NEW YORK AREA

The critical time period for this area is the summer of 1972 and the winter 1972-73. Only one nuclear plant (Indian Point 2) is involved. Construction is completed. The earliest projected date of completion of NEPA review and issuance of the operating license for full power is June 1972. Assuming that the presently scheduled licensing schedule is met, this plant could help to alleviate the low reserve margin for the New York area in the summer of 1972. If a power emergency is indicated by the spring of 1972, the provisions of Appendix D for authorizing operation under emergency conditions could be considered.

VIRGINIA-CAROLINAS AREA

Critical power supply problems are anticipated in the FPC report for the Virginia-Carolinas area during the summer of 1972. The earliest projected date for the issuance of an operating license for Oconee is in March 1972. If the projected schedule holds, and no unusual difficulties are experienced in startup, the reserve margins in this area will be increased. By the winter of 1972-73, three nuclear plants in the area (Oconee 1 and 2 and Surry 1) should be at full power with an adequate reserve margin as defined by FPC.

FLORIDA

The Federal Power Commission report indicates that Florida, due to its lack of adequate transmission within the state and from adjoining states and because of unit size, requires more reserve than other areas, particularly during the summer. The construction of the two nuclear plants (Turkey Point 3 and 4) is expected to be completed in December 1971 and April 1972, respectively. The earliest projected date of completion of NEPA review and the issuance of operating licenses for these units is April 1972, and they should be available to provide reserve in the summer of 1972.

NORTHERN ILLINOIS-WISCONSIN-UPPER MICHIGAN AREA

The FPC report predicts a critical low reserve margin in this area during the summer of 1972. Construction of the Quad Cities nuclear power plant was completed in August 1971. Construction of the three other plants (Quad Cities 2, Point Beach 2 and Kewaunee) is expected to be completed November 1971, October 1971 and September 1972, respectively. The earliest projected date of the completion of the NEPA review and the issuance of an operating license for Quad Cities 1 and 2 is March 1972. With the projected schedules, the two Quad Cities reactors should be operating in summer 1972, thus increasing the reserve margin in this area.

Construction of the Palisades plant was completed in May 1971. The earliest projected date of completion of NEPA review and issuance of an operating license for Palisades is March 1972. The Federal Power Commission report points out that while the Palisades Plant is not in the same network as the Northern Illinois-WisconsinUpper Michigan region, the plant is in close proximity and therefore could transmit power to the Chicago area over interconnections in

event of emergency. With Palisades in operation, the reliability of the electric power supply in the Chicago Metropolitan area should be improved during the summer of 1972.

KEY DATES FOR CRITICAL NUCLEAR POWERPLANTS—AEC ESTIMATES

FEDERAL POWER COMMISSION, Washington, D.C., November 15, 1971.

Hon. JAMES R. SCHLESINGER, Chairman, U.S. Atomic Energy Commission, Washington, D.C. DEAR CHAIRMAN SCHLESINGER: This refers to your letter of October 29, 1971 transmitting the AEC staff analysis of the projected licensing schedules for critical nuclear power stations, which responds to my communication on this subject dated October 15, 1971. I appreciate the thoughtful analysis given to this matter by you and the AEC staff. I have also noted the discussion of this same matter in the testimony of Commissioner William O. Doub before the Senate Committee on Interior and Insular Affairs on November 3, 1971. The impact of AEC's NEPA review upon scheduled nuclear capacity in relation to a total power system cannot be predicted with certainty at this juncture. The FPC staff fully recognizes that the AEC staff has projected schedules which reflect "its best judgment as to the earliest possible dates for the various licensing steps that must be taken". We are, of course, hopeful that these are the schedules which can and will be maintained for these plants. The question still remains as to whether the capacity involved, even if these schedules are met, will realistically meet the power needs of the Nation. We trust that continual surveillance of scheduled generation and transmission additions in relation to regional and national power supply will determine the necessity for modification in present schedules as circumstances develop.

We must concern ourselves with the potential effects on adequate and reliable supply of power of a variety of contributing factors and adverse contingencies which experience tells us may well arise. It was this approach which prompted the FPC staff to present its analysis on the basis of the assumptions stated in the report accompanying my letter of October 15, 1971. It is clear, of course, that the different assumptions used in the analyses of our two staff reports could lead to differing conclusions. Some of the factors which underlie the more conservative estimates of probable power availability dates used in the FPC staff analysis are:

A 20 percent power license permits no significant delivery of power to the system and is only sufficient for general testing of the auxiliary equipment and overall plant operation.

Some minimum period of time is required to raise the power output in steps from the 20 percent level or less up to 100 percent output. Thus 100 percent output cannot be available at the time a license for this level is issued.

