ML20091R883

Second Discovery Request to Util Re Util Application for Exemption.Certificate of Svc Encl.Related Correspondence

ML20091R883
Person / Time
Site:	Shoreham File:Long Island Lighting Company icon.png
Issue date:	06/11/1984
From:	Letsche K SUFFOLK COUNTY, NY
To:	Atomic Safety and Licensing Board Panel
References
OL-4, NUDOCS 8406150308
Download: ML20091R883 (25)

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4 b UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION i

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Before the Atomic Safety and Licensing Board

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) In the Matter of ) E,

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-LONG ISLAND LIGHTING COMPANY )

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' (Shoreham Nuclear Power Station, ) Docket No. 50-322-OL-4 Unit 1) ) (Low Power)

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SUFFOLK COUNTY'S SECOND DISCOVERY l REQUEST TO LILCO RELATING TO LILCO'S APPLICATION FOR EXEMPTION Suffolk County hereby requests that LILCO respond to the

' discovery requests set forth below.- The definition of the term

" document" as used herein and other instructions concerning the response to the requests which follow, are the same as that set forth on pages 1 and 2 of Attachment A of the letter dated April 11, 1984 from Douglas J. Scheidt to T.S. Ellis, III, a copy of which is attached hereto for convesience. The documents requested below are to'be produced at the offices of-Kirkpatrick, Lockhart, Hill, Christopher-& Phillips, 1900 M Street, N.W., Washington, D.C.,.or at such other location as the parties may agree..

1. Identify all periodic financial reports prepared by LILCO since January 1, 1983 (such as, for example, financial statements, budgets, cash reports, cash flow analysis, and-4 , , -e. i-w y. r p-+.+ - , - . ,e -.wr- . . .,---.%., .-r ,, 3-p7m--. -

operations reports) and set forth, with respect to each such report, the distribution to which such a report is subject (such as, for example; to Board of Directors:

Chief Executive Officer; Chief Financial Officer; members of senior management; treasurer's office; public filings; lending banks etc., and furnish a copy of the most current version of each such report.

2. Without limiting the generality of the request contained in paragraph I hereof; produce copies of the following (on a monthly basis for the period January 1, 1984 through December 31, 1985, and on an annual basis thereafter):

(a) All financial runs; reports, statements, analyses; and other documents which show actual and projected cashflow; revenues; expenses; capitalized costs and capital expenses incurred or projected to be incurred by LILCO in connection with the following-for Shoreham:

(i) The acquisition, installation, and all activities required prior to full operation of Colt diesels; j

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(ii) The acquisition of materials, construction and l

all activities related thereto, of' Colt diesel building; (iii) All other construction activities relating to the Shoreham plant; i

(iv) Accomplishing each of the phases of LILCO's pro-posed fair part low power testing program; (v) Allowance for Funds Used in Construction

("AFUDC");

(vi) Personnel costs (whether expensed or capital-ized);

(vii) Deferred assets; and .

(viii) Post-completion capital.

(b). Ehe balance sheet accounts for Shoreham, including gross plant, depreciation reserve, and deferred in-vestment tax credit; (c) Income statements and supporting tax computations for Shoreham; i

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(d) Electric, gas, and combined (electric and gas) income l i

statements, supporting tax computations, balance sheets, cashflow statements, together with applicable input sections, payroll and employee count:

(e) Interest and dividend coverage computations.

3. Produce all documents constituting, analyzing, referring, or in any way relating to actual or projected impact on LILCO's cashflow and/or its financial condition, of any existing interim, future interim, or permanent rate re-lief.

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4. Identify all financial or economic models used by LILCO since January 1, 1983 (such as, for example, Decom") in making financial projections or forecasts of LILCO's operations based on various assumptions, and describe the input variables which are capable of being manipulated by each such nodel.

5. With respect to the " austerity plan" which LILCO reportedly implemented in February 1984: l

, I (a) Produce all documents referring or in any way relating to the austerity plan including, with-out limitation, all drafts of the plan, any 4-l

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predecessors to the plan, all accounting work papers and computer data concerning'the plan or any of its predecessors, and all financial projections based on the austerity plan, or any draft or predecessor.thereof; i (b) Please furnish, in . pro forma tabular form, a de-tailed comparison of the results of LILCO's operations for each of its fiscal quarters since February 1, 1984, together with projected year-end-results, showing the effect of the presence and absence of the austerity plan on the results [f LILCO's operations. The result- r ing tables should be sufficiently detailed to ,'

permit the County, or its. experts, to gauge the [

impact of the austerity plan on each line on LILCO's pro forma balance sheet, income state- l ment, and statement of source and application of

-funds, which is affected by the austerity plan.

