ML20041E926
| ML20041E926 | |
| Person / Time | |
|---|---|
| Site: | Clinch River |
| Issue date: | 03/01/1982 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| References | |
| REF-10CFR9.7 NUDOCS 8203150281 | |
| Download: ML20041E926 (53) | |
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NUCLEAR P2GULATORZ COMMISSICN 4
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COMMISSION MEETING l
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OPEN MEETING l
DISCUSSION OF CLINCH. RIVER BREEDER REACTOR
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DATI:
March 1, 1982 PAGzs:
1 - 50 AT:
Washington, D. C.
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DISCLAIMER This is an unofficial transcript of a meeting of the United States Nuclear Regulatory Comission held on March i, 1982 in the Comission's offices at 1717 H Street, N. W., Wasnington, D. C.
The i
meeting was open to public attendance and observation.
This transcript has not been reviewed, corrected, or edited, and it may contain inaccuracies. !
The transcript is intended solely for general informational purooses.
As provided by 10 CFR 9.103, it is not part of the forinal or informal record of decision of the matters discussed.
Expressions of opinion in l
.this. transcript do not necessarily reflect final detenninations or l
beliefs.
No pleading or other paper may be filed with the Commission in any proceeding as the result of or addressed to any'orize.
statement or argument contained herein, except as; the Comission may auth l
t l
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e 1
1 UNITED STATES OF AMERICA 2
NUCLEAR REGULATORY COMMISSION 3
l0 ":
4 DISCUSSION OF CLINCH RIVER BREEDER REACTOR S
OPEN MEETING 6
7 Nuclea r Regula tory Commission Room 1130 8
1717 H Street, N.
W.
Washington, D.
C.
9 Monday, March 1,
1982
'?
11 The Commission met, pursuant to notice, at 12 2:00 p.m.,
Nunzio Palladino, Chairman, presiding.
13 BEFORE.
14 NUNZIO P ALLADINO, Chairman of the Commission 15 JOHN AHEARNE, Commissioner VICTOR GILINSKY, Commissioner 16 PETER BRADFORD, Commissioner THOMAS ROREETS, Commissioner 17 18 STAFF MAKING PRESENTATIONS AT MEETING:
19 SAMUEL CHILK, Secretary LEONARD BICKWIT, General Counsel 20 FORREST REMICK, OPE DENNIS RATHBUN 21 JANE AXELRAD 22 23 24 l
25 i
ALDERSON REPORTING COMPANY. INC, 400 VIRGINIA AVE., S.W. WASHINGTON, D.C. 20024 (202) 554 2345
2 1
EHOCEIDIESS 2
CH AIR M AN PALLADINO:
The meeting will please 3 come to order.
4 The topic of today's Commission meeting is 5 discussion of the Clinch River breeder reactor, CRBR.
6 The agenda indicates that this will be an open meeting, 7 but that portions ef-it may be closed.
Whether or not a 8 portion or portions will be closed will depend on 9 whether or not we get into discussing matters which are to exempted under the Sunshine Act.
When and if such 11 questions arise, I will turn to the general counsel for c
12 his advi.ye.
13 In setting the stage for the discussion today, 14 I believe it is appropriate to repeat some of the 15 background material presented at our February 16th 16 meeting on CRBR.
That background is as follows.
30 17 On November S&, 1981, the Department of 18 Energy, DOE, for itself and on behalf of its 19 co-applicants, Project Management Corporation and TVA, 20 requested the Nuclear Regulatory Commission to grant an 21 exemption from 10 CFR 50.10 pursuant to 10 CFR 50.12 to 22 conduct site preparation activities for the CRBR prior 23 to the issuance of a construction permit or a limited 24 work authorization.
l 25 DOE's proposed site preparation activities l
l ALDER $oN REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W., WASHINGTCN. D.C. 20024 (202) 554 2345
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1 include site clearing and grading, excavation and quarry 2 operations, the construction of temporary 3 construction-related f acilities, a barge f acility, an access road,puur railroad spur, and the installation of 4
W47 /L 5 service buildings power, Sever, sewage and fire 6 protection.
7 On D9: ember 24, 1981, the Commission, after 8 hearing from the main participants on this matter, 9 issued a memorandum and order setting out its decision 10 to review and decide whether or not to grant the request l
11 for exemptions.
The order further provided a schedule 12 whereby members of the public and governmen t agencies 13 could file comment on the exemption request.
14 Participants in the CRBR licensing proceeding were asked 15 to respond to specific questions and DOE was requested 16 to submit currently available documentation in support 17 of the exemption request.
18 On February 8, 1982, an NRC report was 19 submitted which identified the technical and policy' 20 issues raised by the request and summarized relevant 21 background information.
This report is available in the 22 NRC public document room.
23 On February 12, the Commission held an open 24 mee ting. to receive and discuss the report.
On February 25 16 th of this year the Commission met to hear oral s
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINEA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-2345
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4 1 presentations on the request for exemptions to commence 2 site preparation activities for CRBR under 10 CFR 3 50.12.
4 Section 50.12 provides that:
5
"(a) The Commission may, upon application by 6
any interested person or upon its own initiative, grant 7 such exemptions from the requirements of the regulations 8 in this part as it determines are authorized by law and 9 vill not endanger life or property or the common defense 10gand security, and are otherwise in the public interest.
11
"(b) Any person may request an exemption 12 permitting the conduct of activities prior to the 13 issuance of a construction permit prohibited by 50.10.
14 The Commission may grant such an exemption upon 15 considering and balancing the following factorsa l
16
"(1) whether conduct of the proposed 17 activities will give rise to a significant adverse 18 impact on the environment, and the nature and extent of 19 such impact, if any; 20
"(2) whether redress of any adverse 21 environmental impact from conduct of the proposed 22 activities can reasonably be effected should such 23 redress be necessary; 2;
"(3) whether conduct of the proposed 25 activities would foreclose subsequent adoption of ALDERSoN REPORTING COMPANY,INC.
63 VIRGINIA AR S.W., WASHINGTON, D.C. 20024 (G 564-2346
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l 1 alternatives; and 2
"(4) the effect of delay in conducting such 3 activities on the public interest, including the power 4 needs to be used by the proposed facility, the 5 availability of alternative sources, if any, to meet 6 those needs on a timely basis, and delay costs to the 7 Applicants and consumers."
8 Also a part of this section, and I'm still 9 quoting:
" Issuance of such an exemption.shall not be 10 deemed to constitutt a commitment t-issue a 11 construction permit.
During the period of any exemption 12 granted pursuant to this paragraph (b), any activities 13 shall be carried out in such a manner as will minimize 14 or reduce the environmental impact."
15 An important aspect of Part 50.12 I believe is 16 that the Commission is to consider and balance the four 17 factors listed therein which I just quoted.
With 18 respect to the public interest, a number of issues have 19 been raised.
These include Congressional m andate,
20 research and development, hardship, demonstration of l
l 21 licensability and cost of delay.
I believe that all of l
22 these issues merit discussion this afternoon.
l 23 To set further the stage for discussion, I 24 believe there are several questions we should address 25 first.
I will presume that we are agreed that the ALDERSON REPORTING COMPANY,INC, cfG N /ML ELDm N M M GO'kM l
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1 decision to be made is whether or not to grant the 2 exemption.
But I think we also should address the 3 question of, are we agreed on the criteria to be used 4 for making the decision.
I listed the four criteria, 5 but I think it's worthy to discuss it and make sure 6 there are not others the Commission feels should be 7 considered.
8 What is the scope of the public interest 9 criterion?
I did identify a number of areas we've 10 discussed.
How are the factors to be balanced?
Do they 11 apply equally or do we wish to give different weights to 12 different factors?
And then lastly, do we need any more 13 information on any of these criteria to make a final 14 analysis and judgment?
15 And then after addressing these questions I 16 will ask each Commissioner to highlight points of 17 particular relevance a:d of concern to him.
So I would 18 propose that we see if we are agreed on the criteria to 19 be used for making this decision, namely those four 20 factors that were' listed, or are there any others that 21 people think we should we considering?
22 I gather silence means --
23 COMMISSIONER AHEARNE:
Well, at least what I 24 intend to write, instead of tr ying to sk e tch out, one of 25 the issues I will first address is whether 50.12 should ALDERSoN REPORTING COMPANY,INC,
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7 1 apply.
And then after having concluded it should apply, 2 I will reach the criteria in 50.12.
3 CHAIRMAN PALLADINO:
Well, maybe that's the 4 first issue.
5 COMMISSIONER AHEARNE:
But I just wanted to 6
CHAIRMAN PALLADINO:
Well, do you reach the 7 conclusion that 50.12 --
8 COMMISSIONER AHEARNE:
Yes.
9 CHAIRMAN PALLADINO:
Well, maybe that question 10 11 COMMISSIONER AHEARNE:
I just wanted to point 12 out that that is the approach I would take.
13 CHAIRMAN PALLADINO:
Well, if we're agreed 14 that these four factors are to apply, I think the major 15 issue that comes down on any of them is wha t is the 18 scope of the public interest criterion.
I believe that 17 the items we have discussed are appropriate, but I don't i
18 know how the other Commissioners feel on th a t.
19 Ihat would include considering Congressional 20 mandate as we individually see it, the research and 21 development aspects, hardship, determination of --
22 demonstration of licensability, and cost of delay.
23 The next question I listed is, how are the 24 factors to be balanced.
Do you feel they ought to be 25 equally applied or are there difference weights that you l
l ALDERSON REPORTING COMPANY,INC,
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1 would like to give to them?
2 COMFISSIONER AHEARNE:
Well, I think, to speak 3 for myself, it's a judgmental conclusion.
And as I went 4 through all of the issues, I found that until I got to 5 the public interest section I found nothing to deny.
6 But it was very marginal on a few of the points.
7 Then in addressing the public interest I would j
8 have to turn to the information that was provided by the 9 Energy Department.
And I found that, at least in my 10 judgment, the arguments tha t they make f ailed.
11 CHAIRMAN PALLADINO:
And did you ccnsider them 12 all equally, then, even though --
13 COMMISSION ER AHEARNE:
Well, there is some 14 judgment that I can put on the points that you 15 mentioned.
For example, I reached the conclusion that 16 as f ar as the Congressional mandate goes there are 17 enough statements on both sides of that, including the 18 sta tements made in direct response to my questions at 19 the oral presenta tion, so that I think that is pretty 20 much of a neutral -- you've got statements on both 21 sides.
22 As far as the need for the reactor, I believe 23 that that was addressed in the previous NBC decision.
I 24 take it as a given the reactor is needed and I don' t 25 therefore address the question, is it needed or is it ALDERSoN REPORTING COMPANY,INC, ci3 vm 4 a% wNN, @)J3. S@ N
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1 not needed.
For me, a-large amount turned on the cost 2 of delay, and I felt that DOE's presentation was, to put 3 it mildly, very poor.
4 CHAIRMAN PALLADIN0s I didn't follow your 5 point about you said a statement, a decision was made 6 that we are to accept the DOE -- the need --
7 COMMISSION ER AHEARNE:
No, I said I am taking 8 -- I am not addressing whether the Clinch River reactor 9 is needed.
I'm taking it as a given that it's needed.
10 I 'm accepting the previous NRC decision that the NRC 11 addressed that in its previous decision, and as I recall 12 said it should be taken as a given that the reactor was 13 needed.
So I'm accepting that.
14 CHAIRMAN PALLADINO:
Oh, I see, and you're 15 accepting it as part of this argument?
16 COMMISSIONER AHEARNE:
Yes.
I'm just not even 17 questioning tha t.
18 MR. BICKWITs Excuse me.
I think the decision 1HL Eff!Cf 19 was to.be that the program was needed and that a 20 demonstration reactor was needed.
21 COMMISSIONER AHEARNE:
Right.
22 COMMISSIONER GILINSKY:
That decision is which 23 one?
24
- 52. BICKWIT:
Ihis is the 1976 decision of the 25 Commission on the breeder.
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CHAIRMAN PALLADIN0s I come down, if I listen 2 to you and don 't misinterpret you, tha t the factors are 3 to be balanced so that they apply equally.
4 COMMISSIONER AHEARNE I'm saying that when I 5 vent through it it ended up turning in my mind -- the 8 largest factor ended up being the cost of delay.
