empowered under the LIPA Act to f acilitate j development of cogeneration and alternate energy facilities. To that end, LIPA will participate in sae various PSC proceedings ef f ecting the development of cogeneratio hvoided Costs and Wheeling proceedings. LIPA will review proposed non-utility co' generation and alternate energy projects and work with developers in over- LIFA 4 coming obstacles to the development of desirable projects. will also analyze the potential for LIPA accistance in the financing of cogeneration and other alternate energy f acilities. Electric'and Gas: Resource *Plannina LILCO is tequired to consult Under the Settlement Agreement, with and seek the advice of LIPA in developing a least-cost power LIPA intends to review LILCO's progress on the supply plan. development of such a plan and offer suggestions as appropriate to the company. 9 O
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000076 f l The Gover ror has established by executive order an in-p tegrated energy resource planning process to be jointly imple-mented by SEO, DPS and the Department of Environmental Conserva-tion. LIPA will participate actiVSly in that process.
~
penitoring the: Settlement LIPA will review closely LILCO's activities in order to determine their consistency with the settlement Agreement. LIPA also plans to examine on a continuing basis the efficiency and ef f ectiveness of LILCO's management of the utility. runding Allocation Approximately $376,000 will be needed to pay the salaries and f ringe benefits of L1PA's projected staf fing complement, which will include a total of ten f ull-time positions. Approximately $226,000 will be needed to cover the Authority's - capitel and operating expenses. D Apprexima ttly $1,092,000 has been allocated to pay the f ees of consultants, many of whom will be retained by LIPA in order to assist in the initial development of the Authority's programs and activities. The Authority's legal fees are
$265,000 h'as bgen set asid) to pay estimated to be $200,000.
a for cost incurred for professional services during fiscal year 1966-1969 which will need to be paid f rom LIPA's current appropriation. Finally, $600,000 has been allocated for the implementation of conserva tion and load management projects. B consultant;Budce*g we expect that initially LIPA will rely substantially on the use of outside consultants in order to accomplish its ob2ectives. D Our staffing plan provides for a small staff. Thus, outside consultants will be required, not only to provide necessary technical support, but also to perform tasks that would ordinarily be perf ormed by staf f in a larger, more established organization. D Outside consultants will assist LIPA in the initial development of new programs and activities which are provided for under the LIPA Act and the Settlement Agreement. Once
! programs are firmly established, LIPA's reliance on outside experts is expected to decrease, and additional staff will be D brought on board as necessary to support individual program efforts.
B OCT 24 '91 10:39 9144543315 PAGE.006
U O . 000077 O We have budgeted the following amounts for consultants in each program area: y Conservation / Load Management 1235,000 l' O , Prepare a Contervation/ Load Management Plan
. LILCO Conservation Plans and Programs
- Analyze current LILCO electric and gas con-servation plans and programs O
- Meet with LILCO, DPS staff, SEO, NYSERDA, local gover nments and others to discuss LILCO plans "
and programs.
- Review LILCO's management of its conservation /
O load management progrees, and tl.e appopriate-ness of any incentive payments provided for under the Settlement Agreement - LILCO assues or otherwise authorised by the PSC.
- - Participate in various PSC conservation # proceedings, in:1u61ng the Energy conservation and Load Management Investment Program Plan.
Sidd2ng (with respect to demand-side management pro]ects), Integrated Planning and Home Insu-lation and Energy Conservation Act (residential energy audit and loan) proceedings involving 50,000 2 p 9 LILCo. ~
. SEO Conservation Programs
- Review SEO conservation / load management programs; assist in program implementation 4 to the extent funds are available.
. NYSERDA Conservation Programs
- Evaluate NYSEPDA conservation / load zanagement programs; assist in program implementation
# to the extent funds are available.
- See Appendix B for a discussion of the estimated time pertods for disbursement of LIPA's funds for implementation of the programs identifie
# by numbers 1-11.
S 9144543315 PAGE.007 ~
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, .(. .,. _u _ ,_. _ _ _ -- ___ lo . v v 000078 Analyt,e the potential f or LIPA assistance in the l O financing of conservation measures, particularly in 60,000 3 locc1 governmental and school buildings. \ l 00treach and Technical Assistance Program. ' Provide informatic.n to all categories of end users regarding available conservation programs and other 52,500 4 l O opportunities to save energy and money.
$392,500 l t
"" ' " I'# " !
C 9 " ** " *" ^ "" "*** D'#9Y ## l O
. Identify wayr to encourage, and remove irnpedi- j nents to, tts f urther development of cogeneration and alternate energy (such as resource recovery) '
pro 5ects.
- Analyze the potential for LIPA ascistance in the financing of cogeneration and other energy $25,000 3 facilities.
. Review proPored non-utility cogeneration and
- O alternate energ* projects and assist developers 50,000 5 '
in overcoming C.;stacles to the development of those pro 1ects. l
. -Par ticipate in PSC Bidding, Long-Run Avoided 1
I C sts, Wheeling and other related proceedings 0 if f ecting the devcicpcent of cogeneration and 75,000 6 alternate energy projects on Long Island. i
. 4150,000
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eov-str sor v w , l V v 000079 Electrse and Gas Pesource Planning
)
, C.eprehensive Least-Cost Er. orgy Plan.
i
' - Consult with SEO, DPS, NYPA, LILCO, local gov-ernments and others regarding Long Island's energy needs.
)
- Analyze electric and gas denand and supply pro-Sections of LILCO, SEO, DPS and I;YPA.
- Provide advice to LILCO regarding its develop-eent of a least-cost plan and review the LILCO 175.000 7 f plan,
- Examine the benefits of, and impedirrents to, the extension of LILCO's retail gas distribution 25.000 8 syster to eastern Long Island.
. Integrated Energy Fesource Planning Process.
- Fer ticipete in process to be jointly in-plemented by SEO, DPS and DEC.
ns
* . Legislative and Administrative Acti
- Develop and recomnend legislation or administrative actions such as changes in PSC regulatory practices necessary to f urther the impleeentation of conservation and demand-side 6
F ranagement programs and the development of cogeneration and alternate energy production IT00,000 f fattisties m
-7 i
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c;4 J.sz,,77;;L 7ggg rEwro . , yc, , , o V , v 000080
# Eleettse and Gas Fact 11 ties and supplies .
. Provide commen*.s to LILC0 regarding potential NYPA pro 3ects.
. Approval of specific NYP Energy Pro $ects.- Consider how NYPA prop LIPA's least cost energy plan or otherwite meet Long Island's energy needs in an environmentally sound manner.
. Help secure Federali State and local licenses andother app and gas f acilities and supplies (including Canadian gas) needed on Long Island.
3- Shoreham 2nvestigate and develop alternative uses, if any, 1150,000 9 for the Shoreham plant. 3 Monitor the Settlett.ent
. Review LILCO consistency with activities to determine the settlements their in participate PSC proceedings to ensure LILCO's rates are the lowest reasonably possibles examine the ef ficiency 3 and effectiveness of LILCO's management of the (200,000 IC utility.
Conservation Projects
$200,000 1:
3 Develop conservation / lead management projects "TGUDN0 3. e 1 g ,' 3 jy .44g y '~ g g pg
V 000081
- S affine Budcet j
We have identified 10 full-time staff positions for LIPA in
. 3989-1990. Eight of these positions will fill a broadi range ing twoofare set
, legal, analytical and administrative needs; the rema n aside f or secretarial staf f.
9 Five of LIPA's ten positions are existing positions (Executive Director and General Counsel; Vice President, Administration and Pubite Affairs Executive Assistants and two Administrative i Asssstants (secretaries)). O 'the Executive Director and General Counsel is responsible f or maneging LIPA's day-to-day activities and serves as LIPA's chief legal advisor. liis current salary is approxinately $97,300. Tre Vice President. Operations, assists the Executive Director n pol;cy retters, and is in charge of LIPA's internal administrative The O duties, as well as its community relations and communications. annual salary level f or this position is $62-60,000. (Financial Analyst) is responsible for The Executive Assistant handling LIPA's payroll, menaging its bank accounts and arrangenents, per f ormi ng its financial reporting requirements, conducting its O accounts payable, preparing its budget and expenditure plans, nanssing its investments and relat'ed reporting, and assisting LIPA's outside accountant regarding LIPA's internal accounting. The annual salar y level f or this position is $54-72,000. Five additione' positions (En/gyf.onservation er Po er JA alyst: O as System Analyst:4ttorneys and %dministrative plant specialists The f ollowing is a svemor y o Aide) would be added to LIPA's staff. the tasks of the five additional staf f LIPA intends to hire: An attorney would be hired to represent LIPA before .the PSO and other State agencies in connection with a wide variety of LILCO o matters, coordinate court litigation involving LIPA, oversee LIPA's legislative activities, assist LIPA technical staf f in developing and { implerenting programs, including LIPA conservation projects, assist in the evaluation of alternative uses for Shoreham, and help nonitor 0 the Settlement. It is necessary to hire a very experienced attorney P since the Executive Director and General counsel will be primarilyThe salary level for O responsible for the management of the office. this position would be 472-90,000. A power plent cpecialist would be hired to evaluate propoced independent power projects on Long Ictand, including supply biddingparticipate in P O proceedings regard 1ng new power supp1Los,and planning proc Shoreham. l O
~OCT E4 '91 10: 42 g3g e,4333g GAG [ Ott
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y - v v 000082 3 An enetgy conservation analyst would be hired to help evaluate LILCO's energy conservation plans, participate in PSC and sEO j conservation and planning proceedings, and help determine the ! conservation projects that LIPA should fund. O- I A gas system analyst would be- hired to assist in the evaluation of Long Island's gas system needs, including increased use of gas in . cogeneration and other power plants on Long Island, the desirability , of expanding LILCO's gas system, and the use of part of the Shoreham plant an a gas plant. 3 It is necessary to hire very experienced technical experts (power plant specialist, energy conservation analyst and gas system L7pA at analyst), since they would be responsible for representing meetings with LILCO, State and local agencies, the legislature and the public, testif ying as necessary in administrative proceedings
- C) and helping select and oversee LIPA's consultants. The annua) l salary level for these positions would be $65-80,000.
An administrative aide would be hired to purchase supplies, furnitore and equipment, administer LIPA's consulting contracts, - oversee its employee benefits program,. handle its af firmative action responsibilities, assist in the preparation f or Bosto and Cor.mittee meetings, and draf t its annual and other reports, among other l tasks. The annual salary level for this position would be ,
$30-45,000.
We plan in the f uture to move LIPA to a more permanent , O organirational structure, by adding .nore $unior level staf f to support certain program areas, and by gradually reducing LIPS's i rehance on outside consultants, i The attached chart (Appendix A) lists each of the proposed staff positions. We have estimated total salary costs to be 4 i i spproximately $292,000s on an annualized basis LIPA's total salary costs would be approximately 1575,000. The fringe benefits O . associated with filled staff. level is approximately 476,800, 4 1~ brirgirs total employee and employee related costs to approxinately
$376,000.
lO-O O
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., 000083 o
Outside co,onsol Budget
' We expect that LipA vill require outside counsel to :
represent the Authority as necessary in court. Outside counse) l O say also be required to perform miscellaneous tasks in connection with the implementation of LIPA programs and activities. We estimate that LIPA vill require approximately $200,000 to cover legal iees during the 1989-1990 fiscal year. O Conservation Pro}ects Bodget1 We will implement conservation and load management pro $ects to demonstrate their ef f ectiveness and to enable a , cornpa ri son .with LILCO programs. ' O We have budgeted $600,000 for these projects. General and Administrative Costs Budget Ef f orts will be made to keep genpal and administrative O costs to a minimum. However, we do expect. that there will be certain start-up costs associated with LIPA's assumption of new tasks. For example, LIFA will need to lease additional of fice space and to acquire additional office supplies and equipment. Using LIFA's prior years' expenditures as a-benchmark, we for-general and O have budgeted approximately $226,000This' amount represents- approximately administrative costs.
$36,000 of general and administrative costs person during the whtch was the actual overhead cost per statt!per staf f person,-
period ganuary 1$, 1987 - March 31, 1988, LIPA's first year of operation. Again, ve would expect a decrease in overhead costs O per staf f person as LIPA begins to establish itself more permanently in its new role. Fiscal Year 1986-19891 Costs *3cdoet LIPA incurred certain costs during fiscal year 1988-1989 for professional services provided by skadden- Arps, LiPA's- .O . securities and acquisition counsel, Lasard Freres, LIPA's financial advisor, and Merrill Lynch, L1PA's transaction advisor, which will need to be paid from LIPA's current appropriation. We have budgeted $80,000 for Skadden Arps, 485,000 for Lazard Freres and $100,000 for Herrill Lynch for <O that purpose.
- O E w,,, % c
o o v - wr.)- v t O v v 000084 , O' BREAF.DOWN OF PROJECTED COSTS *
- 6. J FISCAL YEAR 1989 - 1990 l 0
PAYROLL AND EMPLOYEC-RELATED EXPENSES
$292,000 Payroll Regular 4,331 g Payroll - Overtime -(10%) 2.920 .
Payroll - Vacation (14) J6,t196 Fringe Benefits (26.3%)
$376,047 Total Payroll /Erployee Expences
- O CONSULTANTS AliD OUTSIDE COUNSEL
$1,092,500 v Consultants Other Consulting' Services 24,3006 '
- ~ Accountant - RafaBay & Ternpesta 10,375 6,000 /
~~ Independent Auditors - Price Waterhouse .
-- UDC Administrative Services $@7I
$200,000 V O outside counsel 11,333,175
~
Total Consultants and Outside Counsel $600,000 / CONSERVATION PROJECTS , O
-CORPORATE EXPENSES ,
capp1 * !mpr oveme nts 14,312 u r na t u r e 11,750
--Equipment
$26,062 -
O sub-total L
- See- Appendix C f or a breakdown of projected costs for each cate o--
by quarter. O
.. 49 ucw o c. comam, m, _
oor-24-oi Tsu
- v 000085
) _ Oy rating Expenses 4 $102,600
-- Rent 13,329
)
-- Telephone /7elegraph 11,475
-- Office Supplies 14,472 and Stationery 8,866
-- Printing
-- Postage / Delivery /Hessengers 6,274
-- Employee Travel & Heal Allowances 1,562
-- Data Processing 600
-- Temporary Employees 1,200
) -- Dues / Memberships / subscriptions 3,150
-- Equipment 6 Rental 14,716
-- Repairs & Maintenance 2,400
-- Insurance _ __19,07,0
-- Board Meeting Erspenses
$199.716 Sub-total
$225,776 V Total Corporate Expenses
' $265,000 F2 SCAL YEAR 1968-1999 EXPENSES 12,600,000 TOTAL-EXPENDITURES, 1969-90
)? i I 2 1
. _ _ _ _ y , ggg g,
v 000086 Appendix A J LON3 ISLAND POWER AUTHORITY STAFF POSITIONS s, i 1989-90 FISCAL YEAR 1 l
" ecutive Director and General Counsel ssistant Counsel
, .ef ace President-Opez a tions Energy conservation Analyst Power Plant Specialist Cas System Analyst sefi na nci a) Assistant Admantstrative Aide (Executive Assistant)
;,,,4ecretaries (2)
O O O h/ i C)-
)
a m k a g J '91 10: 45 9344543315 PAGE.01E g wa .ac t tuA t
U v 000087 l n v l Appendix B 1 O sotes to cont,oltent Expenditores i o
~
l LIPA expects to select a consultant in December to prePate the'Ibn w ' Conservation / Lead Management Plan, We have assumed la January and take three conths to conplete.190,000 in February and 190.000 disbursements oi $55,000 in January. in March, n v 2 LIPA expects to disburse the ectimated cos'ts evenly over the remaining five rnenth period, November-March. 3 LIPA expects to select a consultant in January to analyze the . potential f or LIFA assistance in the financing of conservationWe have l eneration. lo measures in February and cog $40,000 in March. and 4 LIPA expects to disburse the estimated costs f or outreach and technical assastance evenly over the remaining five month period. Nevernbe r -Ma r ch. O 5 L3FA expects to select a consultant to help us assist developert of cogeneration pro $ects in January and to disburse the estimated costs in February and March. 6 LIPA expects to select a consultnnt to assist it in participating in PSC proceedings in Novenber and to disburse the a estimated costs evenly over the December-March period. 7 LIPA expects to select a consultant to provide naviseh to LILCO
-on its Icast-cost energy plan in November and to disburse,t e estimated costs over the December-Harch period.
!n' l benefits 8 of extending LILCO's gas system to east to disburse the estimated costs in March. alternative uses for Shoreham and to dinburse th 9 lo the period Decettber-February. expects 10 to disburse the estimated costs evenly October to March. ~ 'O conservation 11
/ load management projects in N the estimated costs in December and January.
O 91,1, Esc 31T PAGE Ol?