(c) Identify each component of the austerity plan as the plan is now being implemented.

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W'th i respect:to statements reportedly made by Dr. Catacosinos at the LILCO Annual Meeting of Shareholders:

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(a) Produce all documents (including, without limi-tation, financial projections, supporting ac-counting work papers, and computer data) constituting, referring or in any way relating to Dr. Catacosinos' reported statements to the effect thst LILCO would have a cash deficit of (i) $20 million on or about September 1, 1984, and (ii) $65 million by the end of the current calendar year.

(b) If the projected cash deficits referenced by Dr.

Catacosinos already take into account the aus-y --

terity plan which LILCO announced in February 1984, identify the size of the projected defi-cits in the absence of the implementation of the austerity plan, and provide copies of all documents relating to such projections.

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(c) Identify every communication between any offi-cer, director, employee, or other agent or rep-resentative of LILCO (including, without limita-f tion, LILCO's accountants and attorneys) and any I

other person concerning the reported willingness i

s of any financial institution to " step forward"

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if LILCO asks them for help, and produce all documents constituting, referring o'r in any way relating to such reported willingness.

1 (d) Set forth LILCO's basis for believing that any lender would " step forward" were.LILCO to ask for help, and identify each lender as to which 1

LILCO has formed such a belief.

7. With respect to LILCO's current outstanding debt obliga-tions, provide the following:

(a) Copies of all debt instruments, loan agreements, y -,

revolving credit agreements, stand-by credit facilities; term loans; trust indentures, trust agreements; mortgages, or other evidence of liens or encumbrances, together with any amend-ments, modifications, extensions or waivers relating to any of the foregoing, including,

'without limitation:

(i) All documents setting forth LILCO's "ar-rangements" with Tri-Counties Resources

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Trust (" Resources Trust") and Tri-Counties Construction Trust (" Construction ' Trust"),

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as described in Note 4 to LILCO's audited financial statements for fiscal year ending December 31, 1983 (" Note 4");

(ii) The first mortgage securing the Company's "First Mortgage Bonds," and all loan docu-mentation pertaining to such bonds; (iii) The mortgage securing the Company's

" General and Refunding Bonds" (the "G&R Mortgage"), and all loan documentation per-taining to such bonds; y . - .a (iv) The Revolving Credit Agreements of both the Resources Trust and the Construction Trust; (v) The Revolving Credit Agreement referred to in Note 5 to'the Company's audited 1983 fi-nancial statements (" Note 5"), and all documents pertaining to such an agreement; (vi) The Eurodollar Revolving Credit Agreement referred to in Note 5, and all documents pertaining to such an agreement; l

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. 8 (vii) All documents pertaining to the "intermedi-ate term notes" referred to in' Note 5; (viii) All documents pertaining to any unsecured short-term notes or commercial paper Which LILCO may have issued since December 31, i 1983.

(b) Identify each of the Company's lenders and the principal amount of debt outstanding to each such lender; including; without limitations (i) The banks Who are lenders to

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(A) The Resources Trust; and (B) The Construction Trust (ii) The trustees, if any, of the First Mortgage and the G&R Mortgage (iii) The banks who are lenders under the Revolv-ing Credit Agreement referred to in Note 5 to the Company's audited 1983 financial' statements; i

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(iv) The b'anks Who are lenders under the i

Eurodollar Revolving Credit Agreement I

l referred to in Note 5; (v) The banks Who are lenders under the " inter-

mediate term notes" referred to in Note 5.

(c) The amount of all debt outstanding, as of:

4 (i) December 31; 1983; (ii) the most recent date for which such infor-mation is available.

8. With respect to such of'LILCO's preferred stock oustanding which carries mandatory redemption features (e.g., Par Value $100 per share; Series L, M; Q; R, and S, and Par Value $25 per share; Series 0, T, U, V and X), furnish >

copies of all documents which describe, set forth; or oth-4 erwise relate to the rights and preferences of the holders

. of such preferred stock.

9. Produce all documents constituting, referring or in any way relating to any communication between LILCO, or any of its agents or representatives (including, without limita-tion, its attorneys, accountants; consultants or experts)

and any of LILCO's lenders (including, without limitation, the persons whose identity is sought in parag'raph 7 hereof) and their respective agents or representatives (including, without limitation, their attorneys, accoun-tants, consultants or experts), since January 1, 1982 to date.

