ML20128N920

Forwards Util 850530 Press Release Announcing Agreement Reached on Lawsuit Settlement Against Halliburton Co & Subsidiary,Brown & Root,Inc Re Engineering & Const of Facility.Certificate of Svc Encl.Related Correspondence

ML20128N920
Person / Time
Site:	South Texas
Issue date:	05/30/1985
From:	Newman J HOUSTON LIGHTING & POWER CO., NEWMAN & HOLTZINGER
To:	Bechhoefer C, John Lamb, Shon F Atomic Safety and Licensing Board Panel
References
CON-#285-203 OL, NUDOCS 8506030417
Download: ML20128N920 (5)

Text

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NEWMAN & HoLTZINGER, P. C R_Y 1615 L STREET, N. W.

wituaM E.SAER,Ja WAS H I N GTON, D. C. 20 03 6 JACs R.NEwMAN J1MN E. MOLTItNGER,JR. oOUoLAS L.SERESrORo 202-955-6600 JANET E.S.ECRER EULICE ARELRAD J. A. OOunnionT,JR. ,,y, ",$$g' pauLM.nECm ,,,,,,,,,,g

'if LEEN .SaEA May 30, 1985 KETED S'U Ya^"I "

SCOTT A.MARMAN OAY10 4. POwCLL DOUOLAS G. GREEN ObbbC ' DESORAtt L.64 AWNING AUSON LeMASTER*

BMEL LYN NEwNAN MOLLY N.UNDEMAN J P8 N ?. STOUOM. JR. REVIN J. UPSON JAMES 3.VASILE DAVID S. RASKIN MICHAEL A.SAUSER JANE LRTAN LLYIN M. GUTTERM AN DOteALD J. SILVERMAN TM'sMAS A.SCHMUTI JOSEPH E.STUSGS MICHAEL r. HEALY a=M vA.

OF SECRE,iAb,v

. ROBERTi.want CFFfC ,,,,,,u,,,,,,,,,,,

00CK TING & SEBVlu NORMAN A.rLANiNoAM BRANCH o' c va=

Charles Bechhoefer, Esquire Chairman, Administrative Judge Atomic Safety and Licensing-Board Panel U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Dr. James C. Lamb, III

. Administrative' Judge ~

313 Woodhaven Road Chapel Hill, North Carolina 27514 Frederick J. Shon Administrative Judge Atomic Safety and Licensing Board U.S.' Nuclear Regulatory Commission

-Washington, D.~C. 20555 Re: -Houston Lighting & Power Company South Texas Project, Units 1 & 2 Docket Nos. STN 50-498, STN 50-4 99 0t

Dear. Members of the Board:

Enclosed for your information is a press release issued today by Houston Lighting & Power Company announcing that agreement has been reached on a settlement of the lawsuit against Halliburton Co. and its subsidiary, Brown & Root, Inc.

arising out of-the engineering and construction of the South Texas Project.

Respectfully, ul' K 1.u~

Jack R. Newman Enclosure cc:' Service List l

8506030417 PDR 850530 C A g K 0500049g PDR

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TheLight NE%Y HoustonLighting8e1%wer RO. Box 1700 Houstun. Texas 77001 (713)2.

For release: '

For information contact May 30,1985 Don Beeth (713) 22P-7305, Houston Lighting & Power Company, project manager of the South Texas Project, announced today that an agreement has been reached on a 8750 million cash acttlement of ths long standing fewsult asalast Halliburton Co. and its subsidiary Brown & Root Inc. This is believed to be the largest cash

ctt!cment in history.

Don D. Jordan, Chairman and Chief Executivs Officer of HL&P, said, *Ay significantly reducing the cost of the project, the settisment is extremely .

advantageous to HL&P custome'ra and the customers of the other owners?

In the lawsult the project owners alleged Brown & Root had mishandled engineering and construction management of the auc! car plant in Matagorda which will require court and PUC (Public County. Under the settlement, Utility Commlision cf Texas) approvst to become final, Brown & Root will begin on October 1,1985 to pay the project owners 5750 million Jn eustterly payments over the next seven years. Each owner will receivs the same The four percentage of the award as its perceetage of ownership in STP.

owners of the South Texas Project are HL&P (30.3%), City Public Service of San Antonio (28%). Central Power and Light Co. (25.2%), and the City of Austin (16%).

Based on these ownership percentages of the 2,500 msgawatt s!cetric generating station. HL&P would receive 5231 million, the San Antonio utility would receive $210 million. CPL would reesive $189 milllon, and if the City of Austin accepts the settlement,it would receivs $1:0 million.