'be u.ot t ru n
y.,- _ _ m y -- .. y . 8 t
,. .t t
s Appendix C , P g JAM-MARCM_ OCT-DEC _ JULY-SEPT _ I
'i APRIL-JUNE _
,l 144,000.00 58,000.00 50,000.00 40,000.00 1,237.50 -
( ' s 0 PDyroll-Regular 618.50 1,237.50 37,872.00 1,237.50 10,520.00 1 Pcyr011 -Over time 2,920.00 13,150.0C tr Pcytoll-Vacation 15,254.00 260,000.00 432,500.00 , Fringe Benefits ': 6,075.00 *: Consultants 6,075.00 6.075.00 6,075.00 10,375.00 r. KOrabay & T6gtsta : , I Price Waterhouse 3,000.00 3,000.00 50,000.00 [ ! 50,000.00 UDC 50,000.00 - 50,000.00 600,000.06 U Outside Couanel 26.062.00 ( I Conservation Pro M ts ] 49,929.00 T Capital Improvements 49,929.00 g 49,929.00 49,929.0C Operating Expenses
- 265,000.00 1,758,050.50 FY 88-89 Espenses 417,142.50 j" '. 438,391.50 186,415.50 2,800,000.00 :
m
- TCitALS O ~
- c, ~~ a , n caAnn TOTAL - o ,. o ,; CO ' G3
is ef v _ u .. , i ,, r r T .s a , n , m mm ,,,, .o W 000089 I v
- o i
O. July 20, 1990 O Ry.Jacaimilm-Karl J. . LaPointe Records Access Office STATE OT NEW YORK. O OFFICE OF THE STATE COMPTROLLER Albany, NY 12226 Rot Long Island PoWor Authority Dear Mr. LaPointe! O In the past, pursuant to the Freedom of Information Act,- 1 your office has been kind enough to provide us with copies of various (LIFA), materials-filed by the Long Island Power Authority It irc our understanding that Director of the Ludget and LIPA.all repayment agreements t t betwee
- 13. -schedul.ing repaynont by LIPA of advances made ~ by- As the the Sonly ate, mus becfiled pursuant to State Finance Law 540-A.
repayment agrooment provided to us thus far is dated August 20, 1987, and there~have since been additional appropriations of advances to LIPA made by the State Legislaturo, we would lika to know if there have been any subsequent ropayment agreements O executed by LIPA. It.so,.please advise us of the cost of photocopying so that we may obtain copics of these documents. Thank you for your anticipated cooperation. I shall look forward to hearing from you at your earliest convenience. O Yourc very truly,
.LEWIB & GREER, P.C. '
L. p 10 Michael J. Englert l MJE/c1h lCn r
- . - . . .. - . - - . . .......-..s.a..-..v-~~~L.....-
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N 000090
' " srm or mw yong l 1 OFFICE OF THE STATE COMPTROLLER ALBANY.NEW YORK
-3 122?6 l
g i MAnvi9 u. Na:Lon emeu man Any towAno v. ar C ;!;f' 7 J - stAta cowTv g S i%D SEP 0 gpg August 'll,1900 Mie hnel G. F.nglert t .O l e wla & G roer , P. C . 11 Dnymonel Avenun I ouunkerpr.io, New York 12601 RE: f R902 fill Ol n. in Mr En glert, Thn Comptroller'n Burca.J of ContrAr ts hna fut ntshed A rophympntthe 7,ong ng,oemnot bntwcon the Stato Dudgot Dirnetor antiI have bron advised by time or Authority par your retjuost of July 20 borono that thern nro no additional ugreoments with I,lPA on file with O i h" ( 'nmet rolice's Of flee. l'ho afot omentioned document ennalwir of of theDtstandard pnger and will be photocopytim phninenpled an(1- mont to you upon recolptAccordingly, plenan romit your check or chni go of $.2fs por pnge.neonny nriter, pr.yable to the Now York Sinto Coinptt O "I' M7.00 if you wish to recalve a copy. 9 Sin etM1y, .-
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4(y ed* IA P. Inta 1}d,Wda Access ottlecr .O s 5 t .O O
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- 000091 1
I b o April 25, 1991 l 6 Carl J. LaPointe Records Access Officer STATE Or llEW YORK OTTICE OF THE STATE COMPIROLLER Albany , 11Y 12236 Re: Long Island Pcver Authority
Dear Mr. LaPointe:
In the past, pursuant to the Troodom of Information Act, ,3 your office has been kind enough to provide us with copies of various materials filed by the Long Island Power Authority (LIPA). We executed understand that, pursuant to the repaywent agrcoment between LIPA and the Directer of the Budget on Auguct 20, 1987, LIPA has filed repayment bonds and/or replacement
?lcase advice us of repayment bonds with the State Comptroller.
j) the cost of photocopying so that we reay obtain copics of theno l documents. Thank you for your anticipated cooperation. I shall look forward to hearing from you at your earliest convenience. Yours very truly, O LEWIS & GREER, P.C. Kenneth F. Peshkin KTP/c1h J
..<, ,,e e c,, e n,c--
ss . - - g-, - - _ _ _ _ . _ _ _ _ .
,v O %/ 000092 STATE OF NEW YORK OF FICH OF THE STATE COMPTROt.!.ER ALB ANY,NCW YORK t2236 .O IJ ARViN u. N AtLOR PMn f6f ent f ARY RDWARDV.REGAN STATE COprimoLLt M May 7ft, 1991 O
Kennnth it, Peshkin g lewi= 4 Groor, P.C. Ii Raymond Avenuo Pnuchkcopule, New York 22603 RE: PR8841178B O , ,,, , g y , i,cshkin: I his is in regard to your recent letter, prevlonely neknowNdged, ti law , whor-chy you request, pursuant to the Freestem of Informa on information regnrding the ropnyment agreemont executed bntwoon
"'^ ""il thn IMractor r the nudgni.
~O We hnvo reviewed your request with permnnnel in our Division of_ Inyn=1 mont < nnel Cat.h Management, our Starenis of Stato Accounts f d un and the
< ' .or.iteinf or of Pubite Authority Programn and they have in orme t thnt they have no record of any ropnyment or replacornent We suggont you contact Cinudin bonds bo nv 1 ^
g loue.<t nod filed with this Offico,flution who is the Recorris Arness Office flor nelsf ress is State Capitol, Albany, Now York 12224. pne rely. I O- P berL -R, .Itinckley Roetircis Access Officer ititti <tw O
- o i 1" A 3 "ig d LEWfs a GREEM, P.O.
j L
- O 9taas m is Nor . o n
' ~~
vT L g g.4 g g, g, , Hov-1e~91 FRI 15 m_ O 000093 D v.
.O -O June 4, 1991 .O- claudia Hutton Records Access Officer DIVISION OF SUDGET.
Stato Capital Albany, NY 12224 tet Long Island Power Authority Q Dear Ms. Muttont Your office was referred to us by Robert R. Hinckley, t ller. records In the O _ access officer for the office of the state comp ro past, pursuant to the Freedom of Information Act, Mr. Hinckley's office has been kind enough to provide us with copies of various Mr. l materials filed by the Long Island Power _ Authority (LI L L certain LIPA documents wo are seeking, and I would therefore O-request that your office provide.them-if they are indeed in your possession. Pursuant to the repayment agreement executed betwcon LIPA and the Director of the Budget on August - 20, 1987, LIPA has filed repayment bonds and/or replacenent repayment bonds, together with ,O written certification of delivery-with the Director of the Budget. Please advise us of-the cost of photocopying these documents so that_we may obtain copies in the earliest possible time. am looking Thank you for- your anticipated cooperation. .I forward to hearing from you at your earliest convenience. O: Sincerely, LEWIS & GREER, P.O. O KENNETH F. PESHKIN I i KTP/ser .Of I L A.LAiciiM i c, P C, A r . h i t
e " " 000094 2 (
. Nf -
3 QT . STATE or New Yong h 9 EXCcVTIVC DEPARTMENT gg&B b osvla10N OF THE BvooTT g6 ALsANY 12724 e Cavoia N"o=
*SE'.I*
r ESC June 28, 1991 3 Mr. Kenneth F. Peshkin 14wis & Groor, P.C. Attorneys at Law 11 Raymond Ave. Poughkeepsie, N.Y. 12603 Ret FOIL file No. 91-175/29 O Dear Mr. Pochkint Please forgive ny delayed responso to your June 4 letter requesting, pursuant to the Freedom of Information Law, of O certain documents concerning the Long Island Power Authority. Specifically, you requestod repayment bonds and/or repla with the Director of the Budget. I have been advised by the Publio Authorities and Capital J- Finance Uniu within the Division of the(This Budget that the explains why records the you are roquesting do not exist yet. Office of the Stato Comptroller als documents to you.) Our budget examiners are working with the t>u t Long Island Power Authority on preparation of these records,I have boon to n they are not be ready by ready Marchat31, this time.1992, and possibly before then. V' May I suggest that you contact ne in a few months; I will check up on whether these records are ready. It is doubtful that I will remember to check unlocc I get a gentle remindor from you. Sincerely, Records Access Officer -O_
- O l- - a ., . n,n - _
'I "3 ' ' ' ' ' ' ' '* '*'
E'_', *
- N O V ~ 1 D '8' 1- "ki 1 -
D U 000095 EDWIN M. SCHWENK
)$ UTTLI PLAIN $ ROAD 50VT)(AMPTON NEW WRK 11968 D
D D September 17.1991 e Richard M. Kessel, Chairman l l.ong Island Power Authority 8 200 Garden City Plaza Garden City,N.Y 11530 Re: Freedom of Information Act Requests 3-
Dear Mr. Kessel:
Enclosed please find a list of requests, pursuant to the Freedom of Infor-mation Act, Pub. O. 84 et seg. Please respond thoroughJy to each re-4 quest by sending the appropriate information and documentation to my 3 adress listed above, If'ady request will require more than two weeks for a response, please contact me by letter to explain the difficulty. Sine ely yours. 3 fj wi i h en' af g.ymytp d c.F p i 0 391, O LFwis a GREER,P.O.
.) m. s m , ,
_-o, .. , . 0 000096 n" FOIA PE0tfE814 of the New York State Freedon et t'nder the provision Int ornation Law, pub. O. 84 et seq. , I horeby roquest access to the followingt O 1 Records setting forth the name, public of fice addrenn, titic, and salary of the chairnan and each trustee and onployee of LIPA for each of the years 1987 through 1991,
/.
A reasonably detailed, current list, by subject natt er, r ali records in the posscosion of LIPA, whether or not available O under Article 6 of the public Officers Law. 1. LIPA's financial statement, income statement, and year-end balance sheet for each fiscal year that begins during concerning, the years relating, or threugh 1991 and all records income 1987 otherwise pertaining to each such financial statenont, O statement, and year-end balance sheet. 4. The annual investnont report prepared by LIPA, purr.uant to 4 7925 cf the public Authorities Law, for1991 cachand fiscal allyear that recorris the years 1967 through beginn during or otherwise portaining to each annua) c necrning, relating, O inver.tment report.
's . Records of all bonds issued by LIPA, including, but not limited to, records showing the face value, date of issuance, date l
of maturity, intercct rate, recipient, and disposition of the
- g proceeds of each such bond.
6. Records pertaining to the delivery of non-interest-bearing bonds to of LIPA LIPA,toincluding, the State but of Newnot York limitedto to, repay state recorris appropriationsreflecting the face value and date of delivcry of each such hnnd. O' Records of all stato appropriations to amount LIPA during tonch he
/.
through 1991, including the of yearn 1987 appropriation, the dato LIFA received'each appropriation, and the dispcsition of cach appropriation.
'i - All records pertaining to LIpA's obligation anit/or taxos, with respect to the
- O L ability to nake paytonts Shoreham Nucicar power Station, in lieu ofas provided by $ 1020-q of the l
' Public Authoritics Law. 9. The verified annual report prepared by LIPA, for pursuant cach fiscalto 55 1020-w and 2000 of the Public Authorities Law, lO year that begins during the years 1987 through 1991 and all records concerning, relating, or otherwise portaining to each such annual i report. l (O .
- _ m I
R h yywxmm, . _ . 6 000097 d t, The annual audit of LIPA's accounts, by the indepen enDivision of Budg
- 10. selected by the State for each fincal cert i f ied accountant l) recordo purr.unnt to i 1020-w of the Public Authoritics LaV, h annual year that begins during the years 1987 through 1991
, sud s t . The budget report prepared by LIPA, pursuant for each fiscalto ilyear 10?n w 11 Public Authoritice Law, and 2801 of the beginning during the years 1987 through 1991 and all records h budget eenecrning, relating, er otherwise pertaining to each suc
, report.
12 The report of every external examination ofi the books andil e e:;ou nt s of LIPA, purcuant to Authorities Lov, and all records concerning, relating, or otherw se pertaining to cach external examination.
- 13. All records relating, concerning, by the or otherwise pertainingStato Comptro to each and ovary examination, of LIPA's a: ounts and bookt.,
rinking legally authorized representativo, disbursonents, contracts, leases, to including receiph , and any other records and papers relatinq funds, investment., 5 5 1020-n and 2en) nr I its !inancial standing, conducted purcuant to the Public Authoritics Law. 14. All reports concerning procurement contracto prepared by or en behalf of LIpA, 6, and 7 of during the years 1987 through 1991, pursuant 5 to subdivisions 5,
, I,aw.
14. LIPA's expenditure plan for each fiscal and all rscordsyearconcorr.ing, that begins during the years 1987 through 1992,reint ing, or othervise portain 16. All repayment agreements between LIPA and the director of of the budget of the State of Now York, as provided by $ 40-a(P) Scr.n on the state Finance Law and 6 9(e) of chapter 517 of the 1986 New York, and all records concerning, Laws of the or Stato ofpertaining to such repayment agreenantn. otherwiso relating, 9 17. All agreements betwoon LIPA and the State of New York, income relating, concerning or othorviso pertaining to investment earned by LIPA on its state appropriated funds. D
c . e c c u m u gracH th %
,6 ... ..._____.....____... . .__...______________ __. ...__. .. _ ,, , , _ _ ,, ,,_
Heat on LIPower uthority " M"s"'*" Agenev's existence questioned t'"l rac'1"'ry"a" . spaw N last two years pwpanng the Like the nuclear power plant it helped consign to obimen, the Long lo- remains ambigs.ous, its long-term po- aimed at averting a battle with state 'I** land Power Authonty ia coming under Ltical future unce-tain. Lacking either 1swmakers who new LIPA as a pnten- " " *
~ " ~ "~*""# f [ ~.1. '
fire from critics who q=sedion whethn- the clout of a mature state authonty or taal brwding ground for political nysis. ,,"g g" it sneuld be a permanent firture m ahe the popuhst mandate of a grm-nnts W1ule tendmg to Skreham, UPA g og gg [ 4 ,c. (*, local pohtical landsmpe. organization. LIPA remains largely de- also has attempted to cast itself as a as th authonty's chief spokesmari The critici=m has come from all quar' p ndent m & Mwdl dik m, w watchdog over local energy matters - a "YA if w ddn't make that our mam ters - from longtime opponents who end tb state legislators who created it. weecdthe pecple in an arena wherethe objective. it would wmd up metmg rste-fml the authonty never should ave And while no one in Albany appears pubbe seidem exercurs darvet infhienm-been cwated, as well as an.cs who wor- ready to pull the phig the divergr nt po- It is spendmg more than $500.000 to p hrMW Ward members ddo'dars'" any UPA has ry that LIPA has become htti move Iru ! interests that united to create determine whether Shoreham should be failed to promote its mission as an t inn an arm o : >vernor s o . the authority nep years ago have con- converted to a natural gas. fired power agency devoted to helping einctne rate. gh M M- ;- iheting news eGout its future. plant. It commiemned a $300.000 study payers save money. "We kw w e State Sen. James Lack (H. East that exarnmed the potential for cost-ef- more strong!y tk econ smicin portsn e other look at UPA's role. In February' Northport),one 4 the authonty a carly fertrw energy savings on long Island or upA said board member tremg MN ' edibrial ed e suppodes, says ta St while UPA could and was used to prod ULCOinto under- Uke _ "We've not given enough atten-collecti f local busine leaders mannue k wtw a Mul funen. no ginwe*Rgm*2" en*"vaten ten to getting that mesnage across." callM for UPA's outright abolition. gmnnment prueram can k & gard.d mmns it has ennnded e longtirne cntics may the prvblent in And even some staunch anti. Shore- as sacrnaaract at a time Uten tM state en for enngy-cWioency damm- not publicity, but the lack of a clear ham activists have admitted having is facmg a 24 billion deficit. "It's not strati m prorcts in pubbe buddmes on missma. Although the long Island As-doubts. "I dm't want to demean the the first egency I want to get nd d." long Island. It aim has penmised to op- sacration has not taken a formal pnmi-valuable role that UPA muld play." Lack said netly. %t if w. han to pnae UILO e nwnt nqinest fw - tion on LIPA's fate. LIA President said Murray Barba h. a busmesaman rob Peter to pay Paul. wi be it." erw 5 perwnt elactric rate increases. James Larocca, says the authonty's who helped lead the cruande agamst th Marm Cuomo saya lus support though the full extent of UPA's obre. vanous functmns muld candy be w. the plant. "But UPA has absciutely no is Tarm, but Cuomo didn't g:w UPA a twns have cet been speUed out. sumed by the ageec es such as the New pvwer. So what good is itt - Finally. UPA has clung to the notmn York Power Authonty, the Pubbe Ser-Estabhshed in 1986 to stage a hostile penny in his proponed 199192 budget. thatit nught one day mouns a takee-cr vice Comrsismon, the State Energy Of-takeover of the long Island Ughtmg a move that Assen4b_ Irwis Yeveli (D-Co., UPA instead settled for a deal that Old 11ethpage) asys is
- tantatmount to of ULCO though having faded whm fice, the New York State Energy 'e-virtually guaranteed UlfD's profit. asnneyou don't thmi they should stay LPif0 senck few tfunk wascould UPA sellmg puilitfo-olieth 3*La+ thehare, statesearch Censumer and Protecten th'emt AutMntyBoard.trw tM abihtv an an inwator-owned utahty and in existence "
And Assemb. Paul Harenberg tD- aseck now at $22. "Sorocone would have consumer dmsson of the s*. ate Attorney lea the authenty with thejob of dispo,. ing of an idled auclear plant. Bayport), who was inetrummtal m co- to take irp full-ume re=>deree in the twi- Gennare Ofrxe and the proponed Con-UPA otT.czals say it's a enacial pb. tabliahing UPA says e wdl introduce light one to think there is a remete sumer Utility Board.
"There are literally a bakee's dozen."
but one that has left the authonty legislatmn Ister this year postponing threat of a takeever." said former Suf-linuted time to promote a more secamble the first schedul*d election of UPA folk Irgit Wayne Proepact. who ence Larnan said. "I thmk one r , the prob-energy policy for for g faland. trusteen until at least November.1992 advomted a public takenver cf ULCO. Piemme me UPA on Page:S As a result, the authonty's mission - a tactical retreat at least partly if. de,pite sisch efTorts. UPA has O CO Cn
O- O O O 'O O O O O O O 3 . . . . r. . - LIPA's Continued Existence Questioned ,, UPA frcen Page G wem seated next to UILO*a lawyers, said nothing, an Essel, though, e deferneve wher M omiaaion he explams by noemg that the question was Iems UPA has had, is derning its role among and not darveted at him. "Then ere times when you walk with such entsown. "If there are geople out there between these agenoes." e nry difrecult line " hseet said. "And that was one who think we shouhl be doing less or doing more, let While UPA hos owne to espect such critiemn, it oftham. them run for the UPA board," he said recently. has also coine under Gre from seme of its natural 'Ihe di!Teculty is -.-- ,cd by the fad that UPA if UPA has an endurmg role, says Warren IAoki, allica, includmg actmots at the forefrunt of the Eght has had to devebp a ckme working relataonship with president of the Albany-bassal - toekee " -- UILO to snake headway on demmmissmoeur4 and by ning bbby,it may be se en
'h- - - - tal plan.
Pete Mamacakn, a longtasse anti 4horeham cam. the fact thet en outright attack on UILO's rate case *nd 8"
- FWagwy"W to Gnd.
paigner, says the authorrty hasm,U itself by could crpone flaws in the Gnsnaal assumptiore , m ung the cheapest means of supplying electnoty to an attempting to be too many things to too many people. der!ying the Shorehase settlement, which enes " that han the highest rates een the nataen. On the one hand, M=n=e=Im said, LIPA is promot. annual increasce of up to 5 perwnt. It,s a concept endorsed by state Se i. Kenneth La. ing a beld conservstaan program that has the poten. Ye'oli while supporting UPNs wntinued e Valle OL. Pod Jefferson), a sponsor of the orgnal t.ial to cut electne bills signncantly while reduong the . . tence, says he's amcernei that the authonty hasn'( UPAleginistson. neaf for new power plants. On the other hand, in been keeping a sharp enough eye on UILO. "Th,e "I thmk their role has to be dermed nanswly as an talking up the propwts of a nuclear-to gas conver, nhoukt ba more forceful in these rate appliestions " advocate for the recon, LaVaIIe said recently. *T sion UPAnew enormnus haspower reased thethat plant prospect cf buikhng would almost cer. an Yevoli naid. "It's one thing to samt a perfunctory let, secure ciwep energy smrres for long Island.. i ter. It's another to come up with sprofics." that's the importantjob aheed for UPA." tainly undarcut a:vy senous m. muori effort. . . - - . .
