ML20128Q791

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Addresses NRC Concern Re Inservice Criteria for rate-setting & Effect Criteria May Have on Unduly Speeding Up Plant Const.Order on Inservice Criteria Encl
ML20128Q791
Person / Time
Site: Callaway, 05000000
Issue date: 11/14/1984
From: Steinmeier W
KANSAS, STATE OF
To: Asselstine J
NRC COMMISSION (OCM)
Shared Package
ML20128Q694 List:
References
FOIA-84-354, FOIA-84-355, FOIA-84-356, FOIA-85-324, FOIA-85-354, FOIA-85-355, FOIA-85-356 NUDOCS 8507270052
Download: ML20128Q791 (9)
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k November 14, 1984

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. MISSOURI 651c2 Comissioner James Asselstine Nuclear Regulatory Comission C i..i.ners: 1717 H S:reet. N.W.

wituAM D. $TEINME!ER Washington, D.C. 20555 Chairunan MRLOTTE MUSCRAVE

Dear Commissioner Asselstine:

A, RAN C. MUERER CONN!! n. HENDREN c It has Come to my attention that you and other members of JAMES M. MSCHER the Nuclear Regulatory Commission (KRC) have voiced concerns about the decision of the Missouri Public Service Comission (Missouri ROBERT) 5CRI8NER Commission) in Case Nos. ER-64-168 and EO-85-17 pertaining to the Mi DM.' in-service criteria for the Callaway Nuclear Plant, Unit 1 (Callaway). In particular, it was suggested that our in-service HARVEY C.HUBBS criteriaifor ratemaking purposes would somehow encourage Union Sa'*rr Electric Company to unduly expedite completion of the plant, at the expense of safety of the p* ant. I would like to address this KENT M. RAC$ DALE gongggg, '.. ..

Genera! C.ensel -

First, the Missouri Comission believes .,i; hat the NRC's requirements for safeguarding the health, safety, a,nd welf are of the public stand alone. The Missouri Commission's. requirements for ratemaking recognition of Callaway are not oblivious to the exclusive 3e jurisdiction of the NRC over nucl, ear plant saf.ety.'. The Missouri Commission's Report and Order of August 22, 1984 'concerning the

E ,- in-service criteria for Callaway requires first and foremost that the j g NRC-approved testing and licensing requirements must be satisfied g .

before the plant may be included in rates. -

Second, under the " file and suspend" method of proceedings t- set by statute in Missouri, electric utility rates must be ruled upon by the Comission within a maximum of eleven (11) months af ter the O.

, filing of the tariffs requesting an increase in rates. Although the e suspension period in which the liissouri Comission may act is I constrained by law, the timing of the utility's tariff filing is jg within.its sole discretion. Thus, Union Electric Company initiated W c5 the schedule with which you are concerned. Prior to deciding the

$3 matter of the Callaway in-service criteria,.the Missouri Commission "E.* co sought to address Union Electric Company's concern that Callaway might not be -in-sdrvice by the end of the eleven (11) month rate case IV

  • period that tinion Electric Company set in motion by the filing of tariffs on Tebruary 15, 1984. In fact, we have established an

" u" CT extraordinary procedure in this case to try to assure that a.whole

- new rate case regord need not be begun even though-the in-service criteria are not met by the end of the current rate case. In

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$,0 addition, the Missouri Comission han scated that AFUDC may continue

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-u B507270052 B50617 .

"" PDR FOIA BELL-84-354 PDR n

Co_missi tr Jcmas Asselstine

, Nove=ber 44, 1984 Page 2

, to be accrued on Callaway for rate:aking purposes if there is any lag between the in-service date and an order giving rate recognition of the plant. These devices should give Union Electric Campany ample and adequate protection such that the Company has no incentive te unduly expedite plant completion and power ascension testing at the expense of safety considerations.