The City cf Austin la still considering whether it will accept or reject the agreement.

The settlement provides that If any owner rejects the settlement and later obtains a higher out of court settlement, Brown & Root would increase the compensation to the other utilitics proportionately.

Each of the owners of the project will Individually determins the NL&P wllt seek PUC approvat to disposition of its share of the settlement.

use the money In excess of litigation costs to lower the overall cost of the power plant and thus reduce the cost of the electricity from the plant when it becomes operational.

t App!! cation of the total 3750 inillion toward. seducing the overall cost of the project would result in a savlass to ratepayers of 52.4 billion over the life of STF. It would also. reduce the construction sont per kilowatt to $1.893, which is comparable to the sost of other suolear plants which received construction perm!ts after June 1974.

White the. settlement will reduce tbc cost per kilowatt for each of the four owners' ratepayers, the total amount including laterest during construction will depend upon the Individual utillty's finanolog arrangements. Typically, the bisher construction costs of nuclear power plants are offset by fuel costs which are substantially lower than plants using coal, lignite, ell, or natural gas.

The STP lawsuit is pending in the Bay City, Texas court of state Distric't' Judge G.P. Hardy. Judge Hardy has consistently urged the parties to settic the dispute outside of his court in order to avoid a leasthy, complan, and expensive trial. The esse has already taken almost four years and has not yet been scheduled for trial.

ML&P and Brown & Root will now submit the settlement to the court for appropriate action by Judge Hardy. In addition, HLAP will submit the settlement to the PUC, which has jurisdiction over inclusion of any plant costs in a utility's rate base. The purpois of the submlesion will be to seek a prudency review of the project after taking into account the terms of the settlement.

An 1ssue to be resolved by the court is the disposition of the massive

. record including mi!Ilons of pages of documents already gathered la the case.

Currently any public rolesse of these documents to the press or regulatory bodies is prevented by a court imposed protective order. HLAP will petition .

the court to release the whole record from the protective order.

. _ _ _ . . _ r_ ., , __,y- - _ _ .,y . - _ , - , _ . _ _

t. RELATED CORRESPONDENff, I

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION 00 KETED g

BEFORE THE ATOMIC SAFETY AND LICENSING BOARD

'85 HAY 31 #1 :25 In the Matter of )

) CFFICE OF SECRt'IAC HOUSTON LIGHTING & POWER ) Docket Nos. 50-4FfMbhNG RANCH

& SERVlQ COMPANY, ET A_L.

) 50-499 Of (South Texas Project, Units 1 )

and 2) )

CERTIFICATE OF SERVICE I hereoy certify that'a copy of the letter from Jack R. Newman to the_ members of the Licensing Board dated May 30, 1985, has been served on each of the following individuals and entities by deposit

~in the United States mail, first class, postage prepaid, on this.

30th day of May, 1985.

Charles Bechhoefer, Esq. Brian Berwick, Esq.

Chairman, Administrative Judge Assistant Attorney General Atomic Safety and Licensing for the State of Texas Board Panel Environmental Protection U. S. Nuclear Regulatory Commission Division

. Washington, D.C. 20555 P. O. Box 12548, Capitol Station Austin, TX 78711 Dr. James C. Lamb, III Administrative Judge Kim Eastman, Co-coordinator 313 Woodhaven Road Barbara A. Miller Chapel Hill,.NC 27514 Pat Coy Citizens Concerned About Frederick J. Shon Nuclear Power Administrative Judge 5106 Casa Oro Atomic Safety and Licensing Board San Antonio, TX 78233 U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Lanny Alan Sinkin 3022 Porter St. N.W., #304 Mrs. Peggy Buchorn Washington, D.C. 20008 Executive Director Citizens for Equitable Ray Goldstein, Esq.

Utilities, Inc. Gray, Allison & Becker Route 1, Box 1684 100 Vaughn. Building Brazoria, TX 77422 807 Brazos Austin, Texas 78701-2553

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J~ . . s:

J, . -

Oreste Russ Pirfo, Esq.

Robert'G. Perlis, Esq.

. Office of the Executive legal

. Director fu.S. Nuclear-Regulatory Commission Washington, D.C.- 20555  :

Atomic Safety and Licensing Board.

U.S.' Nuclear Regulatory Commission

-Washington, D.C. 20555 Atomic Safety and Licensing Appeal Board U.S. Nuclear Regulatory Commission

~ Washington, D.C. 20555

. Docketing and Service Section Office of the Secectary=

U.S. Nuclear Regulatory Commission

' Washington, D.C. 20555 .

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