*~D.ry have a spht personality," Mensacalco said.
' **Dicy are tsIking out of both sides of their mind." Mammadco fears that UPA might omvert Shore. ham ramply to grve itself an Ir44at source of revenue-a motive bnent members deny "And from the governor's point of view, it would look good ifyou took a fachty that had been closed and turned it into something useful " Mamecalco said. UPA also has seemed inrn in its <b=Imtr" with LIU XL Although it touts itself as a guardian of retepayer interests. UPA reacted cautaously to LIILO's recent request for annual 5 percent rate increenes over the next three years. Kessei say. UPA =ill opsmee LIILO's rate request. Yet when federal regulators asked UILO cfP. sale at a rewns meetmg in Washmgton whether anyone had ' cppreed the company's rate hike request, Kessel, who C C CC CD
O 'O O O. O O O O O O O e g g1*t="'v*yn m v assmt.st sttuunnennemua v -......m..m. m . . a *
- 4 =u. - -- - --- ---- -..,
It's More "* Than Meets the Eye RRs**-' Faced with the highest e3ertne retco LILCO formulaplanwouldpush """'*Ju~1x0 m,.r ten.ed . en annual 5 p reent increase wee calcu-in the nauon and a uutity that we,as virtually openamded incremare for the 5 percent rateIn.ke even lu. er i~d ~ e w * +nd - . ' next thne years, UICO customers are ers are due to reterve under the terma of a cismo ctsen laww. sit that won e4-apt to do anything they can to redom rate formula that could open the door hike in electric retca. tlad out of court two years aan.h ac-their bille. to even larg rincreen e. &condly, while ULCO emys its eme- taal inenese would be shout oW I But as retwee Joseph Nappi discov- h propnaal in UILO's first official rent rate proposal would raise electrie of a percentage point hackr ifit were cred, it inn *t always that easy. rate hike request under the settlement retce by about 5 percent a your, the alculeted before the refunds.
' At UIEO's sugreetson, Nappi esgnad that led to the closing of the Shoreham plan actually would permet the utihty e Revenue shortfalle freen low-r-up for e program that encourages cu nuclear power plant. And while that to raine its rates even more, if empensee W electne amies would be '
tomers to eluft their electne use to oft. settlement contained no explicit roar- go up or e3cetne onI=e begin to lag. anode up by .-m .,instially by add-peak hours in return for a break on antece, state regulaters committed Among the provusons that would on- ing the shortfall to tb " mortgage" er, their electne bille. themselves to a gradual phase-in of da-able UIOD to piere its own 5 percent ifit exceeded $10 artiilion, by chargmg He used a fan inetsed oren air mnd;. ferred expenses - most of them in- " cap"are thew . rutepayers through the fuel. adjust-taoner during hot summer days. He did curred in the constructson of Shoreham
- U140 has proposed extending usent cinuse.
the laundry and the dahee at night. IIe - that will inevitably result in further- from 10 to 12 y-ars the pened over Richard Kenwl, wk as head of th kept the pool pump idle during the day. rete hikea. which its dererred esper.n=e would be etste Coneamer Protectson Board -' i After all that, his electric bill still As the PSC cpene hearmas in Minen- phased into rates - efTectively addmg chairnian of the tems hdend Powe, j went up $137 over the previous year. la today on LIILO's p.-M rate to the nearly 31 billion " mortgage" thority intends toc _"aw- elemante of The Ixing Island Ughting Co. attribut- plan, it may find itarif in the esme that m m., rill be sched to pay off UICO*e plan, anys the public may be i ' ed the increase to rate hikes and told quandary Nappi faced when ha tried to and incremung their electne bille. nessned to rate incnaaee. Neppi he'd have been charged $14 cut his electne bille.
- As in the past, higkr than expect-j more if he hadn't signed up for the pro. "There seems to be a perception gram. Nappi was not imprenned, While UILO*n plan neemsenrunatent ed fuel costa, operetmg and mainte- out there that UILO i guarante=d 5 with the settlernent, thare*e more there nonce charg=e simply would be passad percent este menesse av.e the nest
**It seems like a gnet deal orinconve. than meets the eye. on to the cuatamer 1.rTrn ha. m. - "w w-
sGene fue 514,~ i.e amad yesteruny. hrst - t>=cause UILO is entitled to posed crpandmg that hat to udsde why he expecteel s low turnout at th It muld get worse. ; remver higher fue! costa and a handful were settlement, higher hee!th care hearing. UILO has maked tk state Public of other extenere - whet was billed me costs and other empensee Othere hb Nappisempty hk for est- i Service Commission for m. _, to a cumulative 15.8 perent increene Ice
- UICO has proposed that it be al- infection i A -in his ame,emaR raise electne rates 5 = r ent in each of the first twoyears cf the settlement ac- lowed to roll mII ofits fuel c:sste into the claime court, where he's suing UI40 the next three yes s and has prepowd a tually has reaulted in a 23.2 percent bane rate - and then raise that rate 5 for hio $137 O
C C C _ C ; i - - _ - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - - _ _ - _ _ _ - - _ - _- -
O O O O O O O O O O O 6 GoingAlongon LILCO Pass-Along 65f.9 nirteen people showed up Tuendsv night for noncialplan for 1991. while the rent of Iong Island staggers under the - the public hearmg on your next LILCO rate hike. A . . . K250 mibn of Generuf and Refanding weight of the highest utihty rates in t!.e naten; Five of them were employees of the Pubhc Ser. Bonds are issa.tf at an interest rete of10perwns in w hile the rest ortong Island sufTers a ternble recco. vice Comminnion, which is the agenew that is sup. Feb.1991, to retire $m milhon of G & R Series sion that may cont 23,000 people theirjohs this yeer. poned to regulate utahties. IJ.25 perwn! bonds; $250 million is occessed from "We are in a death cpiral," said Paul lomwaky, Three were from the state Consumer Protection an extension of the company's Rroolving Credat a I ng-time public activist and entie,"and UICO Board and another state agency callad the long Agreement at on interest rete c(10 perwnf during is like a pamete. Island Power Anthority, neither of which has the the third quarter; and $100 mdison of tar <rempt power to do much for you. Two were bondsa eassuedatatotaln-stofapprur'- [***d with his elbow on the table, his chin in his hand.
"I
[ ]7 ; reporters raately 7.7perwnsin April i The rneeting started at 7. ' Ist's ace. That leaves three people I , A Thaikyou- At 7:30, the hearing offiwr asked if there was who were there en your behalf, not get-ting paid. [ In the last two yearn, rste hikes and anyone el=. who wnuld speak, and no one eine did. pans-alongs have increased ULCO bills Who knows why no one came? Maybe too many They did their best. 1 M by 23 percent.
, penple are working two jobe to make ends owet.
"I am calling on all long Island rate- UILO stock,which was traded for 53 Maybe it is the recent war in the gulf, and the payers to fight back!" said Sheldon Wie- m*
a share before the agreement with way m.hMy got with the program. Maybe om. derman of Setauket. Cuomo to ahut down the nuclear power pie are going along with any pmgram they can find De empty sesta behind him in the plant, was pe"Ne yenterday at around now, even ifit is ULCO's. Wim knows? meeting room of the Nannau Board of $23. *** Supervmors in Mineola were cool to the Paul At the evidentiary hearings yenterday, more Things have gone ULCO's way since touch. Someone had left a window open. Welle that settlement. And yet, if someone than 30 ULCO executives and lawyers fdini the "You can do it!" he said. ankt a estion utility officials don't seats in the name rwm that was all but empty the ULCO is ankirg for a 5 percent hike this year,5 like, an nomeone diYyesterday at a perend hearmg. nigh on w get ang percent next yeer and 5 percent the year siter. their lawyer stops the proceedings and complains: They are also askmg for the nght to penn on to "Your Ifonor, he a starting to hemme argumenta- a ountants They referred to many initials- FACs. you -- on top of the 6 percent a year - any owts tive here- as in fuel e4ustment clause; and DSM, which in they meur for employee health msurance, asbastos But this was at what they call *.cvidentiary hear-demand side a%.-wnt cents: RMCa, which arr removal, tar movesen, mterest expenses on money rate moderation w...Hents; and BM:n, which are they borrow and. cf courne, fuel mgs." which were held yesterdgy. Only lawyer" base fmancial components and cuperts went to that one. And we are ahead of The pass-along for interest payments is e=pecial- ournelven. it would be hard to tell ynu exactly what it Iy important to UILO becaune borrowing money meant, except that it was not meant for you and On Tuesday night. Wiederman and th- other me; and even the expert queetioners from the Put - in LILCO's No. I activity. Producinst electricity is two guys enid many interesting things. ncy said a lee Service Comminnion nometimes were caught in one of the wsys it pays for L .M money. Mont cnmpmy that made a 35.5-billien mmtake when it mintaken of unas-
./ *J.L .wwy L *uv sw =1 to pay fw d.e uf,-LG- i,us die 5ieurenam nutinar puwer piant should when this would happen, enme of the !!140 lion nuclear pow =r plant at Shoreham, which was not be rewarded with a ba: lout that promines it a 5 experts would cuchange glances and snicker.
shut down beforeit ever produced power, by agree- percent annual rate hike from now until 1999- And once, when a PSC lawyer asked what munt ment with Gav. Mario Cuomo ney said it was unconscionable that MICO have been perteived an an unkind quantmri, the From the transcript ofcupert testimony given in Chairman William Cataconinos should reenve a SS- UILOlawyercomplainedtothejudge "Yourlion-preparation Ic- tha hearings: millian retirement package;usn..inable that he or, he's starting to bemme wg ssutative he-e." . Q. Mr. BrandVico, please oatline the LTLCO fi- should shower his und-rlings with generous raines and thejudge told the g sy not to te argurnentstave. "- L d3 H C i w
s 000102 l Challenge s co me me LILCO from Page 6-. O T LILCO .utomauesny raine iu ',tes a el*tne **la l'8 tion exceed the utihty% forkasta. In some cases t}w aded met would te directly passed on to customen In ethers, it would be add-ed to h pool of exp'nditures - most of them O Ra/te/ PleR ' related to the constru: tion of Shoreham areLitcO
,that hated 'nto r ttes over a 14 year femd.
to be $as estimates.that those deferred charpe wiu total $1 binion b 1995, and it~has maked th Taxes and oilprices w)dch they can
~ ~'
hs ed into rates. lower than expected sn;;;;;ENe,at: tar,';"A:@"d't request for 5 percent increans could be scaled back s to 4 percent or leas. Or the deremd charpe could be . O Uy Kinney Wils n OM 3 u,ca into est,, mon quickjy - effectively reaue-em wartta {n,g the cost of the "rr ortgage" L11f0 took out to As state officials legan picking apart LilIO's re- cover those costs The mnsumer board,the staff of quest for higher electric rates in formal heanngs this the PSC and the lens.lsland Power Authority are week, there were indications that the utihty might expected to (de briefs next month spelling out how not need as much money as it first estimated. the rates should be at dreasul A lower than expected property tax bill for long in the meantime, everal potential changM in Island Light Co. and cheaper oil prices were among LILCO's financial piojections were identified at O the factors dacussed in the hearings that onuid con- the heanng. uLCo reduced by 818 million - tribute to the utihty's need for leu money. from $220 million to bout $202 milhon -its esti-Whether that could slow the expected n$c in elw- mate of its 1992 p'operty tax paymer.t - an tric rates remained unclear because of the complex amount thtt could po entially shave as a much as 1 terms of the rate-i.etting agreement negotiated two . years ago as part of the utihty's decnion to close the percent oft iu propo, <l tste hike.The company s Shoreham nuclear power plant. enue from "ernisaion credits" that it is entitled to Alfred laine, an attorne twenting the state nell to other utihties under the federal Clean Air O Consumer Protection luan( w refach ha chauened Act. Ahhouf.a.i h ulue of those endia is ULCO's rate request, saw the testimony as clear evi. dence that Ulf0 doesn't need as much as it has lion to 875 million . . though rnost of the revenue requested. "Certairdy there were serious quest. ions would not be realiteil until after 1995. raised as to the company's need for a 5 percent in- LILCO continues .o stand by the oil. price fom creane," isvine said. casts it prepared in ( ectober, when cnide was at an in interviews yesterday, ULCO executives conth- all t'me high. But the utility was hard pressed to ued to defend the utibty's need for a 5 percent in- defend thcoe project one under crtes examinatin n V crease, but acknowledged that lower spending fore. this week. Because t se cost of fuelis mit casts in some areas could reduce the risk of those rate ly on to customers, lower pricaa wou hikes crwping above the 5 perant tarret level. prointed inerene ir etwtric rates.
"We still need the 5 percent," LILCO vice resident in addition to tho e factors, the consumer or Adam Madsen esd. "(But) the lower the fuel costs has questioned whet her L11LO's rate of ret are, the more certain the 5 pertent is." profit, could be parod from the 12.2 penent ULCO ha asked the state Public Se:rvice Commis. proposed by the con ipany to 112 l ercent - a m
*i n * *Pprove a 5 percent increare in etwtrie rate. for duction that couM t im as rouch as 15 pegntase O each of the next three years - a figure consiste nt with ,
points from the con pany a proposed rate e. the targets established by the Shoreham nettlement. At the same time, the mmpany said it wants to a Please see LILCO on Page 37 s O O O
am P If LIPA Won't Die, Rein Is In not easy, since UPA had no track record and Uttle it's time for the Long lalraid Power Au- nuclear expertise. So LIPA has contracted with the New Y ork Power
)
WE'VE SAID on this editottal page that thority to fold its tent and go. It has Authority - an agency of unquestioned technical d one its job - defusing the controversy competence -to *1o the actual work. We'd prefer that over the Shoreham nuclear power NYPA have corr.plete control and we suspect the plant. After sboreham, LIPA is unneceasary at best. NRC would too. But Cuomo stands in the way. And But LIPA won't quit unless Gov. Mario Cuomo helps pull the tent pegs. That's unlikely; IJPA's his the process of saitching might delay the VRC by as baby. And disbanding it could add costly dclays to the much as a year.Thelonger it takes to start t he decom-decommisdoning of the Shoreham plant. There is an missioning, the more electric users (who t ill foot the D alternative,though.The State Legislature should rein bill) will pay; delay costs millions of dollars a montl . LIPA's poutical origins helped in crafting the Shore-IJPA in by rewriting the legislation that defines it, in ham settlement; now they three ways: hurt. Although the agency
- IJPA's duties should be re- - ~
/u_ .I must work hand-in hand with stricted to taking charg'e of ' 'j- h, e ULCO on Shorth 6m, it also Shoreham and overseeing its de- .
' challenges ULCO ctions and commissioning. - - i + .
g N rate proposals.UP.t chairman
- LIPA thould have a firm -
F~ i
- Richard Kessel- who made timetable for going out of busi- . , <
his poutical nkme :4 a LILCO ness, perhaps six months after ' ' ' ~ \c antagonist - has t med dow11 decommissioning is complete. his rhetoric, but ht has uttie
- All requirements that LIPA <
choice:11e can't att ack LI140 M - have an elected governing board, - in the papers witt out raising should be euminated. 1 . g '
; eyebrows at the NI C.
The various post Shoreham - And the legislati m creating s oles that ilPA'already is trying E* . . LIPA called for m elected to carve out for itself - promot- %
.#'4 ~
board,in part to r ! assure op-
'V e I ing conservation. planning Long ponents of nuclear power that Island's energy future, even gen- y) ,.. -
l J .- they'd have a vtice in the l ersting power - duplicate jobs '
- authority's actions if theNRC of other agencies.The last thing "'
- which normally desis with LongIsland needsis anotherlay. '
(. staldpubucutihtte -fecisun-er of government, doing what's . ( . .
, , sure ofLIPA now.t ow wouldit already being done, complete m reactif the elected board were with another set of political packed with antinuclear activ-mouths to feed. ists? Or with people out to make Shoretu m arn kind First, though. LIPA has a job to do. UPA needs to convince the Nuclear Regulatory CommLsion that it of political football?
g The first LIPA election, set for Decen ber, tdll al-is managertally capable of being Shoreham's care- most certainly be bypassed,if only bect.use there's taker. The authority's multiple roles don't help reas- neither time to set it up nor money t< pay ior it. sure the sadttish federal agency on that score. M UPA was created as a poutical device, a Ughtning That's not enough. If the scheduled e:ection trn*f rod for anger at the 14ng Island Lighting Co. and the held, LIPA's legality might be challenge 1 - further Q Shoreham power plant. Cuomo and LILCO eventual- unsett!!ng the NRC. No, if Cuomo wcn't g ve up 5 ly worked out a deal to scrap Shoreham and assigned LIPA, the State Legislature should rewalte the leg-3 LIPA the job. IJPA and LILCO have been working islation creating it, narrowing MPA's r>1e, limiting f, together for many months to get NRC approval to its Itfetime and eliminattng its elected beant - per-
- transfer Shoreham to UPA for decorranissioning - manently.
3 O
" ' - - -----,m.__,_______,__ __ _
o Mothball"ng Gains Favor % gmgyggttggm Poll inds residents' shift l
, .r, 3) While on the whole kng Islanders stil! want to see Shoreham O ," Mat t0 DOIA. . T*a.M5!w 7m.yg,D,pbY "?3
- plantc'* PP"d
- r'"*i"8 """'" * " d lik' ' **' th' ""** ' P "" I r w "c* ar 6*
2 reserved oa"P for future use according o'r'ai"o"- e o to a poll con j With Shoreh. am;..g ~ , Gc:'- d.'e.Lc., A , ,c.g,.g. The survey,'taken in l'ebruary, found that about half of all the c d g. . h],,j 'g Q d] leng Islanders polled favor dismantling Shoreham, while 43 per. with the Shoroharn nuclear power ' plant, , cent said they preferred to we it mothballwi. That compares with
.. the 59 percent who favored dismanthng when they were asked for wheri ghten the dioice bcN(een W.eg 74 their views in June.19&S, and 34 percent who favored mothballmg.
O *
, ;3 for possible future
- ., i e or dstnanang The it gpois aiso revealed that so pereeni of ung tsianders f,vor
, c 77;- {8jQ p converting Shoreham to a conventional gas. fired plant - although a ~v % % ;,Fi 4 . , the resulta, w hich were identical regardless of the sex, age, pohtical gg " ' gg ? ..gg , ..gg f
, . . amlietion or income of the respondents, appear to reflect httle more Tfotal .,
'34'?43*(69M51)j,. than a gut impression.
. . . .~ Larry Hugick, the Gallup vice president who conducted the sun
% g,L. g. m 3.. .. ZE!M
+
; gossey e- .
vey, said opmion appears to have shifted chiefly among the groups "N > 36 w Ga61966 <tc 4By that are most likely to have followed the inn clowly - namely I$,wfiamassau- s . - , . - : 32 # 40& S2a' 64; } older, better educated raidenta. Ye In 1988, ilurick said, it was a big peority to make sure that
}'Ser'* " *--4i'4 M @ $
- P' Q d . Shoreham didn't get on line." Now r .a the shutdown all but as- .