7 CHAIRMAN PALLADIN0s But you did not ignore 8 the other factors.
9 COMNISSIONER AHEARNE:
I did not ignore the 10 other factors.
11 CHAIRMAN PALLADINO:
It just cam'e on a 12 different side.
13 COMMISSIONER AHEARNE:
And I was just frankly i
14 very disappointed by the continually changing DOE 15 estimates of cost, and I'm very dissatisfied with them.
18 CHAIRMAN PALLADINO:
Are you saying you're 17 giving primary interest to public interest and not the 18 other issues?
You 're not dismissing the other issues?
19 COMMISSIONER AHEARNE:
I'm not dismissing the 20 other issues.
I would try to explain in what I 21 attempted to sketch out how I treated each of those.
22 But in sum, the final point that weighed most heavily 23 against was the treatment of cost.
24 CHAIRMAN PALLADINO:
But you did not ignore 25 the others?
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1 COMMISSIONER AHEARNE I did not ignore them.
2 COMMISSIONER BRADFORD:
I agree pretty much 3 with what John has said, wi th the possible exception of 4 taking the need for Clinch River as a given.
I don't 5 know that the previous Commission decision is 6 necessarily compelling on that point, but I certain 7 agree with what you said about the economics.
8 CHAIRMAN PALLADIN0s But that's not the 9 question I raised.
I raised the question, are we going 10 to balance them all equally or are we going to give 11 preference or weight to one of these or the other.
My 12 own theory is, I think they're all equally valid ans 13 that's why I think we should list them in this 14 particular section.
15 COMMISSIONER BRADFORD Well, let's see.
If 16 you gc through them and conclude that there is no 17 especially significant environmental impact and what 18 there is could be easily redressed, and tha t there was 19 perhaps some but not overwhelming foreclosurable 20 alternatives, but that the public interest did not push 21 in the direction of granting the exemption -- you're 22 right, there may be a certain amount of balancing 23 there.
24 But the bottom line f or me would then be not 25 to grant the exemption.
That is, well -- put it ALDERSoN REPORTING COMPANY,INC, h
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'I another way.
Supposing you concluded there was 2 absolutely no way of redressing the environmental impact 3 and tha t it was very substantial.
Then -- well, I guess 4 I don 't know whether you could then grant the exemption 5 if you concluded the public interest favored it.
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CHAIRMAN PALLADINO:
. minor position?
7 COMMISSIONER BR ADFORD :
No, that's right.
8 CHAIRMAN PALLADINos Any other comments?
9 Well, let me ask, do any of you feel that we 10 need more information on any of the criteria on which to 11 conclude our judgment or analysis?
12 COMMISSIONER GILINSKY.
Let's see.
Does OPE 13 have any guidance on the submissions that we rece'ived 14 since the last meeting?
15 MR. REMICK:
OPE has nothing in general to 16 comment on, but we are prepared to answer any questions 17 people might have.
18 COMMISSIONER GILINSKY:
Well, we received some 19 cost estimates, and I must say for myself I come to the, 20 same conclusion as John.
But I'd be pleased to have 21 your views on it.
This is the Arthur Andersen 22 submission and the DOE submission.
23 MB. REMICK:
Well, in the COE submission, the 24 most recent submission signed by Secretary Davis, they
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l 25 propose three diff erent ways of looking at the cost, and l
ALDERSON REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2346
13 1 in that basically for the first time they do agree that 2 there is one approach, an economic and resource approach 3 which basically agrees with the staff position.
4 However, they point out that there are two other ways 5 that one can look a t it.
They are financial and fiscal 6 appropriation, which basically supports the previous 7 submissions.
G COMMISSIONER GILINSKYa And what do you make 9 of those?
10 MR. REMICKa Well, personally, I think their 11 point that when they go to Congress to request funds 12 they do it from what they call the appropriations 13 standpoint -- they ask for it in inflated dollars.
14 However, as we pointed out before, from an economic or 15 resource viewpoint we believe that the position which 18 they call the economic or resource viewpoint is the 17 proper way that you look at cost of delays to make 18 comparisons on things which are in different year 19 dollars and bring them back to a present year basis.
20 COMMISSIONER GILINSKY:
In particular, the 21 last table they have which they described, I think the t
22 financial analysis as opposed to the economic analysis, 23 I must say I couldn't make head or tail of it.
It j
24 didn't seem to me to be consistent.
25 ME. REMICK:
I'll have to ask either Dennis or ALDERSoN REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2346
in 1 Sid Feld, who his here from the staff.
2 COMMISSIONER GILINSKY:
I was wondering 3 whether you had any idea what they were doing.
They 4 should have gone back to their original table and simply 5 relabeled it " financial analysis".
In the column for 6 present worth, they continue to list the original three 7 i te m s.
/
8 MR. RATHBUN:
It refers to page 5 of the DOE 9 February 25th paper, and the first column of that 10 represents a cost from an actual dollars perspective.
11 And the first three of those numbers there, for 12 inflation, revenue and management f actors,' ' track the 13 approsciations one for one.
The sum of those --
14 COMMISSIONER GILINSKY:
Those are undiscounted 15 dollars?
16 MR. RATHBUN4 That's right.
17 COMMISSIONER GILINSKY:
The second one is a 18 relative column, which is discounted supposedly?
19 MR. RATHBUN:
Yes, and those are the same 20 three numbers as they present on the economic or 21 resource perspective.
Now, in both of those entries for 22 actual dolla rs and present worth dolla rs they show 23 entries for interest at $737 million for actual dollars 24 and 7190 million f o,r presen t worth dollars, which they 25 argue comes from capitalization of the additional year l
l ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGToM D.C. 20024 (202) 554-2346
15 1 of interest, measured at the time of plant completion.
2 And that's how they come to it.
3 I think that's basically what Arthur Andersen 4 was arguing also.
If you did it on a differences basis, 5 the way the other three entries were made, I don't think 6 those would appear.
7 COMMISSIONER GILINSKY:
The last item?
8 MR. RATHBUNa That's right.
9 COMMISSIONER GILINSKYs That's the conclusion 10 'I come to.
It seemed to me that Arthur Andersen got the
' 11 wrong answer by comparing numbers from two different 12 years.
13 CHAIRMAN PALLADINO:
I would like to caution 14 tha t cost is only one item under the public interest 15 items factor, and when my turn comes on these -- I
- 16. vonder if somebody would like to begin on the points 17 t,ha t they are concerned on.
I'll open with a
- 18. Volunteer.
I prefer not to go first this time, since I 19 consumed so much time the previous meetings.
20 COMMISSIONER BRADFORD:
Well, I don't know 21 that I'm going to be a full-scale volunteer, Joe, but it 22 seens to me that one has to have a positive reason for
- 23 gesnting an exemption.
That is, in the normal course of 24 events veen we follow the procedures laid out in the l
25 req uia tions -- and I must say that as I ge down through t
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ALDER $oN REPORTING COMPANY. INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2346
16 the vbrious claims made, both in terms of economics and 1
2 in terms of other benefits for this plant, speaking now 3 only under the heading of ~ the various public interest 4 considerations, although there were some individual 5 points the.t hadsomevalidityhonbalancenone'ofthe 6 major assertions of benefit seemed to stand'up very 7 vell.
8 In particular, when pressed both industry and l
9 DOE witnesses really did not have very m,uch by way of 1
10 what shortage needs to be averted, national needs to be 11 met, crises that would result from the plan t being I
12 available a year later rather than a year earlier.
The C 0.JSlD:ff m J'J5 13 kinds or affirmative decis-i-eas I would look to as a 14 ' basis f or granting an exemption under a public interest 15 heading just didn't materialize.
16 CHAIRMAN PALLADINO:
John?
17 C05 MIS 5IONER AHEARNE:
No, I think I f
18 summirized m y poin ts.
19 CHAIRMAN PALLT.0INot Do you want to restate 20 them?
' 2,1 COMMISSIONER AHEARNE:
Well, I th ought I --
22 CHAIRMAN PALLADIN0s All righ t, if you feel 23 you stated them bOMMISSIONERAHEARNE4 Yes.
I had hopedeto 24 i
25 have read the material sooner.
I had a nu'mber of
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17 1 personal. problems over the last several days and it put 2 me behind getting through the material.
But as I think 3 I tried to explain it, I would address whether 50.12 4 applies.
I would conclude that it does.
I would 5 address whether it is the normal licensing procedure.
6 It is not, but that does not preclude it from applying.
7 It does weigh slightly against the argument of the 8 public interest and the licensability argument.
9 Going through the four criteria, clearly you 10 can redress,'although something you've spent $88 million 11 doing, I question whether you can redress $ 8 million.
12 But it certainly can be redressed.
Whether it forecloses any alternatives; I 13
' 14 don 't think there are any alternatives really 15 foreclosed.
18 Whether it has a significant environmental 17 impact; again, I think the inf o rma tion we have in front 18 of us leads me to conclude that it probably does not.
19 Br. t all those are -- some of those in particular, the 20 fact 'that you are going $88 million into it is 21 significant. There's also the fact that we are in 6 V n'ri A cc 22 essence going intu LWA_1 without a hearing, using a 23 provision which at least my understanding is was used 24 before we really had the 17A-1 to use.
25 And finally, I look at the public interest and ALDERSoN REPORTING COMPANY,INC,
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18 1 on that I do try to weigh the Congressional position, 2 and at least my reading of it is it comes out on both 3 sides and so it's sort of neutral.
4 I read the conclusion that the expedition that 5 is not necessarily directed to us can be just as well 6 directed to DOE to proceed expeditiously.
My own
- 7. conclusion is that as far as the other factors on 8 50.12(b), question of need for power, that is excluded 9
es by the Congressional statement.
10 As f ar as the RED need, as I say I take it as 11 a given that the plant is needed.
I did not find that 12 DOE made a very strong case of the urgency for the RED l
13 for this one year.
I did find that much of their 14 information they submitted to us stressed the cost of 15 delay.
I find that cost of delay was grossly 16 overestimated in my conclusion, and I think the latest 17 UOE submission basically says that the cost of delay is 18 really quite small in actual dollars.
19 And I think the third section they have in 20 their la test is just an attempt to keep those nunbers 21 there.
But there's not much support fo r it.
22 CHAIRMAN PALLADINO.
Well, you tell me that 23 satisfied all four factors, except they did not.do the 24 kind of job you would have liked to have seen done on 25 cost, and you weigh that against all the others as ALDERScN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTcN. 0.C. 20024 (202) 554 2345
19 1 overriding?
2 COMMISSIONER AHEARNE.
No, on the contrary, 3 Joe.
I said that on three of the factors it is just 4 very ma rginal whether they satisfied it or not.
I'm 5 willing to say, all right, they're satisfied.
On the 6 fourth, I think this whole issue comes down to public 7 interest and I think the public interest case on the one 8 hand -- it's using a novel provision of our rules to go l
9 ahead and grant an LWA-1 before the hearing for this 10 system where licensability has been a strong objective 11 of the program, and on the other hand a big argument 12 made for granting that exemption, at least as I read the 13 information, was on the cost of delay.
And I would i
14 grant that if the cost of delay were the 100 to.$240 15 million that they originally insisted or the $190 16 million which they tried to come back with later, that 17 would be a very strong argument for in the public 18 interest going ahead.
S.:,.
19 But not only is the money not spent, but the 20 license applicant, namely the DOE consortium, has to my 21 mind insisted on claiming numbers which I have great 22 difficulty with.
23 CHAIRMAN PALLADINO:
That's the only negative 24 factor you gave.
You said the others are marginal.
25 COMMISSIONER AHEARNE:
That's right, but it's ALDERSoN REPORTING COMPANY. INC, 400 VIRGINIA AVE, S.W WASHINGTM @e. M (SB) 920-E!O
20 1 a very strong negative factor, the cost and the 2 licensability.
3 CHAIRMAN PALLADINO:
Tom?
4 COMMISSIONER ROBERTS:
Go ahead, Vic.
5 COMMISSIONER GILINSKY:
Well, it seems to me 6 what Peter said as to whether the argument is strong 7 enough to go forward, -- and I think we ought to hear 8 those.
9 CHAIRMAN PALLADINO:
Tom?
10 COMMISSIONER ROBERTSs Sir?
11 CHAIRMAN PALLADINO:
We'd like to hear some of 12 the arguments to go forward.
