FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January, 1996
MAINE PUBLIC SERVICE COMPANY
(Exact name of registrant as specified in its charter)
Maine 1-3429 01-0113635
(State, or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
209 State Street, Presque Isle, Maine 04769
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 207-768-5811
Current Report, Form 8-K for Date of Report:
Maine Public Service Company January, 1996
Items 1 through 4. Not applicable.
Item 5. Other Material Events
Maine Yankee
Reference is made to the Company's Form 10-K dated March 29, 1995,
Part I, "Subsidiaries and Affiliated Companies," and Form 10-Q dated
November 13, 1995, in which the Company reported that Maine Yankee was
experiencing degradation of its steam generator tubes in the form of
circumferential cracking. During the refueling-and-maintenance shutdown
that started in early February of 1995, Maine Yankee detected an
increased rate of degradation of the Plant's steam generator tubes in
excess of the number expected and started evaluating several courses of
action. The Company owns 5% of the Common Stock of Maine Yankee. In
1994, when the Plant operated for the entire year, Maine Yankee provided
43.3% of the Company's power requirements.
On May 22, 1995, the Maine Yankee Board of Directors approved a
plan to repair these tubes using welded sleeves. Sleeving involves the
inserting of a tube of slightly smaller diameter into the defective
tube. The sleeve is welded in place and acts as a new tube. Sleeving
is a proven technology and has been used at other nuclear facilities.
In addition to the extensive technical analysis on the steam generators
performed by the Maine Yankee technical staff, two independent studies
on the overall condition of the plant were also undertaken. Both
studies concluded that the overall mechanical condition of the plant was
very good.
The sleeving of the steam generator tubes was not completed until
mid-December of 1995, and will cost an estimated $27 million, with the
Company's share being approximately $1.3 million. During 1995, while
Maine Yankee was out of service, the Company incurred additional
replacement power costs of approximately $5.7 million. As more fully
explained in the Form 10-Q dated November 13, 1995, the Maine Public
Utilities Commission (MPUC) approved a multi-year rate plan for the
Company. As an element of the rate plan, the Company eliminated the
fuel adjustment clause except for the cost of power purchased from the
Wheelabrator-Sherman Energy Company, an independent power producer. As
part of the Plan, $3.5 million of the replacement power costs associated
with the Maine Yankee outage was written off in 1995, $500,000 will be
amortized over the four-year rate plan period, and an estimated $2
million will be deferred until 2000. The rate plan also includes a
mechanism to handle similar unexpected Maine Yankee outages during the
rate plan period. In addition, the Stipulation allows for the five-year
amortization of the actual sleeving expenses.
Current Report, Form 8-K for Date of Report:
Maine Public Service Company January, 1996
On December 4, 1995, when the sleeving project was substantially
complete, Maine Yankee obtained a copy of a letter from an organization
with a history of opposing nuclear power development to a State of Maine
nuclear safety official based on documentation from an anonymous
employee or former employee of Yankee Atomic Electric Company
("Yankee"), an affiliate of both the Company and Maine Yankee that has
regularly performed nuclear engineering and related services for Maine
Yankee and other nuclear plant operators. The letter contained
allegations that Yankee knowingly performed inadequate analyses to
support two license amendments to increase the rated thermal power at
which the Maine Yankee Plant could operate. It was further alleged in
the letter that Maine Yankee deliberately misrepresented the analyses to
the Nuclear Regulatory Commission ("NRC") in seeking the license
amendments. The allegedly inadequate analyses related to the operation
of the Plant's emergency core cooling system ("ECCS") and the
calculation of the Plant containment's peak postulated accident
pressure, both under certain assumed accident conditions. The analyses
were used in support of license amendments that authorized Plant power
uprates from 2440 megawatts thermal, a level equal to approximately 90
percent of the maximum electrical capability of the Plant, to its
current 100-percent rated level.
In response to technical issues raised by the allegations, the NRC
initiated a special technical review of the safety analyses performed by
Yankee relating to Maine Yankee's license amendment applications for the
power uprates. At the same time, Maine Yankee and Yankee initiated
intensive internal investigations of the allegations and provided
responsive information and documentation to the NRC.