Male . ..4 ,_ - 36 M e52 M424 4 42 ) d sured, some resideals may be reconsidering whether the ple.nt
.- -.- should be proerved.
'Demale:
- y. m 4.32 m 35w 90.m, $8 ) " Demolishing the plant seems like a lot of waste of rnoney," said V Sggdyt::a&d.Q:g,,g"g balling Tim Colyer of Selden, one of the poll respondents, "I think by moth-it would leave open opporturdties that might come up to ,,e n f: *18gge ' -- ~.,
V 49 - ee ' : 32 +g 38 i r 05 -.: ;tTI.f renovate it for other use, or mmeday using it as a nuclear plant. But Q
- i. ;.m i 137. 251 ;r-r 50 Nagd*fs k to demolish it, my goodness, what a waste." p rq The shift in att tudes is heartening to omcials at the U.S. Depart. *
[950 +s.,_: .n v k.~,$
.. a -
Esecadas W 6n ;Ilc t. Q ment cf Energy, which mounted a vigorous campaign last year to $
.*c t %g . v. ,
1.33. W .46 o , 63 & 44Rf,p convinz Long Islanders that Shoreham should not tv destroyed. A 6M d "That's what we're hoping for," Deputy Energy Secretary W. g
%~Ykt%seg.3.f.W
~ r J .4 .DG ,de".hA"y.E..# yv Henson Moore said in an interview "That that kind of opinion
'(A40tff TIEf FDtt. For the lasset Newsday Pot, tre Gep'd change may occur."
rr [ ~O On the other side of the debate, the cludrman of the bng Island g ks) Ovarazaban canassed a I)MI#rusug( t ymeaor.oroff gtj P wer Authority says the shift may be due to misconceptions about mothballmg. i conta rews in.kne.19ee. nie maron of anor turtegg l "I think the only reason they favor mothballing is because of the l )S, add up to tuu because responses of *cnnt linouv'"hpcan erroneous information was 4 peroersage that was putpoints. out therePercerta0oa doanctq
- that mothbalhng g!weimmoneend,e,vg'
- 6. a . . W o . O m . . w;;gjjdeggy'
*~- ' -
--- e
,Y INe,ase see , POLLING on Page 26 ,58 O - - -- - - -
Qilqu}MydDVMgliR 0sqt m sE eeime h h I,mll gIrg! W84 h fn [a ta c di hg iI khIMIfd fQi !$ l
@4 4f r utev M.%sllIFUM.s%Qjl$iEfe 7p L?Pto fD fil o, e .7 4 qlp[}b- d Qe Qdh I wh v ?
b i a$ '~ I LEEd !.3MHe $s ll$?ae 1' d M o
O O O O O O O O O O O m Taking Shoreham Apart i LIPA to give regulators plan on decommissioning l "This is the beginning of the forma- And the NRC sta!T has indicated its
, By Kinsey Wilson #d4/70 -
tion of a formal relationship between willingness to retar otic cos*Jy safg
, The long Island Power Authority the long Island Power Authority and requirements, including diamantlmg
,was npcoted to give the Nuclear Regu. the Nuclear Regulatory Commission." the organization that would implement latory Commission a report tcAay spell- the utility's offssite evacuation plan.
ing out ita plane to decommissioen the ' LIPA Chairman Richard Kessel said Shoreham nuclear power plant in the last week before the report was filed in Ohale famihar with the % brie-Washington. DC. "It's like the senior mr said the NRC was unwilling to ad-Carst formal contact with the regulators drene ULCO's request for a further who will dende whether UPA is quali- prom. We've spent the last few months walkmg around the cance finor lookmg emaing of safety requirements and fied for the task. at each other. Now we're introdring a&puon.of a zero-power hcense until . While net a technical decommis- eerselves and hopefully well form a re- LIPA had presentd its report-a m aioning plan - that will take at least lationship " or which was obtained by Newsday last another year to prepare - the 46- In September the last time th* NRC week - and made formal centact vnh page report provides an overview of addressed the Shoreham issue pubbely. the agency. the path UPA expects to follow and staff members expressed concerns "Its significanm from our m represents an important milestone in about LIPA's qualifkations to take the state's efforts to assume control. ever tha plant and said they did not see' ---- ... . fl sMMe f LIPA on Page 17 of the plant. any c!*ar path" to sl-ownmissoning. First, it serves to bolster the long : Island Lighting Cols interim request l ?Our oniv communication with the state of New York is what we read in for a "zero-rmwer** license that would i The New York Times and Newsday." allow the utility to curtailits Shoreham i Thomas Murley, the NRC's director of operations and expensa Seconds it sig I t Nuclear Reactor Regulaten runarked nals LIPA's willingness M begin deal-ing with the regulators who wifi dmde I at the time. whether a pubhc authority with only [ Since then, the NRC has ofTicially recognized ULCO's commitment not
- xxicst finsncial resources and no nu. to operate the plant. although the util-clear expenence should oversee what may be the largest uuswerial dccom. ity stil! holds a full power op-rating li-mivioning propet ever undertaken in
- cense for Shoreham. Lilf0 h.ns taken the United Stata ; the fuel from the reector and has begun Moreover. the eport confirms the ,mothballing about 70 operating sys-existence of relatively low levels of con- items, including the emergency core tamination at the plant and concludes ! conbr:g system and has cut the plant's
! staff nearty in half.
that immediate decontamination and dismantling of irradisted . ystems s would be simpler and cheaper thsa en-tombmg the plant in concrete or post- , p< ming the process for several decades until the radiation has diminished, two O other optume permitted by the NRC. O
~*. W C
UR .O ,
i : w xn _ l t ) ? e NRC to Get Plans on Decommissioning mately have to assemble " sufficient l 3 ertheless believra UPA has made sub- vessel i LIPA from Pair 3 Initial itse'f. surveys reven! that the fuel - technical renources and a-i adequate or-stantia! progres . ; The board has achieved a unity it ceneisting of $60 caparate asaemblies ganizational structure" to oversee the a l tive is that it formally communicates to never enioyed when Shoreham a fate - in the caly component m the plant decommtaseonmg. llow the authority intends to deveksp 4 g ; . wa8 Up for grabs. It has developed an .evel that would requite deposol in a high-ste r en r rd eshoartive weste facility. AI! eth- such an organization is not spelled out ff I 11 *s ul * * * * * "I"# ** M + M detau.tignship ing the Shorchsm unicear power M n.c M e adwith n we rM.hnt to !wM eks in tre wport, dagh deiala fanuk P ""t*.. " d J**Ph McDo""*11 UL. I agreements with both LiLCO and the such as ther at bfar 1. Waah , Ihrn- with UPA's plans have said the au-New York Power Autheity, which wd1 well. N.C., or des in flew Yorkmensgers State thority maytoask needw! oveNYPA the pro-to provide the _ .fn t iss n a supeme tne decomissiomng. And it once they come <m The report line. acknowledges the difficul- jyt,
.mformation they can address our & has retainad consultants to examine de- The decommissioning report also quest for a zero-power heense. commissioning as well as the feasibihty ty UPA could inwin d aposing of Shor-
*"ta of converting Shoreham,to gas-firmi eham's fuel. With no high-level waste makes clear that UPA is not seeking to -
O LI to mee i ea cu "*n J 'n m . n n' ex- ta*se over the full. power operating h-tives of f Fn"a n- 6 8'a 8 wnse the NRC grantn! ULCO a year he NRC staff babl I t ** @ne. 8 "" 8 month And by'mi lune 1 id m nths egg there weld have been Shehans at the cod of a layear wait- ago, but rather a moddied license that ; LII,A should be ready to seek formal' some legitimate questi. n about wheth- ing list, there is httle prospect of dispos- reflects C.e plant's de-foeled status. pennission to assume Sho4eham s 9p- er we had a unified board that had iw ing of tha fuel at a high-level waste State nite ofFcials concluded some ti:ne erating licer.se - a step the authonty imprimatur to make decisions " Lal for at least 30 yearw Other options, still that UPA would stand a better of obtaining federal approval ha nee hoped to take before th end caid.
- You can't expect this thin ~ to to be explored, to another irxlede utility selling for use in a the fuel fw Ge tamver if Shoreham's license function-happen overnight. It's notlike app g e O year. ing rector, ne!!ing the fuel to a repro- hahi dwnMd I,rogress on the transfer and demm' for a driver's license." During the next several months, missioning of Shoreham has been slow, LIPA's report d.acribes, in gent al ceasing facility such as timae operated y m part because of f he deliberate pace at terms, the issues that the authority will in France, or simply storing it on or oft UPA will sohcit bids from engineering finns, one of which will be asked to j which the N RC has addressed the issue- have to address as it mmes closer In its to the to report Shoreham the NRC, LIPAsite. em- egend alm a year draw a @y and in part because of the difficulty decommissioning.
13ecause Shoreham operated for the phsaitee the heavy reliance it will place dataded and technical dammminmn ,g
' LIPA encountered gearing up for the y on the New York Power Authonty, ing plan.
task A year ago, LIPA was little more and e,iuivalent radionetive of only two full-power contamination is far days, which already operates twa nuclear . In atklition to coming"p wit than a paper organiretion with a frac- below the levels found in other plants, c-ever c:r both UPA and NYPA will y with thepowerfederal plants and has gmd retai s regulators. have to a-embla an orgamration to 5 tious nine member board of directors, a LIPA has tentatively decided to --move malent budget to mve r consulting fees. or decon* .minate all of ra ficactive NYPA will be respesible for main. carry mt the work, s. Make more de- g
,--wan-and virtually nu sta!T. Even now, the components at the plant, leaving it safe taining Shoreham in accordance with tailed radiatie surveys, kaar authority has only five paid stafTers and for other uses in the future.
NHC requirementa end for day-to-day nel en carry out the job, and obta:r. ;; The so<alled DECON option is one supervision of the demmmissioning. NRC approval every step of the way. i two secretaries. ULCO has agreed to make its employ. A though tne report subraitted to the {
"I think ibey are generally going in of three olTered by the NitC and is enn-the right direction." .aH Warren Lie- aidered far cheaper than d-ferring the ces available to aseret in the mamte. NRC today does not contain a preciae bold, president of the Albany. based work until radiation lesels have subsid- nance and decommissioning of the rust estimate (or the work, UPA offi-plant. And NYPA is cupected to adopt a cials have said they believa it will run environmental planning lobby. "But ed or entombing the radioactive por.
variety of UlrO's safety prtyrams for between $100 million and $200 milhon. they are limited by a very meager tions of the plant in concrete. use during the decommissioning. Among the medor sour &s of radioac- The cost of decomminaioning will be stafT ** Despite the NYPA entral rule, the Ressel, while conading he underesti- tivity in the plant are the reactor water. , matal the complexity of the job when the boifer, ihe turbine, a variety of regert is careful to note that LIPA .a- as borne - .- by UIIO he took over as chairman last year, nev-weste rtwvery syst ms, and the reacter the iritcoded.beense holder - v,nll
. . . ..ulti , money from ratepsycre.. .
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40NG 15 HAND BtlSINESS NEWS - 5/6/91
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The.:. 4c*: m .1 1;m Townsend
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LIPA OUTe SHOTIEH AM IN7 i Iq#NV{ While abolishment of anti-Shereham Ll P t .- (W 13 1391 V Authority (LIPA) is L.' .: eeN c ro by Sen, Marino. Newsdoy, LlA.h. J, .. ...a L1 Economi. Summit. supperL for nuclear power is inerensing. M S 0 oil 6 U N E.C. Dme's April 29th eever story reports'growingin. terest and respect for nuclear plants" . Net'l Acad.
) emy of Scienceo this month called for'swiftdevelep-ment of si new generation of nuclear plants to help fi Chtthe greenhocee effect*, In Tebrusryi'rcel. ..
de nt 11unh proposed greatly epeeding up the prr,ce-dure for licensing a new generation of nuclear pinnta since the US needs 250 new large coni, gas, oil or nucient plants by year 2010. Mme points out that the new push foe atomic power also gained , r
) impetus from the gulf war which focused attention ;
en Amerien'a appetite for Middle East oil, that the - thrent of climatological change could lead to cap-prechement between the nucient power industry.
. and Ub environmentalists, and that the 1)cpad ment of F.nergy has inverted $160 M to develop a new generst sn of advanced reactnrs with standard-ined designs to cut building and maintenance costs.
> Open mg Shorchnm is CllCAPEST with nu.
elene rnel 30% 1ower than oil. coal, or tas, and with Lit.CO's rates up 26% in past 2 yents, already high. est in nation end projected to double by year 2000. Opening Shorchn m in nlao SAFEST aince Itis the mnst inspected nnd tested of the nation's 112
. eperating nucient plants. Sir.ce no modern nuclear .
plant can explode, worst pcssible sceident calls for
- 2. mile evneuationi Su!Tolk County did a 10 mile p
evneustion pinn and LlLCO sn eveeuation exercise.' i ,
' both opproved by the NRC,' ' ' **8
l' Opening Shoreham is SUrtCST since illess-ens IJs dependence on foreign oil and on limited ; power lines from questionnble Canadian hydro - sources. (France no longer fenrs high electricity costs or shortages being 70% nuclear and building 5 mare plants.) . 5 Opening Shoreham MAT (ES LENSC with li NYS's Indian Point and Connecticut's Millstone I ' end Il closer to the mnjority of Li's residents than Shoreham; with Pres Dush saying *ws must safely use nuclear power
- and US Secy of Energy Watkins saying
- closing wnuld be appalling"; with edvoency by nat1 Scientists 8 Eng:neers for Secure Energy ,
t (includes 6 Nobellaurentes) and nuclear research. ers et Drookhaven Nat'l Lab (5 miles downwind); i g with support by Woll St Journal. NY Daily News. ! Forbes, NY Post. Ruders Digest, Journal of Com. I merce, Darron's. NY nmes andIJDNetes, ABLI.L1 Fed of tnhor.lluntington Chamber, LIM D A.ELIE.* j N.S fluilding Trades Council, N-S Contractors - Assn, Lift and Oil llent Institute. ' v - w ,1 With 431 pinnta in 25 countries and compet.' 1
-I ~
Ing Europe att endy 60% nuclear,will LI shoot ; ltecifin the foot by replacing its safest, clean *
~
I4 cat, and chenpest source of energy? My nnme le PAUL'lX)WNSE,NILany answers??? . f(g f gggagy.e,-,u a ,a ..w,,aan 1Icalth Care Survey ................ 511 l llospital/IIcalth Carc Guide With L e P r
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's? . ..* '.".~.* *V.*~ " Tr"rDv r r*1TVt t k. .ri%% 511d MidU $Ui1(iiifl * &dh.*] -~ . . . . . .: l * ' *$].'Ns '. ! ! : s s s*#2SE* 2' Cuts-Sought;in LILCO Rate: Hike-
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% '. PSC staff members have gone along ' -
' By Kin'sey Wilson SN. 3 J
[9 J'. 'seen~.the. fdings
,'uLCO ofncials'siid' and could not mmment they" hail'not J ing by UPA creases,over knd the Consumer Proteo.
the next three years, in tion Board call fo The utility has requested annual would hold MLCO to less than 5 per.- l arm ww.rrta part because they say it would enmur-State regulators and'mnsumer advo ' ~*e lectric. rete increases of 5 percent for cent in the ftrat year, disallow the $108 cates yesterday called for significant each of the next three years ,- an ' milh.on and thus preserve the* 10. year. . ~ age more mat +frective management.
- cuts in the eledric-rate increases re- am untmnsistent with the targets out - phase-in The PSC of deferral erpenses.
has proposed ~ giving LIUX)- mechanisn s that eirectively would sev-Opested byJhe long Island Lighting lined in the settlement reached with a total of $30.milhon -e!Tectively a' er the traditional link.between in- creami sales and higher profits. Under 7 Co. over the next three years. the state two years ago, under which t 4.15 percent increase - while the the con- PSC's plan, revenue derivc<! from I
,pof nthetestimony fdedin Albany,thestaff Public Servim Commission r* - ' LIILO agreed to close the Shorehamnuclear power plant in return for as.
e turned to ratepayers, while loanes at-
,ommended LILCO recene less than J surances.of future finandal relief. ~i..@f In its rak filing, UIEO made it clar v ditional revenue - s. 2.8 perwn ghalf of the added revenue it requested crease. .
dD.extyear, while the Consumer Protec ; thatitwould need more than 5114 Inmil.. both cases, the rwluction in HIE wou!d be made up by ratepayers..,
~ ,'
> tson Board and the long Island Pcwer flion in revenue generated by a 5 per- . : CO's projected revenue requ rementa .:. On the flip side. ULCO's profits ;* r..
l , r. , Authority proposed m ajomt filing that, '. cent rate hike w. are due to changes including revisions ? would be tied in part to the mmpany's ; l ULCO asked that it be allowed, in ' ntheforecaetedcostof fuel; reductions f ability td meet certain performance -- I n HILO recene even less. ., i f -
,QThe PSC stafTslao recommended sig- "efTect, to collect another $108 million huficant changs in the mechanism b r from ratepayers by adding to deferred 4 in the utility's estimated prope
'Arh'ich ULCO's tates are calculated, expenses--most of them related to the e paymenta, and reductions in the utili,.p. ensbie ULCO,' for ex PSC officiala say much a system would construction of Shoreham - which are ' ty's rate of return, er prufit. both as conservation without concern that the
.[sugreeting that the utility be rewarded .being phased into. rates over the next - Ihchard Kassel, who serveschatrman of the LongIsl
.4 g for ita overall performance, rather than '10 years. To cualuon the in.oact en re- .thority and executive dirretor of the woulda undermme pr increased sales.
.s. A sundar system has been adepted by tepayers, the utility also proposed that , The entire rate case is pendmg before # . -
Consumer. Protection 13 cut said he *j.
- Orange and Rockland Utilities, serving j the phass-in period be extended from was remmmending the uth sy be grant ; an admmbtrative law judge, with fur-
~ _ ther testimony scheduled fer mid-June.
about 180.000 customers upstateJ but ' .
" has yet to be tested broadly Both the PSC staff and thejoint fil- ed a simple one-year increase._ _ c _ . n, , _
in New Yord .10 to 12 yeara. 7
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! Wi..%%W. m ,Wj .44 .QT-tw Dontg gatings a 6/ l @ #@gQT ",,,,tpigyp$tn
,'+ Locatiorn in New York State and New Jerscy and their bond Iatings.
, Nm Yofk State New Jersey O
LJ#. n ! ,M,'l' p < <*WL - M,4 sy Albany Ratlas A Dayonne v
- natins A
kfg[Qk, dY - g Buffalo DBB+ Hackensack AA-h M k M h .'? I.. .
' New York City
- A - Middletown - /@
Y P d ,' m~~ ' W y /'t. g % .- "* :[.[.; . { 50cklandCoun'y , AA ' ' Newark - 808+ ms ,, Scarsdale a . a ,. O ==4 stoa'oad** : AA'1 Paterson - , .
- 0B8 View of Shoreham nucle )lant. Suflofk .* N "
BB Secaucus. +. AA.
