; DRA5 9/15' P ATEO CORRESPONDS

January 7, 2005UNITED STATES OF AMERICA

NUCLEAR REGULATORY COMMISSION DOCKETEDUSNRC

January 10, 2005 (8:10am)BEFORE THE ATOMIC SAFETY AND LICENSING BOARD

OFFICE OF SECRETARYRULEMAKINGS AND

ADJUDICATIONS STAFFIn the Matter of Docket No. 70-3103

Louisiana Energy Services, L.P.

National Enrichment FacilityASLBP No. 04-826-001-ML

DIRECT TESTIMONY OF MICHAEL F. SHEEHANON BEHALF OF NUCLEAR INFORMATION AND RESOURCE

SERVICE

ANDPUBLIC CITIZEN

I

npt/t fe= c v ot -

Contents:

I. INTRODUCTION 4

A. Qualifications 4

B. Purpose of Testimony 7

C. Summary of Conclusions 8

II. OVERVIEW OF NEPA REQUIREMENTS 9

III. LES 11

IV. LES'S CLAIM OF "NEED" FOR THIS PLANT NOW 12

V. LEU SUPPLY AND DEMAND IN THE U.S. 15

VI. URENCO AND EUROPEAN SUPPLY 20

VII. USEC VERSUS URENCO AND UNITED STATES NATIONAL AND 25ENERGY SECURITY

VIII. OTHER PROBLEMS WITH THE COST BENEFIT ANALYSIS IN 34THE ER AND THE DEIS

IX. CONCLUSIONS 35

2

EXHIBITS

Exhibit

MFS-1;NIRS/PCExhibit 45

MFS-2;NIRS/PCExhibit 46

MFS-3;NIRS/PCExhibit 47

MFS-4;NIRS/PCExhibit 48

Title

ER Table 1.1-3

EIA, Nuclear Fuel Cycle Projections 2000-2025 (January 2003)

EIA, World Enrichment Requirements 2000-2020 (May 2001)

ER Table 1.1-8

3

I. INTRODUCTION

A. Qualifications

Q. Please state your name and address for the record.

A. My name is Michael F. Sheehan. My address is 33126 Callahan Road, Scappoose,

Oregon 97056.

Q. By whom are you employed and in what capacity?

A. I am a partner in the firm of Osterberg & Sheehan, Public Utility Economists, of

Scappoose, Oregon and Mount Vernon, Iowa.

Q. Please describe your professional background.

A. I hold B.S., M.A. and Ph.D. degrees in economics from the University of California at

Riverside. I have taught project analysis, quantitative economics, and operations

research, as well as basic, intermediate, and graduate courses in economic theory and

policy at the Graduate School of Administration at the University of California at

Riverside; at California State College, San Bernardino; and in the Graduate Program at

Chapman College. In 1979 I was hired into the Graduate Program in Urban and Regional

Planning at the University of Iowa, where I taught courses in environmental policy and

planning, public utility policy and planning, planning economics, local energy planning,

and state and local development finance. I have published a substantial number of

articles in scholarly journals and a number of chapters in books. I also hold a JD from

the College of Law of the University of Iowa and I am admitted to practice in Oregon and

Iowa. My legal practice focuses primarily on land use and related matters. My resume is

attached to this testimony.

Q. Please describe your background on issues related to the nuclear fuel cycle,

environmental planning, and environmental and land use regulation.

4

A. Much of my practice over the last twenty years has been involved with environmental

planning and regulation, including geothermal development in California, surface mining

in Oregon, high and low level radioactive waste issues in the west and midwest, and the

economics and regulation of MSW. I have worked extensively on water quality issues,

including reclamation of waste water in the Los Angeles basin, NPDES permits in the

meatpacking and related contexts, and radium 226 problems in the midwest. I have

published on the economics of water supply, and been involved in several studies and

cases involving water supply economics. I have published a number of articles on public

policy related to toxics. My dissertation was largely focused on the issues of

infrastructure and mining development in the United States and Mexico.

Q. Have you previously testified on issues related to finance or project planning?

A. Yes. I have testified before the Indiana Commission in a number of Causes dealing with

including incentives, utility planning, valuation, and rate of return. I have testified before

the Oregon Commission on utility planning, rate design and cost allocation; before the

Kentucky Commission on cost of service, rate design, credit and service, and

conservation-related issues. Before the Iowa Commission I have presented testimony on

rate of return, rate design, excess capacity, issues involving municipalization, utility

franchises, and utility planning in a series of electric, natural gas, and telephone cases;

before the Massachusetts DPU on utility planning and rate design issues in the area of

demand-side management and least cost planning; the South Dakota Commission on rate

design and utility planning; the New York Commission on avoided costs in the allocation

of preference power; and the Wisconsin Commission on rate of return. I have testified

before the Alaska Commission on investment planning in telecommunications, cross-

subsidization, rate design, and the problems of the communications handicapped; before

5

the Texas commission on economic development rates; and before the Hawaii

commission on rate design and low-income conservation programs. In addition, I have

testified before the Illinois Commission on utility planning issues in the nuclear context,

and I have appeared before committees of the Nebraska, Missouri, Iowa, and Washington

legislatures on various aspects of utility regulation and energy management, and

valuation of service territories.

Q. Have you examined environmental or planning issues in any other forum?

A. Yes, I worked on contract to Economic Research Associates to provide several chapters

of a detailed study of energy planning in Missouri, including the impact of the Clean Air

Act Amendments. Together with Skip Laitner I prepared a report on low-income

wveatherization as a stimulus to economic development in Washington. From about 1982

I have been involved in several studies involving problems of utility franchises. I was a

member of the Iowa City Franchise Review Committee in 1983-4, and I am co-author of

an article in the Urban Lamyer on utility franchise fees. I have also provided services on

contract to the Vermont Commission staff on utility planning issues, the Nebraska

Energy Office, and the Iowa Energy Policy Council in the areas of local energy planning

and the relationship of energy pricing to local economic 'development. I have served on

the Rate Advisory Committee and the Resource Acquisition Council of the Columbia

River PUD, the Research Advisory Committee of NRRI and the National Consumer

Advisory Panel to AT&T. I have been economic consultant on issues related to

municipal solid waste disposal to METRO, the regional government for the three

counties around Portland, Oregon, and I am a member of the Solid Waste Advisory

Committee for Columbia County, Oregon. I have worked on costing and valuation issues

for various cities and organizations. And I have consulted on issues related to radioactive

6

materials in the low level waste context, the LES case, and in other proceedings.

Q. Have you previously testified before this Commission?

A. Yes. I submitted testimony in the following cases:

Hydro Resources Inc. Application to Construct and Operate the Crowvnpoint Uranium

Solution Mining Project at Croivnpoint, NM, Docket No. 40-8968, 1997. I presented

expert written testimony on the economics of the proposal (issues related to financial

capability, cost benefit analysis and need) on behalf of ENDAUM and the Southwest

Research and Information Center.

In the Matter of Private Fuel Storage, LLCfor a License for an Independent Spent Fuel

Storage Installation Docket 72-22-ISFSI, ASLBP No. 97-732-02-ISFSI. I presented

expert written testimony on the issues of financial assurance, alternatives, no action, and

NEPA on behalf of the State of Utah. 1999-2001.

In the Matter of Pacific Gas & Electric (Diablo Canyon Nuclear Powver Plant Nos. 1 and

2). I presented a declaration and assisted with preparation of Contentions relating to the.

application to establish a high level nuclear waste facility at Diablo Canyon on behalf

various local groups. July 2002.

My partner David Osterberg was also a testifying expert in the LES, Homer, Louisiana,

case, and I was involved in some aspects of the case preparation there.

