ML20147G131

Motion to Reopen Record on Financial Qualifications. Filed by Seacoast Anti-Pollution League Sapl.Sapl Requests Consideration of a Safety Related Issue

ML20147G131
Person / Time
Site:	Seabrook
Issue date:	11/30/1978
From:	Backus R O'NEIL, BACKUS & SPIELMAN
To:
Shared Package
ML20147G110	List: ML20147G104 ML20147G131
References
NUDOCS 7812260092
Download: ML20147G131 (9)

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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION before the ATOMIC SAFETY AND LICENSING APPEAL BOARD

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In the Matter of- )

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PUBLIC SERVICE COMPANY OF )

NEW HAMPSHIRE, et al Docket Nos. 50-443 (Seabrook Station, Units 1 and 2 )

50-444

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MOTION TO REOPEN RECORD ON FINANCIAL QUALIFICATIONS NOW COMES the Seacoast Anti-Pollution League ("SAPL")

and respectfully moves that the' Appeal Board, as part of, any remanded hearings regarding the construction permits for Seabrook, reconsider the issue of the financial qualifications of the lead applicant, Public Service Company of New Hampshire {

("PSCO"), and in support hereof states the following:

1. In testimony before the Licensing Board, in May of 1975, PSCO Vice President Robert Harrison testified that PSCO l l

could construct its 50% share of the proposed nuclear power plant without resort to construction work in progress ("CWIP")

I financing. (Tr. 1587) l 78122600 O

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2. Notwithstanding the foregoing, Mr. Harrison subsequently testified before~a House Committee of the New Hampshire Legislature, which at the time was considering a Bill to prohibit CWIP, that without CWIP, "Public Service would be unable 'to construct any base load additions to generating capacity including the Seabrook plant.'" (ALAB-  ;

422, 6 NRC 33 at 81, emphasis supplied.)

3. Notwithstanding Mr. Harrison's testimony, the New l Hampshire Legislature, in the 1977 session, passed a Bill ,

l to prohibit the use of CWIP financing. This Bill was vetoed )

in June, 1977. The Legislature failed to ovsrride the veto.

4. On May 25, 1978 the New Hampshire Public Utilities 1

Commission ("PUC") issued a Report and Order allowing the Company a 30 milli on d ollar rate increase, including CWIP financing, which the Company had been collecting on an interim basis l since December of 1977. The PUC Order, and particularly the CWIP component, have been appealed to the New Hampshire Supreme Court by one of the Intervenors, the Legislative Utility Consumer Council, which imposed the charges. The appeal is pending.

5. On November 7, 1978, Governor Meldrim Thomson, Jr. war defeated in a bid for reelection by the Democratic nominee. The chief issue in the election campaign, as agreed by all observers, was CWIP financing. The

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s election was described by the Democratic Nominee, now '

Governor-elect Hugh Gallen, as "a referendum on CWIP."

The Governor-elect has announced that the first order of business in the new Legislature will be the introduction of legislation to prohibit the charging of CWIP, and that he will sign the bill into law.

6. On November 8, 1978, Public Service announced that it was " temporarily postponing," an offering of two million shares of common stock stiginally planned for November 14th to help raise funds to pay for the 2.33 billion facility. There is attached hereto, and made a part hereof, an excerpt from the Boston Globe of Thursday, November 9, 1978, entitled "Seabrook Minus Thomson: A New Look at Financing." The article indicates that "it is expected the Legislature will pass it (legislation prohibiting CWIP) again." )

7. In its preliminary prospectus, dated October 18, 1978, for the proposed sale of 2 million shares of common, l 1

new " temporarily postponed," the Company stated as follows:

"The success of the Company's financing plan, which is essential to the construction of the Seabrook nuclear plant, is dependent upon a number of factors, including the Company's ability to obtain adequate and timely rate increases, conditions in the securities markets, economic conditions and the Company's level of sales. The principal factor, however, is the continued inclusion in the Company's rate base of expenditures for construction work in progress ("CWIP")

associated with major generating facilities, or the generation of equivalent revenues in some other manner.

....The Company's financing plans assume that upon application of the Company the NHPUC will permit such inclusion of CWIP in the Company's rate base for periods subsequent to such test year, at least until the completion of Seabrook Unit No. 1 in 1982."