--m A Future f'or Shore mm? ;' Yonkers mie w
- sussa county , u m
cu. BBB ' Trenton 4 .- s A. Newsday's editorial "Shoreham Inses licene, . Onntroversv Lingers On" i. lune 141 once again at. ;
- Nassau has not asked to be rated by Standard & Poor's. , ,
O tacka the raal5 a.id objectives f the long Island *
,v 7 ,.
Power Authority. Newsday'a <stitorial honrd eun- , How They Detefmine the Ratings ,
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' i t that lJPA wants to build its own i
i Itr emwer plant nt Shoreham." This is , The types of things Standard & Poor's looks at in formulating its ratings; fxtually untrue. l.lPA is only studying the poten- Econernlc, Area to be rated must have an economically diverse tax and tkl comernon of Shoreharn. Abol,utely nn dect- service base. The creation of jobs and adequate income levels abo are sinns base been made in (net,1,1pA n rstudying the important. ' u Debt. The type of security being pledged to debt repayment, ovorall debt Shor eham conversion becaue it iueq'u"nd m" "i"l7 to do no O hv uniute and becaa*e cov. Marb burden and debt history are considered. ned us to dn so. It is certainly prudent to deter. Adrninistrative. Form of governmont and its abMy to impfernnat ptans and mi ne whethat parit of the O f bilhnn Shorchnm , luffin legal regarements. Tho history of labor management relations and phnt rnutd he used in f urnish power m the future- personnel tumover also are lmportant factors. Furthermore,1,lPA a review of a Shnreham enn- Fiscal Ar examiniaton of fScal pcMorrnanco vs. the budget. Tribalance verw,n hae nhanlutely nothing in do with genernt- sheet for the main operating account is examined with emphasis on current ing a revenue enurce for the authority, in fact, I financial posrt:on and fund balances, have seen on proposals that would rererate any , O revenue for 1.tPA Any profits gnrnered from a " - "_-=="-
-nen'-m_-
Shoreham conversion would be passed on to 1.llr0 ratepnver* - not I.lPA. Finall,s, Neivsday onec again pits n Shoreham ennvermon against the New Ynrk Power Authnr-ty.propoed linttsvitic plant. linwever, these two reoposal, neither compete with nnr exclude one another. For instance. while lloltsville is planned O for 1994, a Shnreham conversion is being looked at for 1996 or later. And all indications are t, hat you could do linitsville, a Shoreham conversion, ag-gressive ennservation and r.till save LILCO rate-- pnvers millions of dollars. Unlike the failed Lilf0 policies of the past, LIP /. is studyirm all of the Island's energy possi-O bilities in an opcn forum. And our first prwnty is tokromote aggressive energy conservation.ny decision on a Shoreham conversion will 1 await a public review and investigation of all the facts. The final analysis by LIPA's staff wdl be presented to the LIP /. board in July. Prudence dictates that we weigh all the facts carefully and garner full public input before decidmg which O energy pohcies to pursue. Maybe Newsday would want to do the same. Richard M Kessel Albany Editor's Note: The writer is r*cculice director of the New York state consumer l'rotenien 13oard. O . . _ , t I l 0
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World Heavy-Rate Contender. 1. v NEWsDny 919l 'f / R f By K,nety Wilson i kfm. said nW de b traditionaDy her, M 4 stan warm enume of the city *e isolauen freno tf e rest dwhat was tkn 2 ^ y LI teeg Island not only has the idghmt etertric rates in tM West Gerranny. - J >- naisen -it*e fruhrstrial rate Tw electriaty mpparenth ranks NI for hal g InessN M had to be Wt in by e'
$ u. secruid in the a--AW wor $, jest behind gggggg ., g _
=W 2ng ==
I s% travarussion lines that origina'ert in the wenter,i part of tM ducted in April by National coon:try. That could change -
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Utdity Service of Park Itidge. PRICE OF PO'a'ER jd(*M "" " ' " ' **'d-
.f. NJ. e consulting firm that trac $s electric rates for large I" O*. M' M b-
' ,) - Cost in cents Mr kile=tatt-hour for selected mn utility customers beer , t. Id1Andlightingco wea industrial users. April,1991. M #th* "t d*'l"d" th** th highest-cost UA utility. %n the Wat Geman coal
- trubtry- makingntre there i D- $ fjI^7,\rido-E+ g og, UNITED 5TATES hieScr thn ir: r. nt other w.,e l y watt har- Cocmofideted Edi, F.een cwnW enn d New York ranked arrr>rul long Island Lighting Co. 11.09 . to home. IJrg om._
in the United States, enrong Consolidated Edison 10.63 l .re (Nw*g#M d""t y ' d'" Q "d' Phi 1adeiphia E1ectric 3.82 factors, including a evtwtsntial (** Lew. high deper.dence
. hasthe highevit residential rata Jersey Central Power a Light 3.56 8.27 " ""7 D ""* '"P"'t-
! ' in the nstaon. Pacific Gas & Electric (San Frant.isco) *" l Worlwirte. IJwo's imh2* Florida Power & Light 6.05 t,cgYt;on, ,,t rE uhis-t'i"' '**'* *"* **"d"f "7 l thectilitythatsuppliesprwer to Public Service of Ottahoca 4.15 ties in the New York i metropolitan eres to burn what was kmerly West fiertm. .
- ur whne larre --~ dal and ia-d=8tr=3 o=*"a": aruharzwt INTEINATIONAL l Y row g Western Ber)in 11.79 tori much ,,s,,,c,,,e, 11.79 ernas a kikmati bour. Engl and 6.97 m am tk M d tk h Fra.nce 6.54 h n DNY N ; "er "in-- - **'," *'t13""'t i* P eard into Quebec 4.12 . . . . . 2 r
Source: National Utility Service.
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000111 O Shoreham Re-Redux U.Se in court Vm**-~~n 4 CastEsthmate (O bar'ShuldOWn *Mcnwww mateessnaksinGItshbeg , hAJhM8dg)j ygjj 64J86 23
"' N'" "."" M6 W'd AV / > ^ /* Al In9meermt & Down O + ., .es
. an omrrsa pi jSpeuel Tads. Materiaft & (guitenect 17,309 93 The IWah admirustretmn went to fedem! eaurt for 14.b47 13 2 e
e tM tion first dthe S6weham tiene yesterday muclear power nn bierk p the btanned demol6 h Decontammeer@emarshng af Plant Entems - J3. t*6 year campec to save the facthey from t,preest ethvengtia, g D ' *^8*'@antantbng of SA34 13
. In pagers f' led wnh the U 5 Court of Appeals for the H"*a"%'d@0 Competa
, .Distret of Gokmbia, the Juauce Department ns.4 fed.
eral segulatore ahnuld not to allowed to revoke Shore. 7, .,,
' pu,,m,,,, % 3,,4,,q p gp g'pg
.* enan, a ofereung brente aid effectmly clear the way p
- for W plant's Jeetructson enhout first revwwsr:g the ~
Q *, ennronmental ennarquenroe of th dension Watts Ptteessmg & Deposa! $ 042 17 m "Feaanly the diaaasembung of W bulk of e SS A hilhon'riuclaer power plant has enviror. mental ennae. gl, 7 MaNigement & Admmetreten 101X3 $4 4 g que nm. Justxw IMartment to-ym wmte m the y
- bewf "No. . anaJyse 'if thtme coracqi encee haa bsen La~ fnaf N$clogicallu'ver & Report 'J4 03 performel " To Nuclear Regulatory Commsen e af '#
if be tourt agned to renaiOr the department'a avenu the ruhr.g Sould basw delav the er. going ; Metalaneous $ 827 37 r-a5 *m of the paant unut at least sued Oruber, at a g_ av w rewpayers of more than8400,000 e day, ' Contingecy 7,127 3g The J.sure Department's deciama to entar h emme O. . .upt-rurh4 W ene, a shore han.ferc,i .mc u. came
.a,ed eithe
. _enagmg of m, r . .,
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.m.apaa.rn to keep the Phant from bems portaanenov
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- f.u.aawoe,a,m.-o.af n ,nb,
- - c- .
- e. the Long Leiand 1.aghtmg Co =bch held r+iceur.g
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- w r ,, ) j3 - - -
- .ah we menbre mm b, e u.un,.t,sm to form.u, o,,,
pohrym,akers Co,re m an es,t t. hes . and enbeted the help e eymr.a.
. -m of S-. onte.t.a.
Shoreham closing costs going up, up' up O -
. the case puta tt 'in u'w un'"usuaJ p eau'*on ofg or'p'osin"Ow gg g ilson war, it amounta to e 13 perce it hike in electne rates m n w us e ="un a due arm to unsataapited prop-
- b. m th e sed th u of 5 opa r, Richard Keneal, eeteran ante-Shoreham crusader arty 4aa ytnents and delays in samrtng fadaral y
.stmg bcenae and the inauance of e e .w3.gradd tha ahundcar:LThe % Lays could be eserar-
"pn con oady"bosaae and amm-to be owner of the now defunct aucient PI'. hhes Lo say that Shormham a no more radmac, {roval tW by @e U $ Justim Npartmenre dwaam Oppuneena of the Shoreham shutdown were buoyed v to attempt to bhacia 4.s mecatun of h
.* by the (thng. mymg sa Aound hetp their cause consuber. than a denust s oiTaat.
b"It's an usagprsuom awant W drtw home uw point f"* *Per*L*g lamnae, a no eenary mep on Ow road eNr.
"It's very heartsnmg to see thces wonis wntaan that contammauon ns thght and ndding the plant of to shutting Even wben down the mtdear formal niant destemaanierung ge a under scoces W top of the pac,' Memo andum of uwl'anad r*'kertmty abouhin't be that engenssve 6tata '" said Waabngton tewyer James McGranary, Yn despite the low levets of anntaaunauar., skamg s a y, cureent asumstee andace.a that the long taland Q who representa the Shoreham.%ading Rmr Schuol Shoreham and transferr"ig h plant to the ter g 1. Power Authority wdl spend as snuch decantammatmg thatnet ansL Scienusta and l,r.gmeers loe $arurs iner. land Power Achnty, Om agency Kmamel heads, in Snoreham - obch uterow for the equmlent of gy. two groups optweed to dammnuasotung proving to be anythms but theap Already, the enet of only two days at fuD p&oer - ma osany uubuse plan The Jus. ace Depart. ment e precure m the came was the shutdown appwt kholy to top $1 bdhon. to spend derosanuamonmg ph nas that have operatal ammedannely ameaaled by the state and L!LCO, wbch That's 3:26 stilbon more than state officiale esti- for 40 years are work 2ng teether to shut the plant down. mated it would enst when the eve) was evuch m toep PNiedelpha Eleetne, for e <mmple, whic.h overs ae "The Juauce Departfreet's act4ons wdl only sem u Shoreham from opmbng - an amamt the long to. Tw plants aimdar to Shorehe e, has told regulatnes t delay further the pn=ene of reduema cua at Shore.- Land bghung Co wd! han to borrow from na creds. enit ~
neeet $163 sullen to dea mm.emen each piant ~ at Lors, at ari saued not to ratepayers of about $30 eul-Pleaam ese SHOREH AM en Pap 27 bon a year enr uw nest 40 yeara Vw.ed anohr Phonae see S WTDOWN on Page PT O O O ,
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- n ES. Sues to Stop Shoreham Shutdown 51106(1:11et fnem Pap 3 O9 last month's decanon authonsmg the annumews t.f a Justice Iseparwent al=> i. mvuived pee a.on.nir i, cease osid s>>o. the ut.hiyto betnn t..yere fur ihe she w .. ..gued that an revirue.
'; h.,n - co.. u.no como .and m a state,.eni. ***: we -~ d a rma os -r- - -aa e d -ai
- ac e "Ulf0 ratepayne will omd up beartng the financial ang Wt it would never agam generata elenncuy as a proves the actus: method I y =hei;h the plant e111 be burden d this deav - muclear powei plant The decioson aW cleared the d.emm.a.uoned in ad&uo o the mmmaasion has not, if the assuaner af the pienemason only.luonae were
- 7 I NNC ***'deret:en of ULCO s request to ed that 1.nf0 has vowed ever to oprote the plant.
delayed by the sourt, Luf0 would be foned to cun. smnafer the plant to UPA for eventual dewmm# re ardiene rtthe outcome o gend.ng legij chalknew Slaue apendlag at present levela and poetpone m 184 hartaa Mulhos. a la eye for the NkC. easd ywur. changw in etaMrty and memtenance that the ubbty last week, the echaul dstnet filed an emergerry day that whde he wmid 3 *efer to han the Jusure had pre &cted equiJ aso alcut $40 nulbon over the #"uon with the appeals eDurt es&ng to stay the Department on Ius Side. he f Id not Inheve lu mterven. meri is snentha De utdaty currently spends minut NRC doomon untd a formal court canhenge emn on the oppremg side a vuld aMut the outcome
'Q
- 3160 mdhot a par re enom than Sm.000 e day - Irn bnad tarina, both the er.hool destnet and t.he half ofit en proprty tasse -la maantaa the plant in Justne Drparunent have argued that seauance of the argumenta not e he wrou hem." Mulhns said
. Ultimately the er art wdl kok et the legs!
w hat amounts to a mothba5ed condstson genomasson only bcense clea*e the way for tiecoromw The court could rule on the request for a sta, se
- Under a daa3 rwgousted more than two years ago, omning and thus requires a fenal environmenal re- early as nest Fndav If th. request were svar.ted. a 4- Ulr0 has agned to abandon ha effort to operate the www. In ad&uon. they have argued that the NRC formal decision en the eser te would bkel.* take unbl plant esd mateeJ transfer it to the state for eventual shauld to requand to poetpone any inevocable acuan et least Orwher lf as temnmental mysew wets or, e dowmmms omrq In return. the uuhty was aneured until aner the New York Court of Appals has ruled dmd at t.hst po4nt. the shu kwri would tw delayed at oflong-term financial reber on a erparate challenge to the shulkwa &n wluch the least arvers) more months o .
Shoreham Closing Cost May Top 81 BiLion 6H1'TDOWN from Pap 3 only a hnuted number of anos m = huh gwreer plant m upstate Twibe that demmmewomeg would te any dif the cost of the shutdown magtit be %1 ether actual decornmies:aning ferent " the end nf sta useful hf, curted nets can be hcid tetow $18t. rr.ilhon as Althourh n 'n *IV alliI the techemk'sD In the came of 6horeham. WPA han ULCO is asekir.g to revur hundreds Lir A ofhesala h% i. not cle.n Ontan ""*ld t"da' ntanunw e ombe p+
, e regged the met of decommissianmg, of mdhona in property tasca paid nn the any est nycrruna ewt enemp, am the " P I""' h** '* *** "51 * "8 h"f ""'
the pa't of the 8 l bdhun shuttkwti prv. plant ai- money at has p6edgwt in emen more bkely matrume tue W put am"ectiewnn odh d* eeuw that entasia remnemg ah radsauon in ratepavers And at m areking to huiel #"**"**""""" "" " "
"That hoe leeri the histnr3 of the nu
- O fa ro ws* ai m mu j i tNnk the numter we have estab-4- tw -t of fusi d - by . m. pmn mdu.m nn-av aar.
a
' g"= ,M,":",= st rar.ging for Niagare Mehawk Power Ken beaung d.recer of the WaM.mg- P vowatt rea tar et Shippu4tnet. I a hohed g a good. enhd, consersatige Corp s W uar the uranium ammembha ton D C based Cntacal Maas Energy that was damm nued by the U $ Depart car a'n d r o a h Yd '** **'""# *' ' " "" "* " " " * ' " " '"" *#
that humber dien la i a fart that ~~~-- 'b- * * "II""3'A un m pung O &e ina . na u um h e ! "
, g ,
e When'staw ofTenal first put together , ~ , * ** about Qn unioning b the mm l~ the dea; to close the platit three year, a ( th '8'f' tap 4,[ jg((g\ ) ,.
- et a WM the na can W ago, they admitted estimates e.>re' spec.
I ,i, il M, it T.W,.. tsg,- . Namn er M to W g mn. Lammated nei ear gewer planta ho one could predact how iong P ' ' ~ ~ - h #
- ' >O
- h Pt . @I-D mould Laae to hne up the regt.letary ap ' " ""
. no s .- iu" .n, w", crea,"nmatad e+
pmvala needed w cluma a ful!y heen*"A ready inrun nuaear plant he one had k_ , Ohi# { ment of the pl at - m one pone _ , ggg. ( In the caer , f large commert sal rear-
'N h
, any pnar empenence decomiriassonmg e fullwale commere al nector And g gg p ,,g,, % ,,,, 9 g, there was the "horeham faNr " -- 251a lcr omet eucha' $cw f#' N,* big to be mn ved antad and must tw the recosmt.on, as one ULCO offical
.(
, piaats As p& ants kated are - '; < - r NC i - ntual buna Q
- recently put at. that "anybody who ,
c as th a tiu Genera Eoctre; Boikng G ,% g ;*N1 At Shorehas i plana call for the mast
- imes away a httle j ,--- highly contar mated portions of the f 7 P Ultmiately, state ofTinals. workmg
. Ca. 'sy esemel to be e .t up under weer with enmed.atog at the and of , ' thaa ,' 't a, yn4'" S,7. .8 remote plasma are cuttmg tenia %)ule with the uulity, tbvw up plans that , i <
) ( %A p 3 s*
called for spending $465 milhon over a i gLa,Q ) , 1 =4 1} t **1 t 1 the technologs e,an't new, mdastry es-perts any n ha s never before bwn ap-arven-year permd endmg m 1995 when they assumed deromrnannorung would . t O ee,gm'~"4~'g c
#vg j.v e . i-T "m phed to the da m, ,,eanu,, manthng
,w.ei. . schof a,large uid dn., reec-be complete Another $330 mihion- i * .e A . . _ . . . up the cos; payatJe over 10 years. was set aside to h.v7* %
NEUtPE tytimalai Radianon levels also han httle im-g ease the burden of removing the piasit . .Italfif Rif .;p e menh7yf.b. tM CSU0 %g detahlfeltsalambigtogP wn w part on the er emnt of ume needed to from the tan mile. for a totaj guat< con- - rut up the vem el or the foot of the p+
$ >tugm1. _*
stnseten bill of $35 mallum -
. Baudri. oso ,
ties trecri a "Itadmact.nty s Lk, pregnancy." says Perhaps the b>ggest meacakulaten was the assumptinn that Shoreham -i O or o.n 2 uurna. m uoo min on
- Jack Kdiar. d rector of nucie=r pro-OtandCasse f grama fcr the IS Counal for Energs enuld be quickly transfered from UZO g Cortbatu E . 6200 m I Awarenees the lobby arm of the nucie-to UPA and that the 10 years of pay- Cknton t Chntort B
.h 120$ rMhon er power mdu try "There is nn auch meets mwt m Imuately evnmert of tan = would tr.atend brann prarly twoab l g g g. *
,g g g a thmir as "ahrt ly ' You either are or A you're not "
yeaes after the shutdn=n deal e as enn. U Pugnm 1 PYnouth Mass $240 muon * $horeham's maxlest rad 2ation levela tiuded. ULCO remame the fo* mal own-
" '"d Q pq g "'t
- w m' '
$214 mmon
~ 600 eunes e enpared to more than 2 O property****ta.t bdlof477
"""a'
m'*4t hon Ocmi Bnenan uo : = =on ' """a" d -' '5-"""i "" Paymenta m heu of tanes won't bch "'( '"a"ld etp contam other costa tore -- shou l m unut 1. IPA forniany tan
- P"*
O Orind(YN 1[ M ih %bbesL Salocreon I knwevec () Cooper B'ownsvee Neb S348 maison Y N
- iark emn pvhaps later INa yar. and enuit! r Ja'k Pn=*r I4 Authon rana praient e and af oneth'of t'he nM l
hr at treat $100 milhnn mnre than me P () CWer Creek g Lamy Tm. M M01 rreon l nate charged s ith ener= ens ow d..