There are potentials for delay in the issuance of licenses for 20 percent or higher levels of operation on environmental or other grounds because of both questions which may have already been raised or others which may be raised in hearings still to be held. Even after allowance of a sufficient period of time to raise power levels up to 100 percent and perform operational tests along the way, it is not realistic to count on firm power supply from such a unit in the first few weeks after it has reached full power level.

On the basis of experience, our staff judged that an average of one year potential delay in the availability for dependable full power service of many of these nuclear plants is a reasonable general assumption for an analysis of power emergency possibilities.

While the factors previously cited all relate to the potential completion of individual plants, we cannot overlook the fact that an added condition which may affect the supply of power and the relative importance of an individual plant is the possibility of concurrent delays in a number of plants, both fossil and nuclear, which are important to new capacity in a single region. It is, of course, difficult to predict the coincident impact of variable contingencies bearing on future power supply. Nevertheless, realistic concern for needed power supply emphasizes the importance of the cumulative effects within a region of a number of new plants coming into operation concurrently. The recent damage to the Indian Point No. 2 unit highlights the need for broader consideration than just a unit-by-unit effect on area or regional power supplies. Our FPC staff evaluation concludes that Indian Point No. 2 is an essential source for the summer of 1972 of base load generation for the New York metropolitan area forecasted power demands in conjunction with all other generating and transmission sources comprising the system.

However, its availability in the summer of 1972 is questionable. At the same time, it appears that the Vermont Yankee and Pilgrim units might be capable of operation in time to supply power which may be needed to prevent a critical situation in New York City next summer, provided action is taken sufficiently soon to enable dependable opera

tion to become a reality within the time available. The NEPA review schedule enclosed in your letter of October 29 indicated June 1972 for Vermont Yankee and July 1972 for Pilgrim as the "earliest projected date of license issuance if decision favorable". Assuming a favorable decision and further assuming that AEC does not authorize limited operation above the 20 percent level in steps so as to assure substantially full capacity operation in advance of the AEC scheduled dates, the capacity provided by these units will not fill the power void created by delay in operation of Indian Point No. 2. Similar situations may prevail in the Midwest and other potential problem areas.

We are continuing our review of individual applications for operational licenses referred to us by your agency. Sincerely,

68-699-72-21

JOHN N. NASSIKAS,

Chairman.

30

FPC STATEMENT BEFORE JOINT COMMITTEE ON DEFENSE PRODUCTION

STATEMENT OF JOHN N. NASSIKAS, CHAIRMAN, FEDERAL POWER COMMISSION, HEARINGS BEFORE THE JOINT COMMITTEE ON DEFENSE PRODUCTION, CONGRESS OF THE UNITED STATES, SEPTEMBER 23, 1971

Mr. Chairman, I appreciate this opportunity to appear before this Committee in response to your letter of September 10, 1971. My remarks are directed to both of the industries which the Federal Power Commission regulates, the electric power industry and the natural gas industry. Both industries have great demands to satisfy over the foreseeable future. There are problems. Some are being handled administratively under existing authority, others will be solved through additional legislative action. On July 22, 1971, I appeared before the Subcommittee on Special Small Business Problems, Select Committee on Small Business, House of Representatives, and testified in respect to energy policy. On May 6, 1971, I appeared before the Subcommittee on Communications and Power, Committee on Interstate and Foreign Commerce, House of Representatives, and there discussed electric power requirements and supply. The hearings before the Subcommittee on Communications and Power are now printed.

I shall discuss the factual situation in the gas industry, particularly as it relates to gas supply. I shall also consider the electric utility industry. But, before I do, let me note briefly what our regulatory jurisdiction is and how these two industries are comprised.

Under Part I of the Federal Power Act, (16 U.S.C. 792-823) the Commission issues licenses to non-Federal interests authorizing the construction, operation and maintenance of water power projects on Government lands and on streams over which the Congress has jurisdiction. These licenses are issued for fixed periods not exceeding 50 years and contain terms and conditions which are designed to protect both the public interest and the licensee. Among these conditions are the right of takeover in the United States of projects needed for war or defense purposes, 16 U.S.C. 809. The Commission, in those instances, is authorized to fix the compensation to the owner of the project taken over. The right of take-over in the United States was exercised during the Second World War, Project No. 1494, Grand River Dam Authority. It was returned to the licensee under Act of July 31, 1946, 60 Stat. 743.

The Commission, under Parts II and III of the Federal Power Act (16 U.S.C. 824-825r), exercises broad responsibilities with respect to the regulation of the electric utility industry. As conferred by the Congress, the Commission has jurisdiction over the interstate transmission of electric energy and its sale at wholesale in interstate commerce by public utilities, 16 U.S.C. 824. This regulation at the wholesale for resale level is designed to ensure just, reasonable and non-discriminatory rates and services throughout the United States, 16 U.S.C. 824d, 824e.