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8. In a letter dated November 9th, counsel for Public Service Company advised the parties to this action, along with the Commissioners and the members  !

of this Appeal Board that Mr. Gallen had been elected

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l Governor of New Hampshire, and that he would oppose i the inclusion of CWIP in the Public Service Company rate base. However, in said communication, counsel for PSCO did not disclose to this Commission PSCO's I

response to the election of Mr. Gallen, and the likely withdrawal of CWIP financing. Counsel for SAPL believes that the most recent statement by the Company on this subject occurred on November 28, 1978, after PSCO President William Tallman had met with Governor-elect Gallen. According to the press reports on this meeting, which was a private meeting, Mr. Tallman admitted-that CWIP was probably "not a viable way" to finance construction of the E2.3 billion Seabrook nuclear power station. There is attached hereto, and made a part" hereof, an excerpt from )

the Boston Globe, of Wednesday, November 29, 1978, entitled

" Utility Retreats on Seabrook Surcharge." l

9. SAP L b e lieves that the defeat of Governor Meldrim Thomson, Jr., who had single handedly assured the l success of CWIP financing by vetoing a bill prohibiting such financing and the present admission by PSCO President William l

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5-Tallman that CWIP financing may not be a viable method .

of financing the plant warrants this Appeal Board ,

reopening the record on financial qualifications, a safety related issue, to consider:

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a) The likelihood that Construction Work in

. Progress financing will not be available to PSCO..

b) The question of whether or not, absent such financing, PSCO can presently be' considered financially qualified to safely construct and operate the proposed nuclear plant within the meaning of the Commission's regulations.

Respectfully submitted, SEACOAST ANTI-POLLUTION LEAGUE >

By Their Attorneys, ,

O'NEILL BACKUS SPIEL %N BY

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l November 30, 1973 F

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3.g The Boston Gli.he We<inesday, Novemtwa 3.19.tl Ttility retreats on Seabrook surcharge Meeting with Gallen focuses .

on alternative to CWIP for N-plant

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By Charles Kenney said ti.e meeting with Gallen focused on During the reteut gubernatorial <am. A < .mpany spokesman has said re-Special to The Glube aber, natives to CWIP." paign. Gallen denounted C%IP as a peatnfly m the past that if CWIP mere Sam e CWIP tharges were instituted a 'P"II~ 8"d "'ny observers attribute his outlawed ti.e company wi.uld be forced to CONCORD. N 11. - After a closed-door session with New llampshire gover- y,ar ago. they have cost the company's re-victory over Guv. Meldrim Thom>on Jr. to sell part of its 50 percent om nership m the tail electric customars nealy $18 million. the CWIP issue 'I homson supported plant, ami that su(h a move sould result nor elect Hugh J. Gallen, the president of CWIP.

W minpany has asked the Federal in a mnstruction delay at Seabtr.ok of "at the Pubhc Service Ca of New llampshire, At a meeting witn reporters after Irast a yea:J the state's langent electric company, said I,nergy hgulatory Comnussion in Wash- yesterday's senion with Tallman. Gallen yesterday that a controversial 9 percent 'ngton for permission to charge w holesale reiterated his oppositmn to CWIP- H electricity surcharge is probably "not a customus for CWIP as mell Wholesale "My position is as strong as ever " Gal- the to .pany has no plans to se!! off part viable way* to finance construction of the CWIP charges would amount to about I 815 *ntf5h8P m the plant He said if

$23 bilhon Seabrook nuclear power sta. $M milhon anntzally, accordmg to a com- ten said. -I do not wish the'ratepavers " " *

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pany %pi kesman- the state of New Ilampshire to be subject.

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William Tallman, president. of tL llowever,Tallman said yesterday that Gallen sa . that if a bill outlawing Before his mertmg with Tallman. Gal-Public Service Co. said the "pussibihty' it is 'possible" the company might drop CWIP is pas .4 by the Legislature, as is ten discussni CWIP with Michael tuve of of the Construction Work in Progress its request to the regulatory commission expated, he will sign it. the Legislative Utahty Consumus' Coun-(CWIP) sur.harge "is still,there" but he for wholesale CWIP(harges. If such a bill becomes law, the Public cil Service Ca would have to find an alterna-l tive fundmg source to CWIP. leve suggestesi to Gallen that the com-pany sell sis full 50 percent share of Talltran said the Pubhe Service Co-position "all al>ng* has been that "we Scabrook Station, then tene back a pur-cuuld not build Stabrook without CWIP tion of the project from the new omntrs.

or some equivalent alternative " love has long been a critec of CWIP Talhaan said "there are viable alterna. Gallen said yesterday th.! he miends tives" to CWIP,

• bu t he deilmed to discuss to hold future meetmgs with Tallman to spaifics discuss CWIP.

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% stock offer postponed -

Seabrook minus Thomson:

.a new l ook By James Wormam at financing G'cbe staff the company wou;d be forced to n!! some of us stock in j The defeat of New Hampshire Gov. Meldrim Thom- Saabrook. Srzing a de'iy in construction and driving i up son in Tuesdayi election has prompted the Public Set- pnees for electrierty Seabr%k is schedu!cd to open in twa  !

vice Co of New Harnpsnare to beg:n a review of its plans for financing the contrmersial Seabrook nuclear pour The company Aready has asked the Federal Energy plan t. R< gt. atory Cornmission for permission to charge its As'a,hrst step the company yesterday announced it wi miesale power customers for CWIP. A hearing on the . '

was "te:t:perarily postponing" the offering of two million tss ue will be held in Nashua on Nov. 21.