- tuhy prutnud () Srorecem Shonenam. N Y $186 rMhon
( manding of the plant, save thv sbwnre i Despite the higher than-etperted cmt, he= met save he is confidret tha' Qp . 5
. gg g
- M ereon of any contam isted concrete and the m ',Ma N Y
- relanvely low vets of ru,ntammauon l future ra:e meressa can be held below '
W Nn' Md* P 4* . $218 minen m much of the upmg should cut down j l the annu.d 5 p trent tarpt estabhshed h BrunswO 1 SodpYt N C $227 rrece on onth dwuna immauon and dewat ,,
~
'O '* the shorehe a .^ t* n a<reemeat State regulaturs have recommended a-h ,,Y, e p, u m o.
' co ta e t- ULCO alrea tv han begun flunhmg 5*
ULCO remwe a 4 percent hise nest QJ Peach Boemm 2 . Psam Bctiom Top P23 $183 mihan some of the pip a to determme whede' yuz o hde UPA has prop >aed a hise of at can nd them of rudaoamvity redat I 6% than 3 per ent ULCO however. as eene e scepree* am incue - ear m: twt av u s4* **may,. mg the amouru .f pipe that nee 6 to b, [ w +urht m.~ tun o.ee the e-w
.~ r.,, .., n..n. i.
b iho n...iq q n. ,,
. . m .
.wp. m . he h n a.m,. e, _ g,my'e %. . . .
, % %,, rmn dfrm
- teac w ~fW l'imawes emu > ItTlM3% N *a Pnd u ys..a, . w .wws O
1 1 l l
( .. 4 s, .
)
u00113 SNoreham Costs Rising
, ISliUTDOWN frum Page 27 6
it should reduce the amount of low level radione-t!ve waste that hl.i. to be shipped to specital burial sites at a projected cost of $240 cubic foot. Omcials said other factors have kept the project-ed cost clooe to that of more highly contaminated g plants. They include higher transportation and La-tot costa on long Island, and lower pr+ctivity rates. In addition, says Kessel, with *!.oreham like-
~
ly to be the first largescale reactor ever decommis-sicedned, some jobs are likely to take longer then they would if the industry had more experience. Finally, both industry omeials and critics of the nuclear industry said they believe estimates pre-D . pared by other utthtica may be off basc. Bec..see
' utilities are required to act aside the funds they'll 4 need to demmmission their plants, there is some suspicion that utilities are low balling their esti-8 mates to minimize the amount of capital tied up, y "You don't want to lose control over any more e money than you have to," said one nuclear indus.
try official who asked not to be named. In the few S cases where utilities have had to present eclid pro-g, jections, they tend to be higher than the figures
' commonly submitted by operators whose plants 0 aren't due to be decommissionied for another dec.
h- ude or more. la For example, the owners of the Rancho Seco nu-u clear power station near Sacramento, Calif., which E was shut down in a voter referendum after more than a decade of full-power operation, have told federal regulators they will need $281 million in 1990 dollars to demmmission the facility, accord-ing to spokesman Scott Mackey. Even assuming Shoreham's estimaur is more ae. curate than those prepared by most other utilities, a number of uncertaities could drive up the cost. g Finally, any significant delay, either in obtain-ing regulatory approvals or in the decommission-ing w'ork itself, would extend the time the work-forte remains on the alte - a cost inat already is expected to consume 54 percent of IJPNm decom-
; missioning budget.'It's a terrible tradgedy LILCO was allowed to
- ontaminate the plant a'. all," Kessel says. "I think 3 t's a shame we have to spend all this money on a ,
.lant that is barely radiose,ive. But you can't walk Yf rop it."
i ,.
),g , y gg g
......... _ .. . = ....._.
9 D l t_ - _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ _ _ _ _ _ - - _ _ _ _ _ _ _ _ _ -
-- - - - _ _ y.- ._ _ _ _ . - _ _ . - _ . . - . . .
. . . .m
*~
- failedtometre4efollowme,wneeboard .
- By Kinsey WHson emrewerme Agency?s existence questioned '
memh.re y s ewel, - m ,i_ spmt the last two years preparing the '
- l. Like the neeleet power plant it - E' " I
. helped etmke to oblinon, the lang le* tememe esibigtsous, its long term po-- sented at swrting a bottle with state -
- l l land Power Authardy in teming under litied future uncertem. Imeking eithee . lewmakers who v,ew UPA es a poten- """ en a heedhne W.
l rue frem mtsce =he gesution whetlwr the clout of a meture state outbesty or - tiet breeding ground for polRiemi revole. "' A ** While tendma to SNeehem. UPA l
.-it should be e W._ ;; risture on the 4 the populist mondete of a grass roots P" I(* organization, LIPA remeine largely de- algo has ettempted to cast itself as e y 9,"g 7 p" l g pendent on the gocalwill of tk governor watefwing owrlaceiencery meHers-e y4 ;g ,,e didn't unde tht w - .
p , _ gy, , gg,g ;,,, yy g . and th* state legislators who created it. voice of the people m en erene where the % ,R M seind w W e
, M while no one m Albany apreers pubhc seldom escrevses direct influence.
Other
,,;g;,,,,gg-licard _ .. 6 any UPA has .
g gg , g u hedsvngmt& R is png munh M,N UPA has l,ittle htical interesta t t umted to create determme whetherSL 'c ohould be feited k preewte ik mie a en {th ,gg ifra ty E n years ago ten- an plant It--.. a notural nd 3"" esecy devoted to helpmg etwtric rete. e 5300.000 study ,,,,,,,,,, ,,,,,y, w , w ,, g % g in,9 January, Senate "g,db..; sug- .g , flicting Stete Sen. newsJames about Lock its 'uture. (It-Esot that enemined the potental for ast.cf- ,,,,,,g,,,,,gy w ,,,,,,,,,ge g g other look et UPA's role. In February, . Y I"** ""ET **'iac ** Idat 888"d 1 of LTPA omid heerd memher Irms both Newsday*e edstonst page and a . NOP0") *ae =hkdthe WA **O*'HY could and 8 weeearl Me prmt UWintoW g3 , ."We*w not given enough atten-cellection of local beeinese leaders ~'r"h,myscontinue to serve a useful function, no taking more aggrmve conorrvetsen tion to gettsag timet memme= emima? called fw U*A's 6 h. governamt progrann enn be regarded pmemme. It has earmerhed methw lesnatione critsu any the rev'rleen is And even esine samencia enti-Share- $600,000 for mergy.cfUcwecy dween- aut publicity, but the lack of a dear he,n activiste have edamitted having asisescrusenct fedng a 36-billion et a timedeficit. whers*lt's state stration propste in pubbe buildmgo en mesamin. an.f , gg,, g,,g g,g ,g A,. the not dd-k. "I don't went k deinmann h the renst osmey I went to get rid of" long Inland. It also hasr d to ep. . sedetson has sist taken a formel pnei-valuable role that UPA could ploy'- Lock said nantly. **Ihit if we han to pae UW's weent mined fw sumece- ten ou LIPA*e fete, LIA President amid Murtwy Bestiesh, e'busuicassien rob Peter to pay Paul, so be it " eive 5 pervent ekttric rete inmeersL Jeeses Larecca, emys the authenty*e wW helped leed tlw eeninst Gov. Mario Casame asys his support thogh the full entent of UPA's ebyse- venous functmens epulet seemly be as-the plant. "But UPA has'_ * ' _^ F' no 1s Term, but C*oino didn't give UPA e tiene have not been spelled out, esse.d by the egenews sech as time New p,,,,r. So erhet good is itP* Finally.UPA has chang to the naties : York Power Authority, the Pwh8.e Ser-Established in 1998 to stage a fiestus Praay in hi8 prepened 1991-92 budget. that it might one day moient a takeover via Commisessen, the State Energr Of-takeover of the long Islead IJehtang ' a nieve that,IAssearb. Iswie Ye eli ID-asyn is "tentatmount to e( U1EO, though home failed whm rece, the New York State Energy Ne-Co.,UPAinsteadsettledforedeelthat ' .Old M .2. _ x: Aethnty,the virtually guerenteed LI140's profit, saying yois doe *t think they should ~ few thinkstay UPAcondo UIEOrullitoff stack withwasthe setting for 2" : J :.Protectson state Comisumer searchandl' Enerd. th
- ability as en investor.eumeal utdity and im enstenece." - stock now at $22. "Someone weeld lurve consumer dension ofik state Auerney And Aserestr. Peel Herenberg (D-l left tsw authenty with thejob ofdespeo- ^-' in co- to takeup full-tinue.am;in the twi- Generere Of5ee and ik penposed Con ;
Beryport), who wee inesta ing of an idled nuclear plant. l UPA efficials any it*e a crucial 4 te%shing UPA,anye he willinteedece threat light of a tekcowe," none to said thinkforthee ser Sur- is e eenmote "There era sumer beerallyUtdsty a baker's Reard. deseen " but one that has left the enthority - i.,_ "l = Inter this year a ^. _ q I IArwere said. "I think one of the prob.
' limited time to promote e amore sensible she first scheduled election of UPA folk Legie. Wayne Prespat, who enee l enmitees until et Icust E _.?_ .,1992 edversted a public tekeewr ofIJIEO. Please are LIPA cui Page 2R I energy policy for lang Island. -
<a tect~ cal retreet et leest partly If, despite such efforts, LIPA has As a result, the authenty*e h _ _ , _
I l O O e. teh d ci. %b= [________._ _____.___o___._ -- - .-_____-___h__. ._____u
.- -__s-__ _ . _ - .-.-w
0- .O xO. O. O O 10: 10 O' 'O 'O
- g. .,
..........................c...,,,, .
~
LIPA's Continued Existence Questioned
- WPA Deen Pawe 4 was e,eted next to UtrO* lawywn, emid rething, an Lwu t theanssi, grsw deferime,e wbn u _ _2
**w'non he espleens by noteg that the geesen w - with such critsoeni. "If thee are people cet thee :
lenw UFA bas had, is 3rfining its rete enneng and """ di'**d at hisi. "Dier. are tinm w4n you walk between thee W= a wry difficult line," Leert easd. And that ne cM wk think we should be doing h.as er doing niere, ic.- '
' While UPA has anse to espect soth criticssui,it *I th'"'- tim se rurs for b UPA board
- he amid recently.
has also coese under fee been asese e(its naturni
'U'e dificulty .as m _ m _ _, _ by the fact t!*et UPA If UPA has an x ?_. ,4 r,le, say werwn IAm,id!,
allies, inchschest actswiste etrthe fore rest of tk right has had to dewtop a deae working relatanahip with g g g3,,7 % w _ __ g g
. nig lebtry,it misy be an an advocate ore a hurtisme seethSherehamn case. Alw e that attack Nulde a wy* M nd.
~ paianer, seye the authenty has - could espn=e flows in the rmanemnd esensniptione en. '"E 'h' M "'"*"" *f "N"8 'I"I'W7 "" .
atten,pting to be too enemy thsess to too user.y peepic.' itself by derlying the C~~ ' _ settlenwnt, whi-h - _. * ""* M b Ib W * '" tb "**""-
'~- On the one head, Manimemire unid UPA is proinet. annualincreases ef op to 5 penent. It's e concept endnesed by state Len. Keneeth 14 Ing a bold conservatson pregense that has the pas,n. Yevoli, while s'2pywtme UPA*e contanoed cris. Jah EPort Mauen), a spemer of the erisinal tial to cut etwtne bille signrcnntly while reducing th t'"te. **ys he*a etmaanwd that the authority hanon't iJPA legnaletkees.
need for new power plants. Oui the other hand. in been keeping a shacp criough eye on UILO. "They "I think their rete has te be defbwd marvewly as an talking up the propects of a mucicarwee eenvw. should be score forerfel in thne rete oppbcetiona." e&vocate for tk respovs," taWI)e sied rwently. "To miou, UPA hee russed the prospect of beeldmg an Yevoli maid. **It's one thing to emd a perfunctory let. e, eure cheep energy enurces for Imr g Island. I think encruises meer power plant that womid ahneet ee ter. It's another to coew up with spearica." that's the important job ehead for UPA." tainly undercut any eenous eenmer,mem etfort. - . . . . . .
- rhey have a split p._ _ * :,," Menesenko enhL "nier are trikine cet of both side of their amind."
Mansneeleo fears that UPA snight enerewt Shore. home sumply to give itself an independent sourts of recesse -a smetree board sneenbers deny. "And Freus the -
,*s point of view,it woodd tsok sosd irym took a facility that had been domed and turned it into snewthaneruseful," Man =kw emid.
UPA also has enceind toes isi ils eselines with uixo. . Altkugh it toute itert es a guardlem of rutepayer interenta, UPA evected ' 4 to ULCO's recent request for sammuel 5 pennet rate leeressee oc=r th
. next thney usrs. .
Keuses anye UPA will oppose utEO*s rute request. Yet when federni reenletees asked IR40 emciale et , a raent useetsag in Washancten whether anyone had ' eppaerd the *===T==y's rute hike repeut, Kenset, wk O I C3 C' s Q
l b 000116
' 1 1 UhITED STATES NUCLEAR REGULATORY CCMMISSION 2
3
; MEETING BETWEEN NRC AND LILCO/LIPA/NYPA 4
- 5 LICENSE TRANSFER AND DECOMMISSIONING OF SHOREHAM 6
7 0 Days Inn 8 9 Georgetown Room 10 1775 Rockville Pike g 11 Rockville, Maryland 12 0 13 Wednesday, February 13, 1991 14 15 The above entitled meeting commenced, pursuant to O notice, at 9:12 a.m., Stewart Brown presiding. 16 17 a 18 0 19 20 0 21 22 23 24 25 O
I t-M00117 1 Stan Ylimberg who is our Executive Director, cnd I think how 2 we're going to work it is after that I will take questions. ,D l 3 What we'll do is I guess Stan will nake some comments and 4 then turn it over to Jack and Les. l Hs 5 DR. MURLEY: Could I interrupt and ask a question p 6 on something you just said? 7 MR. KESSEL: Yes.
] 8 DR. MURLEY: You recall part of, I think, the 9 staff's concern last May and I remember I asked several 10 questions myself was the adequacy of fending, becauce one of O
11 the things that we have to concern ourselves with is the 12 stability of organizations and institutions and particularly
.s 23 the fiscal soundness of organizations that we license and u
14 deal with, because we really have to be concerned about the 15 possibility of not completing something that's undertaken. 3 16 At that time, we were given very sound assurances 17 that the funding for decommissioning would actually 18 essentially be a passthrough to LILCO; that there were 19 procedures in place that the rates would actually be 20 adequate to fund decommissioning. 21 But I have another question now. That is not the 22 soundness of the State of New York, but the fact that we all 23 understand there are fiscal problems, as cany states have, O 24 and under consideration et least is the possibility that F 25 LICA itself may not be funded. Perhaps you can speak to l CJ
000118 23 1 that today, but I can also say that something that we're 2 going to have to look very carefully at and make come
)-
3 -findings, I presume, when we do our reviews, which we're 4 doing of the transfer from LILCO to LIPA. So maybe you
; 5 could respond to that.
6 MR. KESSEL: Yes, and I recognize that. I l , 7 actually expected that to be the first question that came. 8 Let me kind of detail to you our funding as separate and 9 apart f rom the decommissioning question. The Long Island 10 Power Authority has currently in non-Shoreham related funds I approximately $2.8 million in our bank account. 11 12 It's money that we have been able to save through 13 good management and the capability of our other trustees. 14 We've tried to be efficient. Unlike a number of entities and 15 governments all over the country, I guess, we have been able 16 to -- we have not -- we have tried to keep our team as lean 17 as possibls. One of the things LIPA does not want to become 18 ,is some kind of sprawling bureaucracy on Long Island.
^19 I c'on't know that we could become that with our 20 budget anyway, but we have tried to put money away. Last 21 year, towards the end of last year it became apparent to me, 22 as Chairman of LIPA, that the state had some severe economic 23 problems. 'I'm sure you're aware of that. The Governor and 24 the state legislature are currently dealing with a budget f
25 deficit that approaches $6 billion. ?
00011 24 1 It is a-very difficult problem. I think it's part 2- of a na' clonal economic recession that many states in this 3 country, from New York to California, are facing. At some 4 point late last year, I Luggested to Governor Cuomo that 5 LIPA might be able to help out to some extent because we did 6 have funding available to us, that we had put money away. l 7 our yearly payroll with, I think, benefits totalled slightly p 8 less than $.5 million. 9 With the expenditures that we had, excluding 10 Shoreham, which comes from the settlement that you I 11 mentioned, we had $2.8 million, which was five times or 12 close to six times greater than our annual payroll. And 13 even with some expenditures that we make on other D 14 activities, such as conservation and conversion, we did have 15 a considerable amount of money. 16 It was decided by the Governor that LIPA did not 17 need funding in 1991-92. Our fiscal year, by the way, runs 18 from April 1 of 1991 or whenever till March 31 of the D 19 following year. The Governor's decision did not in any way 20 reflect a lack of comm' it to fund LIPA, but rather the 21 fact that LIFA was capable of funding itself for the next B 22 year because of the funds that we had put away. 23 I think that you have to look at the Governor's 24 decision, Tom, in light of some of the cuts that the 25 Governor has made in his budget, cuts to education, cuts to P
U00120 cr 25 1 mental health and social services, layoffs of thousands of 2- state employees, and I think that when you are able to look 3 at an authority like LIPA, which has successfully been able 4 to manage itself to th'e point where we have been able to () 5 save, in non-Shoreham funds, $2.8 million, that it was a way 6 that LIPA, in effect, could help the state during very 7 difficult economic times. O 8 I have brought witn me a letter which I would like 9 to give you. It is a letter that the Governor wrote in 30 response to a recent' article which raised some of the 0 11 questions that you raise, giving the Governor's firm 12 commitment to LIPA, not only funding, but its future as an 13 entity. We have an original copy of that letter. I'd like O 14 to give that to you, Tom, and then copies to evetyone else. 15 This is a letter that was written about a week 3 16 ago. I'm not going to read it. It's something you can 17 read. It, I think, clearly outlines the Governor's full 18 commitment to LIPA and explains just what I told you, why we 'O 19 did not receive funding this year. I think this will answer 20 your questions in terms of LIPA's stability. 21 I want to just say one other thing. This may be
- un L 22 very unusual for someone to say as head of an agency. As 1
23 you know,.I also head the state's Consumer Protection lO 24 Agency, we don't want to collect money where it's not i 25 necessary. The Shoreham project has cost Long Islanders and l lC)
o; 26000121 1 - people in New York enough money and already and the last 2 thing we want to do is spend money unnecessarily. 3 I think we feel very confident, A, in the fact 4 that we have sufficient fur.ds to have LIPA be an entity unto 5 itself, and, B, that Governor Cuomo has made a commitment, I 6 think clearly, not only to me personally directly, but in 7 writing in this letter, to make sure that LIPA is strong and 8 funded appropriately in the years ahead. O 9 MR. PARTLOW: Do you have a budget for 1992-93? 10 MR. KESSELt We're not ready to draw that up. We O 11 will have a budget. 12 MR. PARTLOW: There is no state budget for 1992-13 93? 'O 14 MR. KESSEL: No. How the process works, just so 15 you're aware of it, is that once the budget for 1991-92 is - g 16- - we have our own internal budget obviously for 1990-91 and 17 1991-92 which incorporates many of the expenditures. In la- fact, in going over this with_Stan last week, I recognized 0 19 that even at the end of our budget year in 1992, which is a 20 year from now, we will still have a surplus of well over S1 21 million in our bank at that particular point. C We do intend to ask for a state appropriation for 22 i 23 1992-93. Again, I don't know that we're going to need a i g 24 whole lot of money. My sense is that our look forward is l 25 that in order to carry out our responsibilities, that ) O l
000122 p- 27 1 includes Shoreham, but include other projects, that that , 2 budget request would probably be somewhere around $2 3 million. I would expect that we would grant that. 4 But how we prepare budgets is that we will start B 5 preparing our state budget request sometime in the summer, 6 right, Stan, of this year, to be submitted in the fall? 7 MR. KLIMBERG: The process in the state is that in 9 8 September and October, state agencies make recommendations 9 to the Governor and the State Budget Division regarding the 10 upcoming fiscal year. The Governor's Office then considers 11 that. Then in January, the Governor makes his 12 recommendation for the following fiscal year.