B. Purpose of this Testimony

Q. What is the purpose of your testimony in this case?

A. The purpose of my testimony is to identify the inadequacies of the license application as

related to the need and purpose of the facility. I will also address the following related

issues:

1. Claims of substantial job and tax benefits associated with the construction of the

7

facility;

2. The adverse environmental impact of installing the NEF facility in the United

States;

3. The adverse environmental impact of operating the facility on the heavily mined

and declining Ogallala Aquifer;

4. The impact on the competitiveness of the NEF relative to European supply of

LEU, of the cost of disposal of DUF in the US compared to the cost of disposal in

Europe for European plants;

5. LES' equivocation about the movement of DUF offsite by the end of year 2038.

(8306).

Q. Please briefly describe the materials you reviewed for this testimony.

A. I have reviewed the following documents and classes of documents among others in

support of this testimony: The ER and DEIS, pertinent parts of NRC and EPA rules and

related materials, discovery materials, and publicly available data on the enrichment

industry, much of it supplied by LES in the discovery process. I would like to note that

research for and preparation of this testimony was seriously hindered and interfered with

by the closing of ADAMS and the unwillingness to make a reasonable adjustment to the

schedule to compensate for the associated delays. These delays differentially impacted

the preparation of this testimony, when compared to the data available to the applicant

and staff at the time they were preparing their cases.

C. Summary of Conclusions

Q. Please summarize your conclusions.

A. I reach five conclusions:

1. The assertion by Urenco that construction of the NEF plant will produce a

8

competitive market in the United States is defective, given the facts of this case.

2. The construction of the NEF plant would seriously jeopardize the ability of

USEC, Inc. to construct the American Centrifuge plant with its up-to-date

technology. Construction of the NEF plant would also almost certainly mean the

end of USEC's Paducah plant as an economically viable producer, leaving the

Urenco plant as the only producer in the United States.

3. The replacement of USEC by Urenco as the dominant or single producer in the

United.States would sharply worsen, and not improve, the security of United

States supply.

4. There will be an adequately improved competitive supply without the NEF plant.

5. The calculation of the benefits associated with the NEF plant has significant

defects in several important areas.

II. OVERVIEW OF NEPA REQUIREMENTS

Q. Dr. Sheehan, what is your understanding of NEPA's requirements for a major action like

this?

A. The applicant's ER and the agency's draft environmental impact statement (DEIS) need

to do a number of things, including the following:

1. Set forth the "need" and "purpose" of the proposal;

2. Rigorously explore and objectively evaluate all reasonable alternatives;

3. Include in the analysis reasonable alternatives not within the jurisdiction of the

agency;

4. Include the alternative of "no action."'

In its "Forty Most Asked Questions Concerning CEQ's NEPA Regulations" the CEQ

See 40 CFR 1502.13 and 1502.14.

9

elaborates on these requirements:

Q. If an EIS is prepared in connection with an application for a permit orother federal approval, must the EIS rigorously analyze and discussalternatives that are outside the capability of the applicant or can it belimited to reasonable alternatives that can be carried out by the applicant?

A. Section 1502.14 requires the EIS to examine all reasonable alternatives to theproposal. In determining the scope of alternatives to be considered, the emphasisis on what is "reasonable" rather than on whether the proponent or applicantlikes or is itself capable of carrying out a particular alternative. Reasonablealternatives include those that are practical or feasible from the technical andeconomic standpoint and using common sense, rather than simply desirable fromthe standpoint of the applicant.2 (Emphasis added).

Moreover,

"At the outset we note that the evaluation of 'alternatives'mandated by NEPA is to be an evaluation of alternative means toaccomplish the general goal of an action; it is not an evaluation ofthe alternative means by which a particular applicant can reach itsgoals."3 (Emphasis in the original).

Furthermore, an agency need not consider alternatives which are infeasible, ineffective,

or inconsistent with the agency's basic policy objectives.4

Q. Does the NRC have rules setting forth the analyses to be presented in the DEIS and by

implication in the applicant's ER?

A. The NRC's rules on this are found at 10 CFR 51.71:

(b) Analysis of major point of view. *** [T]he draft environmental impactstatement will include consideration of major points of view concerningthe environmental impacts of the proposed action and the alternatives, andcontain an analysis of significant problems and objections raised by otherFederal, State, and local agencies, by any affected Indian tribes, and byother interested persons.

2 CEQ, Forty Most Asked Questions Concerning CEQ 's National EnvironmentalPolicy Act Regulations, 46 FR 18026, 18027 (March 23, 1981), Question 2a.

3 Van Abbema v. Fornel, 807 F.2d 633, 638 (7th Cir. 1986).

4 Headwvaters, Inc. v. BLM (Medford District), 914 F.2d 1174, 1180 (9h Cir. 1990).

10

Section (d) "Analysis" further requires that:

** * [D]raft environmental impact statements should also include considerationof the economic, technical, and other benefits and costs of the proposed actionand alternatives and indicate what other interests and considerations of Federalpolicy, including factors not related to environmental quality if applicable, arerelevant to the consideration of environmental effects of the proposed actionidentified pursuant to paragraph (a) of this section.

III. LESQ. Who is LES?

A. According to the Environmental Report LES is a'limited partnership with 90 percent

ownership by foreign entities. Its structure is as follows:

General Partners:

Urenco Investments, Inc.: This is a corporation owned by Urenco Limited, a

British corporation which is itself owned in equal shares by BNFL-EL (itself

wholly owned by the British government), UCN (99 percent owned by the

Netherlands government, with some ownership by at least one major foreign oil

company), and Uranit GmbH, a German company. Urenco owns 70.5 percent of

LES.

'Westinghouse Enrichment Company LLC ("WENC"): WENC is a wholly

owned subsidiary of the American-sounding Westinghouse Electric Company

LLC ("WELC"). However, WELC is, through a labyrinthine ownership pattern, a

wholly-owned subsidiary of the British government. WENC owns 19.5 percent

of LES.5

This leaves 10 percent ownership of LES in the hands of limited partners. These

include:6

5 ER 1.0-2.

6 ER 1.0-1 and -2.

11

Urenco Deelnemingen B.V.: A Netherlands corporation and an affiliate ofUrenco.

Westinghouse Enrichment Company LLC (WENC): This is the same British

government-owned entity which is also a general partner.

Entergy Louisiana: An entity affiliated with a major U.S. nuclear utility.

Claiborne Energy Services: An entity affiliated with another major U.S. nuclear

utility, Duke Power.

Cenesco Company: An entity affiliated with the largest U.S. nuclear utility,

Exelon.

Penesco Company: Another entity affiliated with the same major U.S. nuclear

utility as Cenesco, Exelon.

Q. Altogether, who owns how much of LES?

A. European governments, oil companies and utilities own 90 percent of LES, while

American nuclear utilities own 10 percent, and that only in the capacity of limited

partners.

Q. What is the difference between a general partner and a limited partner?

A. General partners have management control, while limited partners have only an

investment interest but no management control.

IV. LES's CLAIM THAT THERE ISA "NEED" FOR THIS PLANT NOW

Q. What is LES' claim as to the need for the NEF plant?

A. LES sets forth five arguments that there is a "need" for the construction of the plant at

issue in this proceeding.

First, LES stats that domestic enrichment capacity from USEC plants in the United

States has fallen from a level greater than demand to one where, "[i]n fact, at present, less

12

than 15% of U.S. enrichment requirements are being met by enrichment plants in the

u.s."7

Second, LES cites the statement by DOE's William Magwood in 2002, where he

"stressed the importance of promoting and developing additional domestic enrichment

capacity" and maintaining "a viable, competitive, domestic uranium enrichment industry

for the foreseeable future." 8 LES further quotes from DOE: "the Department firmly

believes that there is sufficient domestic demand to support multiple enrichers and that

competition is important to maintain a healthy industry.9 Note that these statements by

DOE were made just a year after USEC closed its Portsmouth, Ohio, enrichment facility

in June 2001, but before USEC filed for a license to build and operate its new American

Centrifuge plant.

