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UNITED STATES OF AMERICAJUN 2 91979 *n

NUCLEAR REGULATORY COMMISSION . , .wt g5 -

' ., _ r.u gMBEFORE THE ATOMIC SAFETY AND LICENSING BOARD g

In the Matter Of: ))

PUGET SOUND POWER AND ) Docket Nos. 50-522LIGHT COMPANY, et al., ) 50-523

)(Skagit Nuclear Power Proj ect, )Units 1 and 2) )

)

INTERROGATORIES AND REQUESTSFCR PRODUCTION TO

PUGET SOUND POWER AND LIGHT CO.AND OTHER APPLICANTS(Dated June 25, 1979)

In accordance with 10 CFR, 52.740B and 10 CFR S2.741,

please answer the following Interrogatories and respond to

the accompanying Requests for Production.

Documents to be produced should be presented at the

offices of undersigned counsel at 9:00 a.m. on July 16 , 1979,

or at such other time and place as may be agreed upon.

INTERROGATORY NO. 1: Attached is a copy of a newspaper

story which appeared in the Seattle Times on June 7, 1979.

Is the information contained therein accurate? If not, please

set forth all respects in which such information is not accur-

ate.

ANSWER:

790830o'763 2027 0 9

-1-

. .,

INTERROGATORY NO. 2: How long have the applicants had

under discussion the formation of a "j ointly owned indepen-

dent subsidiary company" which would undertake construction,

or financing, or both, of the Skagit plants? Please identify

all documents which reflect the fact and content of such dis-

cussions, to date.

ANSWER:

;

INTERROGATORY NO. 3: Has the consideration, by the app-

licants, of the formation of a j ointly owned independent sub-

sidiary company to assist with construction or financing, or

both, of the Skagit nuclear plants, been disclosed to the NRC

staff at any time? If not, why not? If so, please give full

particulars, and describe all documents which have been sub-

mitted or trancmitted to the NRC staff in that connection,

' ""'"2027 038

- 2-

. .

ANSWER:

INTERROGATORY NO. 4: When did any of the applicants first

inform the Bonneville Power Administration of the plan to form

a j ointly owned independent subsidiary company to assist with

the financing, or construct ion, or both, of generating facil-

ities, including the Skagit plant? Please identify all docu-

ments of any kind which have been submitted or transmitted

to the Bonneville Power Administration in that connection,

to date.

ANSWER:

2027 039

-3-

. .,

INTERROGATORY No. 5: When and how did any of the appli-

cants first inform the Securities and Exchange Commission of

an intention to pursue the formation of a jointly owned inde-

pendent subsidiary company which would assist in the financing,

or construction, or both, of power generating facilities?

Please describe all documents which have been submitted to

the Securities and Exchange Commission at any time in con-

nection with such proposal, and also describe all such docu-

ments which have been submitted to any other federal or state

agency, including the United States Congress, the state power

plant site evaluation council, and the governor.

ANSWER:

INTERROGATORY NO. 6: Please explain how the current

version of the regional power bill would permit a jointly

owned independent subsidiary company to build or finance,

or both, new power plants. Please identify all documents

which reflect or embody such a plan.

ANSWER:

3n- n -n

-4- >

. ..

INTERROGATORY NO. 7: Please explain how the formation

of a jointly owned independent subsidiary company would per-

mit the financing of the construction of new power plants by

the issuance of bonds, rather than stock, and identify all

documents, reports, and studies, which pertain to this sub-

ject, and which have been prepared by or for you at any time,

to date. Please also explain why such bonds would have a

lower interest rate than bonds issued by the applicants dir-

ectly, and identify all documents, studies, or reports, which

explain or discuss the reasons why such interest rates would.

be lower.

ANSWER:

.

INTERROGATORY NO. 8: Please identify all documents,

including correspondence, memoranda, notes, reports, and

other records of any kind, which have been:

a. Produced internally by any of the applicants,

b. Exchanged by the applicants, or their attorneys,

consultants, or agents,

And which relate to the proposal to form a jointly owned

but independent subsidiary company to build new power plants.

2027 041

. .