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10. With respect to LILCO's participation in Nine Mile Point 2, produce all documents constituting, referring, or relating in any way to any agreements or understandings between LILCO and other cotenants in Nine Mile Point 2, including, without limitation: *

(a) All documents referring or in any way relating to the suspension of payments by LILCO for con-struction of Nine Mile Point 2; (b) All documents constituting, referring, or in any way relating to ('i) the notification by Niagara Mohawk-(or any other cotenant) that it considers the company to be in default of its obligations to other cotenants (including all the documents constituting the alleged obligations); and (ii)

Niagara Mohawk's (or any other cotenant's) l i 1 l

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advice to the Company that it may institute litigation; (c) All studies, analyses, reports, communications or other documents relating to any relationship between (i) LILCO's suspension of payments for Nine Mile Point 2, and (ii) LILCO's relationship with any of its creditors; or actions or re-sponses by any such creditors; i

(d) All documents constituting, referring or in any

way relating to communications with other i

cotenants concerning LILCO's suspension of pay-ments for Nine Mile Point 2.

11. Provide copies of all documents analyzing, discussing, re-ferring or in any way relating to any voluntary or invol-untary bankruptcy of LILCO including; without limitation, the effect of such a proceeding on LILCO's pending Appli-cation for Exemption; or all or any portion of its request for a low power license.

12. Unless otherwise being produced in response hereto, produce all documents constituting, referring or in any way relating to, the advice by the banks, referenced in

4 Note 44, that advances by LILCO to the Construction Trust in excess of the $500,000,000 advanced by the banks vio-lated provisions of the Trust agreements referred to in Note 4, and provide the following information for the

period January 1, 1983 to date

, (a) The amounts of all LILCO advances to the Construction Trusts; (b) The dates on which each such advance was made; and (c) The purpose for which each such advance was made.

13. With respect to the amendments to the Trust agreements

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referred to in Note 4, and unless otherwise being produced in response hereto, provide copies of: all documents constituting, referring or in any way relating to such amendments and provide the following informations (a) . With respect to each payment by either Trust of in-terest payments un' der the pertinent Credit Agreement, identify (i) the amount of the payment; (ii) the date of the payment; and

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(iii) the source of funds used for the payment.

(b) Identify the date, the amount, and the source of funds for each payment of (i) interest and (ii) principal, which became due, or will become due, under the Revolving Credit Agreements for both Trusts for the period January 1, 1983 through December 31, 1985.

14. With respect to the amendments to the Trust agreements referred to in Note 4, provide copies of the following:

i (a) All documents constituting, referring or relating in

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any way to any communications with or from any bank since April 27, 1984 concerning such amendments; and (b) All documents constituting, referring or relating in any way to studies, analyses or reports concerning the relationship between any potential default under the Trust agreements and LILCO's relationships with any of its creditors.

15. With respect to the statements made by LILCO in its Posi-tion Paper dated May 30, 1984 (at pages 47-48), state the bases for, and provide copies of all documents constituting, referring or relating in any way to, any

, studies, analyses or reports concerning the severity and ,

! i breadth of the impact of a possible LILCO bankruptcy,  !

including without limitation, the impact of such a possi-I ble bankruptcy on:

(a) The credit of utilities throughout New York, any pos-i , sible higher financing costs, any possible higher

! prices of energy, and any possible higher costs of living and conducting busine s in New York Stater

(b) Utilities outside New Yorkt 4

i (c) Alleged increases or interruption of services that i

j consumers and businesses in Long Island would facer '

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. (d) The credit of New York State, its municipalities and 1 .

its agencies, as well as the allegedly resulting in-I crease in borrowing costs of the Stater.and i

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! (e) . The allegedly precarious banking system and the al-s i

1 legedly national and worldwide implications LILCO i .

contends would result.

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l'6. With respect to LILCO's needs for financing'during fiscal i I

years ending 1984 and 1985, provide copies of'the follow-

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(a) All documents constituting, referring, or relating in any way to such' needs including, without limitation, internal LILCO communications as well as communica-tions with any lending institutions, investment bank-ers, investment advisers; and any governmental agencies; and (b) All documents constituting; referring or relating in any way to the relationship,'if any, between LILCO's obtaining a low power license for all or any phases of LILCO's proposed low power testing program and its ability to obtain financing.

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17. With respect to the statement in LILCO's Form 8-K dated February 21, 1984, that "the Company is evaluating the im-pact which any disallowance of the Shoreham costs will have on the company's financial condition and operating results," produce all documents Which constitute; refer or relate in any way to such an evaluation.