shares of commen stxk ortgmally planned for Nov.14 to During the campaign Gal!en labeled the ' CWIP l help raise funds to pay for the 22.11 billion lactitty. eb rge "Thomsoni sa'.es tax" and called it a " rip-off." He That*,on supported the corrn ty's 9 percent sur- Li.1 he favored the Seabrook p! ant. but said it would oc bmit wahout CWIP.

narge to customers for constr. . ion work in progress t CWIPl The $17 8 million a year raised through the sur- Thorrson argued tne CWIP charge

• were necesnry .i t 9arge covers interest . harges on money borrowed to pay to su:ld the plant. but later worked to win an esemption l on goingionstruction costs. fre m CWIP for the eMeriv.

la the New Hamph' ire ' case. CWIP only ine!udes Themson's victortous opporient. Hugh Gallen.c*,a.s op. the company pays for borrowing, but in other states posed;the CWIP charges and made them the major cam. it somet.mes includes ! abor and material ecst paign issue, pledging to stop :riem if elected He defeated ing plants l Thomson W sercent 'o M pertect.

A e6fApan; statement yesterday said th t the financ- . In Massachuset:2. Boston Edison Co has sounded

.ng stratfgy for its construction pregam. p.rticularly aut state officia.s on 'he possibility of seeking CWIP Seabrook, had been based on the assumption it would be ch.acges to help finance the Pilgrim J nuclear. facility at ar. owed to colleet CWIP charges through at least 1981 Ply mouth. But they say any decision on a request to the 4 The New Hampshire Legis!ature !ast year passed ** Dqt.

a 'heof Public Utilities will not be made untt! Tebruary earliest.

bill to bar the CWlP charges. but Thomson vetoed it.

Gallen promM to sign a similar measure when he be- During the came.iign. Democratic gubernatorial can.

corres Mernor and it ts expected the leg. stature w:ll did, te Edward J. Ka.g saal he supported CWIP charges pass it again. if t ey were "the er.ly way ' to bu !d Pilgrim 2. but later Companv spektsman Gordon McKenney declined to ** hts stand to say he "Jid not endorse" the elaborate on yesterday's announcement, but has said pre- e nn&T ancis W Hatch Jr. opposed vioasly that CWIP was "absolutelv necessary" if 'he

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corm was to build Seabr>rm and still mentmn 30The DPU commissioners King will appoint to take percent ownership He aid then that if CWIP cN.rges were outlawed. ove.c in January will rule on any Edison request. In the pau the DFU has refused requests for CWIP charges.

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UNITED STATES OF AMERICA NUCLEAR REGULATOPY COMMISSION CERTIFICATF OF SERVICF.

I hereby certify that the enclosed was mailed first class or air mail, postage prepaid to the following on this 30th day of November, 1978.

Peter Bradford, Commissioner Marcia E. Mulkey, Esq.

Victor Gilinsky, Commissioner Office of the Executive Legal Richard T. Kennedy, Commisssioner Director U.S. Nuclear Regulatory Commission UsS. Nuclear Regulatory Comnission Washington, DC 20555 Washington, DC 20555 Samuel Chilk 'E. Tupper Kinder, Esquire Secretary Assistant Attorney General U.S. Nuclear Regulatory Comm. Environmental Protection Division Washington, DC 20555 Office of the Attorney General 208 State House Annex Alan S. Rosenthal, Chairman Concord, New Hampshire 03301 Atomic Safety and Licensing Appea' Board Karin P. Sheldon, Esquire U.S. ';uclear Regulatory Commission Sheldon, Harmon & Roisman Washingten, DC 20555 1025 15th Street, N.W.

Washington, DC 20005 Dr. John H. Buck Atcmic Safety and Licensing Atomic Safety and Licensing Appeal Board Board Panel U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Comnission Washington, DC 20555 Washington, DC 20555 Michael C. Farrar, Esquire Dr. Ernest O. Salo Atomic Safety and Licensing Professor of Fisheries Research Daard Panel Institute U.S. Nuclear Regulatory Commission College of Fisheries Gashington, DC 20555 University of Washington Seattle, Washington 99195 Ivan U. Smith, Esquire Atomic Safetv and Licensinc

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Board Pane 1 Laurie Burt, Esquire U.S. Nuclear Regulatory Conmission Assistant Attorney Gener.al

, One ,shburton Place

,de,hington, DC .0555 s Bosten, Massachusetts 02109 Cr. Marvin M. Mann Atcmic Safety and Licensina Filyn D. Weiss, Esquire 3 ^#d Panel Sheldon, Harmon & Roisman L. S . '.,uclear Regulatory Commission 1025 15th Street, N.W., Suite 500 Washingten, DC 20000 Washington, DC 2000}

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..a Thomas Dignan, Esquire Ropes and Gray 225 Franklin Street Boston, MA 02110

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Docket & Service Station ,',_, ,.

Office of the Secretary U.S. Nuclear Regulatory Commission

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Washington, DC 20555 Pobert A. Backus James L. Kelly, Esq.

Acting General Counsel Office of the General Counsel U. S. Nuclear Regulatory Comm.

Washington, DC 20555 s

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