Third, LES tells us that replacing the capacity lost at Portsmouth is important because:

The [DOE] believes that the earlier than anticipated cessation ofplant operations at Portsmouth has serious domestic energysecurity consequences, including the inability of the U.S.enrichment supplier USEC to meet all its enrichment customers'contracted fuel requirements in the event of a supply disruptionfrom either the Paducah plant production or the Highly EnrichedUranium (HEU) Agreement deliveries. The energy security.concerns are due, in large part, to the lack of availablereplacement for the inefficient and non-competitive gaseousdiffusion enrichment plants. These concerns highlight theimportance of identifying and deploying an economicallycompetitive replacement domestic enrichment capability in thenear term.' 0 (Emphasis added).

Fourth, "current U.S. energy security concerns and policy objectives establish a clear

7 ER 1.1-1 citing DOE (2003).

ER 1.1-1.

9 ER 1.1-1 citing Magwood (DOE) to Virgilio (NRC), July 25, 2002.

10 ER 1.1-1 to 2. Quoting DOE, no date.

13

need for additional domestic uranium enrichment capacity, a need that has been

recognized by Congress for some time. See e.g.,,* * * 'some domestic enrichment

capability is essential for maintaining energy security,' and 'a healthy and strong uranium

enrichment program is of vital national interest.""' (Emphasis added).

Fifth, natural security requirements are probably most significant, as LES concedes:

"National security concerns and policy objectives also underscore the need for anadditional reliable and economical domestic source of enrichment services.Congress has characterized uranium enrichment as a 'strategically importantdomestic industry of vital national interest,' essential to the national and energysecurity of the United States' and necessary to avoid dependence on imports. 2

(Emphasis added).

and, even more clearly,

"National security and defense interests require assurance thatthe 'nuclear energy industry in the United States does notbecome unduly dependent on foreign sources of uranium oruranium enrichment services."'13 (Emphasis added).

Summing up, LES tells us, "purchasers of enrichment services view diversity and

security of supply as vital from a commercial perspective as well. *** Because it

would deploy commercially viable and advanced centrifuge enrichment

technology in the near term, the NEF would further important U.S. energy and

national security objectives. Specifically, it would provide additional, reliable,

and economical domestic enrichment capacity in a manner that would enhance the

diversity and security of the U.S. enriched uranium supply."14

Q. Please summarize LES' claim that there is a "need" for the facility.

ER 1.1-2.

12 ER 1.1-2 quoting S.Rep. No.101-60 (1989), see also 42 USC 2296b-6.

13 ER 1.1-2 citing S.Rep.No.102-72, 102nd Congress, 1" Session 144-4 (1991).

14 ER 1.1-3.

14

A. LES claims that the need to build this'particular plant at this time is based on five

elements.

1. Active Shortage of Enrichment Capacity This plant is needed because LES

claims that only 15 percent of the United States' enrichment requirements are

being met by enrichment plants in the United States.

2. Closure of Portsmouth Left only One Plant in the US There is a need for the

Urenco plant now because DOE in 2002, just after Portsmouth closed, was

concerned that the United States develop additional, viable, competitive domestic

plant capacity.

3. Cost-Effective Technology There is a need for this plant now because DOE was

concerned at the time of the Portsmouth closure (June 2001) that the Portsmouth

capacity be replaced with a plant based on a more up to date and cost-competitive

technology.

4. Energy Security This plant is needed because "some domestic enrichment

capability is essential for maintaining energy security."

5. National Security This plant is needed to ensure that the nuclear industry in the

United States doesn't become unduly dependent on foreign-dominated enrichment

services.

Q. Are these claims of need well taken as a justification for this plant?

A. I don't believe so, and I set forth the basis for this opinion in the following sections.

V. LEU SUPPLY AND DEMAND INTHE UNITED STATES

Q. Please provide a brief overview of the low-enriched uranium (LEU) supply situation in

the United States today.

A. The response to this question has several components:

15

1. The evolution of USEC as the major supplier of LEU in the United States.

2. USEC's current LEU supply capabilities, including the status of its enrichment

facilities;

3. The status and significance of the HEU agreement with Russia's Tenex;

4. USEC's move to a more cost-effective enrichment technology;

5. Structure of the United States market for enrichment capacity.

Q. Before dealing with the five items you've listed, what is the product we are talking about

in the discussion of "supply"?

A. It is good to be clear about this because the issue of supply becomes obscured when there

is ambiguity over whether "supply" refers to the flow of LEU or whether it refers to

enrichment capacity. In my view it is quite important to keep this distinction straight.

Nuclear power plants use LEU, not SWUs. LEU is the relevant product; SWUs are an

input to the product. One way to get LEU for use in the United States is to run uranium

through an enrichment plant in the United States, but there are other ways to get LEU as

*well, most notably through downblending HEU.

Q. How does the background of USEC relate to the supply of LEU in the United States

market?

A. In the beginning the AEC, later DOE, was the only supplier of LEU in the United States.

USEC, as we all know, is in effect the part of DOE that produced the LEU. USEC was

spun off and privatized in 1998, after the passage of the USEC Privatization Act in

1996.15 As part of the privatization and a subsequent 2002 agreement with DOE, the new

USEC got certain rights and undertook certain obligations. Among the rights were the

leases of DOE's two major LEU enrichment plants at Paducah and at Portsmouth, as well

1 5 42 USC 2297h et seq.

16

as the right to be the United States agent for the sale of LEU derived from Russian HEU,

under an agreement running until 2013. Among the obligations were the requirements

that USEC continue to operate the outdated Paducah plant until 2010 and develop, build,

and bring on line a new state-of-the-art centrifuge plant by the time that Paducah closes.

Currently USEC is well along in the development and testing of the "American

Centrifuge" technology for this plant. It also began the licensing process before the NRC

in 2004.

Q. Can you put some numbers on demand in the United States and USEC's supply

capabilities, now and for the next several years?

A. Yes. The United States demand for LEU is approximately 11.6 mSWU equivalent. ER

Table 1.1-8 (NIRS/PC Exhibit 48; MFS-4) contains LES's 2003 estimate of USEC

capacity, measured in mSWUs, currently and in 2016:

UNITED STATES

Economically Competitive and Usable Capability

Source 2003 2016

USEC: Paducah 6.5 0.0

USEC: DOE HEU Derived 0.6 0.0

USEC: American Centrifuge Plant 0.0 3.5

USEC: Russian HEU Agreement 5.5 5.5

TOTAL 12.6 9.0

Q. How secure is the Russian HEU agreement going forward?

A. The current Russian HEU agreement continues through 2013. LES hints in some places

that the agreement may not be renewed, while elsewhere assumes that it will be

17

renewed.' 6 This agreement with the Russians, however, is essential to the national

security both of the United States as well as the Russians, while at the same time

providing the Russians with a substantial income flow in the $8 billion range ($2.5 billion

paid as of June 2002). Given the state of security in the ex-USSR republics, getting this

weapons-related material away from that environment as soon as possible is clearly in the

national security interest of the United States. As of mid-2002 the program had resulted

in the conversion of enough highly enriched uranium to make 6,000 nuclear warheads.' 7

Moreover, to the extent that LEU from the Russian HEU is marketed in the United States

at competitive prices, it exercises a downward pressure on enrichment prices. Such

pressure works to the financial disadvantage of Urenco. Conversely, to the extent that

Urenco and its allies can drive USEC out of the market as a viable contender, their

market share would increase sharply; and, especially if they could also sabotage the

Russian HEU Agreement, they would dominate the United States market, and prices for

their product would soar.

Q. How certain is the construction of USEC's American Centrifuge plant?

A. The American Centrifuge plant is now in the planning and licensing stage, yet its success

probably depends in large measure on whether this Urenco plant, the NEF, is built. I say

this for the following reasons (which I will deal with in greater detail in the section below

on USEC versus Urenco):

1. The Western European/United States market is an oligopoly market.

2. The market for enrichment capacity in the United States has natural monopoly

16 See, for example, ER Table 1.1-5 reference line 7a: "U.S. Russian Agreement

ends in 2013; may/may not be extended."