ANSWER:

INTERROGATORY NO. 9. Has the proposal to form a jointly

owned but independent subsidiary company to build new power

plants been referred to in any formal filing with the SEC,

or in any form 10-K, or in any security prospectus, filed by

any of the applicants , to date? If so, please identify each

such document. If not, please explain why no such reference

has been made, even though such a plan was under consideration.

ANSWER:

INTERROGATORY NO. 10: Please explain why the applicants

are requesting an exceptic;n from the Public Utility Holding

Company Act with respect to their proposal to form a j ointly

2027 042

- .. .

owned but independent subsidiary company to build new power

plants, and identify all documents which contain or reflect

such explanation.

ANSWER:

REQUEST FOR PRODUCTION NO. 1: Please produce for in-

spection and copying at the ottices of plaintiffs' counsel,

all documents identified or described in your answers to

the foregoing interrogatories.

DATED this 85 day of June, 1979. ; .

f , <,/

\ yv_ o -t_.-

! ROGER M.'LEED

.

2027 043-7-

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AO O % (Continued / om Page f.) BL'T MacDOULD sa:J mc>t of 1-

hw.1

rsU the pnvate atWt:es that .m.J ,the legislarne etemption. , hat

" bill is pencina in Congress. fort'i the p.nt:yenM sm:d2a.7 g j.

wc w . 2 yp.correany -o s could recene anArdrew '.f acDocaid, ass. startadmmdrnve enmct.on wuhnut |ch:ef counsen for the S.E.C., uid *

mucn 1 f.cuay. ard *ahuut tre jthe !!oldirg Corrsany Act w:i$ nead for :ers.at on.passed after disc.osure in the ,

las of "a lot of questionac' He sand insate utWttes un:cn ;pract:ces that wa-a detnmental,t mmnt nave a proo4em obts.nma ;

-.

an admestratne exemption arethe Pacific Power and L: gat Ci f' '

to ratepayers and stockholders ofprivate utihties-

The abuses tr.c!wded " instancesand, to a lesser extent. tre Eastt- -.

other cor .oanies whien could { 8h"*_*'m .maton Water Pnw ar Ca. ._ .. ,- -in wluch holding camparues. wiet -* " "" " _^ _- " ' ' * '

$e y smad mvestments. were con- y

ba invohad :n formmg a geneean , Mg',,)Mmgym. .trolling "far.ffung utility em*

Sound Power & Lant Co, the Wa- i t*y J G yg; i.q g W@,..y@b,;,- - ..vtc *

mg subsc.ary mduJe tre Pugat ; f.g., ygy * gfy%d%ppires." MacDoes;d sa:d. Rate;a?i ecs were ?'gouses' anc stockhoid-

p.o Po ser C1. the Mantana Power i K?t./gW :. Q f , ^ NCo. and the Portland Ge eral ! rgy;sW6 G~y. > v^g,.V#M(/dM* ers ind some cas(s were

pF' ' " : h..s A.'C'." screwed /* he sa d. .,.

E ectnc Co. l*,? C.-

The Bentteville Power Adm:n:s- |MW@$67>* *. M 7 'M.'CBut MacDonaid said the North-

e

.' # '3wast's private unbr:es arvi t piaft' - 7/*

_6trat:en. in an 2cpare<v mimead- ' 2.M /-mrg to engage a the pracuces of '- . -the U::Os and therehre were ut :ng state nent to mem e s of Con- %*V -

mtended to come under the f*rP ress, ad (nat * ::!rneuan eset '3- ,g *

'. > '' .3 N 9tions are 9e-mittad under P';HCA e

ist:on of the Heidirg Compa"Y (the Honing Comoany act) o t a ,' efr J- 7,

' # 7 * " = ;fj/Act. +

-~he A.P PA arnes (nat Ccq- case.bv.csse basis. the exemo ' f *:rvs are rot np:Scame to tre i | [s*>gress passed the :sw for a raw

Northwast 141;s r nvesor . ,-'md no leg:s:a.tve exemptio"5 '

owrajprnata unlm "hold be ,gran ed [f an admh ' ,

Harvey Spq11, haad of :de etry;ve exerrpt.on can't t:e c b- i d

3 P.A. cv racterwauon N |- /ta:ned, the'1 the pnVaie ut.hCes ,

(;en 3r.d ;u .w .J ":a g3rer'ae'**!

