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SOUTH TEXAS PROJECT NAMED TO NRC "WATCH LIST"

 HOUSTON, June 25 /PRNewswire/ -- The Nuclear Regulatory Commission (NRC) today announced that the South Texas Project (STP) is being placed on its "watch list." This means the plant will be subject to tighter regulatory oversight. Houston Lighting & Power Company (HL&P), a subsidiary of Houston Industries Incorporated (NYSE: HOU), owns a 30.8 percent interest in the plant.
 "Certainly we regret that South Texas was placed on NRC's watch list," said HL&P Group Vice President William T. Cottle, "but we are dedicated to the development and implementation of corrective action programs to address the root causes of performance deficiencies identified." Many of the NRC's concerns were previously identified by HL&P, and corrective actions are presently underway; some have already been completed. These include significant management personnel changes as well as changes in the basic processes by which work is performed at the plant. The planning and development of additional corrective actions is an on-going effort.
 "I remain confident that we will resolve these difficulties and continue our record of safe, reliable production of electricity for the citizens of Texas," Cottle said. "The South Texas Project is one of the newest, most advanced nuclear plants in the nation, and has a skilled and dedicated work force. HL&P and the other owners are fully dedicated to providing the financial and management support needed for success. Building on these fundamental strengths, and guided by conservative, safety-conscious management, the Project's current challenges will be met and overcome."
 The nuclear plant has been out of service since February and will return to service after issues identified by the Commission's Region IV office in Arlington, Texas, are addressed. HL&P said it anticipates no problem in meeting the area's energy needs this summer.
 It is difficult to project the exact cost of having the plant out of service or the date it will return to service. There is little precedent for Texas Public Utility Commission treatment of additional fuel costs attributable to an extended operating outage at a nuclear plant, but in the only reported case, the Commission established performance factors which were utilized to determine recoverable costs. If that approach were followed in reconciling fuel costs associated with the current outage on the STP units, and if HL&P were judged against the same factors, the company projects that from $12 to $15 million of fuel costs likely would not be recoverable, even if both units were to return to service as late as the end of the year. Additionally, HL&P estimates that approximately $65 million of non-fuel expenditures in excess of previously budgeted amounts, of which HL&P's share would be approximately $20 million, are being expended to support an NRC Diagnostic Evaluation and to accomplish previously identified corrective actions undertaken during the current outage.
 -0- 6/25/93
 /CONTACT: Sandy Brendler, 713-629-3123, or Dan Bulla, 713-629-3120, both of Houston Industries Incorporated/
 (HOU)


CO: South Texas Project; Houston Lighting & Power Company ST: Texas IN: UTI SU:

TM-LD -- NY050 -- 5931 06/25/93 18:17 EDT
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Publication:PR Newswire
Date:Jun 25, 1993
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