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Position Paper Shoreham Nuclear Power Station (1984)

Author	Long Island Lightning Co
Date	May 1984
Classification	3.01.8.13/02 (UNITED STATES - SITES - SHOREHAM)
Front

INTRODUCTION

After over 18 years of planning, construction, and licensing, LILCO's Shoreham 
Nuclear Power Station (SNPS, the plant, Shoreham) is completed and ready to go 
into operation. The plant was conceived and built to assure a continued source of 
future low-cost power to the residents of Long Island.

The fate of the Shoreham plant remains uncertain because Suffolk County has 
refused to participate in a federally mandated emergency plan for the 10 mile area 
surrounding the plant. Both Suffolk County and the State of New York are contesting 
the operating license of the plant ·before the Nuclear Regulatory Commission.

Meanwhile, most of the cost of the Shoreham plant - including carrying charges of 
over $40 million each month - is not yet reflected in LILCO's rate base, and as a 
result the Company's cash flow is insufficient to support its operation. In view of
LILCO's financial condition, external financing is not presently available, and the 
company's current estimates show that it will run out of cash in September 1984.

EXECUTIVE SUMMARY

In an effort to bring certainty to the destiny of the plant and stability to LILCO, 
its ratepayers and the Long Island economy, this position paper concludes that LILCO 
will continue to seek a license for the Shoreham plant so it may begin operation as 
soon as possible. The operation of SNPS will result in lower rates for the ratepayer 
than not operating the plant; all independent inspections indicate the plant would 
be safe; and its operation is essential to ensure a reliable supply of energy for
Long Island.

The plant is completed and must be paid for whether or not it ever generates 
electricity. The question being debated is not whether LILCO should begin 
construction of a $4.1 billion nuclear facility. Rather, the issue at hand is why 
the people of Long Island should not receive the benefit from this completed 
plant? LILCO can find no valid reason for not pursuing a license to bring this plant 
into operation as quickly as possible. LILCO Board of Directors has concluded that 
its responsibility to assure adequate supplies of electricity to Long Island at 
reasonable rates would best be met by licensing the Shoreham Nuclear Power 
Station. This position paper articulates the bases for the foregoing decision of 
LILCO Board of Directors.

The proposal contained herein offers a rate phase-in program to minimize the 
impact on ratepayers of the recovery of the plant's capital investment. The rate 
phase-in plan proposes rates substantially lower than any previous proposal offered 
by LILCO, the Public Service Commission, the Consumer Protection Board, 
Nassau County or Suffolk County. (1)

(1) PSC Case No. 28252, "Ratemaking Principles Applicable to Shoreham
Nuclear Generating Station," submittal by various parties.

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