4 .L,,wmply steOuld ha.e 'o C3mply Whi sa d. I can't Terremher w7v i:re 2Ct. the assoc:atlnn says. wrof t th3t.k f/THE 5.E.C. has ihp-fhj " Later. Sci 2a! said quesnons (

,

.Nrher at woGd t'e pCSsibte IO toout nas s& emet "are amra :a .fri e +rmot the pcvara unhues an ad race fra t0 led and c"*clC t o ice M:f it shou:d N mnd:f.ed :t we !tmstrative exempnon from tre

hNd'PE<ofrp3T GU r" ade an e''*nr at sor e point w 'J

In a |etter last September to whl try to Corrac* ;L" He 53id ne #

tnad tre str.remeat m teval on /Representative John Din g+ll- m;or ra!.on frem t*.e S n.C. 2:idOchyt Democrat and chairma to' rhe House sube:mmittee ort ea- some ramerar::y .:rn tr.e uni.t; ! gbnr.ess ' 'crTy and power. t'e S E.C. sa.d e1r appears that ore or more of The 3 PA gater ent, par * af a C

tre exisurg pravs'ans of the act ramn on 'te rescra;gwar 61. i ,, p[ ,- ' V-

e-g333 p. nnom erat :re S E.C. *''''''provee exemorne authenry to

tms commission" Js an alter a. "tas racommandas cat Cqress , .,*

nve to a :eg:s:ame esempton- g. ant the eve ~.pt.un "J h

'~ . -

this y ear ro Omge:1. the Sx .C. 5 E.C.14 not ta.6e a oos.t.zon on I k' p' b;T.rI WIn a sesequent mernorar:dum But it fa>$ 'o nore that 'he 1 J - ;"

re:terstad that pos:t;on althogh whether crest.ng me kmd of c:m- SM..hit mdreated it prefer-ad |eg:s:anve p3.iy sou.zat by me prWa:e ut.h-

Des would be m the puccc crer- ;, *4 ' . *.,

*) Daci.co. **est.Tn:d to the pr:vate utiLnes' j '*1.Aiet Rad 2n. evacutne d. rec!ce Ipm for a leg statne exempt on .

t**m the McId.rg Corrpany Act is of the A.P.P A.. sa:d of the pro- I a i

pesad legis atn e- exemphon 8 s:.: #er provision m the regional- 7hara may oe more to th:s thanpuer bill t'iar would gne :ha ;Prcev;11e Power Admestranon mets the eye There is a tre e'd - g yf,,,,pdeus potent.al for acuse " He san.1a.u or ry to gua anraa the pur- :he ut inty comramas' efMs 1re #a.w % !a%y*' .y*,%.mene or s' ectr:cuy km new ut:h.t;. pu .ts, whemer sucuc:y or prb . p1et of a tortome camps.gn o 8 '3( .437e v ':rancel. craate som**r2 hie t9s." ./ hn. Srmme 3 ;o.c tr ownaj but TOLR NORTHW EST . Lt:-s , I

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-mutTender:t suo5:d.ar*/ Comp 3D;/ tr.ad unsuccew:u ; :n the Ns h / 3'

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pen with tw a P. Awenasewe.,r-ry. tne pn.me umnes .ay m o p.,3;, ,, 3 r ,.d m.,. g:17 %dd St.# Sof'C.s. T3tne* s. . m ,.m g.,,,c, c yn:.r .Wk. fOr mGst or 30 of I'e g g ,p - .t :

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i~A;* to s'1be r*CMV ar'd pass Ihesa ms on to rat *;a.ers. yy g g . .,q , g3 p. % *

ro a ;, ,..1.nder lanetap tne S c. C. hh. g,ct of rris tw c ere tre pasj ,, g pr a f y, _, - - S* x -- *[pyrmoed for (T,e !t*0sl3fne W p* pnon, the private utilities g gg .g 3, _4... .. ,

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.

+;anuid 9 a5le to for n a jomtcr p p g g , , ,,c,,,; ;,g >-3 g, bp .,, m -f

y.ccet eeneraung sunsdarv oN. .,.g 3g, g ,,,,y . 37 .;. , _ ,,,.-*9-

-

* .