17 See USEC, "Governments Approve New USEC-Russian Agreement," June 19,2002.

18

characteristics;

3. USEC is not as strong financially as Urenco and its allies; USEC may have

difficulty attracting financing for the American Centrifuge plant if Urenco's NEF

is licensed first;

4. USEC would almost certainly be in the weaker position financially, compared to

Urenco, in a price war in this natural monopoly market.

Q. What are the sources of supply for the 11.6 m SWU equivalent demand in the United

States market?

A. U.S. supply is composed of the following elements: The Paducah plant has been

producing at between 5.0 to 6.5 mSWU per year. 8 Russian HEU imports are at or below

5.5 mSWU.19 Foreign imports, primarily from Western Europe, have been in the range

of 3.0 mSWU.20 USEC sells about 3.0 mSWU of its capacity to customers outside the

United States, primarily in Asia.2 ' Thus, of the total of about 11.6 mSWU demand, about

8.6 mSWU equivalent is supplied by USEC. This is roughly 74 percent of the total

United States demand.

Q. What is LES's forecast of demand for LEU over the period 2002 to 2020?

A. This forecast is set forth in LES' ER Table 1.1-3 (NIRS/PC Exhibit 45; MFS-1). LES's

estimate for the United States is set forth below:

18 See PACE, USEC - Heading Into the Perfect Storm?, p.3, September 2003 and

ER Table 1.1-5.

19 Id at 4.

20 Id at 3.

21 Idat6.

19

UNITED STATESAnnual Enrichment Requirements Forecast

(MOX Adjusted; Million SWU)

Year United States

2002 11.5

2003-5 11.6

2006-10 11.8

2011-15 11.4

2016-2020 11.4

Q. What is the annual growth rate of demand in this forecast?

A. The forecast is flat. The overall growth rate is slightly negative, i.e. forecasted demand in

2016-2020 is slightly lower than demand in 2002.

Q. What is EIA's forecast for the period 2000-2025?

A. EIA's forecast for the period 2000-2025 is set forth in NIRS/PC Exhibit 46; MFS-2.22

The date of the forecast is January 2003. Note that the figure for 2004 is 14.03 mSWU.

LES's figure, as noted above, is 11.6 mSWU. Note further that the EIA's forecast figure

for 2025 is 14.23 mSWU. Again, demand is flat. The annual growth rate from 2004 to

2025 based on this forecast is 0.0673 percent or virtually zero.

VI. URENCO AND EUROPEAN SUPPLY

Q. What is "Urenco"?

A. Urenco is a multi-tiered conglomerate based in Western Europe, primarily in Germany,

England, Netherlands and now France. The ultimate parent company is Urenco Limited,

which owns Urenco Group which itself has two subsidiaries: Urenco Enrichment

Company Limited (UEC) and Enrichment Technology Company (ETC). UEC provides

22 EIA, US. Nuclear Fuel Cycle Projections 2000-2025, January 2003.

wwwv.eai.doe.gov/cneaf/nuclear/page/forecast/projection.html. See also EIA, World EnrichmentRequirements 2000-2020 (May 2001), NIRS/PC Exhibit 47; MFS-3.

20

enrichment services to utilities, while ETC sells centrifuges and centrifuge technology

around the world.23 Other subsidiaries and the countries they operate in are set forth in

the table below. Note that the LES Partnership is owned 75.5% by the Urenco Group, an

entity high in the Urenco hierarchy.24 Note further that in the LES Environmental

Report, Urenco ownership of LES is shown as only 70.5%.25 Recall that the other major

partner in the LES Partnership is Westinghouse Electric (an entity owned by the British

Government), which now owns 19.5 percent of LES or, if the 2003 Urenco Annual

Report is more credible, 24.5%.26

THE URENCO INDUSTRIAL EMPIRE

Subsidiary Country

Urenco Enrichment Co. Ltd England & Wales

Urenco (Capenhurst) England & Wales

Urenco Power Tech Ltd England & Wales

Urenco Deutschland GmbH Germany

Urenco Nederland BV Netherlands

Urenco Investments, Inc. USA

Urenco Inc. USA

Urenco Power Tech Inc. USA

LES Partnership USA

Enrichment Tech Co Ltd England & Wales

Enrichment Technology Ltd England & Wales

Enrichment Tech Nederland Netherlands

Urenco Ownership

100%

100%

100%

100%

100%

100%

100%

100%

75.5%

28.3%

28.3%

28.3%

23 Urenco Limited Annual Report and Accounts, Year to 31 December 2003, p.33.

24 Id at 49 (last line, right side).

25 ER p. 1.0-2.

26 Urenco Limited Annual Report and Accounts: Year to 31 December 2003, p.7.

21

Q. Is Urenco the only major enricher in Western Europe?

A. No. There is another major enrichment empire in the form of Areva and its many

subsidiaries including, most notably, Cogema, Eurodif, and Framatome ANP.

Framatome ANP is well known for being the company that designed Red China's first

two nuclear reactors.27 Framatome ANP is also a consultant to LES in this case.28

Q. Who owns Areva?

A. Areva is a French holding company owned largely by the French government. Areva and

Urenco are partners in the development of a major new enrichment plant at Tricastin in

France, utilizing the centrifuge technology owned by Urenco. This agreement is built

around Areva's acquisition of 50% ownership of Urenco's ETC Group, the high-level

subsidiary that develops and sells centrifuges and centrifuge technology, as announced in

Urenco's 2003 Annual Report.29 This proprietary centrifuge technology is the same

technology to be emplaced in Urenco's NEF facility in New Mexico, if permitted.

Q. Has there been another connection between Urenco and Areva?

A. Yes. In 1999-2000 Cogema, one of Areva's major subsidiaries, made a bid to buy all of

the shares in Urenco held by Urenco's Dutch and German shareholders (including a

major utility in Germany and the Netherlands government). This was in competition with

a similar attempt by BNFL to acquire the shares. BNFL is one of the owners of shares in

the British end of Urenco and one of the current owners of the LES partnership.30

Q. At this point can you provide us an overview as to ownership and technology?

27 EIA, International Energy Outlook 2003, p.105 (May 2003).

28 See LES-02303. (13099).

29 Urenco Limited Annual Report and Accounts: Year to 31 December 2003, p.9.

30 See LES ER page 1.0-1, last paragraph, and Boer et al, Urenco and the

Proliferation of Nuclear Weapons Technology, (draft) p.9 (April 2004).

22

A. Yes. There are three major enrichers in the world today: Urenco, Areva and, in the

United States, USEC. The Russians are a somewhat distant fourth. The major competing

technologies for enrichment are the Urenco gas centrifuge and USEC's American

Centrifuge. Areva and Urenco are affiliated; both are aggressive sellers of centrifuges

and enrichment services. USEC is their largest potential competitor if the American

Centrifuge plant in Ohio can get off the ground.

Q. What is the supply situation in Western Europe?

A. For the last several years Urenco has been sharply increasing both the capacity of its

three European enrichment plants and its market share there. Enrichment capacity has

increased from 4.8 mSWUs in 2000 to 6.5 m in 2003, an increase of 35 percent. Market

share has increased from 13 percent in 2000 to 18 percent in 2003, an increase of 38

percent in three years. These figures do not include the LES plant. Urenco plans to

continue to expand its business worldwide:

The expansion of Urenco's enrichment plant capacity to meet the demands of theGroup's future order book continues at all three sites. Commissioning of cascadesin the third assay unit of the E23 enrichment plant in Capenhurst, UK, and in thefirst tranche in Almelo (Netherlands) were both completed ahead of schedule inSeptember of [2002]. A further three cascades were also commissioned in one ofthe two new cascade halls of the UTA-1 enrichment plant in Gronau (Germany).With centrifuge failure rates remaining low and no major tranche of capacitydecommissioned, Group enrichment plant capacity consequently increased byaround 11% over the year to a nominal 5.85 tSWU, a third in Almelo, a quarter inGronau, and the remainder [42%] at Capenhurst.

