that the cumulative requirements for domestic reactors through 1980 would be 170,000 tons. Domestic reserves are thus inadequate at current prices to meet relatively near-term domestic demands. In addition, while foreign ore cannot be enriched for use in American facilities, the proposed criteria permit the enrichment of domestic ore for use in foreign facilities, so that foreign requirements must be added to the 170,000-ton figure. This evidence, coupled with the recent renewal of intense exploration activities by domestic producers, strongly suggests that there is no longer any problem in maintaining a viable domestic uranium industry. Indeed the problem may have shifted to one of conserving an irreplaceable natural resource. ISOTOPIC CONTAMINANTS IN FEED MATERIAL 6 6. All feed material furnished to the AEC and enriched uranium delivered to the customer shall be in the form of UF, and conform to the Commission's established specifications for such material. The Commission already has specifications relating to the chemical content of feed material and enriched uranium but has not as yet published specifications establishing permissible limits for various isotopic contaminants. We strongly urge that AEC develop specifications dealing with these isotopic contaminants, keeping in mind that they will be of increasing importance as more and more material is recycled through the separative process and that the setting of unrealistically low permissible levels could have serious economic impact on fuel cycle costs. (See app. 22, p. 525.) DECLASSIFYING INFORMATION ON COST OF SEPARATIVE WORK 7. We note that in the current hearings there has been considerable discussion and testimony on the need for declassifying the makeup of the cost of separative work. The AEC has stated that this matter is under continuing review with the intent of declassifying such information at the earliest possible date consistent with national security. We believe that this information is vitally needed by industry in order to make long-term projections of fuel cycle costs and, ultimately to speed the transition of enrichment facilities to the private sector of our economy. Again, we express our gratitude to those who have worked so diligently to arrive at a mutually acceptable set of documents for enriching services. Although they do not incorporate all provisions desired from the customer's viewpoint, we believe that they represent an equitable arrangement. ENRICHMENT OF FOREIGN URANIUM; DATE FOR REMOVAL OF PROHIBITION AGAINST USE IN DOMESTIC FACILITIES Representative PRICE (presiding). Thank you, Mr. Coe. On August 3, Mr. Coe, the Commission testified that it may be possible to remove the prohibition against the enriched foreign uranium for use in domestic facilities earlier than the July 1975 target date which was set in the 1964 private ownership hearings. Do you think the AEC should make a more definite statement than that at this time? 70-510—66——10 Mr. CoE. I am not sure that I have any very definite opinion on that. The only thing I wondered is if the AEC might not set some domestic market price which when reached would permit foreign ore to come in. Representative PRICE. What is the date that you were thinking about in your preferences to the foreign ores in your statement? Mr. COE. I was not thinking of any particular date. I was thinking that perhaps a more definite statement of policy might be made by the AEC rather than naming any particular date. Representative PRICE. Would it be helpful for you to have that more definite policy statement? Mr. COE. I think so, yes. Representative PRICE. In what way would it be helpful and why would it make any difference? Mr. COE. I think if an earlier date were set it might affect the price of uranium in our favor in that we would have a world price rather than a U.S. price. Representative PRICE. Do you have any comment, Mr. Wagner? Mr. WAGNER. Mr. Chairman, I think another point that was indicated in Mr. Coe's statement is that based on the presently estimated and reasonably assured reserves there has been some concern expressed about the adequacy of such reserves for long-time usage. Representative PRICE. You are talking about the domestic reserves? Mr. WAGNER. Yes, sir; and being perhaps augmented by foreign reserves as well. So, some statement of the policy in this matter might be helpful in this respect. However, recently the committee on nuclear fuels of EEI has held a meeting with the staff of the Atomic Energy Commission. At that time Mr. Faulkner gave us a very good presentation concerning not only the reasonably assured reserves but those that might be reasonably expected to be located by exploration which is proceeding at a good rate at the present time. I think certainly as regards our concern about future reserves, we have better understanding of what these may be. Representative PRICE. Mr. Coe seemed to express some concern about the exportation of domestic uranium for use in foreign reactors. Do either one of you feel there should be restrictions on such exports? Mr. CoE. I did not have that concern. I was simply bringing that in as an additional factor in evaluating our reserves plus the possibility of new discoveries in this period. Representative PRICE. Do you believe foreign uranium will be cheaper in the early 1970's than domestic uranium? Mr. Coɛ. I do, yes. Representative PRICE. Mr. Bates, do you have any questions? COST OF POWER FROM YANKEE REACTOR; OPERATING DATA Representative BATES. No, excepting I was reading Bill Webster's statement to the stockholders last night and maybe you would like to comment a little bit on it. Mr. COE. Does anybody have a copy of that statement here? I could comment on it better if I had a copy of it before me. Mr. CONWAY. I don't think we have one handy here but I think it showed how much savings he had made from his original projections on his costs. (A copy of the statement referred to follows:) To: Yankee Directors. YANKEE ATOMIC ELECTRIC CO., On June 30th YANKEE completed five years of commercial power operation. Over this period we have been very fortunate to avoid major hard luck, to exceed our output estimates, and to be on the low side of cost figures. Our average power cost for these first five years was 9.8 mills/KWH*---this is less than two-thirds the July 1958 estimate of 15.3 mills/KWH. This result is due partly to the original low construction capital cost, partly to the attaining of a higher capability and more hours output than projected, and partly to a net saving in many assorted items of operating expense. These favorable developments stem mainly from the capable and dedicated efforts of a very fine group of individuals. This letter is written to call to your attention and to record the accomplishments of our splendid "Yankee Team". Here is a comparison of actual figures with the July 10, 1958 estimates that were used as a basis for Yankee financing. These figures cover the first five years of commercial operation (July 1961 through June 1966). 