Date: Fri 11-Sep-1998

Publication: Bee

Author: CURT

Quick Words:

NU-ruling-rate-energy

Full Text:

Judge Rules That Rate Payers Shouldn't Pay For Nuclear Plant Mismanagement

By Brigitte Greenberg

Associated Press

NEW HAVEN -- Northeast Utilities cannot foist the entire $427 million bill to

decommission the old Connecticut Yankee plant onto rate payers because the

company mismanaged the facility, a federal judge has ruled in a preliminary

decision.

Attorney General Richard Blumenthal last week hailed the recommendation from

Federal Energy Regulatory Commission Administrative Law Judge William J. Cowan

as a "major victory" that could save consumers as much as $200 million.

The 117-page decision was August 31 by the US Department of Energy. Cowan said

his conclusion that the company's imprudent actions were to blame for the high

cost of mothballing the plant was "inescapable."

NU owns 49 percent of the plant, which it operates. The judge found the

company's estimate of decommissioning costs was error-ridden, and failed to

support its request for $82 million to return the plant's Haddam Neck site to

its original condition.

The judge's recommendations will be forwarded to the full, five-member

commission that makes the final decision. Before that, both sides have about

two months to file objections to the judge's findings. Either side also can

appeal the decision of the full commission, which could come at any time.

Connecticut Yankee spokeswoman Kelley Smith said plant executives were

considering whether to argue against the judge's ruling.

"Right now, this is just the first step in a very long process. We're in the

process of reviewing the decision in order to fully understand the

administrative law judge's reasoning," Smith said. "We haven't made any

decisions."

Despite the ruling, decommissioning will continue, Smith said.

The plant closed in 1996, when the company concluded it would be cheaper to

buy power elsewhere than to continue running the aging plant. State officials

said it closed early after deteriorating because of inept management. The

plant closed 11 years before its license was to expire.

A state-hired consultant found that radiation had leaked from the reactor onto

the grounds, and some contamination was spread through the removal of fill to

land once used as the site for a day care center. State officials said,

however, that the radiation levels did not pose a public health threat.

Cowan accepted the state's arguments, saying the "evidence paints a pretty

clear picture of drains carrying radioactive contaminants that were unmarked

and uncontrolled, sloppy work habits around radiologically contaminated

materials that went uncorrected, careless handling of radwaste outdoors, and

uncontrolled or poorly monitored movement of contaminated materials on- and

off-site."

The plant also should not be able to rate payers $90 million for spent fuel

storage costs because those charges are the responsibility of the Energy

Department, the judge said.

The decision rejects Connecticut Yankee's request for a rate increase and sets

temporary rates at a previously approved level, close to $350 million.

If the recommendation is adopted, the company will not be able to collect $78

million for decommissioning costs and will not get an additional $70 million

in returns on the plant owners' investment. Also, the decision could exclude

an additional $50 million that the plant wanted to charge its customers.