The roll continues:

A license for a third hall to the ... plant in Almelo was received and anapplication submitted for a license to increase enrichment capacity at that site to2,800 SWU. The licensing procedure for the second enrichment plant at Gronauhas continued through the public hearing ...

And,

Investment in manufacturing facilities has increased capacity by 25 per cent andfurther investment coming on line in the next year to remove bottlenecks will

23

raise the capacity by a further 25 per cent.31

The Urenco 2003 Annual Report shows similar aggressive investment in growth. The

Urenco/Areva Enrichment Technology Company (ETC) reported, "commissioning of

new capacity increased by 55% in 2003. The manufacturing rate for production of

centrifuges increased by 25% in 2003.'32 Finally, Urenco reported that it had invested

over $310 million in capacity expansion in 2003 alone and intended that its European

enrichment capacity will have expanded to 7.5 mSWU by the end of 2005. This will

mean an increase of 56% in enrichment capacity between 2001 and 2005. This does not

count the LES proposal.

Q. Please summarize.

A. There are two major producers in Western Europe: the large and multi-level Urenco

industrial empire, with worldwide operations and substantial ownership positions by the

British and Dutch governments, and Areva, another major industrial empire dominated

by French government ownership, with major subsidiaries Cogema, Framatome ANP and

Eurodif. These two empires now have interlocking ownership; they share ownership and

control of the dominant enrichment technology in the form of the Urenco gas centrifuge.

Both empires are rapidly expanding their centrifuge.enrichment capacity. LES is owned

by Urenco and advised, at least in part, by Areva's Framatome ANP subsidiary. Urenco

intends to install the Urenco/Areva centrifuges in New Mexico.

31 Urenco Limited Annual Repor and Accounts: Year to 31 December 2002, p.15.

32 Urenco Limited Annual Report and Accounts: Year to 31 December 2003, p. 17.

24

VII. USEC VERSUS URENCO AND UNITEDSTATES NATIONAL AND ENERGY SECURITY

Q. Could you summarize Urenco's claims as to the United States' need for the NEF plant?

A. Urenco claims that allowing it to build the NEF plant would meet the following United

States needs:

1. Active Shortage of Enrichment Capacity. This plant is said to be needed because

LES claims that only 15 percent of the United States' enrichment requirements

are being met by enrichment plants in the United States.

2. Closure of Portsmouth Left Only One Plant in the US. There is said to be a need

for this plant now because DOE in 2002, just after Portsmouth closed, was

concerned that the United States develop additional, viable, competitive domestic

plant capacity.

3. Cost-Effective Technology. There is said to be a need for this plant now because

DOE was concerned at the time of the Portsmouth closure (June 2001) that

Portsmouth be replaced with a plant embodying a more up-to-date and cost-

competitive technology.

4. Energy Security. This plant is said to be needed because "some domestic

enrichment capability is essential for maintaining energy security."

5. National Security. This plant is said to be needed to ensure that the nuclear

industry in the United States doesn't become unduly dependent on foreign

dominated enrichment services.

Q. How do you respond to these claims?

A. To understand these claims it's necessary to get a sense of the economics of the market

for LEU in the United States. As we've already seen, USEC is the main provider of LEU

for nuclear power plants in the United States. Some of the demand is served by the

25

output of the Paducah plant, while another portion is served by LEU downblended from

Russian HEU. The problem is that two large, aggressive, and rapidly expanding

conglomerates from Western Europe would like to take over the United States market for

LEU.

Q. What is it about the United States' market for LEU that would make such a putsch by

Urenco doable, given the established nature of USEC?

A. Several things. The first is that USEC's existing plant uses a gaseous diffusion

technology that is significantly more expensive to use than the centrifuge technology

being used by Urenco. This is especially true if the Paducah plant is not operating at full

capacity. At levels of utilization less than full capacity, the fixed costs of operating the

plant make the cost per unit far too high.

Let me illustrate this point with a simple example. Assume that a hypothetical

plant has a fixed cost of $100 whenever it is used to produce any output whether large or

small. Also assume that the variable cost of production per unit is $2. Notice that, as

production rises, average cost per unit falls, and the units become cheaper. We learn

from this that, to the extent that Urenco can force USEC to lose market share, the high

cost character of the Paducah plant will worsen, and USEC will lose even more market

share and will eventually go out of business. Note as well that if USEC does not operate

the Paducah plant at least at the 3.5 mSWU level, DOE need not continue USEC as the

official agent for the Russian HEU agreement. Thus, by being forced to lose market

share, the problem for USEC would begin to snowball: lower market share, higher cost of

production; higher cost of production, higher prices; higher prices, fewer customers;

fewer customers, lower production at Paducah; lower production at Paducah violates the

DOE agreement, etc.

26

EXAMPLE: AVERAGE COSTS

Output Fixed Cost Variable Cost Average CostLevel (Constant) ($2 per unit) (per unit)

10 $100 $20 $12.00

20 $100 $40 7.00

30 $100 $60 5.33

40 $100 $80 4.50

50 $100 $100 4.00

60 $100 $120 3.66

70 $100 $140 3.42

Q. How is USEC's situation related to the problem of the natural monopoly market you

mentioned earlier?

A. A natural monopoly market is a market where demand is small relative to the capacity of

the producers in the market and there are substantial fixed costs involved in production.

This means that a single producer could serve the whole market at a lower unit cost than

could two separate producers, each with a fraction of the market.

Q. How is that related to the United States market for LEU?

A. To counteract the fact that its Paducah plant employs an uncompetitively expensive

technology, USEC should build a new plant that employs an up-to-date technology that is

less expensive to operate. In fact USEC's 2002 agreement with DOE requires it to'do

just that, and to have the new plant on line by 2010. The problem is that, though USEC's

new American Centrifuge plant would be cheap to operate, its cost to construct is in the

$1.5 billion range, roughly the same as for Urenco's NEF plant.

Q. How is this likely to resolve itself?

A. In natural monopoly situations the result is predictable. A price war will ensue, and the

producer with the greater staying power-the deeper pockets-will prevail, with the other

27

producer being forced out of the market or bought up by the winner.

Q. Who is likely to be the winner in a fight between Urenco and USEC, if the NEF plant is

constructed?

A. Let's look at the advantages and disadvantages of each. What are Urenco's advantages?

1. A deep pocket based on a variety of low cost, new technology, profitable plants in

a number of other locations.

2. Timing: the Urenco plant will be fully operational before the USEC plant, and so

will be competing with the expensive-to-operate Paducah plant. This will reduce

the Paducah plant's market share and force its costs up further, while at the same

time cutting into USEC's cash flow and reserves.

3. Sympathetic Market: A number of the biggest buyers of LEU in the United States

market are limited partners in the LES partnership.33 This suggests that they will

be inclined to do business with LES rather than USEC, even if USEC were able to

match LES's enrichment price.

4. Financing of the NEF plant will-other things equal-be cheaper, since Urenco is a

large, expanding and profitable company compared to USEC and so will be able

to attract financing at a lower risk premium.

USEC, on the other hand, has the following disadvantages:

1. It has only one producing plant in the whole world, and that is outdated and

expensive to operate.

2. USEC's licensing effort for its American Centrifuge plant is about a year behind

33 For example, one of the LES limited partners is Exelon. Exelon is the holdingcompany for the nuclear utility in the United States with the largest number of nuclear plants(17) and 20 percent of the nation's power capacity. See*Xwwwv.exeloncorp.com/generation/nuclear/gn nuclear.shtml. (16015).

28

that of Urenco.