13 COMMISSIONER ROBERTS:
Well, if you want 14 CHAIRMAN PALLADINO:
First, with regard to the 15 environmental impact, in reviewing the site preparation 16 activities the NRC in its FES concluded tha t the 17 environmental effects of site preparation activities 18 would not be significant, and I'll quote:
"In the event 19 the applican t is permitted to proceed with site 20 preparations under limited work authorization, it is the 21 staf f 's cpinion tha t the environmental impacts of such 22 work would not be significant."
23 Now that's from the FES.
"However, more 24 recently the current staff evaluation, the present scope 25 of proposed site preparation activities differs l
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l ALDERSON REPORTING COMPANY. INC.
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o 21 4
1 principally from that discussed in the FES in the 2 greater number of acres affected and the larger number l
3 -- larger amount of excava tion required.
These changes 4 have been considered by the staff in the following 5 evaluations."
6 The first one is impact on land use.
And 7 among the things they says "The staff concluded that the 8 loss for the life of the plant of 73 acres for 9 production of biota would not constitute a significa nt 10 impact on the site, since there are 1,000 similarly 11 forested acres in the vicinity."
j 12 That conclusion is not affected by any 13 increase in the 84 acres and the amount of land lost in 14 production.
The rest of the land disturbed during the 15 preparation would eventually bc graded and revegetated.
16 However, the plant area would reflect a major change 17 from woodland to industrial use.
18 They also says "The staff opinion is that 19 with regard to historical and archaeological teatures, 20 that the opinion is that these historical and 21 archaeological features ara therefore unlikely to be 22 disturbed by site preparation."
23 With regard to impact on water use, the staff 24 believes the situation from site preparation activities 25 and other areas of the site would be negligible since 2
ALDERSoN REPORTING COMPANY.INC.
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22 1 the runoff water would be impounded before discharge in 2 accordance with federal and state standards.
3 With regard to im pact on the terrestrial l
]
4 ecology, there is a paragraph I think vorth quoting:
5 "The wildlife present would be affected in approximate 6 proportion to changes in effective habitat.
In the 7 forested areas which are cleared, animals would either 8 be killed or displaced in the surrounding woodland, I
9 where they would compete for space and food with 10 populations already present.
Following restoration of 11 the temporarily cleared areas, the net effect of site 12 preparation and plant construction would be a small 2
13 increase in open and brushy habitat, preferred by 14 wildlife such as quail, rabbits, and increases in i
)
15 population of woodland species.
None of the shift in i
16 animal population was ultimately to be greater than 20 17 percent of the corresponding populations on the site.
18 Frankly, I don't think they found any i
i 19 difference from now and when they had the FES.
20 On aquatic impact they did have a point, as I 21 recall, which I would say could be made a-condition of 22 granting an exemption.
The staff recommends tha t the 23 applicant be required, prior to activation of site 24 preparation, to conduct a mussel survey in the vicinity 25 of the site, report the results to the NEC, and revise l
ALDER $oN REPORTING COMPANY,INC, 400 VIRGNA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-2346
l 23 1
the water runoff control measures as necessary to 2 pro tect the mussels.
And I would say, yes, that could 3 be made a condition of the exemption.
4 And they go into the socio-economic aspects.
5 The city of Oak Ridge believes that its interests 6 related to socioeconomic impacts will be adequately 7 addressed during the regular NBC deliberations prior to 8 issuance of construction and operation authorization.
9 Also, the communities in which workers are 10 located can expect to benefit from payroll 11 expenditures.
In general, the staff believes the 12 revenue generated by the incoming population through 13 sales taxes, taxes on property and beverages, et cetera, 14 will be sufficient to cover the local cost of increased 15 services to accommodate these workers and their 16 families.
17 That's all under environmental impact.
I l
18 think everyone has agreed that the opportunity exists 19 for redress.
'41th regard to redress the staff's opinion 20 is that the affected areas of the site could be restored 21 essentially to their present conditions of vegetation l
22 and animal life, but perfect restoration of the 23 topography could not be achieved.
l 24 However, mitigative actions can be undertaken, 25 as described by the applicants, which would restore the ALDERSON REPORTING COMPANY. INC.
M VCBE ML 0.Cm WEIXIIETn FXeL Fr.'im A N
24 I site to essentially the same environment or a condit' ion 2 compatible with other industrial uses.
For either 3 restoration option, the cleared areas would be graded, 4 seeded and planted during the process of restoration, 5 and before a dense forest could occur the restored land 6 could provide a variety of habitats which could increase 7 the overall density of animal species on the site.
8 Also go on:. The staff, recognizing that 9 leaving intact the access road and railroad spur and 10 various utility services would be considered consistent 11 with future industrial development to the property.
1 12 Whether the barge-loading facility would also prove 13 useful depends on the nature of future industrial 14 development.
15 But even on this one they say that the slab 16 would not be large enough to be noticeable from the 17 river, and the staff opinion is that the slab should not 4
18 be particularly obtrusive due to its low profile-19 Go on to foreclosure of alternatives.
Then 20 the staff says that no permanent plant structures are i
21 being constructed as part of the site preparation 22 activities.
The excavations for these structures, once 23 they have been made, can be filled if necessary and the 24 site can be restored essentially to its original 25 condition.
Therefore, in the staff's opinion no design ALDERSoN REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 GES $54 2345
25 1 alternative would be foreclosed by allowing the proposed t
i 2 activities to take place.
3 I say that we have met those criteria.
And we 4 go now to the public interest, and I think in the public 5 interest the case is just as strong as it is for the 6 others.
And let me address a few points.
7 I think among the sub-issues that are 8 appropriate to this consideration are those that I 9 listed.
Under the Congressional mandate, there's no 10 question what the Congress has said.
The Omnibus Budget 11 Reconciliation Act of 1981 was explained in the Senate 12 as:
" Construction should be undertaken a's expeditiously 13 as possible to minimize the effects of delay resulting 14 from the 1973 decision to stop the project."
15 In the House it was explained:
"The Congress' 16 intent is clear on this project that the DOE should move 17 ahead with all deliberate speed, and I trust the 18 Administration will obtain the cooperation of other 19 agencies in seeing that construction will go ahead at a
- The conferees' choice of the words 20 significant pace.
21 ' timely' and ' expeditious' were purposely chosen with 22 the intent tha t licensing, construction a'nd other 23 related activities be undertaken promptly, with as 24 little delay as discretion will allow."
25 I think with regard to research 7,nd 4
ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554-2345
26 1 development the conference report of the Omnibus Budget 2 Reconciliation Act of 1981 stated that:
" Congress
)
3 intended that the plant should be constructed in a 4 timely and expeditious manner, so that the decision on 5 the commercialization and deployment of breeder reactors 6 can be made on the basis of information obtained in the 7 operation of the plant."
And that's a quote.
8 Mr. Edgar in his statement said.
The CRBR is 9 an information generator.
Mr. Davis says:
"Having 10 that contribution available, both in terms of the 11 experience with design and construction and licensing 12 and in terms of the operating aspects a year earlier in 13 my mind is something that has to be something very 14 substantial as compared to the value of the project.
It I
15 is not necessarily something that we can quantify, but 16 ve are doing it to gain these intangible values and 17 getting them a year earlier, I will submit, particularly 18 in view of the sort of competitive nature that has 19 arisen worldwide in the breeder business, I think it is 20 dreadfully important.
I think if we can gain a year in 21 terms of the results from the project th a t this in fact 22 is the most persuasive argument at all in my mind."
23 That is Secretary Davis.
24 With regard to hardship, the Applicants' 25 memorandum points out additional delays in this project I
I ALDERSoN REPORTING COMPANY,!NC, M VCLINIA AR 9.W WTHINGToN. D.C. E4 (6%) 554 2345
27 1 will extend further to adversely affect, one, the 2 policies expressed by the Congress in favor of rapid 3 completion, and two, the na tion 's preparedness for 4 long-term nuclear power needs by delaying development of 5 LMFBR technology.
6 With regard to licensability, 50.12 is part of 7 the Commission's regulations and CRBR will undergo NRC 8 licensing procedures, even if the option is granted.
9 Effectively, the exemption would only substitute 10 Commission findings on environmental impact and public interest under an exempt'nd' request for Licensing Board 11 12 findings and environmental impact of site preparation 13 activities under an LWA-1 request.
All other 14 requirements will be met as usual.
15 Now, with regard to cost, I in no way can 16 become convinced that the last f our years of delay have 17 not been a real cost to this nation.
I think it's just 18 an alarming cost to this nation and I deplo re it, and I 19 say that another year's delay on that cost I think is 20 just hiding one's head in the sand.
Whether the costs 21 are $28 million or $218 million, I could sit here and 22 a rgue all day.
But I say they are positive, 23 considerable, substantial, and I think they bear on this 4
24 matter.
25 I
ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON D.C. 20024 (202) 554 2345
28 1
With regard to the costs, I think the costs 2 considered by the Commission must include not only the 3 quantifiable money costs, but also the unquantifiable 4 and equally delay costs; namely those resulting from 4
5 deferral benefits, and the likelihood that the project'$
Secuu 6 vill be placed in jeopardy, in the contravention of 7 Congressional intent in regard to the expeditious 8 prodect completion.
9 I think the most important cost due to the 10 delay is that of deferral of information.
I, in my 11 mind, can't see how anybody could conclude that this 1
12 exemption should not be granted, and I think ought to A
13 hear some of those arguments.
14 The only one given to me is that the cost 15 that DOE didn't do a good job on costs, and I say 16 whether they did or not, the cost is real, it's there, 17 i t 's po sitive, substantial.
18 COMMISSIONER ROBERTS:
I share your views so 19 eloquently expressed.
20 COMMISSIONER AHEARNE:
Let me respond to a 21 couple of the points.
22 COMMISSIONER GILINSKY:
Does that complete 23 your comment?
CopM. ko$.QkD 24 CF".I P ?. h t..
zD 3 0:
Yes, at this time.
25 (Laughter.)
ALDERSON REPORTING CCMPANY. INC.
400 VIRGINIA AVE., S.W., WASHINGTON D.C.20024 (202) 554-2345
29 1
COMEISSIONER AHEARNE:
As far as the 2 Congressional mandate is concerned, we've had a number 3 of letters in from the Congress, and they a re all, I 4 think, very careful to point out that the exemption 5 would be consistent with.
6 None of the letters say this is what Congress 7 intended by their statement.
They are consistent with 8 the exemption request, just as we also have a number of 9 letters from Congress saying that it would not be 10 consistent, with the licensability provision of the 11 arguments that have been made over the years for Clinch 12 River.
13 So I cannot read that necessarily granting the 14 exemption is the only way that we would be following the 15 m an date of Congress.
16 CHAIRMAN PALLADINO:
I'll just take one at 17 random from Senator McClure:
C o>~Y W ad 18
Dear Mr. Chairman:
T he Commit-+ee-has 19 received a request from the Sacretary of Energy to begin 20 preliminary siting work relative to the Clinch River 21 Breeder Reactor Project.
This facility is a vital 22 element of the government's research development proc am 23 related to the liquid metal fast breeder reactor.
As 24 you may know, the conferees' language in the Omnibus 25 Budge t Reconcilia tion Act o f 1982 states that Congress ALDERScN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. 0.C. 20024 (202) 554 2345
30 1
vants this project to be constructed 'in a timely and 2 expeditious manner.'
The floor statements of both 3 Houses further support this conclusion.
I am therefore 4 concerned that the Secretary's request is consistent 5 with the Congressional intent."
6 But he makes the points that it was to be 7 constructed in an expeditious manner.
8 COMMISSIONER AHEARNE:
But the last sentence God C Lv C4 5 9 also makes the point I was making.
He completer thi 10 that their request was consistent with.
11 CHAIRMAN PALLADINO:
It would have been bad if 12 he had put it they were inconsistent.
13 COMMISSIONER AHEARNE:
That's correct, but the 14 furthest he would go was that it was consistent with.
15 We have other letters from Congress saying they do not 16 read it that wa y.
17 In fact, as I recall the chairman of the 18 Senate Appropriations Committee, which I wo uld conclude 19 tha t at least the Appropriations Committee had some 20 major work in the Omnibus Bill -- pointed out that we 21 should not take it that way.