1 Note that the power costs shown above are based on 20-year straight-line depreciation and normalized Federal income taxes. With 30-year depreciation and flow through, as used by most of our companies the 5-year average power cost would have been 8.4 mills instead of 9.8. WILLIAM WEBSTER, President. Representative BATES. As I recall his estimated operating costs were 9.8 mills per kilowatt-hour of power for a 20-year depreciation base. It would be 8.4 mills on a 30-year basis. Mr. COE. The original prediction for the average cost of power for the first 5 years was 15.3 mills and the actual experience was 9.8 mills. Both these figures are averaged over the 5 years and includes some early operations at lower power and intermittent operations which make the figures higher than they would be otherwise. The difference between those two numbers is made up of several factors. First of all, there is something like 25-percent lower capital costs than we estimated originally. We have to admit now in hindsight this estimate was definitely on the conservative side but I think you also have to think back to 1957 when the only plant that had been built was Shippingport and everybody was aware of some of the unfavorable cost experiences that occurred down there. It was not surprising that these figures were developed on a conservative basis. The next thing is that the projections made in 1957 or 1958 were based on very low burnups. They were based on single region cores and they were based on operation without the use of boron shim which meant that the reactor was control limited so far as burnup was concerned. You could only put in so much reactivity because that is all you could hold down with the rods and the burnup life was short. In the last 2 or 3 years we have been operating with boron shim, and we have gone from an original enrichment of 3.4 percent to substantially higher enrichments in later cores. In the next refueling we will have a complete core at 4.9 percent, and this means a great deal more excess reactivity. Furthermore, we have gone from single region, one-cycle core to a two region, two-cycle core and we have essentially doubled the number of kilowatt-hours that come out of a single, complete core loading. All of these things had a very beneficial effect on the fuel costs, so really the difference is a 30- or 35-percent reduction from the original estimates. It is made up almost equally between savings in the capital part of the power costs and savings on the fuel cycle costs. Representative BATES. Wasn't the capital cost expected originally around $57 million and it went down to $40 million? Mr. COE. That is right; it came out $43.7 million. That is not the plant cost. It included fabrication of the first core and working capital, the total amount financed, and this was on the same basis as the $57 million. That had allowances in there for fabrication of the core, the plant costs and the other things for which capital had to be raised. Yankee is a separate company with no financial resources except what it finances. Representative BATES. Is it running at 186 megawatts now? Mr. Co. 185 gross except during the stretchout period. We are now in the stretchout period and we are coasting down. Representative BATES. Is that the maximum you believe you will be able to get out of it? Mr. COE. We are up against limits on the turbine and generator. We would have to spend quite a little money on the generator to go above 185. Representative BATES. Providing there was no limitation on your turbine and generator, what would be the maximum you could get out of your present reactor? Mr. COE. In terms of electric output? Representative BATES. Yes, sir. Mr. COE. I would guess somewhere around 210 or 220. Representative BATES. All of these costs for turbine and generator have been at the original capital cost. Mr. COE. There is no where else to put it. Representative BATES. The real expansion factor would be in that area. Representative PRICE. What was the original electrical output of Yankee? Mr. COE. The nominal rating was 134 net. That is what appeared on the early reports and drawings. When we got into the actual design we took, I guess you would call it, a business risk. We decided that we did not want the core overdesigned and we deliberately had Westinghouse cut down on the core size and at the same time told them we would be satisfied in the initial operations with something less than the 134 megawatts. When we got to the licensing stage, the original licensing was on the basis of 392 thermal which corresponded to approximately 120 gross electric or 110 net electric. Within 3 months of the time we reached that power, we had filed an application to go up to 485, which corresponded to the original thermal rating of the plant and corresponded to 150 megawatts gross electric. The efficiency was better and I believe I am right on this. It was 140 net electric-slightly better than the original figure. Then on two occasions after that we applied for increases in power, and we went first to 540 megawatts thermal, which corresponded to 170 megawatts electric and then finally to 600 megawatts thermal which corresponds to the present 185 megawatts electric. Representative BATES. How many cores have you put in now in Yankee? Mr. CoE. This gets a little confusing because we have been loading half cores recently and probably a better way to say it is we are now on our fifth core cycle and we will shut down October 1 to refuel and then we will be on the sixth core cycle. Actually I think we have had about four complete cores. Representative BATES. What is the difference between the output on the original core and the latest? Do you have those figures? Mr. COE. The first core we got 1.3 billion kilowatt-hours net out of that core. The next core cycle which will start after this refueling we expect to get 1.9 billion kilowatt-hours out of that cycle. I made an error when I spoke a little earlier about doubling the output per complete core. Actually, the output for a complete core is a factor of three greater now than in the earlier operation. Representative BATES. Your output is second to Dresden 1? Representative BATES. In terms of kilowatt-hours produced? Representative BATES. I thought I read that Dresden 1 was first? Mr. COE. We can't catch them until they shut down for refueling, and I think we will be shutting down first. Representative PRICE. I understand your operation is almost con tinuous? Mr. CoE. We operate just as many hours as we can. The only thing that shuts us down is breakdowns and things of that kind. Representative PRICE. Evidently you have not had too many of those? Mr. CoE. No. We did have a long refueling outage last year. ISOTOPIC CONTAMINANTS IN FEED MATERIAL Representative BATES. Do you want to develop a little bit about these isotopic contaminants? How much of the residual do they amount to, and what sort of problems does it look like they are going to impose, and specifically what should the AEC do about it? (See app. 22, p. 525.) |