3. USEC does not appear to have any obviously sympathetic or captive market.

4. USEC is going to have a difficult time getting reasonably priced financing. It has

a large debt that it hasn't been paying off. Its credit rating is lower than

investment grade and falling,34 and it has been losing money.35

Q. What do you conclude from this?

A. I conclude the obvious. If Urenco enters this market before USEC gets its American

Centrifuge plant up and running, more likely than not USEC will not be able to get the

American Centrifuge plant up and running. Moreover, even if USEC did get its plant up

and running first, Urenco's deep pockets, derived from its many profitable operations

elsewhere, would allow it to prevail in a price war against USEC, which has a single

plant in the market at issue and no financial reserves.

Q. What makes you think that Urenco would be inclined to pursue such an aggressive

course?

A. Urenco has an aggressive management, committed to the world wide expansion of its

enrichment and centrifuge sales. USEC competes with Urenco's operations not only in

the United States but also elsewhere in the world, especially in the Far East. USEC's

competition is not just for enrichment services but also potentially for enrichment

technology as well, if USEC is allowed to perfect its American Centrifuge technology.

Presented with the golden opportunity to eliminate a major competitor, Urenco is

unlikely to turn it down. This is especially so, given the possibility that, if USEC leaves

the scene, Russian LEU may leave the market as well. Additional evidence for Urenco's

34 USEC 1O-Q for September 30, 2004, p.25 (1440).'

35 USEC 10-Q for September 30, 2004, Income Statement, p.4 (1419).

29

readiness to act aggressively can be found in Urenco's (and Areva's) use of subsidies to

penetrate the U.S. market.36 Moreover, in arguing its case before the Court of

International Trade, Urenco claimed that LEU is a service, not a product, and therefore

immune from United States trade laws. Had Urenco succeeded with this argument it

would have opened the United States market to a flood of "dumped" and subsidized

LEU, which might well have forced USEC out of the market.37

Q. How would such an outcome bear upon the "need" for the NEF plant, as set claimed by

Urenco?

A. In the first place, the elimination of USEC as a viable competitor would leave just

Urenco. This clearly would not meet the stated need for a second competitor in the

United States market, or the need for a more "diverse" supply. Second, in the market as

it stands today, if USEC departs from utilities' expectations of competitive price and

service, U.S. utilities can have recourse to Urenco or Areva in Europe for LEU. On the

other hand, if USEC is eliminated and Urenco is left as the only (and monopoly) producer

with an operating plant in the United States, U.S. utilities will not find pricing relief by

turning to Urenco and its partner Areva in Europe.

Q. Why isn't it possible that Urenco would get together with USEC and reach an agreement

where they would peaceably divide the market?

A. Whereas such an arrangement is conceivable, it would create an oligopoly market, not a

competitive one. Moreover, it would make USEC a de facto-if tributary-ally of Urenco,

and so U.S. utilities would be faced with a market dominated by a multi-continent array

36 See, for example, "US DOC dumping case against Eurodif and Urenco" at

www.antenna.nl/wise/uranium/epusa.html (January 4, 2005).

See PACE, op.cit. p.4.

30

of allied producers in the form of USEC-Urenco-Areva. Such an outcome is certainly not

something we "need."

Q. But one of the stated needs for the Urenco plant was to ensure that there was at least one

plant in the United States with up-to-date and cost effective technology. If the Urenco

plant is not approved, how will this need be met?

A. USEC is not only obliged by its agreement with DOE to bring on line such a plant by the

year 2010, but it is already in the licensing stage for such a plant. The Urenco plant is

unnecessary to meet this need.

Q. *What about Urenco's claim that its NEF plant was required because "some domestic

enrichment capability is essential for maintaining energy security"?

A. The NEF plant is not necessary to have this need served, since there is currently USEC's

Paducah plant in operation, and the more cost-effective American Centrifuge plant is

planned. Moreover, both USEC plants will be operated by a genuine United States

"domestic" producer. Urenco is hardly a United States domestic producer; but instead an

aggressive foreign conglomerate, owned by foreign governments and utilities.

Q. What about Urenco's claim that the NEF plant is necessary to ensure that the U.S.

nuclear industry doesn't become unduly dependent on foreign-dominated enrichment

services?

A. The answer here again is straightforward and obvious. Urenco and its affiliated entity

Westinghouse (owned by the British government)38 are the general partners and owners

of at least 90 percent of LES and perhaps more (depending upon whether a person

believes the ER or the Urenco Annual Report). Urenco is a foreign company, and a

38 LES ER 1.0-1 and 2. Note that Westinghouse is owned by BNFL which is one of

the owners of Urenco Investments. BNFL is owned by the British government.

31

Urenco-owned plant cannot logically "ensure that the nuclear industry in the United

States doesn't become unduly dependent on foreign dominated enrichment services."

And it is dramatically more impossible to avoid foreign domination by building a Urenco

plant, since a Urenco plant will probably cause the elimination of the only legitimate

United States domestic plant and its replacement with the exact "foreign dominated

enrichment service" the "need" was supposed to combat.

Q. Would United States national security be affected in other ways by having Urenco

construct and manage the NEF facility?

A. Yes, in at least two other ways. The first is that-as noted above-to the extent that the

placement of the NEF facility resulted in the inability of USEC to fulfill its

39responsibilities under the DOE-USEC agreement 3, and therefore USEC lost its place as

official agent for the Russian HEU agreement, that agreement might lapse, to the great

detriment to the security interests of both the United States and the world.

Q. What is the second item of national security concern?

A. There is a fair amount of literature that suggests that Urenco as a company has poor

record with disastrous consequences when it comes to keeping dangerous technologies

and other sensitive information out of the hands of people or nations where it doesn't

belong. Specific cases involve the notorious Mr. A. Q. Khan, father of the Pakistan

Nuclear Weapons program, and a variety of other subcontractors of Urenco and their

employees.

Even more troubling than the possibility that Brazil might divert its Urencouranium, were the reports that Pakistan was actively developing a nuclearweapons program with the assistance of a scientist, Dr. Abdul Quadeer Khan,

39 Specifically the requirements to operate Paducah at a minimum production levelof 3.5 mSWU and to bring on the American Centrifuge plant by no later than 2010. PACE,op.cit. p.4.

32

who had worked for a Dutch subcontractor to Urenco and was thought to haveaccess to sensitive information. * * * Numerous journalistic accounts laterreported that Khan did indeed obtain detailed information about Urenco'scentrifuge process while working for the subcontractor [FDO]. * * * In 1985,Khan was convicted in absentia on changes of stealing confidential papers andwas sentenced to four years in prison, but the verdict was later overturned on alegal technicality. Nonetheless, he was expelled from Holland in 1989.4041

Moreover, Urenco's name also emerged in reports about the illicit transfer of nuclear

weapons technology to the Saddam Hussein government in Iraq. ** * Later press reports

named Karl-Heinz Schaab, a former senior technician in the Urenco centrifuge

development program, as also being investigated for selling secret information to the

Iraqis. Referring to Urenco's role in these investigations, a U.S. Department of Energy

official said: "We've seen a consistent pattern of data leaving that program, and that's an

indication they have a major security problem ... Urenco has a lot of explaining to do."

In 1999, Schaab was convicted of treason in a German court.42 It is also of interest that

Urenco publishes on its website the detailed layouts of their several European enrichment

plants inside and out, along with pictures of the plants again both inside and out and

including full page aerial photographs. 43

Q. What do you conclude from this?

A. I conclude that the construction of a sensitive facility of this sort, to be built and operated

by Urenco, clearly does not advance Unites States' national security interests (for the

reasons set forth above) and so does not serve the "need" identified by Urenco in the ER.

40 Public Citizen, Urenco Limited: A Corporate Profile, p.2 (April 2004).

41 See also, Boer, et al, Urenco and the Prolieration of Nuclear WeaponsTechnology (2004).

42 Id at 2.

See, for example, wv-vw.urenco.com/im/uploaded/1086886998.pdf. (accessedJanuary 4, 2005).