Third, I would point out that Section 393.135, RSMo 1978 was adopted by popular referendum on November 2, 1976. Said section provides that tha plant of an electrical corporation must be " fully operational and used for service" before any charge may be made or demanded based on the costs of said property. While it is true that Callaway is Missouri's first nuclear plant, it has not been singled out for the application of "in-service criteria." In-service

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criteria have been set and applied by the Missouri Com=ission to nine (9) coal-fired units 1n the eight years since Section 393.135, RSMo 1978 became law. Our in-service criteria for Callaway are designed 1

to assure that the plant is fully operational and used for service,

. and is safe and reliable, before the risks of the plant are shifted to ratepayers and costs of the plant are included in rates.

I have taken the liberty of enclosing a copy of our Report and Order on in-service criteria for Callaway, for your reference.

In summary, let me say that we have the utmost confidence

in the quality and adequacy of the,NRC's safety requirements for the -

Callaway (and Wolf Creek) nuclear plants, and fully recognize your

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exclusive jurisdiction over t,he safety of those plants. Your safety

, requirements must be fully met before those plants may operate commercially, regardless of the criteria we have established for rate recognition of the plants. In fact, our in-service criteria for ratemaking purposes include successful completion of the NRC's safety requirements.. Therefore, I can conceive of no manner in which our

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in-service criteria could adversely affect the safe completion of Callaway.

. If the Missouri Com:iission can be of assistance r' e$arding this or any other matter, please do not hesitate to contact me.

Si erely. -

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,(/W liam D. Ste nmeier l, lh( Y

, Chairman Enclosure s- cc: Chairman Nunzio Palladino *

'.. Commission'er Thomas M. Roberts Commissioner Frederick M. Bernthal Commissioner Lando W. Zech, Jr.

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EEFORE TF.r'., PUBLIC SERVICE COMMISSION 0F 1"dE STATE OF MISSOURI

. I CASE No. ER 84-168 In the matter of Union Electric l

Company of St. Louis, Missouri, ,

for authority to file tariffs increasing rates for electric service provided to customers in the Missouri service area of the Company.

CASE NO. EO 85-17 In the matter of the detemination .

cf in-service criteria for the Union Electric Company's Callaway Nuclear Plant and Calle.way rate base and related issues.

APPEARANCES: Paul A. Agathen, Attorney at Law, and Gerald Charnoff Attorney at Law, P. O. Box 149, St. Louis, Missouri 63166,

. for Union Elec,trle Company. 33 William Clark Kelly, Assistant Attorney Genei alf' P. O. Box 599, Jefferson City, Missouri 65102, for the State of Missouri.

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William M. Barvick, Attorney at. Law, 124 East High Street, Jefferson City, Missouri 65101, for the. City '

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of Jefferson, et al.

Richard W. French, Assistant Public Counsel, P. O. Box 7800, .

Jefferson City, Missouri 65102,'for the Office of the Public Counsel and the Public.,

s William C. Harrelson, Deputy General Counsel, P. O. Box 360, Jefferson City, Missouri 65102, for the Staff of the Missouri s

Public Service Commission REPORT AND ORDER - PHASE I PROCEDURAL EISTORY 0.n February 15,.1984, the Union Elgetric Company (hereinafter Company) filed revised tariffs seeking authority to increase rates for electric service -

provided to customers in the' Missouri service area of the Company. The tariffs bore an effective dat'e of March 16, 19.84.

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. The Conpany has proposed four criteria while the Staff has preposed six criteria. Missouri Retailers Association, which participated in the prehearing ]

l conference only, supports Staff. The Public Counsel and the City of Jefferson, et al. , support Staff's Criteria 1 through 5 but cppose Staff's criterion 6. All parties argue that their respective positions propose criteria which necessarily must

! be satisfied to support a finding by the Com=ission that the Callaway Nuclear Plant is " fully operational and used for service" within the meaning of Section '93 135, l RSMo 1978.

The Company takes the position that the plant should be declared "in-service" when the plant is providing safe and reliable power. The Company's "in-service" criteria is as follows:

Criterion 1. The Company was granted an operating license by the Nuclear Regulatory Commission to operate the plant at high power levels.

Criterion 2. The turbine generator and nuclear steam supply system have demonstrated the capability to sustain reliable power operation. .

Criterion 3 The plant has supplied electricity to the Company's system with output scheduled by the system load dispatcher."