22 CHAIRMAN PALLADINO:
Well, I don ' t know what 23 rou mean.
If somebody says it's consistent with the 24 intent of Congress 25 COMMISSIONER AHEARNE:
All that means -- at ALDERSoN REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
31 1 least in the past, what that has meant, when something 2 is pointed out as consistent with or inconsistent with, 3 it means that Congress either allows it or doesn't allow 4 it, in the view of the writer of the letter, and that is 5 as far as they seem to be willing to go.
6 So I just don't reach the Congressional 7 mandate that might otherwise be --
8 CHAIRMAN PALLADIN04 Well, you know, you read 9 them differently from the way I read them, but I don 't 10 find that statement in Senator Baker's letter.
11 COMMISSIONER BRADFORD:
No, you wouldn't find 12 it there.
13 (Laughter.)
14 CHAIRMAN PALLADINO:
That's all right.
I find 15 stronger language there, and I don't think it's up to us 16 to try to play games with the Congress.
The Congress 17 has said it wants it, and said so repeatedly.
It said 18 so over the ve to of a prior President.
19 COMMISSIONER BRADFORD:
It says it wants the 20 project, Joe.
It hasn't said it wants the exemption.
21 CHAIRMAN PALLADINO.
It says it wants the 22 project, and it wants it in an expeditious timeframe.
I 23 think this is one way of granting the expeditious time.
24 I honestly find it very difficult to come down 25 the way you do, that everything washes out, and the only ALCERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (2021 554 2345
32 1
thing is this little bitty discussion on cost.
2 COMMISSIONER AHEARNE:
The other point I would 3 like to make, the issue in front of us -- at least on 4 cost is not whether the previous four years were or 5 were not a real cost, as you are addressing.
I believe 6 it is what is the cost of the delay of a year, and I 7 think that if a ility-applicant had come in with 8 numbers that were.ufficiently suspect, as we have just 9 seen on the application, we would be addressing taking 10 some action against the utility.
11 I don't'think that the difference between 12 whether it's $20 million or $280 million -- I think if i
13 they were in the applicant's position, we'd be looking 14 at that very skeptically, as I do here.
15 CHAIRMAN PAL 1ADINO:
Go ahead, Tom.
16 COMMISSIONER ROBERTS:
What will be the 17 practicality of asking the Applicant to provide another 18 presentation?
19 COMMISSIONER AHEARNE:
We did, and we asked 20 the set of questions went out in December specifically 21 asked for the supporting evidence for their cost 22 estimate, and then when they came in with it, they came 23 in in mid-January with one set of estimates.
24 The commenters on those estimates criticiced 25 them fairly harshly.
So they came in with a ALDERSoN REPORTING COMPANY,INC.
400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-2345
33 1 modification at the end of January, and then as a result 2 of their request here when we had our meeting with the 3 applicant, w e g o r.
a further refinement or modification 4 change in this latest letter.
I, for myself, don't see 5 any value for asking them once again.
6 COMMISSIONER GILINSKY:
They've 111d it out 7
7 pretty clearly, and they're completely wrong.
8 (Laugh :er. )
9 CHAIRMAN PALLADINO You know, yo u ' re 10 dismissing the last four years as though they didn't yJ l TY l 11 have~anything to do the last four years are a 12 demonstration of the amount of costs involved in 13 delaying.
14 COMMISSIONER GILINSKY:
But that's not what 15 ve're dealing with, i
16 CHAIRMAN PALLADINO:
But I'm saying that's
\\
17 proof that your delay will bring about costs.
It's 18 experjence and you can't deny the experience.
And I'm 19 saying it won't be any less for the forthcoming year.
20 COMMISSIONER BRADFORD:
I'm not sure it's 21 altogether clear tha t the last four years --
22 CHAIRMAN PALLADINO:
It is for me.
23 COMMISSIONER BRADFORD:
Well, it isn't to me.
24 CHAIRMAN PALLADINO:
Nobody is arguing about 25 the 5800 million the last ALDERSON REPORTING COMPANY. INC.
400 VIRGINIA AVE,S.W, WASHINGTON, 0.@. 20024 S 554 2345
I 34 1
COMNISSIONER GILINSKY:
When you say you save 2 $200 million, 520 million -- with any sort of reasonable 3 interest rate, that $20 million becomes a minus number, 4 so I think 5
CHAIRMAN PALLADINO:
If you're going to start 6 to talk about minus numbers, then you'd better bring out 7 some facts.
I don't believe your minus numbers one 8 lota.
And let me explaina 9
There are costs that people have tried to say, 10 oh, well, if you had money in the bank -- if you didn't 11 need this money and had money in the bank and you could 12 get interest on it, then it would be related to present i
13 worth.
14 These are tax dollars.
The taxpayer doesn't j
15 have money in the bank.
The taxpayer is pa ying his 16 taxes out of money that he earns each year.
And I think 17 these are real costs to him.
And to say that by some 18 translation of acrounting or economic theory, that they 19 are not real, just doesn't convince me.
20 And if you want to say they're negative, I say 21 I've got to be shown, because everything is positive.
22 The only question it whethe r --
23 COMMISSIONER GILINSKY:
In DOE's own analysis, 24 there is a negative contribution.
25 CHAIRMAN PALLADIN0s Oh, yes.
ALDERSoN REPORTING COMPANY,INC, S MTNF"D /XIL fWIL N fMEL M (RM RbfEl'Yi
35 1
COMMISSIONER GILINSKY And th'ey're taking a 2 real interest rate of 3 percent -- a real discount rate 3 of 3 percent, which is ridiculously low.
If you took a 4 higher one, that item would be more than that, the whole 5 total would be negative.
6 I don't want to make a big point about whether 7 it's negative or positive.
It really washes out.
It's 8 -- the important aspect of this item is really, I think, 9 the one that John has, is that the applicants didn't 10 make a big thing out of it.
They presented really a 11 completely erroneous analysis.
12 CHAIRMAN PALLADINO:
The applicant didn't make 13 a big thing of it.
We made a big thing of it.
The 14 applicant included this as part of his analysis.
Then 15 we blev it up, I think, all out of proportion to such an 18 extent that we could hardly ever get back to the other 17 issues.
18 COMMISSIONER GILINSKY:
Well, then, we were 19 pretty hard on it, and we blev it up, I suppose, by 20 ask in g them to justify it.
In fact, I must say I'm very 21 surprised that we were -- that we had submitted to us 22 the kind of analysis tha t was submitted to us, both by 23 DCE and by a firm with the reputation of Arthur i
24 Andersen.
I'm more than a little surprised.
25 CHAIRMAN PALLADINO:
Well, I have a problem ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AR S.W., WASHINGTON. D.C. 20024 (202) 554 2346
36 1 here.
I don't think the problem is with the cost 2 analysis as with the people doing it, and if I get 3 somebody that's supposed to be expert, like Komanoff, I 4 get somebody that's supposed to be expert like Arthdr 5 Andersen, I get DOE, that certainly has handled many 6 projects and ought to be able to tell what their costs I
7 are, I think all that has thrown us into confusion.
8 But, nevertheless, I'think the costs are 9 positive, and I see nothing that indicates they are not i
10 positive.
Even including Komanoff.
Despite a statement 11 that says they migL L be negative.
12 COMMISSIONER BRADFORD:
Joe, you had indicated 13 a while ago that it seemed to yo u th at the po sition 14 against the exemption hinged entirely on economics being 15 lower than DOE had suggested.
I hadn't meant to leave 16 you with the impression that at least my position was i
17 that narrowly based.
18 Again, it seems to me we start out with a 19 licensing process, and it's presumed that the public 20 interest lies in having that process followed, unless 21 somebody makes reasonably strong affirmative cas,e that 22 it shouldn't be.
23 If anything, there's no public in terest in 24 taking shortcuts and getting substantial amounts of Sf!v(
25 money, and then deciding to do things dif ferent ways.
1 l
l l
l ALDERSoN REPORTING COMPANY,INC.
400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 'y02) 554 2345
37 1 So, by and large, one prefers to have a decision made 2 through the process as it's laid out in the Commission 3 regulations in advance of major commitments.
4 So there is, it seems to me, a burden on 5 somebody who says that they want an exemption.
We 6 don't, f or example -- we wouldn't routinely take any old 7 reactor applicant who came in and happened to have a 8 site that was pretty well cleared, anyway, and redress 9 was easy, and there weren't too many alternatives and 10 say, okay, there you go, you get a 50.12 exemption.
11 CHAIRMAN PALLADINO:
Have we done that before?
12 COMMISSIONER BRADFORD:
It's happened once or 13 twice.
But what I'm saying is --
14 CHAIRMAN PALLADINO:
You've done it more than 15 once or twice.
16 COMMISSIONER BRADFORD:
-- in 70-some cases of 17 operating power plants, it's happened -- in whatever the 18 right number is, it's a small number of them.
19 Now there is a presumed consequence of having 20 the process followed, which I would say would be 21 stronger in the case of a one-of-a-kind or a 22 first-of-a-kind project, and to me it's at that point 23 that the economic question becomes an important one, 24 together with the question of whether there really is a 25 compelling need for having this project one year sooner.
ALDERSON REPORTING COMPANY,INC,
38 1
Because it's the one year sooner that at's 2 issue.
After all, what we're deciding here today is not 3 whether or not Clinch River gets a license; it's whether 4 it gets it --if it gets it, whether it gets it one year 5 sooner.
6 CHAIRMAN PALLADINO:
It's whether or not 7 they're going to get the opportunity to do site clearing 8 and the like.
9 COMMISSIONER BRADFORD:
Okay.
But the end 10 result in terms of what the significance of that is, is 11 whether Clinch River is available to the nation a year 12 sooner, or even later.
13 CHAIRMAN PALLADINO:
I thought we were going 14 to accept that th a t was a fact, and tha t it is 15 beneficial for this nation to have this information 16 sooner.
17 Otherwise, we are trying to substitute our 18 judgment for that of Congress, that says this is 19 important and we want it done timely and expeditiously.
20 COMMISSIONER BRADFORD:
Well, what Congress 21 has said is that the project is -- well, what one might 22 generally say is that Congress has said the project is 23 important and at least the majority of the Congress 24 expects to see it completed.
25 I think one has to search a little harder to ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2345
39 1 find a preference for one year as against another.
2 COMMISSIONER GILINSKY:
I would add that the 3 same people in the Congress who urge us forward on 4 Clinch River are, I think, generally speaking, the 5 people who urge us in the strongest terms to make sure 6 that we meet the schedules on power reactors, which we 7 have several dozen, perhaps, and we'll get others.
8 CHAIRMAN PALLADINOs That's a different 9 criterion.
4 10 COMMISSIONER GILINSKYa I don't think it's a 4
i 11 different criterion.
It's a public interest criterion.
12 And I must say that af ter one has washed out these 13 various cost numbers, it seems to me -- there is an 14 interesting point on the costs.
If you're dealing with 15 a pcwer reactor, you would in fact have deferred 16 benefits, fairly substantial ones, because of the 17 generation of power and presumably providing lower cost 18 power than would otherwise be available.
And I wonder 19 what the effect of this precedent is if we were to grant 7-fG4 20 an exemption where that benefit isn't eeest, would we 21 then have to grant the exemption in every f uture 22 licensing case?
That's something we haven't talked 23 about.
24 CHAIRMAN PALLADINO:
I think you're 25 extrapolating without basis.
ALDERSON REPORTING COMPANY,INC, NCJfN\\ &IL ELCm N f4GL F.Wt3 8 EP36Y1Ci
40 1
COMMISSIONER GILINSKY:
But let me just return 2 to the point I was going to make, which is that it seems 3 to me when all is said and done, to my mind, it's the 4 benefit that you mentioned in getting information a year 5 earlier, assuming this project goes forward as planned, 6 as opposed to putting the project on, so to speak, a 7 fast track, a fast licensing track.
8 And to my mind, there is a substantial cost 9 associated with that, and we are stretched fairly 10 tightly, We've had to cut back on a whole range of 11 projects in order to make sure that we are in a position 12 to meet all the various licensing schedules on power 13 reactors, so that power reactors don't needlessly stand 14 idle.
And we've been accused of it; pilloried all last 15 year about it.
16 The situation seems to be much better in 17 control than it was, or seemed over the past year.
But 18 I don't know that there's a lot of room, a lot of safety 19 margin.