33

Q. Do you have an overall conclusion for this section?

A. Yes. The construction of the NEF plant by Urenco would not serve the "needs"

identified in the ER.

VIII. OTHER ASPECTS OF THE COST-BENEFIT ANALYSIS FOR NEFAS SET FORTH IN THE ER AND THE DEIS

Q. Please explain how this section is organized.

A. The presentation by LES of its cost benefit analysis embodies several unreasonable

assumptions about the impact on the American Centrifuge plant of the construction of the

LES plant. This section deals with each issue.

Q. What is the first problem?

A. The first problem is that LES and the Staff in the DEIS both assume, without analysis or

explanation, that the job and tax benefits claimed for the construction and operation of

the NEF will not be offset by a loss of corresponding benefits if the construction of the

Urenco plant results in the elimination of the American Centrifuge plant in Ohio and the

Paducah plant in Kentucky." It is unreasonable for both the DEIS and the ER not to

consider the possibility that, if the NEF is built, it will adversely affect USEC's ability to

build the American Centrifuge plant and operate the Paducah plant. Since the failure of

either the American Centrifuge plant or the Paducah plant are matters of substantial

national policy concern, the impact of the NEF on their viability should have been

thoroughly dealt with in the ER and the DEIS.

Q. Please describe the second problem.

A. The second problem is that water for the NEF will come from the Ogallala Aquifer. This

is a very important, multi-state water resource, currently being progressively overdrawn.

44 See ER Sections 1.1.2.4 and 4.10.2.1, tables 4.10.2 and 4.10.3, and DEIS Chapter7.

34

Establishing the NEF plant will exacerbate this problem, unlike constructing a plant in

non-arid Ohio. The issue is dealt with in one dismissive sentence in the DEIS. This is

inadequate.

Q. Please describe the third problem.

A. The third problem is that LES is equivocal about its commitment to have all DU offsite

from the NEF plant by 2038. The longer the material stays onsite, other things equal, the

greater the environmental risk. LES has agreed to no "long term storage" of the DU on

site. See, e.g. ER 8.10-1. At the same time, LES says the decommissioning of the plant

will end no later than 2038. See DEIS 7-5. On the other hand, LES defines "long term

storage" not as storage past 2038, but as storage "beyond the life of the plant." See ER

8.10-1. Thus, LES hedges its commitment to remove all DU from the site by 2038 by the

possibility of a license renewal. Urenco might seek a license renewal if it found for some

reasons that it was not going to be cost effective to move the DUF offsite by 2038. A

clear statement by LES that all the DU will be offsite by 2038, without fail, and that there

will be no license renewals justifying further storage does not appear in the ER.

IX. CONCLUSIONS

Q. Please summarize your conclusions.

A. I reach seven conclusions:

1. LES's assertion that construction of the NEF will produce a competitive market in

the U.S. is defective, given the facts of this case.

2. The construction of the NEF would seriously jeopardize USEC's ability to

construct its American-owned American Centrifuge plant with its up-to-date and

cost-effective technology. Construction of the NEF would also almost certainly

mean the end of USEC's Paducah plant as an economically viable producer,

35

leaving the Urenco plant as the only producer in the U.S.

3. The replacement of USEC by Urenco as the dominant or single producer in the

U.S. would sharply worsen and not improve the security of U.S. supply.

4. There will be an adequately improved cost-competitive supply in the form of the

American Centrifuge plant without the LES facility.

5. An aggressive foreign conglomerate dominated by European governments should

not qualify as a "domestic" United States producer.

6. Urenco's track record with respect to national security concerns does not instill

confidence in its commitment to protect United States security interests.

7. The calculation of the benefits associated with the NEF is faulty for all the

reasons set forth in section VIII above.

36

August 2004

MICHAEL F. SHEEHAN

Address: 33126 Callahan RoadScappoose, Oregon 97056

January 1, 1946Brooklyn, New York

Born:

Marital Status:

Education:

Married, two daughters

J.D. (With Distinction) College of Law, University ofIowa, May 1987.

Ph.D. (Economics) University of California at Riverside,June 1979

Master of Arts (Economics)University of California at Riverside, June 1973

Bachelor of Science (Economics, Magna Cum Laude)University of California at Riverside, June 1972

ProfessionalLicenses:

Admitted to the Iowa Bar (June 1987).

Admitted to the Bar of the U.S. District Court for theNorthern District of Iowa (July 1987).

Admitted to the.Oregon Bar (April 1988).

Admitted to the Bar of the U.S. District Court for theDistrict of Oregon (April 1990).

Admitted to the Bar of the Ninth Circuit Court ofAppeals (February 1992).

AcademicReferences:

Professor Peter FisherGraduate Program in Urban and Regional Planning,The University of Iowa, Iowa City, Iowa 52242.;

Professor Greg Hayden, Department of Economics,University of Nebraska, Lincoln, Nebraska 68510.

Professor K.C. Kogiku

37

Tsu 602-40 TsuKamakura CityJapan 248

Professor Barney HopeDepartment of EconomicsCalifornia State UniversityChico, CA 95929916-898-4836 off FAX: 916-898-6889

Prof. Harry TrebingInstitute of Public UtilitiesMichigan State UniversityOlds Hall, Rm. 113East Lansing, Ml 48824517-355-1876 Hm: 517-349-1828

Prof. Marc ToolDepartment of EconomicsCalifornia State UniversitySacramento, CA 95819-2694off: 916-278-6945 Dept: 916-278-6223; Hm: 916-457-2782

Professor Richard Moss, Department of Economics,California State College, San Bernardino, California92407.

Teaching Fields:

Research Interestsand Expertise:

Languages:

Public FinancePublic Utility Economics and PlanningState & Local Economic DevelopmentNatural Resources and EnvironmentalEconomics

Operations Research (QuantitativeEconomics)

Law and Economics

Land Use Planning IssuesPublic UtilitiesState & Local Economic DevelopmentAnalysis of Risk'and Environmental SafetyLaw and Economics

Spanish

38

Articles in "The Problem of Mass Evictions in Mobile Home ParksAcademic Subject to Conversion." 8 Journal of Affordable HousingJournals: & Community Development Law 231 Spring 1999.

"Why Ramsey Pricing is Wrong: The Case ofTelecommunications Regulation: A Response toHarkenrider." Journal of Economic Issues (December1993).

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"Ramsey Pricing Without Cross-Subsidization? AResponse to Professor Becker." Journal of EconomicIssues (December 1991).

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"Raising Local Government Revenues Through UtilityFranchise Charges: If the Fee Fits Foot It". 21 UrbanLawyer 55 (Winter 1989). (With Roger Colton).

"Institutionalists Before Regulatory Commissions: TheValue of Doing in Thinking, Teaching, and Writing"Journal of Economic Issues, December 1988.

"Corporate Control and the Decapitalization ofSubsidiary Corporations: The 'Looting of the Bangor andAroostook Railroad." Journal of Economic Issues,September 1988.

"A New Basis for Conservation Programs for thePoor: Expanding the Concept of 'Avoided Costs,"'National Clearinghouse Review. June 1987 (withRoger Colton).

39

"Seven-Cum-Eleven: Rolling the Toxic Dice in the U.S.Supreme Court," Boston College Environmental AffairsLaw Review. V. 14, #3 (1987) (with Roger Colton andKathleen Uehling).

"Regulatory Control of Natural Gas ProcurementPractices in Illinois: Permissible Regulation orPreempted Activity?" 35 DePaul Law Review 317(1986)(with Roger Colton). Reprinted in Public UtilityLaw Anthology v. IX (1986).

"Plant Closings and the Community: The InstrumentalValue of Public Enterprise," American Journal ofEconomics and Sociology, V. 44, #4, October 1985.

"Institutional Development of Water Supply inCalifornia: The Miller-Lux Water MonopolyControversy," Social Science Journal, V. 22, No. 1,January, 1985 (with Barney Hope, equal authors).