,, ,gyJ" 1 *{h er Pubhcly or pn- c $ so N eNW -'

- kk''F P

By form:ng a jomily owned but FOUR NOP.THWEST utthties ;,e j/;4 '*

*,

indenndent. subsidiary compan., tnad unsucce%M!y m the 1950s to - , Q ? .- i .~,

h./C'* p -to bu.ld new power p| ants, m co4 obtain a levsistt.e esemption -6. gr ,

b -J

junction with the B.P A.-purchne from the HoWag Company Act m !t

authoniy. the private utihties say order to Icrm a jomtly ow ned sub v ,

they cuuid ' issue bonds, rat.her s@ary to budd hy4roeieert:c ,;en f *c..c f.

;,

{ 7 *, r .;;than stock. for rnost or a:1 of the eratmg facc.ws In that ' case, a.+*-- ? ,

money needed for construction. C8f? 5"d. the unht.cs sudd hase M..* , g . d*p* * -* A. * ' . />,

{i * QBecause such bonds would hu, used the power themsenes rather y,

.': y *,'

,.y 4 f /f,,- *

y' '?-a lower interest rate, the prnate tr.an se.!ang it to tne B P.A. .L... <g!j g

"k y{;|.. .. - -;* 7 ~f; .uti:stics contend they would be The S.E C. orpusai that esemp. *

'

g%g*&.able to sase t9eney and pass the tien, saymg "the corporate organt- ;* '8*<,..

*;' ,. , 30"I*sarmgs on to ratepavers, r.ation. contrei and hirancmg of a.p .-g. . - g c.- *

Under language the S E.C. has preect of this type create the pos.g.g.(Mg E ' ". ,. i _ * . ,jproposed for the leg:stative es. .tbihty of en:s apmst wh:ch the

3;Pr:t.t - 47 ,, 7fact ts desicne2 to guard." the gg, w - - >emotion, the private utsht:es ,'v. '?VjM.y ..6.

*

*ould be abie to form a jomth A.P P.A said m a recent report. -e

owned generating subsidiarv ons The S E.C said then (nat tne - * " JG.W'j}{4 y-:.g , ,gQg.q;f ; - ;- s,af the sa.e of power would be abse sce of a seg s'amt c .emptien

h.T. Ak 'N M ;g* * * g-fqr

[Q...r9 .e."pnmat":y * to the B.P.A. would not necessan!y prevent the - * .

"private-utihty companies from - ;3 ,-

. p.* ' e4M. ' , ?, c/ .'5THE POWER.THEN would be joining to build hydroeiectr:c

3 ./ 4 .,, , f r??distnbu ed throughout t'e -epan . Pfants "except to the cuent that .W g: y fundenske compud be unwillmg totu sponws woul

tE. d, ' . . . -." * ["1g|P .'to pubhc and pnvate ut;!ines and yance'' with me .:,v gh ^ U, some indastnal users served by , _

* %| ' kCd .'

the B.P.A. Ho: ding Company.Act, the report ,

'.j,yy,ygg /{* . Nare seekmg the |egislauon as a S.E.C.'s present position papers f y., ; QS ' ys.

-

L y'e; One congressional sourcq ques- said. -g p,;Q

a tioned uhether the gnvate uuhties \ta cDonald., whc wrote the M . - "N# -* " jr;

J, . 11means of removmg themselves on the subject said'he is not fa- . Q . ,e- 4 ~.% i

3-from dJrect hbehty - through mutar aIth ne pressous.exemp. sv f - &; . . y ? n.'

formation of a jomtiy owned suo, tion sought by the Northwest pn- *'.g---.''-H' ,'* g-d,.

{;s l.i . -; # - M ;s: diary - m :he event there are vare utdices - but .he said the ,v .-

. ;N, g .

,

*

195rs "were the [nf old days ofp*oblems m constrter:on or opera . miktancy m the S.E.C.*.'