18. The LlLCO Position Paper of May 30; 1984 (at page 35) statest "When the conclusions concerning Shoreham maoe by the PSC Staff for the Marburger Commission using a 604 capacity factor, are ad;usted to 65% to achieve a valid compari-mon, the penalty for not operating Shoreham increases to $14.9 billion."

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Please state the bases for such assertion and produce all studies, analyses, reports, computations, data, and other documents constituting, referring or relating in any way to such assertion.

19. With respect to the assumption contained in the Position

, Paper (at page 50), "that LILCO is relieved of its past and future obligation for Nine Mile Point 2 and that its cash investment in that plant is returned to the Company,"

provide copies of all documents constituting, referring or relating in any way to the potential assumption of LILCO's Nine Mile Point 2 obligations by any party other than LILCO.

20. With re,pec - to the proposed settlement of the "prudency case," deseribed in the May 30, 1984 Position Paper (at i pages 50-51), state LILCO's bases for the conclusion that "LILCO arrived at this amount after careful assessment of the contribution the Company cou.ld make toward rate reduc-tion considering.the phase-in time and the rate increases propos'ed in this paper," and provide copies of all l

docume its constituting, referring or in any way relating to the referenced " assessment".

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21. Identify the number of full-time employee equivalents at Shoreham, by job title and employment shifts, necessary, or assumed to be available, to accomplish each of the four phases of low power testing identified in LILCO's Applica-tion for Exemption.

22. State the time at which, and the extent to which, LILCO began, or intends to commence, expensing (as opposed to capitalizing) personnel and other costs associated with Shoreham.

23. With respect to each of the four phases described in LILCO's Application for Exemption, identify:

(a) the monthly cashflow, capital expenditures and other expenses associated with each phaser (b) the anticipated re-sale value of nuclear fuel assemblies were Shoreham to be abandoned at the end of each phase; and (c) the cort, in real 1984 dollars, of decommissioning Shoreham at the end of each phase, and provide copies of all documents relating to the information sought in (a), (b), or (c).

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24. LILCO's May 30, 1984 Position Paper (at p. 46) states that the " effects of LILCO's financial crisis are being suffered . . . by its customers, who are subject to longer service response times and reduced customer service under the austerity plan; . . . State the basis for LILCO's assertion that its customers are being subjected to (a) longer service response ti.nes; and (b) reduced service, and provide copies of all documents constituting, refer-ring or relating in any way to the. effect of the austerity plan on (a) longer service response. time; and (b) reduced service, or the relationship between the austerity program and (a) and (b)'. ,. ...

25. Provide copies of all documents constituting, referring or relating in any way to:

(a) The purchase, sale, offer of purchase or rale of LILCO's gas system by Brooklyn Union Gas or any other person; .

(b) The purchase, sale, or offers of purchase or sale of any other LILCO assets, during the period January 1, 1984 to date; and

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(c) LILCO's suspension of property tax payments with respect to Shoreham.

26. Provide the following information as of January 1, 1982, and December 31, 1982:

(a) Anticipated completion date and cost (construction, AFUDC, total) for Shoreham.

(b) Anticipated completion date and LILCO share of the total cost for Nine Mile Point 2 (construction; AFUDC; total).

(c) Bond rating of LILCO. --

l (d) Cumulative-to-date expenditures for Shoreham (con-struction, AFUDC, total).

(e) Cumulative-to-date expenditures for Nine Mile Point 2 (construction, AFUDC, total).

(f) Capacity to issue additional long-term debt and preferred stock; based on coverage limitations.

(g) Common stock price and dividend payment rate.

27. Identify by name and title each officer (including each Vice President) and director of LILCO since January 1, l

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1983, to date, including date of office and, in the case of termination or resignation, the reason (s)' therefor.

28. Provide copies of all insurance policies, agreements or other sources of financial protection, upon which LILCO relies for asserted compliance with 10 C.F.R. Part 140.

Respectfully submitted, Martin Bradley Ashare Suffolk County Department of Law Veterans Memorial Highway Hauppauge, New York, 11788 Law'repce Coe Lanp)ikt ' '

KarlW J. Letsch/ .

Cherif Sedky KIRKPATRICK, LOCKHART, HILL CHRISTOPHER & PHILLIPS 1900 M Street, N.W., Suite 800 Washington, D.C. 20036 Attorneys for Suffolk County DATED: June 11, 1984

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ATTACEMINT A .