20 And also, there are just a lot of safety 21 projects having to do with light water reac tors that we 22 o%ght to be attending to.
23 The question isn 't whether we are going to 24 proceed with licensing or reviewing this plant for 25 licensing.
It's a question of whether we're going to l
ALDERSoN REPORTING COMPANY,INC, 400 VIRGihlA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2345
41 1 advance the schedule.
And to my mind, a substantial 2 penalty is associated with that, and it's going to be 3 paid in part by the very utilities, some of which, oddly 4 enough, are urging us to go forward with Clinch River.
i S But I don't think they've thought it through.
6 CHAIRMAN PALLADINO:
Well, let's examine this 7 question of what it's going to do to the NRC.
I don't 8 think it's --
9 COMMISSIONER ROBERTS:
Don't we have a Staff to memo --
l 11 (Simultaneous conversation.)
l 12 COMMISSIONER GILINSKY:
Mr. Check said that 13 last time.
We have a memorandum from the Staff on that 1
14 subject.
I must say, I just don' t accept those 15 numbers.
I've been around here for a long 16 CHAIRMAN PALLADINO:
Then you must have a 17 basis for giving us some other numbers.
I don't believe 18 19 COMMISSIONER GILINSKY:
I'll tell you wha t the 20 basis is.
It's my experience here over the past several 21 years.
22 CHAIRMAN PALLADINO:
I think this is a red 23 herring, because we are going to have to have an effort 24 on Clinch River, aside from the exemption.
The 25 exemption was estimated by the people that have to do ALDERSoN REPORTING COMPANY. INC.
400 VIRGINIA AVE S.W WASHINGTON D.C. 20024 (202) 554 2345
42 1 the work to be rather minimal.
You can't tell me that a 2 half a year --
3 COMMISSIONER GILINSKY I am not persuaded by 4 those numbers.
5 CHAIRMAN PALLADINO:
Well, I am.
6 COMMISSIONER GILINSKY We're dealing with a 7 project that is --
8 CHAIRMAN PALLADINO:
But you're throwing out a 9 red herring that this is going to delay all 'these other, 10 licenses.
I don't believe one iota of th't, and I have a
11 seen no basis for that, and I think you ought-to have i
12 some basis for it, aside from just'a vague feeling.
t r
+
13 COMMISSIONER GILINSKY My basis is this:
A 14 that if you advance or put on a' fast track substantial 15 project, with many problems add novel problems
~
16 associated with that which make substantial demands on --
17 CHAIRMAN PALLADINO:
But'we're no't putting it 18 on a fast track.
We're only treating'an exemption.
19 You're introducing the other criteria, tbat you're COMMISSIONER GTLINSKY:
Well, that is the way 20 c s
s s
21 I 'in terp re t it and that Qs the,way I read it.
22 CHAIRMAN PALLADINO:
Well, then, we're not 23 working on that.
24 COMMISSIONES GILINSKY:
Well, this is the i
4 25 first step in doing th a t.
I don 't see how you can see
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ALDERSON REPORTING COMPANY. INC.
400 VIRGANIA AVE., S.W., WASHINGTON O.C. 2002 (202) 554 2345 N
43 s
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1 it any other way.
2 CHAIRMAN PALLADIN0s I don't see that that's 3 the first step in doing anything.
It's just whether or 4 not you go with this exemption.
S I think it's quite clear that they don't s
6 impact adversely on the environment.
I think it's quite 7 clear that they are redressable.
I think it's quite l
I 9
. they don't foreclose any options, and it's quite 9 clear it 's in the public interest.
This Congress wants 10 the informa tion, and we're going to get it one year 11 sooner.
And if that isn't the public interest, I don't 12 know what is.
13 Do you deny that we'll get it one year sooner, 1
14 perhaps?
I 15 COMMISSIONER GILINSKY:
Perhaps.
18 CHAIRMAN PALLADINO:
All right.
Then it's on T
-17 the positive side.
t 18' COMMISSIONER GILINSKYs Well, that's what I 19 said.
I said balancing tha t --
20 CHAIRMAN PALLADINO:
Well, then, where's the (i
21 down side?
I don't find a down side a t all.
22 COMMISSIONEZ CILINSKY:
Well, Joe, if you 23 don't accept what I've proposed, you don't see it.
24 CHAIRMAN PALLA9INO:
That's right, I don't see 25 it.
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COMMISSIONER BRADFORD:
The,down side, I
)! think, Joe, is the be,nefit of cetting"that information e'
3 one year sooner just dcosn't outwei h in.my mind a 4 couple of areas of cost.'
i 5
One is in short-cutting our regular processes.
6 Another, I think,, sub stantially is tha t the
- 7 economic numbers are actually negative here.
Certainly 3 in --
9 CHAIRMAN PALLADIN04 Nobody has presented any to data in shcwing they are negative.
11 COMMISSIONER BRADFORDa Well, first of all, 12 DOE doesn't disagree that they are negative.
In fact, 13 they said as much in the case in which the Congrese 14 openly decides not to go ahead.
15 CHAIRMAN PALLADINO:
I don't remember any 16 place their acknowledging that they're going to 17 negative.
If there is --
18 COMMISSIONER BRADFORD:
Joe, surely you 19 wouldn 't disagree, I think -- it doesn't seem to me to 20 be open to argument, that if the project were cancelled, 21 then an extra so many million dollars spent on it in the 22 next year or two is money badly spent.
23 CHAIRMAN PALLADINO:
No, 24 COMMISSIONER ROBERTS:
Tha t's not our decision 25 to make.
l ALDERSON REPORTING COMPANY. INC.
400 VIRGINIA AVE.,3.W., WASHINGTON D.C. 20024 (202) 554 2346
o 45
?
~1 CHAIPHAN PALLADINO:
The Mayor has also 2 pointed that these roads, these railroad spurs, the 3 power line vill be usable in an industrially-zoned 4 environment, anyhow.
5 COMMISSIONER BRADFORD:
Yeah, but that's an 6 entirely different prebles. OdOI#5 / #
7 There are distributions of possibilities 8 across -- over the next few years.
I think it may be 9 fair to say that if Congress has kept the project going 10 this far, maybe the majority of those probabilities is 11 it would continue to keep it going.
Maybe not.
12 There are certainly some substantial 13 probabilities'that Congress won't keep the project going.
14 Involved in all those cases, it seems to me, is that the 15 cost of going ahead on a f ast track now would outweigh 18 the benefits.
17 Then there are other cases and Vic alluded to 18 them, depending on the discount rates one assumes, even 19 if one does go ahead on a fast track, th e benefits of 20 having the information one year earlier don 't outweigh i
1 21 the costs.
So in all those costs -- excuse me.
Let me 22 put it another way.
23 If one goes ahead on a fast track, the 24 benefits are minus; that is we are spending money sooner 25 than ne need in relation to the informatican we're ALDEP, son REPORTING COMPANY,INC.
400 VIRGIN 8A AVE, S.W. WASHINGTON. D.C. 20024 (202) $54 2345
46 1 getting.
2 CHAIRMAN PALLADIN0s To get these benefits, 3 you have to spend money.
4 COMMISSIONER BRADFORD Right.
5 CHAIRMAN PALLADINO:
And the reason the 6 novernment is spending money is to get them.
7 COMMISSIONER BRADFORD:
Eight.
8 CHAIRMAN PALLADINO:
Now if it's got to wait 9 longer, you're certainly' going to spend more money.
10 COMMISSIONER BRADFORD:
Well, see, that's 11 where we keep meeting ourselves going around in a 12 circle.
I'm just not sure that in constant dollars that 13 sta tement is true.
14 CHAIRMAN PALLADIN0s Well, I'm as sure as 15 shootin' that it's going to cost more, and as a taxpayer 16 we'll pa y more for it.
l 17 And I also have another problem with your 18 a rg um en t tha t the Congress migh t choose to look at 19 things differently in the future.
I don't know if 20 tha t's even pertinent, but I can assure you that had 21 President Kennedy said we're going to go to the moon, 22 and nothing happened for four or five years, I'll bet 23 you patience with that would have eroded.
I think 24 that's a --
25 COMMISSIONER BRADFORD:
I'm not basing my I
ALDERSoN REPCRTING COMPANY,INC, 400 VIRGINIA AVE., S.W. WASHINGTON, D.C. 20024 (202) 554-2345
47 j
1 decision on the possibility that Congress may turn the 2 project down at some point.
Let me be clear on that.
3 What I am saying, though, is that when you 4 make the assumption that the economics of the decision H-r/G 5 one way or the other necessarily herren to be in favor 6 of moving the project along faster, there's at least one 7 case, one possibility in the future where that 4
8 assumption is clearly wrong.
We might assign different 9 probabilities to it, but I don't think anyone can argue 10 that the assumption is wrong for a f uture in which 11 Congress terminates the project.
12 CHAIRMAN PALLADINO:
I maintain that any 13 Congress would get fed up with a project that doesn't go 14 anywhere'after they've funded it, year after year, and 15 the money is spent producing very little.
VJ L %
16 COMMISSIONER GILINSKYs Saqpose it doesn't 17 have to be subject to licensing 7 I mean it can be 18 exempted from licensing if Congress wants to do that.
19 CHAIPMAN PALLADIN0s CCngress knew this 20 exemption opportunity was there.
They didn't need to 21 address that.
22 COMMISSIONER GILINSKY:
I doubt if this 23 oxemption opportunity got very much attention.
24 CHAIRMAN PALLADIN0s I'm not sure that it 1
25 didn't.
ALCERSoN REPORTING COMPANY,INC.
400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
48 1
COMMISSIONER AHEARNE:
It wasn't mentioned in 2 any of the letters.
3 CHAIRMAN PALLADINO:
Yeah, I think it was 4 men tioned in something that DOE submitted.
I'd have to 5 go back and find it.
6 COMMISSIONER AHEARNE:
No, the way it was 7 mentioned, it was discussed -- the waiver that was 8 discussed by Congress was the one that Mr. Dirksen 9 mentioned when he wrote a letter to the GAO, and he said 10 a waiver from some of the NEPA provisions might be 11 required, and that was the waiver that was discussed on 12 the floor of the Senate.
13 CHAIRMAN PALLADINO:
I do remembe r something 14 somewhere, and I'm not sure where --
15 Well, my own feeling, of course, is that to 16 deny this exemption would be a very sad mistake.
17 I have another problem that makes me 18 unprepared to vote today.
I'd like to defe r the vote 19 until maybe later this week, and tha t is I'd like to 20 keep the options open for a new Commission or a 21 Commission that has different membership.
And my 22 experience at the University, based on Roberts Rules of 23 Order, was it took someone who voted with the majority 24 to introduce a motion to reconsider.
25 And so my question is, to myself, that I'd ALDERSON REPORTING COMPANY. INC.
400 VIRGINIA AVE, S.W WASHINGTON, D.C. 20024 (202) 554-2346
O 49 1 like to explore and have a little time, should I vote 2 against this so I can make a motion to reconsider later 3 when we have a reconstituted Commission.
And I think I 4 ought to keep that option open, if that's one of the 5 vays to do it, and I'd like to have some time to explore 6 it with legal counsel.
7 COMMISSIONER BRADFORD:
I must say that that's 8 a wrinkle that I wish had occurred to me several years 9 ago.
There have been some reconsideration situations I 10 would have loved to have wored that.
11 CHAIRMAN PALLADIN0s Well, it's a very 12 important one.
I think it's one that is commonly used 13 in the Congress, where someone who introduces an 14 amendment, if he sees it's going to fail, he'll vote 15 against it, so he can move to reconsider it when he 18 thinks it might be appropriate.
And I'd like the time 17 to explore that between now and perhaps Wednesday, and 18 see how I want to vote on this.
19 I don't mean to delay the vote.
I think I can 20 see how the vote is coming down.
21 (Laughter.)
22 And so I'm not going to delay it interminably, 23 but do think I need a couple days to explore that 24 issue.
25 COMMISSIONER BR ADFORD:
Fair enough.
ALDER $oN REPORTING COMPANY. INC, 400 VIRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-2345
50 1
CHAIRMAN PALLADINO:
Are there any other itens 2 that we should discuss?