Criterion 4. All components of the plant needed to generate at 100 percent of capacity are capable of operation.

Company's four'eriteria will be satisfied at 50 percent power although the Company intends to complete all testing required by the Nuclear Regulatory Commission (hereinafter NRC) and complete full power ascension to 100 percent power prior to

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declaring the plant "in service". The minimum standard for declaring the plant "in service" under the Company's criteria is at the 50 percent power level after having

. operated at that level for 25 to 30 days. The Company desires to retain the flexibility tio declare the plant "in-service" somewhere between 50 and 100 percent power in the event the Company is restrained at some power level between 50 and 100

/ percent. Such restraint could be imposed by the NRC or it could be self-imposed because of some equipment problem.

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5cisture carried over with the stea=, since it is i=portant to re=ove as much mo'isture as possible so as not to endanger the turbine generator. A high meisture carryover could. affect design efficiency and turbine longevity.

Although the Company intends to ce=plete testing at'all power levels prior to declaring the plant "in service" if everything goes well, it does not intend to complete the above-referenced warranty tests prior to declarins the plant "in-cervice" since these tests are not required by the NRC.

The Staff includes both warranty tests in its criteria as well as the requirement that the plant be operated for 100 continuous hours at full power (95 to 100 percent) to demonstrate the performance of the entire plant at the full power

. level. The 100-hour test proposed by Staff may or may not be satisfied during the NSSS acceptance test depending on the circu:nstances.

The Company maintains that the plant need not reach full power in order to be detemined "in-service". In addition, the Company argues that the Staff's Criterion 1 is overly stringerit since it not# oily requires that the plant reach full power but requires the completion of warranty tests. In the C6mpany's view these warranty tests are not necessarily related to a detemination of whether the plant is operational and are based solely on the specific contract'entired into by the Company and the manufacturer.

With respect to the moisture test, theCompanyfurtherarguesthath.t ,

should not be required since the Company asserts it has no near term significance with respect to the operability or reliability of the steam generator.

. Criterion 2. The preoperational test program shall be successfully

. completed. .

The preoperati9nal test program consists of a series of tests which verify that plant components and systems fulfill their designed intent, demonstrate proper

' system and component response to postulated accidents and familiarize plant staff with the plant operations.

The purpose cf this criteria is to de=enstrate that Cc=pany personnel are capable of operating the plant in a co=petent =anner and that no hardware proble=s exist which interfere with reliable operation of the plant. Staff maintains that criterion 5 in conjunction with Criterion 1 assures reliable plant operations.

The Company objects to Criterion 5 on the ground that it is inappropriate for the Staff to duplicate the role of the NRC. In addition, the Co=pany argues that the reporting requirements for each delay of over 100 hours0.00116 days <br />0.0278 hours <br />1.653439e-4 weeks <br />3.805e-5 months <br /> is too burdensome. If such a requirement is imposed on the Co=pany, the Co=pany reco:mnends that it report any single event which causes a delay of 100 hours0.00116 days <br />0.0278 hours <br />1.653439e-4 weeks <br />3.805e-5 months <br /> or more in a milestone event or in l

She overall schedule. The Company asserts that only milestone events are reviewed by

, management and, therefore, restricting Criterion 5 to milestone events will focus on possibly significant events. Events other than milestone events can be altered at will by test schedulers and do not require management approval. The Company argues that scheduled alterations are inevitable and are not necessarily significant.

Milestone events are designated by black circles and arrows on Exhibit A4, Schedule l  :

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In addition, the Company contends that the requirement to report each 100-hour delay is overly stringent since the NRC requires approval for modification to the test program of delays that exceed 30 days regarding tests occurring at below l .

50 percent power level and 14 days when the power level exceeds 50 pere'ent.

Company states that it is willing to meet with Staff and other interested parties on a regular basis to explain the progress of the start up schedule. The

. Company is concerned that Criterion 5 in and of itself could delay the "in-service" date because of the time involved in the preparation and Staff review of the information required.