The County hereby requests LILCO to produce the documents lisned below. For purposes of this request, the word " documents " -

is to be given its broadest meaning to include , without limi-tation, correspondence, memoranda, r.eports, notes, computer printouts anh other forms of written data and material, all whether in d aft or final form. Furthermore, (i) If a document has been prepared in 'several copies, or additional copies have been made that are not identical '*(or are no longer ide=tical by reason of any subsequent notation on or other modEfication of a copy),

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e_ach nonidentical copy is to be construed as

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other modifications thereon are significant to the substance of the document. Identical 4

copies need not be supplied.

(ii) If any doenment covered'by~these

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requests is withheld under a claim of privilege,.

furnish a list of such ~ document (s) with the

. following information: data, author, addressee or recipient, persons to whom-copies were furnished, subject matter, the privilege

- which is claimed, and the requests which I

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(iii) If any requested docum'ent was l but is no longer in your possession or subject to your control, state what dis-

. positio,n was made of it..

Unless expressly limited, documents to be produced ,

include not only those in the possession or subject.to the control of LILCO, but also documents in the possession or subject to the control of LILCO's consultants, persons under s

contract with LILCO and vendors of eqdipment or services to LILCO. <.

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COLK te UStfR~'C' UNITED STATES OF AMERICA NUCLEAR' REGULATORY COMMISSION l

'84 JLN 14 A10:57 '

Before the Atomic Safety and Licensing Board Lif:Ld ;7 p: ..

00Chiim f ig,

) 3 RANCH In the Matter of )

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LONG ISLAND LIGHTING COMPANY ) Docket No. 5 0-3 2 2-OL - 4

) (Low Power)

(Shoreham Nuclear Power Station, )

Unit 1) )

)

CERTIFICATE OF SERVICE I hereby certify that copies of Suffolk County's Second Discovery Request to LILCO Relating to LILCO's Application for Exemption have been served onythe following this lith day of June, 1984, by U.S. mail, first class, except as otherwise noted below.

Judge Marshall E. Miller, Chairman Edward M. Barrett, Esq.

Atomic Safety and Licensing Board Long Island Lighting Company U.S. Nuclear Regulatory Commission 250 Old Country Road Washington, D.C. 20553 Mineola, New York 11501 Judge Glenn O. Bright Honorable Peter Cohalan Atomic Safety and Licensing Board Suffolk County Executive U.S. Ruclear Regulatory Commission H. Lee Dennison Building Washington, D.C. 20555 Veterans Memorial Highway Hauppauge, New York 11788 Judge Elizabeth B. Johnson Oak Ridge National Laboratory Fabian Palomino, Esq.

P.O. Box X, Building 3500 Special Counsel to the Oak Ridge, Tennessee 37830 Governor Executive Chamber, Room 229 Eleanor L. Frucci, Esq. State Capitol Atomic Safety and Licensing Board Albany, New York 12224 U.S. Nuclear Regulatory Commission Washington, D.C. 20555 W. Taylor Reveley, III, Esq.*  !

Anthony F. Earley, Jr., Esq. I Bernard M. Bordenick, Esq. Robert M. Rolfe, Esq.  !

Edwin J. Reis, Esq. Hunton & Williams ,

Office of Exec. Legal Director 707 East Main Street  ;

U.S. Nuclear Regulatory Commission Richmond, Virginia 23212 1 Washington, D.C. 20555 1

Mr. Martin Suubert James Dougherty, Esq.

c/o Cong. William Carney 3045 Porter Street, N.W.

1113 Longworth House Office- Washington, D.C. 20008 Building Washington, D.C. 20535 Mr. Brian McCaffrey Long Island Lighting Company Martin Bradlav Ashare, Esq. Shoreham Nuclear Power Sta.

Suffolk Count, 'ttorney ~P.O. Box 618 H. Lee Dennison %111 ding North Country Road

. Veterans Memorial Hignway Wading River, New York 11792 Hauppauge, New York 11788 Jay Dunkleberger, Esq.

Docketing and Service Branch New York State Energy Office Office of the Secretary Agency Building 2 U.S. Nuclear Regulatory Commission Empire State Plaza Washington, D.C. 20555 Albany, New York 12223 Stephen B. Latham, Esq.

John F. Shea, Esq.

Twomey, Latham and Shea 33 West Second Street ,. ., ,

Riverhead, New York 11901 i

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. t John E. Birkenheier.

KIRKPATRICK, LOCKHART, HILL, CHRISTOPHER & PHILLIPS ,

1900 M Street, N.W., Suite 800 ,

Washington, D.C. 20036 DATE,: June 11, 1984 e

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