3 All right, if not i
4 COMMISSIONER BRADFORD:
I'm just not sure 5 whether John is aware --
6 CHAIRMAN PALLADINO:
John, do you have i
l 7 anything more?
8 Okay, thank you, then.
We stand adjourned.
l 9
(Whereupon, at 3:07 p.m.,
the meeting was 10 adjourned.)
11 12 13 14 15 16 17 18 t
19 20 21 22 23 24 25 ALDERSoN REPORTING COMPANY. INC.
400 VIRGINtA AVE, S.W., WASHINGTON. D.C. 20024 (202) 564 2346
1 t
1 UNITED STATES OF AMERICA 2
NUCLEAR REGULATORY COMMISSION 3
4 DISCUSSION OF CLINCH RIVER BREEDER REACTOR 5
OPEN MEETING 6
7 Nuclear Regulatory Commission Room 1130 8
1717 H Street, N.
W.
Washington, D.
C.
9 Monday, March 1,
1982 to 11 The Commission met, pursuant to notice, at 12 2:00 p.m.,
Nunzio Palladino, Chairman, presiding.
13 BEFORE:
14 NUNZIO PALLADINO, Chairman of the Commission 15 JOHN AHEARNE, Commissioner VICTOR GILINSKY, Commissioner 16 PETER BR ADFORD, Commissioner THOMAS ROBERTS, Commissioner 17 l
18 STAFF MAKING PRESENTATIONS AT MEETING:
I 19 SAMUEL CHILK, Secretary LEONARD BICKWIT, General Counsel 20 FORREST REMICK, OPE DENNIS RATHBUN 21 JANE AXELRAD 22 23 24 25 ALDERSoN REPORTING CCMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2346
m
)
suc=n aracu. ear c:m:ss=x This is to certify tha: the attached ;receedings 'cefore the
)
COMP.ISSION MEETING 13 the cattar cf:. PUBLIC MEETING - DISCUSSION OF CLINCH RIVER BREEDER REACTOR Date cf ? rec.eeding:
March 1, 1982 Occket Mumher
?I.act cf Preceeding:
Washington, D. C.
were held. as hereis appears, and chit this is the cr+.ginal :: scscM 2.".eract (cr~ Che CLLa cf the Cec:stssLee.,
Ann Riley Cfficial Eepertar (Typed) f
$n) n
. Official Repceter (31gracure) e 0
o M
KOMANOFF ENERGY ASSOCIATES
- xf:;-
February 26, 1982
- 52 r= 26 e M 6 Chairman Nunzio Palladino Commissioner Peter Bradford Commissioner Victor Gilinsky Commissioner John F. Ahearne Commissioner Thomas F.
Roberts U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Clinch River Breeder Reactor Plant (Docket No. 50-537)
Gentlemen:
This is to respond to the February 23 letter by Jerry E. Walker of Arthur Andersen & Co., concerning the effect of a one-year delay on interest and other costs of the Clinch River Breeder Reactor Project.1/
The purpose of Mr. Walker's letter is to advadce Appli-cants' notion that a delay in future construction of Clinch River will increase interest charges on funds already spent.
I will demonstrate below that Mr. Walker's argument 's falla-cious and that future delays will have no effect whatsoever on interest or other costs associated with project expendi-tures to date.
First, I will briefly review the three other areas in which costs might be incurred (or savings might accrue) from a one-year project delay.
The purpose of this review is to 1/
The Department of Energy's letter of February 25 adds nothing to its prior presentations.
The argument that delay costs should be measured from a so-called "appro-priations perspective" has no place at all in a discussion of real economic costs.
Similarly, the attempted fabrication of a distinction between an " economic or resource perspective",
on one hand, and a " financial perspective", on the other hand, is completely artificial.
Once again what matters are real economic costs; and, whether measured from the stand-i point of an individual entity (the Treasury) or society as a whole, in this case, to the extent they exist at all, such costs. are relatively small.
1 l
h f
4 EST END AVE 14th FLOOR NYC 10023 212-580-3266 4>-
.s KOMANOFF ENERGY ASSOCMTES U.S. Nuclear Regulatory Commission February 26, 1982 Page 2 i
1
)
demonstrate that the net costs (or savings) from non-interest impacts of delay are relatively small and, therefore, to j
focus the Commission's attention on the interest question.
i 1.
Personnel Retention At the February 16, 1982 Commission meeting, Applicants estimated that the present-worth cost (1982 dollars) of personnel retention during a one-year delay would be $31 million.
Mr. Walker states in his letter that Applicants l
have re-calculated this figure to be 538 million.
For reasons I explained in my Supplemental Statement of January 28, 1982 -- essentially, Applicants' failure to weigh the benefits of design improvements initiated during delay, their use of excessive charging rates, and their insufficient consideration of personnel re-assignments -- either figure is likely to overstate the true net cost of personnel retention.
2.
Deferral of Revenue 1
l Mr. Walker has adopted my S20 million estimate for the
~
j present-worth cost of a yea
's deferral of power generation i
by Clinch River.
That figt i however, must be considered i
conservative (likely to err an the high side), not only because it is triple Applicants' estimate but also because of its generous assumptions concerning Clinch River operations:
60% capacity factor, zero nuclear fuel cost, and O&M costs no greater than the LWR average. 2/
a
.3.
Deferral of Future Expenditures Both Applicants and I independently calculated a net $30 million savings from deferring future project expenditures 2/
Mr. Walker's reference to higher foregone costs assuming petroleum generation is gratuitous.
Less than one-half of one percent of TVA's generation is provided by oil, and that is used in start-up of coal plants rather than as a boiler fuel.
Nor is there any prospect that off-system sales from Clinch River would displace oil; a mere 3 percent of 1980 electric generation was derived from oil in the East South central region ( Alabama, Kentuck,y, Mississippi, Tennessee), and this meager fraction is dwindling fast as utilities respond to the 1979-80 increase in oil prices.
333 WEST Ef9D AVE 14th FLOOR NYC.10023 212-580-3266 dG-
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KOMANOFF ENERGY ASSOCIATES U.S. Nuclear Regulatory Commission February 26, 1982 Page 3 for one year, provided that project costs inflate at 8 percent per year and interest rates on U.S.
Treasury borrowing average 11 percent.
Savings rather than costs accrue from delay because, in the event of a year's delay, Applicants could, in effect, invest the funds earmarked for
~
that year's construction in 1-year Treasury bills which, at the end of the year's delay, would more than make up (through 11% interest) the 8% inflation in project costs.
Although in
~
ac'tuality Applicants would not be provided with funds for such investment in the event of a delay, the Federal Treasury as a whole would behave in precisely the fashion described --
the Treasury would reduce its 11% borrowing by exactly the amount cf deferred Clinch River expenditures (a result equivalent to the Treasury's purchasing its.own securities).
Depending, then, on whether the Commission accepts Applicants' estimate that the net cost of personne; retention is S38 million per year or our assertion that the ret cost is less and perhaps even zero, the total effect of Categories 1 through 3 ranges from a net cost of S28 million to a net savings of $10 million.
The cost is lower still (or the savings greater) to the extent that interest rates remain more than 3 percentage points above the inflation rate.
3/
4.
Interest on Expended Capital I
With this range of a year's delay's impact in mind --
from a $10 million savings to a $28 million cost -- I will now try to dispel the notion advanced by Mr. Walker that any future delay in project completion will add to costs associated with past expenditures.
+
-3/
In his letter, Mr. Walker expresses the cost (or savings) of deferring future expenditures (my Category 3) as "a 'saving' of S30 million on a present-worth basis and a cost of over $136 million with inflation of 8% per year" --
juxtaposing the two outcomes (a $30 million savings and a S136 million cost) as if they were equivalent.
They are not.
Th'e $30 million saving is the net effect of two simultaneously occurring factors:
a S 136 million added cost due to 8% inflation, and a $166 million savings from deferring the 11% borrowing required to support each year's ex'penditure s.
To present one f actor alone, without its companion, is patently false.
333 WEST END AVE 14th FLOOR NYC 10023 212-580-3266 i
KOMANOFF ENERGY ASSOCIATES U.S.
Nuclear Regulatory Commission February 26, 1982 Page 4 To begin, if delay does entail such a cost, one should like to know precisely how it will be incurred.
Mr. Walker, not surprisingly, wholly fails to identify any mechanism through which alleged added interest costs are to be incurred.
In fact, he cannot.
The Treasary's obligation to pay interest on past expenditures, established by notes with fixed yields and fixed terms, is invariar".
If Clinch River were to be finished tomorrow, or if it were to be abandoned tomorrow, there would be no increase or decrease in the Treasury's interest obligations on funds already expended on Clinch River.
Mr. Walker is equally vague in his example of the effect of a delay in progress of a home under construction.
In fact, pursuit of his example helps prove my point.
Let us assume that Mr. Walker's builder estimated a four-year construction period, with expenditures of S 18,000 in the first year, S19,000 in the second, $20,000 in the third, S21,000 in the fourth.
To finance construction, he borrowed S18,000 from the bank just prior to year 1, $19,000 just prior to year 2, and S20,000 j ust prior to year 3, with each loan carrying an interest rate of 10% and a term of 30 years.
Thus, at the end of year 3, he has already paid two years of interest on the first loan and one year on the second; he is now facing an interest payment of S5,700 (10%
of $18,000 + $19,000 + S20,000) and he is poised to borrow S21,000 more to finance the fourth and final year's expenditures.
Just then, at the 75% completion mark, the builder learns that he must wait 6 months to do the final year's work.
Mr. Walker argues that this delay must affect his interest costs for past expenditures.
In fact, it doesn't.
The builder must continue paying annual interest of $5,700 on his prior loans.
Indeed, he must pay S5,700 each year until the terms of the loans expire, regardless of whether he abandons the house or if he completes it 'after 18 months.
Mr. Walker's vague attempt to fabricate a cost increase --
"He had to carry the accumulated cost on the 75% completed home and had to pay interest for the six-month delay period" -- cannot withstand the fact that the builder.would have had to pay the.same SS,700 interest on past expenditures during those six months of delay regardless of whether the 333 WEST END AVE 14th FLOOR NYC 10023 212-550-3266 i
e
KOMANOFF ENERGY ASSOCTATES U.S. Nuclear Regulatory Commission February 26, 1982 Page 5 house-building was in progress or not. 1/ Again, future actions have no bearing on past interest obliga-tions.
5/
This is not to say that the delay would not affect the
~
builder's ability to pay off the interest on his past loans.
~
It'certainly would, assuming that he was counting on th a revenue from the sale of the house to cover his interest costs.
But this f actor, def erred revenues, has already been counted here by both Applicants and myself.-- it is my Category 2. 5/
l S/
The result is the same if the builder nego-l tiates the last loan, for $21,000, and then encounters the l
six-month delay.
He could either use the cash to fedeem the loan or lend it to another builder at the same interest rate
-- effectively canceling the loan in either case.
5/
I note here, as I did in my Supplemental Statement of January 28 (at 7n), that delays in completion of capital projects by investor-owned utilities do, in fact, add l
to interest on past expenditures through the mechanism of l
Allowance for Funds Used During Construction (AFUDC).
How-ever, as also noted therein, such added costs are exactly offset by the extension of time in which the ratepayers are permitted to avoid responsibility for paying for past costs.
From a net societal standpoint, it does not matter whether the utility or the ratepayers carry these costs.
In fact, in cases where 100 percent Construction Work In Progress is j
allowed, ratepayers rather than utilities capitalize the pro-ject and there is no AFUDC.
If we substitute taxpayers for l
ratepayets, this description applies to Clinch River.
1
~
at 6/
If the deferred revenue here seems small,
$20 million per year, relative to Project cost, recall that Clinch River will. cost 5 to 10 times more, per-kilowatt, than conventional reactors, and that its revenues, measured in terms of displaced coal generation, will be several times less than the revenues associated with reactors displacing oil or gas.
(The assumption that reactors under construction will displace oil or gas is often made in calculations of delay costs presented to the Commission.).
Thus, the deferred revenue that looms as such a large delay cost to our house-builder, and also in the case of many conventional reactors, is a small factor in the present instance.
333 WEST END AVE 14th FLOOR NYC 10023 212-580-3266 s
KOMANOrr ENERGY ASECCIATES U.S. Nuclear Regulatory Comm'?sion February 26, 1.982 Page 6 In short, when we flesh out Mr. Walker's home-builder example, we find that it contradicts rather than confirms his assertion that delay increases interest costs on past expenditures.