$ 13 MR. PARTLOW: The point of n.y question was does 14 any outyear budget show LIPA funding coming back, and the 15 answer is you don't have outycar budgets.
16 MR. KESSEL: That's right. That's correct. But I 17 think as you will read in the Governor's letter before you, 18 and I would just read one sentence because I think it is the 19 reason why we didn't receive funding, and this is the i 20 Governor's own words. "The reason that this year's budget g 21 contains no new funding for LIPA is simply that no new 22 funding is needed for the 1991-92 fiscal year." 23 I won't read the next sentence because you can
- 24 figure out why we didn't need it.
25 MR. KLIMBERG: If you would like, I will proceed I 9-
i 000123 ( 28 1 with my remarks. 2 DR. MURLEY: Please. 3 MR. 2LIMBERG: In the course of my remarks, I will 4 also be commenting on the funding situation. I thank
) 5 Richie. I also want to thank all of you at thw NRC staff 6 for meeting with us today. Like this May 24 meeting with 7 the NRC staff, at Commissioner Curtis' November meeting with ' LILCO and visit to Shoreham, and in filings we have made 8
9 with the NRC, we have described the circumstances 10 surrounding LIPA's creation, explained LIPA's statutory 11 authority and organization structure, and discussed the 12 various Shoreham settlement agreements. p 13 You have had some time now to review the 14 agreements. I don't want to dwell today on those 15 agreements. I trust that they're basically understood. I I 16 plan to concentrate on telling you what we've been doing 17 since the May meeting and what we have planned over the 18 coming months to be ready to assume Shoreham's ownership and b 19 license. 20 Briefly, let me highlight for you the main p 21 elements, however, of the Shoreham settlement agreements. 22 Please stop me if you have any questions regarding those 23 agreements or you want me to get into any further detail.
> 24 There are four principal agreements of interest to 25 the NRC. First, the February 28, 1989 settlement agreement l
I l
t100124
} 29 1 between Governor Cuomo on behalf of New York State and 2 LILCo. This agreement provides the basic framework for )
3 resolving Shoreham controversy. Under that agreement, 4 Shoreham will not be operated as a nuclear plant. 5 It will be transferred to LIPA. NYPA and LILCO 6 will assist LIPA in maintenance and decommissioning of the 7 plant and LILCO will pay for all costs related to LIPA's } 8 acquisition of the plant and the plant's maintenance and 9- decommissioning. 10 Second, the April 14, 1989 asset transfer ! l
)
11 agreement between LILCO and Long Island Power Authority. 12 This agreenent details how LILCO will pay for all of the I 13 Shoreham costs. the particular assets at shoreham that will
)
14 be transferred to LIPA, hoQ:Shoreham-related contracts and 15 licenses will be transferred to LIPA, and similar matters.
)_ 16 Third, the January 24, 1990 management services 17 agreement between LIPA and the New York Power Authority.
la This agreement sets forth the broad array of services that
)- 19 NYPA will be providing to LIPA in connection with the 20 license transfer, maintenance and decommissioning of 21 Shoreham. In brief, NYPA has agreed to be LIPA's price )-
22 contractor for Shoreham. And as attested to by the presence 23 of Jack Brcns and Les Hill, NYPA is clearly providing us y 24 with first class assistance on this project. Fourth, the January 24, 1990 site cooperation and t 25
)
t100125 O 3o l 1 reimbursement agreement between LIPA and LILCO. This 2 agreement is important for two main reasons. First, the O 3 agreement contains the detailed mechanism by which LILCO 4 pays for all Shoreham costs incurred by LIPA, LILCO or any
,, 5 LIPA or NYPA contractors.
v 6 Under the agreement, LILCO is required to provide 7 funds for LIPA on a monthly basis based on cash flow O 8 projections prepared by LIPA and NYPA. Through this 9 mechanism, LIPA has and will have at all times a three-month 10 cushion of funds, thereby ensuring that we will have O sufficient funds to pay for Shoreham's maintenance and 11 12 decommissioning costs. 13 LIPA has control of all these funds. We maintain O 14 separate bank accounts with respect to these funds. We 15 segregate these funds from LIPA's state-appropriated funds. O 16 I note that the Public Selvice Ccrmission has approved the 17 initial settlement agreement, that's the February 28, 1989 18 settlement agreement; the. asset transfer agreement, and the O 19 site cooperation and reimbursement agreement. 20 In the New Ycrk State Public Service Commission's 21 June 7, 1990 decision approving the site agreement, the PSC 22 determined that LILCO's payment of LILCO costs and costs 23 attributable to Shoreham as defined in the site agreement is () 24 reimbursable from its ratepayers, and costs attributable to 25 Shoreham is a term used in the site agreement to cover all O
31 0 00012C 1 of the costs of LIPA's ownership and license transfer f 2 activities, its maintenance and decommissioning of the { O 3 plant. l' 4 These PSC approvals ensure LILCo will have , 5 sufficient funds through PSC ratemaking to pay for I o 6 Shoreham's maintenance and decommissioning. I might add 7 that, as has been mentioned, LIPA does not rely upon any k
\
8 state-appropriated funds to carry out its activities related O \ 9 to the license transfer, maintenance and decommissioning. 10 All of LIPA's funds for those purposes are provided to us by O 11 LILCo through the various settlement agreements. Stan, excuse me. Does that include l 12 DR. MURLEY: 13 salaries and administrative costs? O 14 MR. KLIMBERc: All salaries and administrative
.l 15 costs allocable to the Shoreham project are paid to LIPA by 16 LILCO. We have an arrangement, as set forth in the site 0
17 agreement, where we at LIPA each year make an estimate of l i 18 the salaries and administrative costs and overhead o 19 appropriately allocable to our Shoreham-related activities. 20 We provide that to LILCO. 21 DR. MURLEY: I understand that, but if the C 22 Assembly were to appropriate no more funds for LIPA in the 23 future, could LIPA continue to exist? 24 MR. KLIMBERG: We would be able to continue to O 25 exist. That's correct. We would have to care down some of O I
._ _. .. . __ .~ _ _ _ , _ _ _ . . __ ..
o~ 32 000127 7 1- our activities so that all of our ptersonnel on staff were 2 involved in the Shoreham project. As such, they would be CY 3 100 percent reimbursable by LILCO pursuant to the various I 4 settlement agreements., g .5- MR. PARTLcW: As I recall,, though, the LIPA staff 1F in May was about seven people. 7- MR. XLIMBERG: It's currently nine. l) 8 MR. KESSEL: I think I would just add, Stan, if 9 you don't mind.- Stan is making an important point, though. i 1 10 I-understand, Tom, where you're going. It is important to .O. 11 emphasize thatiif it happened, I would not expect it to 12 happen,-if-we were to run out of funds in our state 13 ppropriations, LIPA would then be, in effect, solely O. 14' dedicated to the one project of-ownership and g 15 . decommissioning of Shoreham, and would thus-become , "O; 16 reimbursable totally:through rates.
~
-17 So even if we were not to have state
- 18 appropriations in the future, LIPA would still exist as an
- O!
L L19 entity. '- 20- .MR. STAFFIERI: Dr. Murley, that's-to confirm what l 21 Ilbelieve we assured you of last May; that LILCO is lO. i l 22 obligated to pay all of.the costs, including the i-
' administrative and-general costs, attributable to Shoreham.
- (3 -' 24 We're obligated to do that notwithstanding any state 25 appropriation. More importantly, as Stan has just lO
, 000128' J= 33 1
1 indicated, the Public Service Commission has confirmed our i 2 recovery of those costs from ratepayers. O 3 So the assurances that I gave you last spring are 4 no different than the ones I can give you today in 5 connection with this decommissioning effort. 6 MR. XLIMBERG: We have been operating under the 7 site agreement for slightly-over a year. In that time, I O a can say with full confidence that the mechanism has been 9 working very well.- LIPA has timely received from LILCO more 10 than $11 million to date for our Shoreham-related
- O 11 activities,-and I am confident that the site agreement J
12 mechanism is adequate to ensure that LIPA has.all the funds 13- necessary to safely and efficiently maintain and
- O 14 decommission Shoreham consistent with'all NRC requirements.
f 15 The second main reason the site agreement is 10_- 16 important is that it confirms LILCO's. commitments to make 17 existing _Shoreham personnel available to work on Shoreham's
'18 - maintenance and decommissioning. It has been LIPA's inten:
1 'O 19 all along to make use of_ existing LILCO/Shoreham personnel 20 _to the maximum extent possible.- Jack and Les will have more 21 to say on LIPA's plans to integrate LILCO's existing
- 22 Shoreham personnel LIPA's Shoreham organization.
(E 23 I would like now to turn to our'recent activities.
- o. 24 In_that regard, I'd like to give you a sense of what we have 25 been doing cince May to get ready to assume Shoreham's
..g-L -_
l 000129 j7 34 1 ownership. Some of the major activities that we have been J 2 undertaking since that time are, one, we have, as has been 3 mentioned, reic together a LIPA/Shoreham Project Team, 4 consisting mostly of full-time NYPA employees and LIPA and O NYPA contractors; two, we have developed, as Richie has 5 6 mentioned, a close working relationship with LILCO, such 7 that technical and other information is regularly available 4 8 to our people, 9 For example, data developed by LILCO in the site g 10 characterization study was made available to L1PA in our 11 ccnnection with our development of the Shoreham 12 decommissioning plan. Three, we have completed and filed 3 13 with the NRC on June 28, 1990 the license transfer 14 application. The application requests that upon or af ter 15 NRC approval of LILCO's request to amend its Shoreham O 16 license to a POL, such POL would be further amended to 17 designate LIPA as the Shoreham licensee. 3 18 That was a question I think that was identified on 19 the agenda; what is the relationship between the POL, the 20 license transfer and the decommissioning. In our license O 21 transfer application, we make clear that we are assuming 22 that on or before license transfer, LILCO will have received 23 approval for its possession-only license amendment request O i 24 and that that possession-only license amended to reflect 25 LIPA's ownership will be the license that would be ( , 1
.O
000130 0 35 1 transferred to LIPA. 2 Four, we have contracted with Bechtel Corporation O 3 and several other companies for decommissioning engineering 4 and licensing services. Bechtel was very helpful in working 5 with us, LIPA and NYPA, as well as with the assistance of 5 LILCO in preparing the Shoreham decommissioning plan. 7 We have prepared and completed extensive O 8 environmental analyses under the New York State 9 Environmental Quality Review Act, including the issuance of 10 a final generic environmental impact statement on Shoreham's O decommissioning. Six, we prepared and filed a 11 12 decommissioning plan and environmental report supplement 13 with the NRC on December 29, 1990. O 14 The decommissioning plan, as has been indicated by 15 Richie, is based on the decon alternative. Using decon, it O 16 is LIPA's intention to decontaminate and dismantle plant 17 systems and structures only to the extent necessary, one, to 18 remove Shoreham forever from service as a nuclear power 19 plant; and, two, to remove radioactive material to allow 20 release of the site for unrestrictef use. 21 LIPA expects to dismantle systems and structures O 22 only to a limited degree, with the exception of the reactor 23 pressure vessel and internals. We decided to select the 24 decon decommissioning alternative for a number of reasons, c) 25 including the limited operating history and low levels of l O r &- o te m te w w arnso n
000131 0 36 1 radiation contamination at Shoreham; two, since it would 2 allow the site to be released ir. the near term for O 3 consideration of alternative uses; three, since it would 4 enable us to use existing LILCO/Shoreham personnel who are g S knowledgeable about the plant; and, f,ou r , it appears to be
- 1ess costly than the other NRC approved decommissioning 7 alternatives.
O 8 We estimate that decon decommissioning will take I 9 about twc-and-a-quarter years from the time of NRC approval 10 of the decommissioning plan and cost about S186 million. We O ; 11 have assumed that the NRC would approve the decommissioning ' 12 plan on October 1 of 1991 and, thus, we have targeted a 3' completion of the decommissioning by the end of 1993. 14 We recognize that a key aspect of our readiness to 15 -assume responsibility for Shoreham is having a technically O 16 qualified management and site team for the project. We 17 believe that the project being put in place by LIPA and NYPA 18 meets all of NRC's requirements. We hope to convince you of O 19 that, of course, as we proceed. 20 The team is being structured on the assumption 21 that it is a possession-only license that will be V 22 transferred to LIPA and we believe that this structure, 23 organizational structure will be appropriate for both the O 24 maintenanca and decommission phases of the project. 25 MR. WEISS: Stan, let me ask you a question on the i O-
- . -- . . ~ - ._ -
000132 - O. 37 L 1' funding. Dolyou plan to have the $186 million available at
~2- the start of'decommissier.ing?
C1 . 3 MR. KLIMBERG: No. In agreements that the Long 11 Island Power Authority. has worked out with the long Island j) -5 Lighting Company, particularly the site , operation and 6- reimbursement agreement that I mentioned before, we have 7 established a' funding arrangement whereby_LILCO provides a 0 8 three-month cushion of funds so that there is, in fact, a 9 prepayment for three months of LIPA's projected cash flow 10 requirements in'that-project. 1 Oi 'We have the_ flexibility in that agreement to 11 12- modify those cash flow projections at any time we believe 13 that there are more or less funds necessary for the upcoming
;O_
14 period. So in that manner, we will.always be assured that 11 5i we will have on hand what we believe are~next quarter's, LO' '16 next three months' funding requirements. 17 We believe that that provides sufficient-18- assurance, combined with the-Public ServiceTCommission's ig' 19; approval'of_this arrangement to have adequate funds for this
.20; project, I note, as I just mentioned, that-this is a 21 _ project that we anticipate taking-about two-and-a-quarter
- Q_ _
22' years; so that we think that the selection of the_decon: 23 alternative and the near-term completion of decommissioning I L(3 24- provides-additional assurance regarding the adequacy.of that L -- L 25 funding mechanism. l lC l 1 , ._
1100133 k 38
.1: .DR. MURLEY: Again, on the funding, clearly LILCO 2- won't be_ changing'their rates every.three months, at Jeast I )
3' would guess not. Clearly, the PSC won't be holding hearings 4 and. going through its administrative processes every three j 5 - months. _Is this treated like a fuel use charge passthrough? i 7 6- MR. STAFFIERI: Let me answer that, Dr. Murley, if 7 -I might.- When we establish rates, included in the rates j :8 -that will'be established for the forward-lookirg period will
- 9 tbe a forecast of expenditures associated with this effort.
'10 That will be-taken into consideration when the PSC_ grants us y' '
11- rates.-. But, no, it is not an automatic-passthrough dollar 12 like a_ fuel' adjustment is. >
. 13 .DR. MURLEY: I.f there were some unexpected costs, )L 14 some, external event, an act of God or some Xind of_ thing, is 15 LILCO obliged to come up with that money somehow?
i y 16 MR. STAFFIERI:- Yes. Under the terms of the f 17; agreements,--we would fund it. We would.-then capitalize all 18 'the expenditures, carry them on the balance sheet,.and then recover'them over the course of the next several i- .
- 20 ratemakings. But.'we would be' obliged to make those i' . 21 expenditures.- I would suspect in the short-term we either ,
1 -22 finance them, have a revolving line of credit, or we'd pay 23' it out:of funds on-hand.- We would, as I said, capitalize
.- 2 4 : those costs and then recover them during the course of'the 25 ' normal ratemaking process.
( j; _
5 000134 39 1 DR. MURLEY: I'm just thinking through here. To 2 some extent, then, maybe to a large extent, we would have to 3 lcok at LILCO's ability to raise money. 4 MR. STAFFIERI In many respects, that's correct. 5 What we have tricd to do to give you some assurance that we 6 will be able to mako thosa expenditures ar.d to recover those
'l costs is the as,z urances that we've gotten from the Public 8 Service Commicsion, very explicit assurance sat we vill 9 indeed be able to recover thase things.
10 DR. MURLIY: Under recoverable costs. 11 MR. STAFFTERI That's correct.
; DR. MURLEY: If you have to come up with large 13 sums of money, for whatever reason, you may have to go to 14 the bond markets, you're saying?
15 MR. STAFFIERIt That's correct. Or we'd have to 16 tap a bond and credit agreement or some other short-term 17 device to give us sufficient cash flow to meet those 18 obligations. 19 MR. BRONS: Tom, the pooled insurance things are 20 intact also as a part of this agrooment. ; 21 DR. MURLEY: That's a property damage type of 22 insurance? 23 MR. BRONS: Yes.
". 4 KR. CRUTCHFIELD: Does LILCO have at, authority )
25 over the prudence of the expenditures of the New Y ,rk Power ( i
---a-----__a___ -r_____ ________ , _ _ _ _ _ ____
3 000135 40 1 Authority or LIPA on the decomme.'.ioning of Shoreham? g 2 MR. STAFFIERI: We have no authority to disallow 1 recovery of any of those costs. 4 MR. CRUTCHFIELD: Thoy bill you whatever they want
- 5 to bill you and you can't say whether it's good, bad or 6 indifferent. You just write the checks.