On December 18, 1995, a public meeting was held at the NRC to
discuss the findings resulting from the NRC's technical review. At the
meeting the NRC informed Maine Yankee that it had concerns regarding the
adequacy of a proprietary computer code used in ECCS safety analyses
supporting Maine Yankee's last two applications for license amendments
that authorized power uprates to levels above 90 percent of its current
maximum capacity. At the meeting the NRC also indicated that operation
of the Plant at a level up to 90 percent could be acceptable if
operation was based on methods previously found acceptable by the NRC
staff and not on the computer code that is currently under review by the
NRC, and further informed Maine Yankee of the terms and conditions under
which Maine Yankee could resume power operation of the Plant.
Subsequently, the NRC informed Maine Yankee that the allegations would
be the subject of investigations by the NRC's Office of Investigations
and the Office of the Inspector General.
Current Report, Form 8-K for Date of Report:
Maine Public Service Company January, 1996
On January 3, 1996, the NRC issued a "Confirmatory Order Suspending
Authority For And Limiting Power Operation And Containment Pressure
(Effective Immediately) And Demand For Information" (the "Order")
confirming the conclusions of the NRC from the public meeting and
follow-up communications with Maine Yankee. The Order limited the power
output of the Maine Yankee Plant to approximately 90 percent of its
rated maximum until the NRC shall have reviewed and approved Plant-
specific analyses meeting the NRC's criteria for operation of the ECCS
under certain postulated accident conditions, in lieu of the analyses
based on the questioned computer code. The Order further required that
prior to operating the Plant at any level Maine Yankee should submit
under oath specified information relating to operating the Plant at up
to the 90-percent level and descriptions of measures taken to assure
compliance with the limitations on operating level and containment
pressure.
With respect to subsequently returning the Plant to its 100-percent
operating level, the Order required Maine Yankee to submit a Plant-
specific analysis meeting the NRC's requirements for ECCS operation
under specified conditions at Plant power levels up to 100 percent of
its maximum rated capability. The Order also required an integrated
containment analysis demonstrating that the maximum calculated
containment pressure under certain postulated accident conditions does
not exceed the design pressure of the Plant's containment. In addition,
the Order required Maine Yankee to submit a schedule for providing the
requested analyses and related information to the NRC. The Order is
subject to the limited rights of any person "adversely affected" by the
Order to request a hearing or to seek a stay of the effectiveness of the
Order.
On January 10, 1996, Maine Yankee filed with the NRC information
specified in the Order that it believes supports operation of the Plant
at up to 90 percent of the Plant's capability. In its submittal Maine
Yankee also notified the NRC that it expected to proceed with initial
operation of the Plant on January 11, 1996, and the Plant commenced
operation on that day. Under ordinary circumstances, raising the
operating level of the Plant incrementally to the 90-percent level could
be accomplished in as short a period as approximately a week, but Maine
Yankee believes that after the twelve-month shutdown the Plant has
experienced the process could take longer. The Company estimates that
its incremental replacement power costs at the 90-percent level of
operation could range, depending on overall energy requirements and
market conditions, from approximately $40,000 to $60,000 per month as a
result of the reduced energy output of the Plant. With the previously
mentioned rate plan commencing on January 1, 1996, and the elimination
of the fuel clause, these costs will be charged to operations.
Current Report, Form 8-K for Date of Report:
Maine Public Service Company January, 1996
The restart of the Plant is currently in progress. The Company
cannot predict when the Plant will attain a 90-percent operating level,
nor can it predict when the Plant will be granted authority to return to
the 100-percent operating level and, once the authority is received,
when Maine Yankee will attain that operating level. The Company cannot
also predict the results of the internal and external investigations of
the allegations brought to Maine Yankee's attention on December 4, 1995,
or whether any party will seek an NRC hearing or any appeal with respect
to the Order. Maine Yankee has stated, however, that it intends to
pursue its internal investigation diligently and cooperate with the
governmental investigations, and that it believes that after it develops
the information requested by the NRC for operation of the Plant at full
capacity it will be able to operate the Plant at that level while
meeting all applicable NRC safety requirements.
Item 6 through Item 8. Not applicable.
MAINE PUBLIC SERVICE COMPANY
Registrant
January 23, 1996 Larry E. LaPlante
Larry E. LaPlante, Vice President
Finance and Treasurer