,., Criterion 6. Exemptions from Criterion 1-5 may be granted or the

, determination made that the plant is fully operational at some power level less than the rated full power originally proposed for good cause shown.

l . Criterion 1. The UI's Startup Testing Program, which is outlined l in Exhibit A4, Schedule A, shall be successfully co=pleted. This

{ shall include a successful uninterrupted run of at least 100 l hours during which power is furnished to the grid at a level between 95 percent and 100 percent. 100 percent is 3425 W '

thermal with a gro.ss turbine output of 1185.8 We.

Since the Moisture Carryover test will demonstrate design efficiency and turbine longevity, the Com=ission dete=ines that the test should be coepleted. The Company is confident that the unit will have a low moisture carryover. Although the Company maintains that the moisture carryover is an effic'ency i concern rather than a reliability concern and is therefore not a near_ tem problem, Company witness did state that a very great moisture carryover would be quite serious.

The Commission determines that it is appropriate to require the completion of the NSSS warranty test since the test demonstrates the capability of sustained f operation at the rated thermal output. The Company expects to operate the plant when available at full load and therefore completion of the NSSS test' will provide a high level of assurance that hesteamsuppl[hystemcanperformasexpectedandas warranted by the manufacturer.

If all goes well, the moisture test, the NSSS test and the 100-hour test can te completed simultaneously. The Company plans to complete these tests and ac6erding to the Company's test schedule contained in Exhibit A4, Schedule A, the l ~

tests will be completed 18 to 15 days after the completion of power as'cension. The ~

Company proposes to declare the plant "in service" when power ascension is complete obsent some restriction. In the Commission's opinion, the delay of 14 to 15 days is well wortti a high level of assurance that the plant has demonstrated the capability of sustained operations at full power as warranted.

Criterion 2. The Preoperational Test program shall be successfully co.mpleted. . .

Criterion 3 The plant and associated transmission facilities have been tested capable of supplying to the Company's Missouri customers their full share of its rated power and can do so with the single most critical transmission line out of service.

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operations.

I Criterion 6. Exe=ptions from. Criterien 1-5 cay be g anted or the detemination made that the plant is " fully operational" at sc=e {

power level less than the rated full power criginally proposed for good cause shown.

The Co= mission believes that flexibility is i=portant since these criteria 1

are being established absent evidence of facts regarding the operating experience during start-up testing.

Criterion 7. The plant is supplying electricity to the Company's system with output scheduled by the system load dispatcher.

The Commission has added Criterion 7 to ensure that the electricity is being supplied to customers.

The Commission determines that the criteria established herein provide protection to the Company's customers against the risk of paying for a plant that turns out to be seriously defective. In the Co==ission's opinion the satisfaction of Criteria 1 through 5 clearly gli provide the greatest assurance that the Callaway  ;

Plant is capable of providing safe, adequate, reliable and efficient service.

Therefore, Criteria 1 through 5 set an optimal standard for determining when the Callaway Plant will be eligible for inclusion in rate base, but are not necessarily -

the minimum legal standards required to support a finding of " fully operational and used for service" under Section 393 135, RSMo 1978.

Prior to receiving any evidence regarding the operating experience of the plant the Commission is not prepar'ed to make a finding at this juncture that a demonstration of safe and reliable plant operations at some power level less than 100 percent will never constitute " fully operational and used for service" within the meaning of Section 393 135, RSMo 1978. l Section 393 135, RSMo 1978, prohibits charges based on costs associated "with property before the property is fully operational and used for service. The statute does not mandate that such costs be included in rates upon a minimum showing that the statutory requirements have been net. Therefore, the Com=ission has

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Exhibit A4, Schedule A constitute tests required under Criterion 1. If Staff and Co=pany cannot reach agreement as to which events constitute tests, the issue should be brought to .the Co--ission's attention.

a&s ORDERED: 4. That this Report and Order shall becomeJeffective on the '

27th day of August, 1984.

BY TEE COMMISSION Dn wi .h AA b L .

Harvey G( Hubbs Secretary l

(S E A L)

Steinmeier, Chm., Musgrave, Hueller, Hendren and Fischer, CC. , Concur.  ?

Certify compliance with the provisions of Section 536.080, RSMo 1978. ~a Dated at Jefferson City, Missouri, this 22nd day of August, 1984.

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