-. . , '\. - U,

rftion cf nuclear-power or other . f. ". W -i .

geersteg plants. Eth or without a legislatve or - &- . ': d A 0 3administrative exernption, it *y +- nwJohn Cary, attorney for Puget b. .i '* 9<0,./'

Sound Power & L:ght, said ".t's would be pombie now for pnvate r3 ' N'not ready c' ear yet to what extent utlhties to join and fowl an mde- #" ' - - <.the pnvate ut6t:es mould be r, pandent subsic.ary ccmpany to C' *P- -

'

spons.bie m the event their subsi- tAtid nuclear or coalfired power ph,4 -. ... .\ M .T _ . * S . .-

'

- "-^ h ~ - vuM'-d.ary had problems.a p: ants.

The A.P P A., m a pos:to. pa. But if one or more of the utih- - " * '"'-'''- ' ~ ' ' "" " " 'per on the subject, raised a ques- te could not get aa exempuon. It

.tien about subsid.ary compantes wouid have to comply w'th tre,now owned by, pnvate utthries Pubhc Uttury Holdeg Company ,

^Cf-unich develop and supply fuel, ' - : >.pn naniy coat De Pacific Power and Lg* t. p -

..

If the pnvate utzhties jom to Co., m partcar, fea-s mae .: .

form a generateg st.bsid ary and -wouid hase ro diest some of :ts,

'g g M g.. .

decide to build a coabfired gener. hoiings m that case, MacDonald s. q _, , , , , ' .,'-Umg p: ant, it is hkely the coal . said -would come from one or more of Cary said the basic problem " . ''

the subsid; anes owned by the wh forming a boideg company _,

same pnvate utmt es. Cary said. is "the persraswe smem of regu- .,', - ..

The:AP.P.A. said "there is a .!ation by the S E.C." He said a > - 2i'

' ' '

['b| ' clear pccential for excessive secondary considerstmn is wheth- /a n"?9. -t , charges to consumers resultmg er any of - the pnvate utdties .i'j i :i ,

Lt.E . ,J.[,T .KJ ' ., ,, I.g;.' f .from; arrangements between tr.e wouid hase to cvest themse:ses .

fcoal subsic. anes' of the . Pacific c of any triterests ;ri order to comp.y . , f-- . 3,,,

-

#r*/ W' Northwest (utihties) and their with the act. 9 7 *. - - &j '- s

; proposed generateg subs:d: anes:.' 4 Cary and NacDonaid both said' /8di- i '' W ' ST~ 3/. MF- - % * V,,

' '. .. f'.'*4..-"It is thts tge of*trar.saction, they are convinced there would bei

* |-i' * gi. ej ?.+..*[,', .(* 7. .g. 4. .

-

alorg with the potennal for.large adequate protect;on ur. der erst ' .

.,' .

.Q '" "holdmgEcompanies to dommate . .irig law and through the proposedWhe energy field.shich tre Pubhc .le;;:s ative exempaon to' protect V V''

cor.samers and stockho;ders m the p -

' Ut:hty Holdeg Company Act was Nor**est. -

*

1 .sdesigned to address and prevent'- ---

8 * r "EDERICK G ELS,CN '. */

.| Car). said any such transacnons The A.P.P.A. dispu..te.s C.at con-6g g p;,,," g~ , . cot}} i '*-

e Pe d: p', .. generatang subsidiary could be

'm' , % .-

fbbe: ween a coal subsdary and a 5 -

m"''

*

oin4' nease send ra,'

scrutnued m- rate reviews by Apub|[c.employe |m -' |p* |CN- W -

*stare utihties commissions and the -

- -m-

$'hEnergy RegWatory Com- IOCders to meet j % | Seg ! H :i.

A threa. day regio .al ;e3de ship . I ~rg | ' Q' '.ICla the case of the Northwest,

'#' ##pnvate dukties te Hofdeg Com-i

" #I E DC" '! pany Act ec u huid arply if t.ev

~ "'""* ' ' - - ~ ~ ' --| uere to acqwre O per cent o'r* - rncre of the stocx in another unh. I

* # " ' ' ' ^ ~~ "*| <\d -I ty company, such as the jomity "* " * * " " = "i

C J )- - N.-- a w'| owned generat:ng subsid;ary theyPt.bbc E,tre Canadan Unicn of |

.