7 MR. STAFFIERI: That's correct. O 8 MR. KLIMBERG Under our agr,eements with LILCO, 9 they are obligated to pay all of Shoreham acquisition, 10 maintenance and decommissioning costs. There is no LILCO or g 11 Public Service Commission or any other entity authority to 12 review the reasonableness of those expenditures, so long as 0 13 they are expenditures that are covered by the agreements 14 which are costs incurred to undertake this project. 15 MR. REIS: Are you saying that the state Public 1 0 ( 16 Service Commission cannot? ! 17 MR. KLIMBERG: No. 1B MR. REIS: They cannot look at what are reasonable 19 expenditures? 20 MR. STAFFIERI: 'he PSC has issued an order in O' 21 which they have determined, i:. af fect, that any costs 22 incurred by the state agencies in evnnection with Shoreham's 23 decommissioning indeed are prudent and are, therefore, O So it's not a change in the law, but it's a 24 recoverable. 25 finding in advance of the expenditure of funds. O
00013G ) 41 1 KR. REIS: They can do that legally, make that l 2 finding in advance of the expenditure that it is 3 automatically prudent in the future. 4 MR. STAFFIERI In this case, they have done so. > 5 MR. REIS: Can they? 6 MR. STAFFIERI: No olie has challenged it. 7 MR. BRONSt I'd like to comment that I'm getting a k 8 little sense that, gee, this is a big blan) ' heck, wily-nily 9 thing. Chairman Kessel mentioned and you've heard before 10 that there is a significant cooperative effort here. As the b 11 costs are projected and the budgets are prepared, there is a 12 review by LILCO and by the PSC in advance of each budget p 13 year. So we all have a good r.utual understanding of what 14 we're going to do. 15 I think that we've gotten overly focused on the I 16 technical issue of can somebody slice in and say, gee, we 17 didn't think that was a good idea. We have reached 18 agreement that would have this forward-looking prudence 19 review on the part of the PSC and roll into the rates. But 20 the PSC is fully aware of what we intend to spend each year, 21 as is LILCO. Indeed, if what's been passed is prologue, p 22 there's been a real good cooperation and discussion of what 23 we're going to do and how we're going to do it.
> 24 KR. REIS: I see. So belts and suspenders here.
25 What would LIPA think of the need to maybe lock this in with i B
il00137 43 5 1 an insurance policy of some kind, an instrument that says 2 that in the event that something happened at LILCo, that you D 3 would have the funding to take care of this plant that you l
\
4 now have the obligation for? 5 MR. XLIMBERG: We don't believe that'n necessary. 6 We're confident with the funding mechanism that we've worked 7 out with LILCO. We are satisfied that they have the D 8 financial resources to pay for all Shoreham-related costs. 9 We have the assurance of the Public Service Commission that p 10 LILCO's ratepayers will provide rates sufficient to pay for E 11 .All of our costs. We feel that we have this project in 12 sufficient control in terms of the likely costs that no 13 further assurance is necessary. O 14 MR. WEISS: Can the state government or the PSC go ) 15 back on this agreement? \
\
I g 16 MR. STAFFIERI: The Public Service Commission is ! 17 always free to change their minds at some point in time, i 18 much like regulatory agencies of any charter, but we have no 8' 19 reason to believe that they would, given the importance of 20 this issue, particularly to the Nuclear Regulatory 21 Commission. S 22 MR. KLIMBERG: I might add that this is a matter 23 that has been thoroughly considered by the Public Service
, 24 Commission over a period of time. The Public Sarvice 25 Commission in 1989 approved the asset transfer agreement 9
l
1 0 000138 43 l 1 which laid out the responsibilities of LILCO to pay for all 2 Shoreham-related license transfer, acquisition, maintenance 3 and decommissioning costs. 4 In fact, the-Public Service Commissio'n approval O 5 was reenforced by it's approval of the specific implementing 6 site cooperation and reimbursement agreement which L1Lco and 7 LIPA entered into an of January 1990. The Public Scevice O a Commission again specifically approved the mechanism and the 9 rate recovery of all of those expenditures. 10 One last pbint to reenforce. Our agreement with f u 11 LILCO obligating them to pay for all of our Shoreham-related 12 costs is irrespective of any PSC approval of rate relief. { C, 13 They have a binding legal cbligation to pay for our costs. l 14 We, of course, are pleased that the Public Service 15- Commission has approved the agreements and indicated that O 16 there would be assurance of adequate funds through the 17 ratemaking mechenism as a further assurance. 18 MR. KESSEL: I just want to make a couple of O 19 points here, to add to what Stan and Vic have said. First 20 of all, I think that you should understand that the 21 arrangements that we have with the Long Island Lighting O 22 Company in the settlement agreement, as approved by the 23 Public Service Commission, is probably a lot stronger O 24 arrangement than might exist if LIPA were not involved in 25 the process. l lO
g HJ0130 1 In fact, I think that because this is a new area, l i 2 you will probably find over the years that when utilities
.O 3 come into decommission nuclear power plants, the kinds of 4 assurances that we have here in this particular case are not l 5- going to be present for many of the other utilities that !
O. 6 dual with their own regulatory commissions in those states. 7 I want to make that emphasis that the assurances 8- that we have of funding to decommission Shoreham are a lot'
- O 9 greater than would.likely exist if the decommissioning ,
i. 10 entity were a: utility; indeed, it it were LILco itself. , 0- 11 The other thing I must also say in all this
-12 discussion-and listening to this is to assure you that 13 -while,-in'effect, we are' guaranteed the funds, we are very
- O 14 aware of our_ obligations to expend them prudently. I 15 wouldn't want anyone to get the impression here that somehow 16- LIPA has this blank check and is just going to sit around 0
17 and not worry about how the-money is spent on 18 decommissioning Shoreham. OL 19 We. are_very concerned about that. And as someone. 20 who, by the way, is responsible for signing the checks at lT !21 .our-end-and reviewing all.of the'budgetssand expenditures,.I L O 22- can assure you that myself, my staff, and the trustees are y 73 involved on a regular basis in ensuring that the costs 24 . attributable'to Shoreham are expended'in a prudent manner Os .
- 25. and appropriately.
l LO
000140 45 lO 1 Whenever the arrangements may be, we're mindful of 2 our obligations as trustees of representing the Long Island O 3 community and I went to assure you that despite the 4 assurances that we have, we take our responsibilities of 5 keeping costs down and expending them prudently very 0 6 seriously. 7 MR. CRUTCHFIELD: Does LILCO have a rate hike 8 proposal in front of the PSC? g 9 MR. STAFFIERI: Yes. Under the terms of our 10 initial agreement with the state, the Public Service 0 11 Cecmission also put into place a rate plan of ten years' 12 duration. The first three rate increases associated with n 13 that plan have gone into effect. Late last year, we filed 0 another rate plan for another three-year period, which jurps 14 15 off of the first three years that vere initially granted. ; 16 The three-year rate increase and all of its 17 components and the amounts are now under review by the 18 Public Service Commission. So we have indeed filed such a 0 19 plan. 20 MR. CRUTCHFIELD: Has that received any 21 opposition? 22- MR. STAFFIERI: No one has opposed it. Everyone 23 is expecting it. But it was only filed at the very end of 24 last year. So it has not matured to the point where we O 25 would receive the type of opposition that has taken place j O
46 000141 to 1 comotimon in the pcot. m 2 MR. ELEONARD: May I add one thing? I think it's 3 very iwportant that we keep one thing in perspective. That () 4 is I have responsibility right now for a full power o 5 operating license that has been amended through several O 6 amendments. That's why we're spending $150 to Siso, 7 depending on what's going on, million a year. If we can get 8 that possession-only license as a first step, I think that
'O 9 will significantly help reduce the cash flow from our 10- ratepayers, making it far more availabl-a for decommissioning i
. -11 costs.
g 12 The second step would be the transfer of the 13 license, which_would again make more money available because
;Q 14 of the tax' situation, property taxes. So I think we ettst 15 keep in perspective, when we're talking about cash available 16 for decommissioning, what we are actually putting on the 17 ratepayers of Long Island is a burden right now.
18 MR. STAFFIERI It's interesting. John's 19 observation is a good one. We're probably spending more 20- money today on the plant than we would be spending on the 21 decommissioning. a
. () . '22 DR. MURLEY: Yes. We're not so much concerned, at 23 -least I'm not, about the ability of LILCO today to fund the
.24- activities today. We're looking a little bit down the road.
'O 25 'You must understand we're coming from some experience not in i
.O'
-.m.-n... . _ .. ._.........ia.
47 000142 l n 1 v t 1 our reactor licensees, but in our materials licensees where 2 we've had cases, and we have some today, where these O 3 companies are either shell companies with no assets or 4 they've vanished into the mist, leaving an uncleaned up 5 situation behind. . O That leaves it essentially in the state's hands or 6 7 in the Federal Government's hands to deal with. So when we 8 make this decision on the license transfer, we're certainly n v 9 going to have to address these situations because I 10 anticipate we'll be challenged. O 11 MR. STAFFIERI: Dr. Murley, I think we hear your 12 concern and we'll be happy to work with you on a case-by-13 case basis and see if we can give you the type of assurances 14 that you need. 15 DR. MURLEY: Any further questions? Please go 16 ahead. O 17 MR. XLIMBERG: Before we started again to talk 18 about funding, I was going to provide you with an overview O 19 of our technical resources that we will bring to bear for 20 this project. First, as we have mentioned, we vill shortly 21 hire, under a co-employment agreement with NYPA, Jack Brons, O 22 Les Hill and at least five other key NYPA employees. I will 23 leave with you today a copy of the proposed co-employment 24 agreement between LIPA and NYPA. Oi 25 The co-employnent agreement was approved by NYPA's O
000143 0 100 ., f 1 the operators, and so on. They want .'4 to leave, as well. 2 The cadre we have there now, which meet the tech spec 3 requirements, by the way, are, I would say, basically native i 4 Long Islanders who want a career with the Long Island 5 Lighting Company and'on Long Island. They have family O 6 attachmonts and that sort of thing. f 7 We have told them ~~ in fact, I have been told by 0 8 the Chairman of the Board and the President that for now 9 your job with LILCO is to support this ef fort. This is, as 10 we've said several times, over a $100 million a year ^O 11 project. We want it to go well. We want the Power 12- Authority and LIPA to do the best most economical job they
- gp 13 can and we will support them in every possible way.
14 The only people we will move out of there { 15 ourselven are people who will get a promotion. We're not 13 16 going to stand in the way of anybody's promotion. If 17 somebody gets promoted, we'll either try to fill that or Le 18 might have to do what he has to do, that I have to do now .O 19 sometimes, which is go and get an experienced person from 20 the industry as a contract employee. O-21 8"* "* * "10 d ""*"Ythi"9 "" * "10' "" " "10 22 post the position internally, just liko we will any other. 23 If it represents a promotion for somebody in the company, I 24 am sure people-will apply for it. Then he would have his 25 choice. We would offer him some candidates and say we would ) .O
\ (100144 101 1 recommend, based on our selection process, these people. 2 So that's how we would do it. I don't want you to 3 feel there's going to be a mass exodus. Tnat has occurred 4 already.
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g 5 MR. HILL We do have safo'y needs, as well. k 6 Right now I've got a ataff of 45 people working on Shorcham i 7 deconmissioning, basically to facilitate licence transfer, D 8 the people who are involved with the decommissioning plan 9 and getting all the activities that we're discussing here 10 today. Fourteen of them are NYPA employees. The balance D 11 are contract employees working as members of our tear. 12 I do have the contractor safety net if there if 13 the need arises to replace or to fill a vacancy created by 14 somebody leaving the station. We are also opening up a i 15 series of general services contracts with four or five g D 16 different types of consultants who would help us downstream; I,
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17 body shops, architect engineers. ( 18 There's also, throtagh the -- we'd be looking to D 19 have a general maintenance type contractor on site, as well, 20 to help us as far as the physical workers are concerned. So 21 we do have safety nets. I have a safety net just by virtue 22 of the MSA, the management services agreement. If there is 23 a need that I've got on the project, I can also post that p 24 vacancy back in the Power Authority shop. 25 I will tell you that the interest thus far by NYPA 1 S
000145 102 1 staff to participate in this project has been surprisingly 2 high. Plant decommissioning is something that's new, it's a 3 neuly emergent field in our industry, and I've had no 4 problema attracting real, real good people, topnotch pecple 5 to work with the special projects group in pulling this
)
6 thing off. 7 So va do have a couple safety nets. , A 8 VR. SWENSON: How many pacple total are you going i 9 to have approximately on your LIPA/Shoreham organization 1 10 down through the LILCO employees? ! D 11 MR. HILL: Steve, the numbers thtt we went 12 through, including the guard force, the number, all of them, 13 incivding all contractors, LILCO employees, our people, 14 start of deccmmissioning -- what was that number? 15 MR. SCHOEIT(IEGNER: It was like 465. E 16 MR. SWENSON: And that included the guard force. 17 MR. HILL: Yes. That's contract security, that's 18 everybody all up. That was a number that fed into the B 19 costing out of plant decommiscioning, including all 20 contractors, all health physics support and the whole 21 package. 22 I'm going to summarize the funding arrcngement 23 again. It received considerable discussion this morning. t
) 24 It's an important facet of LIPA's qualifications. Very j 2L simply put, LIPA's ability to fund its activities at the
L t100140 103 1 Shoreham site, including the maintenance and decommissioning 2 of the plant, is established by virtue of the site
) 3 cooperation agreement and the settlement agreement that LIPA k 4 and the state have with Long Island Lighting Company.
5 On an annual basis, we put together a budget which 6 outlines, which basically summerizes, which basically i 7 provides a projection of the expanditures during the 8 following year. We put that out on the table so LILCO has a 9 pretty good appreciation for what th3 cash flow needs are 10 going to be all about. p 11 On a monthly basis, LIPA is reimbursed for their 12 Shorehan-related expenditures. The fo.atures of this are 13 such that LIPA has about a three-month -- actually, LIPA and I 14 the New York Power Authority are prepaid for their services, 15 where we anticipate what the cash flow is going to be and 16 we, in fact, have a three-month cushion in a series of D 17 disbursement accounts which are under LIPA's sole management 18 and control. 19 This entire process -- thus far. I think we've 1 20 probably had about something in excess of $10 million I 21 exchange hands. So we have a rather proven approach to 22 funding our activities. This approach has oeen existence 23 now for something in excess of a ynr.r, about 13-14 months l 24 now. We've been in busines" working like this. LIPA and 25 the Power Authority have had no problems paying their bills,
(104147 104 9 1 paying their contractors, cuppliers, the people that we pay 2 rent to. O 3 The proccus has been relatively clean and 4 straightforward. Again, as was pointed out earlier this 5 morning, this entire process is going t.; be -- LILCO does O C have the mechanism of funding the entire costs related to 7 Shoreham's maintenance and decommissioning. They have the C ability to raise funds in the normal ratemaking process. O 9 So I guess part of the most important aspect of
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10 this is that it's not all that much different than a reguler l O 11 etility. The source of funds is the normal ratemaking 12 process, It's a process which has been recognized by the 13 Public Service Cormission in documented opinions and o-ders ; O 14 that they've issued. We really celieve we have a viable j 15 mechanism to fund the Shoreham project. 16 I will also add, and I'm going to get into this on
.O 17 the funding site, when I talk about decommissicning, we're l 18 looking at relatively short-term situation. We're looking 19 at being done with decommissioning by late 1993. It's not
.O l 20 all that far off from now. So we're not looking at a 30-1 21 year long-term propocition where we're really looking out lO 22 there with a crystal ball trying to assess the long-term 23 stability of either this relationship or any of the 24 principals' financial stability over this period.
- O 25 It's near-term that we're looking at to conclude
'O
000149 105 ) 1 our business, at least our business that would fall under l 2 HRC's jurisdiction and purview. We're looki , to ce done
) 3 with that by late 1993.
4 One other feature. If there are perturbations in 5 the cash flow arrangement, if we did have a miccall where we D had greater needs of funds for a given month, we do have the 6 7 ability to make a call for funds and LlLCO is obligated to 8 respond. So it's not like we're given the cash flow and 9 we've got to meet this and, if we don't meet it, we have to 10 default on our oblig'ation to pay our suppliers and vendern g 11 and such. That's not the case. W6 can make an immediate 12 call for funds, he hope we don't have to do this. 13 MR. DUDLEY: In this hypothetical situation that
- 14 you did have a mismatch and you had a significantly highcr 15 need for funds than had been previously allotted to you I 16 guess three months before, LILCO would either provide that G
17 out of existing reserves or would actually undertake 18 financing mechanisms to get that money? g 19 MR. LEONARD: I think I can only repeat what our 20 general councel said. I believe, to the best of my 21 knowledge, he said that we would do just that. We would {
# 22 provide it out of existing reserves or, if we had to, go to 23 a bond.
24 MR. WOOD: How lor.g would you anticipate a bond b O 25 issue taking? O
000149 ) 106 1 MR. LEONARD: I can't speak to that. It's 2 completely out of my jurisdiction. I frankly don't thinx ) 3 that -- and I'm really speaking out of my area, but I know 4 we have a line of credit that is a lot larger than your line 5 of credit or my line of credit on my credit card by quite a 6 few factors of ten, and I think that that would certainly 7 serve the purpose in any emergency situation. 8 MR. HILL: one other aspect of funding. Our ] 9 composite expenditures over this next (so-and-a-half years 10 or so, when I superimpose the maintenance of the plant in a 11 POL condition, and even when I superimpose on top of it the 12 costs of decommissioning the plant, the cash flow, the 13 composite cash flow that we're going to be looking for LILCO D 14 t iund is going to be less than that which tney've funded 15 n che past. 16 If anything, the burden associa.ted with Shoreham 3 17 is going to lessen because of all those things that we're 18 doing to resolve the Shoreham controversy. So, if anything, 19 the peak burden on Shoreham to LILCO is behind us and to the 20 ratepayers. It's a thing of the past. It's going to get 21 easier as far as the funding arrangement, because the cash J 22 flow is going to diminish. 23 Right before lunch, I touched on LIPA's technical , 24 qualifications and I was really addressing it from a people 25 and organizational perspective. Now I'd like to really get O
000150 ! 0 107 1 into some of the other facets of establishing LIPA's tech
- 2 quals. I'm really referring to our adaptation of the
.O '
3 existing orograms and policies and procedures, the paper 4 infrastructure t.3t exists out there. 5 I want to tell you about this because I think it's O 6 a process that -- the global approach is to use as much out-7 there that exists out there in its present fota. I'd like
.O 8' to emphasize that we're not blindly using this. We want to-9 learn about it. It's an education process for the new 10 management team coming in to work at the station. So wo O
11 have a very rigorous program well underway. I 12 We're taking the LILCO programmatic infrastructure 13 which exists out there right now under the OL, we're putting O
~
14 it through some process. We're going to end up with a LIPA 15 programmatic _ infrastructure under the pol, and it's largely j)L 16 derived from this. It's largely identical to this. We are i 17 trying to segregate out the unnecessary. There's an awful 18 -lot that we will no longer have to do by virtue of our non- : .o 19- operating status.. 20 There's an awful lot that we're still going to E , have to do and we're trying to em5 race as much of this. p ,0 22 Thisfgoes a-long way toward trying to minimize the trauma to l 23 people. We don't want to go through an entire-learning O 24 exercise just-because we're transferring ownership of the p 25 facility. This process we're referring to is OMPD, ~~~,
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