Mr. Walker's final attempt to make his point is his citation of Accounting Standard No. 34 of the Financial Accounting Standards Board.
But a careful reading of Standard No. 34 indicates that it specifies merely that any interest costs incurred in capital projects are to be included in the calculated cost.
It does not say that where interest costs have not been incurred, they must be computed anyway and added to the cost.
Yet that is precisely what Mr.
Walker has argued in his letter. 2/
Very truly yours, y ha n~
gds vs Charles Komanoff cc:
Service List i
l M
And in his Exhibit II.
That Exhibit is a i
laborious calculation of hypothetical delay-inflicted l
interest costs on past expenditures on. Clinch River, but it too lacks a demonctration that such costs would accrue in the re al wo -Id.
333 WEST END AVE 14th FLOOR NYC 10023 212-580-32SS s-
t
- e SERVICE LIST 7
~
Marshall E.
Miller, Esquire Itf26 p7.g7 Chairman Atomic Safety & Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Mr. Gustave A.
Linenberger Atomic Safety & Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C.
20555
- Leonard Bickwit, Esquire Of fice of General, Counsel U.S. Nuclear Regulatory Commission Washington, D.C.
20555
- Daniel Swanson, Esquire Office of Executive Legal Direct 6r U.S. Nuclear Regulatory Commission Washington, D.C.
20555
- Stuart Trebey, Esquire Office of Executive Legal Director U.S. Nuclear Regulatory Commission Washington, D.C.
20555
- Atomic Safety & Licensing Appeal Board U.S. Nuclear Regulatory Commission Washington, D.C.
20555
- Atomic Safety & Licensing Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555
- Docketing & Service Section Office of the Secretary U.S. Nuclear Regulatory Commission Washington, D.C.
20555 (3 copies) e D
R
s
.,' *R.
Tenney Johnson, Esquire Leon Silverstrom, Esquire Warren E.
Bergoholz, Jr., Esquire Michael D.
Oldak, Esquire L. Dow Davis, Esquire Office of General Counsel U.S. Department of Energy Washington, D.C.
20585
- George L.
Edgar, Esquire I'rvin N.
Shapell, Esquire Thomas A.
Schmutz, Esquire Gregg A.
Day, Esquire Frank K.
Peterson, Esquire Morgan, Lewis & Bockius 1800 M Street, N.W.
Wa:hington, D.C.
20036 Dr. Cadet H.
Hand, Jr.
Director Bodega Marine Laboratory University of California P. O. Box 247 Bodega Bay, California 94923 Herbert S. Sanger, Jr., Esquire Lewis E.
Wallace, Esquire James F. Burger, Esquire W. Walker LaRoche, Esquire Edward J. Vigluicci Office of the General Counsel Tennessee Valley Authority 400 Commerce Avenue Knoxville, Tennessee 37902 William B. Hubbard, Esquire Assistant Attorney General State of Tennessee Office of the Attorney General 422 Supreme Court Building Nashville, Tennessee 37219 Lawson McGhee Public Library 500 West Church Street Knoxville, Tennessee 37902 9
. Nilliam E.
Lantrip, Esquire City Attorney Municipal Building P. O. Box 1 Oak Ridge, Tennessee 37830 Oak Ridge Public Library I
Civic Center Oak Ridge, Tennessee 37820 Mr. Joe H. Walker 401 Roane Street Harriman, Tennessee 37748 Commissioner James Cotham Tennessee Department of Economic and Community Development Andrew Jackson Building. Suite 1007 Nashville, Tennessee 32219
- Hand Delivered O
e O
e e
9
DtQ AGtD
.?
e h-Vj
~
0$$1 Department of Energy 82 EB 25 P 3:17 Washington, D.C. 20585 February 25, 1982E.h...,f-~h E.m CF The Honorable Nunzio J. Palladino The Honorable Peter Bradford Chairman Commissioner U.S. Nuclear ~ Regulatory Commission U.S. Nuclear Regulatory CcI=aission Washington, DC 20555 Washington, DC 20555 The Honorable Victor Gilinsky The Honorable John F..Ahearne Commissioner Commissioner-U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Washington, DC 20555 The Honorable Thomas F. Roberts Commissioner U.S. Nuclear Re.gulatory Commission Washington, DC 20555 Re:
Clinch River Breeder Reactor Plant Docket No. 50-537 (Section '50'.12 Recuest).
=-
Gentlemen: '
This is in response to the Commission's request that those with curr'nt responsibility within DOE for doing cost
~
e ostimates for Mr. Bevill and his Commfttee examine and provide comments on the Applicants' estimates of the costs of delays in the Clinch River Breeder Reactor Plant (CRBRP). project.
1/
I am advised that the Department of Energy no. longer provideli cost analyses as part of the monthly repor't to Mr. Bevill and' his' Committee.
In view of this and recent reorganizations within the Department, the Office of Policy, Planning and Analysis is the organization with the relevant responsibility and expertise for this review.
The information provided herein was developed by and carries the endorsement of that. Office and the Department of Energy.
We believe that the Applicants' submissions of January 18, 1982 and January 28, 1982 and those of Mr. Walker of Arthur Andersen on February 16, 1982 and February 23, 1982, provide one If Transcript of February 16, 19.S2, NRC me'eting at 201-204.
~
pys P
O
appropriata m3thod for evaluation of the cost of delay to ths CR3RP.
At the same time, we believe that the record has become l
confused as to the relationships between the several elements of these analyses, and thus we welcome the opportunity to place these elements in perspective.
First, we should emphasize that the Applicants' analyses have attempted to measure the cost of an assumed one year delay.
As of January 18, 1982, the NRC Staff's best estimate for issuance of an LWA was September of 1983.
A comparison of this to a March, 1982 grant of the 50.12 request yielded a 15 month schedular I
savings.
To account for uncertainty, the Applicants then assumed
~
l a tolerance of minus zero, plus one year, and a resultant 15-27 l
month range of potential schedular savings.
This was, in turn, l
conservatively reduced to a range of 12-24 months as the potential l
time savings associated with grant of the Section 50.12 request.
The NRC Staff's more recent best estimate of a one year savings l
vis-a-vis its revised LWA schedule remains consistent with the Applicants' 12-24. month. schedular savings, estimate.
We believe, l
therefore, that the estimates of delay cost for a one year delay i
represent a cost at the lowest end of the expected range, and that l
the actual costs would range up to twice the values estimated for j
a one year delay.
i l
Second, we should emphasize that the Applicants' cost estimates have included three di'rtinct perspectives on the cost of delay, all of which have merit in their own right and all of which should be considered by the Commission in its evaluation of the Section 50.12 Ob) (41 public interest factor.
Likewise,. -
~ ' "
'none can or should~be excluded in a fair analysis of the costs of delay to the project. In what follows, I will l
summarize the Department's views 'as to each of these three i
perspectives.on the cost of delay:
al the appropriations or i
fiscal perspective; b1 the economic or resource perspective;
{
and cl the financial perspective..
t A.
' The Appropriations or Fiscal Perspective The Clinch River Breeder Reactor Project is funded through Congressional appropriations and thus operates with, and all costs are estimated based upon, year of expenditure dollars.
j Due to the delay during the past five years, inflation has already increased project costs by nearly S800 million.
An additional j
delay at this time will further increase the project cost and i
ultimately the cost to the taxpayers due to inflation.
It is small solace to the Congress or'to the Nation's taxpayer to suggest, based on economic' theory, that inflation simply does not matter.
l l
4 l
4
a Each year, as Congross debates the funding to be appropriated to the project, ths legislator's viewpoint for the decision will ba in terms of inflated dollars.
The cost of the project to date is always expressed in inflated dollars, not constant dollars.
In the future,'the postmortem on the final cost of the project will inevitably be discussed only in terms of infla'.ed dollars.-
From the appropriations perspective, a one year delay will cause the project costs to increase because of inflation on labor and materials, as well as the added costs of management during the delay.
Offsetting these costs will be revenues that are
~
higher due to inflation during the delay. 2/
These have been esti-mated to be:
$136 million in cost inflation; $42 million in manage-mant costs;.3/ and higher revenues (a net creditl of S'49 million. 4/
This results in a net total of $129 million in increased appropria!
~
tions over the life of the project.
These appropriations costs, however, are merely the immediately quantifiable costs arising in the appropriations perspective.
In this context, the more important, if not decisive qualitative costs of the one year delay are:
11 the delay in obtaining the informational benefits from this R&D project; 2l the increased likelihood that the proj.ect will be placed in jeopardy is to future appropriations; and 3L the cdverse effect upon the Congress' intention that the project be expeditiously completed.
B.
The Economic or Resource Perspective In order to minimize confusion regarding the elements of delay costs, it is necessary to identify the di.='inction betwWen economic or resource costs on one hand, and financial costs on the other.
Economic costs measure the total burden upon the productive etpacity of the national economy.
Financial costs measure the relative burden upon individual ~ parties and provide a useful per-spective when considering individuals, firms or governments as operating entities.
Thus, while in a given case, past expendi-tures may.have.no economic cost, the individual,' firm or govern-ment making those expenditures may sustain a real financial cost because capital is tied up unproductively.
From the econ 6mic or resource perspective, only future
.changes in the requirements'for labor resources, materials, plant and equipment as well as foregone revenues and R&D information are appropriate elements of'the cost'of delay.
In this context a 2/
Applicants' Submission of January 28, 1982, Chart A.
3/
Applicants' Submission of January 18, 1982 at 77.
4/
Applicants' Submission of January 28, 1982, Chart C.
O e
9 6
6
_...__.Q__
t.
dalay in th*2 project will involva at least threo elemsnts of quantifiable economic cost.
First, during the period of delay, I
the project must maintain the necessary managerial personnel to keep the project in a current status at a cost in present worth terms of approximately $38 million per year.
5/
Second, the project revenue stream will be deferred-for a one year period.
The cost to the project has been estimated between $6-20 million per year.
We believe that the S20 million cost more closely approximates the real economic cost to the project.
6/
Finally, the project will realize an economic " savings" due to the deferral of anticipated expenditures in an amoint of $30 million per year.
In summary, from an economic perspective, a delay in the project will result in the following quantifiable economic costs:
Present Worth Management Costs
$38 million Deferred Revenaes
$20 million Savings
($30 million)
~
Total Quantifiable Economic Co'sts
$28 million K?
The' $28 million quantifiable cost of delay only'repre-sents a p'ortion of the loss in terms of economic or resource cost.
The'most important cost due to the delay is the cost associated with'the one year deferral of the project's R&D infor-mational benefits.
Unfortunately, acceptable methods'for quantify-ing this cost do not exist.
The primary project objective is to acquire these infor-mational benefits, not the sale of electricity.
Thus,,the economic value of the deferred information must surely exceed the $20 million coat due to deferred revenues from the sale of electricity.
5/
At the February 16, 1982, Commission meeting, Applicants estimated that the effect of discounting would be to decrease management costs by about, $11 million.
A more precise analysis contained in the Arthur Andersen & Co. letter of February 23, shows.that'this effect is significantly less of a decrease.
- 1982, In particular, it was~not necessary to discount Project Office The costs for both of or Stone and Webster management costs.
these groups were already discounted in calculating the anticipated savings due to delay.
After appropriate discounting, cost of management during delay on a net worth basis is $38 million per year.
6/'
See Komanoff statement attached as Tab A to URDC's January IB, 1957 comments.
See also NRC transcript of February 16, 1982 meeting at 143.
l 1
5 Wa baliovo tho' economic cost of the da#crred information to.ba ceveral times the value of de# erred electricity revenue.
C.
Fi'nancial Cost Perspective 7/
From a financial cost perspective, a delay in the pro-ject will result in substantially increased costs.
By analogy' to commercial power or industrial plants, the effect of a one year delay in project completion will result in the capitaliza-i tion of an additional year of interest measured at the time of plant completion.
In addition, the financial costs of' delay include the add'itional management costs, the loss due to the deferral of. revenue, and any savings due to delaying anticipated expenditures.
As with the appropriations and economic perspec-tives,,these costs are real and meaningful in their own right and context.
In considering financial costs, it is of ten necessary to consider the present worth of cost differences between alternative project plans.