d-at of ,?i* are proposmg.- *

,

mployas, will sp.e ;, ( )ppe ! &-M f4 s C m-,.,,, %. ,ae Acct S .; w - m o. -. . . , . _

-

t , L. _.%, u .w.ma. y ,, ,v m.y,,., w .. , w-

| q, (V, alt Evans is on jury duty. c -^

' ~ His column will resume Sunday.) |~\|_-

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~

UNITED STATES OF AMERICA '

NUCLEAR REGULATORY COMMISSION \ <7v/'f /7 .---: , .Jx

- ? ;,

BEFORE THE ATOMIC SAFETY AND LICENSING APPEAL BOARD' -

In the Matter of ))

PUGET SOUND POWER & LIGHT ) DOCKET NOS. STN 50-522COMP ANY , et al., ) 50-523

))

(Skagit Nuclear Power Project, )Units 1 and 2) )

))

CERTIFICATE OF SERVICE

I hereby certify that copies of:

INTERROGATORIES AND REQUESTS FOR PRODUCTION TO PUGET

SOUND POWER AND LIGHT CO. AND OTHER APPLICANTS dated June

25, 1979, have been served on the following by depositing

the same in the United States mail, postage prepaid, on this

25th day of June, 1979.

Valentine B . Deale , Esq. , Chairman Alan _ S . Rosenthal, ChairmanAtomic Safety and Licensing Board Atomic Safety anc LicensingU.S. Nuclear Regulatory Appeal Board

Commission U.S. Nuclear Regulatory Commissio1001 Connecticut Avenue N .W. Wash ington, D .C. 20055Washington, D.C. 20036

Dr. J ohn H . Buck, MemberDr. Frank F. Hooper, Member Atomic Safety and LicensingAtomic Safety and Licensing Board Appeal Board ,

School of Natural Resources U.S. Nuclear Regulatory Commi'ssioUniversity of Michigan Washington, D.C. 20555Ann Arbor, MI. 48104

Michael C. Farrar, Member

Gustave A. Linenberger, Member Atomic Safety and LicensingAtomic Safety and Licensing Board Appeal BoardU.S . Nuclear Regulatory U.S. Nuclear Regulatory Commissio

Commission Washington, D .C. 20555Washington, D .C. 20555

Certificate - 2027 047

. . .

Docketing and Service Section Canadian Consulate GeneralOffice of the Secretary Peter A. van BrakelU.S. Nuclear Regulatory Vice-Consul

Commission 412 Plaza 600Washington, D.C. 20555 6th and Stewart S treet

Seattle, Washington 98101Richard L. Black, Esq.Counsel f or NRC Staf f F. Theodore ThomsenU.S. Nuclear Regulatory P e rk ins , Coie, Stone, Olsen

Commission & WilliamsOf fice of the Executive Legal 1900 Washington BuildingDirector Seattle, Washington 98101

Washington, D, C. 20555Alan P. O' Kelly

Nicholas D. Lewis, Chairman Paine, Lowe, Coffin, HermanEnergy Facility Site Evaluation & O' KellyCouncil 1400 Washington Trust Financial

820 East Fif th Avenue CenterOly rpia, Washington 98504 Spokane, Washington 99204

Robert C. Schofield, D irer. tor Russel W. BuschSkagit County Planning D part- Eve 1 green Legal Services

ment 520 Smith Tower120 West Kincaid S treet Seattle, Washington 98104M t.Vernon , Washington 98273

Richard M. Sandvik, Esq.,Assistant Attorney GeneralDepartment of Justice500 Pacific Building520 S. W. Y amhillPortland, Oregon 97204

Robert Lowenstein, Esq.Lowenstein, Newman, Reis &Axeirad

1025 Connecticut Avenue, N.N.Washignton, D.C. 20036

H. H. Phillips, Esq.Vice President and Corporate

CounselPortland General Electric '

- > .Company DATED: /

121 S.W. Salmon S treet /Portland, Oregon 97204 ROGER M. LEED /''

7 f{ _ ;/ -

CFSP and FOB ' , . , , ,L m

E. Stachon &L. Marbet ,By -~

19142 S. Bakers Ferry Road M i-ch ael W . G endle rBoring, Oregon 97009

Certificate - 2

2027 048