The~ following table considers
~
both actual dollars and the value of those dollars on.a present worth basis.
Effect of 1-year delay Actual Dollars Present Worth Inflation
$136 million 8/
($30 million)
Revenues (S49 millionl9/
S20 million Management S 42 million 10/ S38 ndllfon-S737 million 11/ S190 million Interest Total Financial Co'sts-
$866 million
$218 million In summary, the costs of a one year delay in the CRBRP have been assessed from three separate, but independently valid perspectives.
In each case, the quantifiable costs of'a one year delay are real, substantial',.and relevant to the Commission's determinatior. in regard to the Section' 50.12 (bl(41 public interest factor.
Further, those' costs considered by the Commission must include not only the quantifiable monetary costs, but also the unquantifiable and equally important delay costs; namely,-those 7/
The financial cost perspective is discussed more fully in i
the Arthur Andersen & Co. submission of February 23, 1982.
i 8/
Applicants' Submission o# January 28, 1982, Chart A.'
9/
Applicants' Submission of January 28, 1982, Chart C.
10/
Applicants' Submission of January 18, 1982 at 77.
11/
Arthur Andersen & Co. letter of February 23, 1982, 1
Exhibit II.
6 resulting from:
aL a deferral of informational benefits, bl the increased likelihood that the projects's success will be pla~ced in jeopardy, and cl contravention of Congressional intent in regard to expeditions project completion.
The record before the. Comm ssion shows no disputes as to environmental issues.
Such. disputes as may exist have revolved'around the cost of delay.
If, however, those costs are properly distinguished and viewed in the. perspective hsre presented, there is little room for dispute.
We submit that the costs of delay here presented are both real and substantial, and that compelling public interest considerations support the Section 50.12 request.
Accordingly, we'again urge the Commission to grant the request.
Sincerely yours, k
W. Kenneth Davis 4
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- . r-Ayp6ve.1 ARTHUR ANDERSEN & CO.-
'82 FEB ?
1666 K Stazzr..}. W.P s :58 WAsHINorow. D. C. 2ooo6 (20'2Ia62-osoo :.,1..
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'.J"R A.9,5,Ee
..a February 23, 1982 C
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/
U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Gentlemen:
This is to respond to the Commissioners' request that I provide (1) comments I might have on the Applicants' submissions, cnd (2) an analysis of the increased in'terest costs-that would be incurred as a result of a one-year delay of the Clinch. River Breeder Reactor Plant Project.
My' comments on the Applicants' submission fall within three categories of delay cost.
a.
Inflation.
b.
Persennel retention, deferral of revenue and a permanent stretch-out of the construction period of one year..
c.
Interest on the present capital investment.
A.
As to Inflation Inflation ha's been reflected in the construction costs because it causes actual incurred costs to increase.
To assume no inflation would be unrealistic and would cause capital plan-ning and budgets to be unreal.
The rate of 8% per annum see=s reasonable for planning purposes.
3.
As'to Personnel Retention, Deferral of Revenue and Deferral of Capital Expenditures o
The parties agree that there are delay costs associated cith maintaining the managerial personnel during the period'of delay.
Applicants have calculated the cost of =aintaining this
/
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ARTHUR ANDERSEN & CO.
U.S.
Nuclear February 23, 1982 Regulatory Commission personnel at $41.8.million per year.
When~ appropriately discounted, the total cost is $38 million pey year.1/
)
~
o As to the deferral of revenue, a one-year delay will cost the Project between $5.9 million and $20 million p'er year in 1982 dollars per the record in this case.
Intervenors base the S2O mil-lion on the avoided cost of power fron coal generation.
We under-stand that, if the avoided cost were based on petroleum generation, the cost of deferral of revenue would increase by a large f actor..
We have noted that the $5.9 million is understated because it is for a five, year period of time rather than for the estimated' service-life of t.he plant.
Because of this, the $20 milli ~on cost of deferred revenue should be a more realistic basis for measuring the cost incurred as a result of the delay.
o-As to the permanent stretch'out of the const~ruction period by one. year, the Applicants' exhibit shows
- t. hat the cost would be a "saving" of $30 million on a present-worth basis and a cost.of over $136 million with inflation of 85 per year.
The above three cost matters, which were developed'by the' Applicant, are summarized in millions of' dollars.
i:.
High Low Increased cost of personnel S 38
$ 38 Lost revenue 20 20 R
58 58 Inflation - Gross 136 Inflation - Discounted
' (30)
Total cost
$194 S 28
==
==
1/
The disc'ount calculations are attached as Exhibits 3, 4 and 5.
At the February 16, 1982', Commission meeting, Applicants esti-
~
mated that the effect of discounting would be to decrease man-agement costs by about S11 million.
A more precise analysis by the Applicant shows that this effect is significantly less.
In particular, it was not necessary to discount Profeet Office or Stone and Webster management costs.
The costs for both of these groups were already discounted in c.alculating the antic-l ipated savings due to delay.
o ARTHUR ANDERSEN et Co.
3-February 23 1982 U.S. Nuclear Regulatory Commission C.
Interest on the Present S1.1 Billion Capital Investment Interest is a cost of doing business that arises from the fact that capital must be raised and committed to each projec.t.
Itx f nuct then be serviced during each time period from its for=ation l'
and commitment to the project through the' completed service-life of
~
the project.
s: /
It is often described as a real cost because it 1s a unavoidable cost just like engineering, construction hard-core,. construction labor, manufactured' components and configu-
~
- material, rations of purchased equipment and the many other elements com-prising the total cost of a new facility.
4 A possible delay of Clinch River has raised the quesifon of the costs of a one-year delay.
Our experience 3 th delays'due i
to material shortages, labor strikes, fires, explosions, ac.cidents i
and regulatory processes illustrate that the cost of inter st is
'i an inescapable part of delay costs.
. = _.
In the event of a one-year delay in the construction of Clinch River,' interest will be incurred for one extra year.
This
~
is so because gapital (money) is a commodity with real value.
It 4
can be exchanged for other items of value,;1oaned to another party or invested to produce a return to its owner.
The use of J capital resources over a period of time causes a co'st to be in-j curred.
During any period of a project'celay;in construction,3 the capital or interest costs. continue to accumulate.
Such cosas 1
are measured by dollars of capital required, the timing of capi-l tal requirements, the rate or cost at which the capital is avail-nble and the length of the period of time to completion of the i
project.
In short, the cost of money is incurred from the begin-
'9 l
ning of construction to the time of placement of the project'into j
continuous demonstration or revenue producing service, the purpose z.
of the project in the first instance.
Accounting Standard No. 34 of the Financial Accounting Standards Board states:
~
"The historical cost of acquiring an assetiincludes the-
~
costs necessarily incurred to bring it to the condition and location necessary for its inte-ded us.
If an' asset requires a period of time in which to carry out the activities necessary to bring it to that condition and location, the interest cost incurred during that period as a result of expenditures for the asset is a
, part of the historical cost of acquiring the asset."
(emphasis added)
~
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ARTsun ANDERSEN & Co.
.-A-February 23, 1982 U.S.
Nuclear Regulatory Commission S
The accompanying Ixhibit I demonstrates the incremental i
cost that would be incurre' as a result of a one-year increment in d
the time perioc.of constructing a plant.
In the example, we assume a project in which $100 million are expended annually in each year i, of a 20-year construction schedule and an 115 interest rate.
In comparing the no delay and one-year delay cases, the cost of delay is measured by the capital funds spent to the time of the delay, the period of delay and the espital cost rate.
- ~
This Exhibit shows that:
t
'o In 1982, $145 million of intere.st cost would be 4
i incurred while the plant activity is idle.
o 1995 is the year when extra or avoidable' interest cost is paid under the delay.
o The'S145 million incurred in 1982 due to'the. delay would be worth $563 million at the end of the con-~
struction period if the delay would be avoided.
In other words, that real economic saving would r
pay the last'five'to six years of construction
, costs.
N The example.which I described in my previous presenta-
~
tion before the Commi'ssion'also illustrates this concept.
The 4
example I refer to,'i's 'the person that is constructing his own home using construction financing.
He is his own general con-tractor and at.75%' completion, an electrical installation approval must(be secured}before additional work,can proceed.
The approval prode'ss. is delayed for six months and construction cannot proceed.
Theftrue economi~c f act to the person building his home is that hisiccsts have increased.
He had to carry the ' accumulated cost.
~
on the 75% completed home because he borrowed from the bank, had a,lre'a'dy expended the funds, and had to pay interest fo{ the six-
, month delay period.
s p
y
\\ xExhibit.II applies this concept specifically to the j
Clinch River Breeder Reactor Plant Project and shows the true (uture cost impact upon the project.
As shown in that Exhibit, interest is accrued for an extra year in the delay case, and, thus,c a o'ne-year delay will result.in additional interest on expended capital of S737.4 million.
Discounted to present c
value, the cost of delay in 1982 is approximately $190 million.
\\
h.
ARTHea ANDERsEN & Co.
3-Feornary 23, 1982 U.S.
Nuclear Regulatory Co==ission Accordingly, I believe that the Applicants' conclusion is correct.
I Interest on expended capital is a real and substantial cost to the project, including that interest that would result from any delay i
in construction.
Very truly yours, ARTliUR ANDERSEN & CO.
C
~
By
- jderry
- . Vla1ker Enclosures e
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ILLUSTRATION OF Ti!E COST OF A ONE YEAR DI LAY IN 1982 f
Ho Delay One Year Delay (Millions)
(Millions)
_ _ _ _ _ _ _ _ - =
___________________________.e__
Carrying Cost Yearly Carrying 1btal Yearly Carrying Total Increase Year Investment Cost
,-Cost Investment Cost Cost
( De crea se )
1974
$100
$ 11
$111
$100
$ 11
$ 111 1975 100 23 234 100 23 234 1976 100 37.
371 100 37 371 1977 100 52 523 100 52 523 1978 100 68 691 100 68 691 1979 100 87 878 100 87 878 1980 100 108 1,086 100 108 1,086 1981
- 100, 130 1,3 16 100 130 1.,316 145 1,461 (11) 1982 100 156 1,572 1983 100 184 1,856 100 172 1,733 (12) 1984 100 215 2,171 100 202 2,035 (13) 1985 100 250 2,521 100 235 2,370 (15) 1986 100 208 2,909 100 272 ~
2,742 (16) 1987 100 331 3,340 100 313 3,155 (10) 1988 100 379
- 3,819 100 358 3,613 (21) 1989 100 431 4,350 100 408 4,121 (23) 1990 100 490 4,940 100 464 4,685 (26) 1991 100 554 5,594 100 526 5,311 (28) 1992 100 626 6,320 100-595 6,006 (31) 1993 100 706 7,126 100 672 6,778 (34) 1994 100 795 8,021 100 756 7,634 (39) 100 850 8,584 850 1995 Tutai
'$8,021
$ 8,58 4
$563 The $563 million cumulative cost that would t>e incurr,'ed 'as a result of a one-year delay represents the f.uture value of the $145 million cost during the year of delay.
It is based on the delay being a f ull year, the succeeding construction period being 13 years and an interest rate of lit.
e a
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1 1
Exhibit 11 INTEREST ON ACTUAf. CAPITAL. EXPENDITUPES TO DATE (Millions $) with Compoynded Interest (Ul) 82 83 84 05 86 87 88 09 90 91 92 93 14 95 Tbtal Cyt without the ' Delay s Actual 189.9 210.0 234.0 259.7 200.3 320.0 355.2 394.3 437.6 485.8 539.2 $98.5 664.3
$4977.6 Present Worth 189.9 189.9 189.9 111 9. 9 189.9 109.9 IF9.9 189.9 189.9 189.9 109.9 189.9 189.9
$2468.7 End of 1st Plve Year's Operation Cret of a One Year Delay s Actual 189.9 210.0 234.0 259.7 288.3 320.0.'
355.2 394.3 437.6 485.8 539.2 598.5 654.3 737.4
$5t!5.0 Fresent Worth 189.9 189.9 189.9 189.9 189.9 189.9 189.9 109.9 189.9 189.9 189.9 189.9 189.9 189.9
$2658.C Present Worth of Dif ference = $ 2,658.6 - $ 2,46 8.7, = $18 3.9 million Conclualons One Year's Delay Now Has A Present Worth Of Year's Interest 9
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