"The Political Economy of Centralized Water Supply inCalifornia," Social Science Journal, V. 20, #2, April1983 (with Barney Hope, equal authors).

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"Possibilities for Local Public and CooperativeOwnership of Short Line Railroads," TransportationResearch Record, 802 (1981), (with Peter Fisher).

"Game Theory Analyses Applied to Water ResourceProblems," Socio-Economic Planning Sciences, V. 15,#3, (1981), (Sheehan, Kogiku). Reprinted in Kiichiro.Kogiku, ed., Resource Allocation Models: Essays onthe Management of Resources and the Environment,Tokyo (Aoyama Gakuin University Press) 1990.

40

"Policy Problems Associated with WaterborneAsbestos," The Water Resources Bulletin, April 1981,V. 17, #2.

."Reply to Discussion of 'Policy Problems AssociatedWith Waterborne Asbestos,"' The Water ResourcesBulletin, February 1983, V.19, #1. ("Discussion" byMichael Edson and Wm. Thompson in the same issue).

"Coordinating Public Utility Expansion, Industrial Sitingand Pollution Control: A Workable DynamicProgramming Algorithm," Socio-Economic PlanningSciences, April 1977, V. 11, (Sheehan, Kogiku).Reprinted in Kiichiro Kogiku, ed., Resource AllocationModels: Essays on the Management of Resources andthe Environment, Tokyo (Aoyama Gakuin UniversityPress) 1990.

Articles in Trade Employment and Jobs: The Employment Impact ofPublications: Federal Environmental Investments National

Commission for Employment Policy; Washington D.C.April 1995 (Research Report 95-02). With Skip Laitnerand Marshall Goldberg.

"Utility Franchise Charges and the Rental of CityProperty," in New Jersey Municipalities December1995, p.1Off.

"Cash for Clunkers Program Can Hurt thePoor." State Legislatures 33 (May 1993) (with RogerColton).

Manuals: Valuation and Compensation Issues in Establishinga Public Power Utility For the American Public PowerAssociation (April 2003).

Books: Oregon's Prevailing Wage Law Fair ContractingFoundation: Portland, OR, 2000. (With Robert Lee andLisa Nuss).

On the Brink of Disaster: A State by State Analysisof Low-Income Natural Gas Heating Bills (FlyingPencil Publications: Scappoose, OR 1994) (With Roger

41

Colton).

Articles in Books: "The Abuse of Economic and Financial Power in theNew Economy: Historical Patterns in the Creation ofModern Remedies." In Marc Tool and Dale Bush, eds.,Institutional Analysis of Public Policy. NY: Kluwer2003.

"Raising Local Government Revenues Through UtilityFranchise Charges: If the Fee Fits Foot It," Reprintedin Freilich and Bushek, eds., Exactions, Impact Feesand Dedications: Shaping Land-Use Development andFunding Infrastructure in the Dolan Era, ABA, Chicago,1995; p.233ff (With Roger Colton).

"Whose Goals and Whose Alternatives? How Bad Cana Private Goal Be and Still Define the EIS UnderNEPA?," Presented to the National Park & Public LandSymposium, to be reprinted. (On the New World Mineproposal) 1995.

"Public Policy: Contributions of AmericanInstitutionalism," In Geoffrey Hodgson, WarrenSamuels and Marc Tool, eds., The Elgar Companion toInstitutional and Evolutionary Economics. Brookfield,VT: Edward Elgar, 1994.

"The Allocation of Wildfire Control Investments." (WithKiichiro Kogiku, equal authors) chapter 3 in KiichiroKogiku, ed., Resource Allocation Models: Essays onthe Management of Resources and the Environment,Tokyo (Aoyama Gakuirn University Press) 1990.

"A System Simulation Analysis of New Strategies forLong-run Cost Minimization in Wildfire Control." (WithKiichiro Kogiku, equal authors) chapter 4 in KiichiroKogiku, ed., Resource Allocation Models: Essays onthe Management of Resources and the Environment,Tokyo (Aoyama Gakuin University Press) 1990.

"An Application of Multi-criteria Decision-making toMultiple Use Planning in U.S. Forests." (With KiichiroKogiku, equal authors) chapter 5 in Kiichiro Kogiku, ed.,Resource Allocation Models: Essays on theManagement of Resources and the Environment,Tokyo (Aoyama Gakuin University Press) 1990.

42

"An Analysis of Davenport City Finances." Appendix6B (p. 181-191) in G. Daniels & K. Gagala, Labor Guideto Negotiating Wages and Benefits, Reston (Prentice-Hall), 1985 (with Peter Fisher).

"The Struggle Between the Electric Utility Industry andSmall Scale Power Producers: Law, Politics andEconomics in State and Federal Policymaking."Chapter 6 in Max Neiman and Barbara Burt, eds. TheSocial Constraints on Energy Policy Implementation,Lexington, D.C. Heath & Co. 1983.

"Economism, Democracy, and Hazardous Wastes:Some Policy Considerations" in Kamieniecki, O'Brienand Clarke, Controversies in Environmental Policy,Albany, SUNY Press, 1986.

"Nonrenewable Resources and the Development ofArid Lands: A Planning Approach," in AlternativeStrategies for Desert Development and Management,UNITAR, Pergamon Press, 1979 (Adam Rose, MichaelSheehan, Dale Hurd).

Professional Chairman, Columbia County Solid Waste AdvisoryAdministration: Committee, 1999-2002

Member, City of Scappoose, Parks and RecreationAdvisory Committee, 2001-2002

Member, Board of Directors, Association forEvolutionary Economics 1999-2000

Member, City of Scappoose Urban Forestry AdvisoryBoard, 1997-1999.

Managing Partner, Osterberg and Sheehan,Public Utility Economists, Scappoose, OR and MountVernon, Iowa.

Past Member, Research Advisory Committee, NationalRegulatory Research Institute, Columbus, Ohio.

Past Member, Board of Editors, Journal of EconomicIssues

Editor, Reports on the Iowa Economy.

43

Past-President, Association for Institutional Thought(AFIT) (1988-9).

Professional & Matthew Glasson Esq., Glasson, Grove and Sole,Legal References: Cedar Rapids, Iowa.

Ellen Johnson, Oregon Legal Services,Hillsboro, Oregon.

Denise Chancellor, Assistant Attorney General, SaltLake City, UT.

Linda Williams, Kafoury & McDougal, Portland, OR

David Girard, Columbia Legal Services,Seattle.

Michael Mullett, General Counsel, Citizens ActionCoalition, Indianapolis, IN.

Dick Springer, Director, Fair Contracting Foundation,Portland, OR.

Mark Smith, Secretary-Treasurer, Iowa StateFederation of Labor, Des Moines, Iowa.

Diane Curran, Harmon, Curran, Gallagher & Spielberg2001 "S" Street Suite 430, Washington, D.C. 20009-1125

Utility-Related Ameritech Petition to the Indiana Utility RegulatoryLaw Practice Commission for Furlher Deregulation. Cause 40849.

1997-8. Representing Citizen Action Coalition ofIndiana, AARP and United Seniors in Action.

Petition of CAC et al for an Investigation into the Ratesand Charges of Ameritech Indiana. Cause 41058.Representing Citizen Action Coalition of Indiana, AARPand United Seniors in Action. November 1997.

Indiana Bell Telephone dba Ameritech Indiana v. IURCet al (Before the Indiana Court of Appeals). February1998. Representing Citizen Action Coalition of Indiana,AARP and United Seniors in Action.

Indiana Utility Regulatory Commission Investigation intoAll Matters Relating to Access Charge and Universal

44

Service Reform. Cause 40785. 1997-8. RepresentingCitizen Action Coalition of Indiana, AARP and UnitedSeniors in Action.

In the Matter of the Application of U.S. West for anIncrease in Revenues Docket UT 125 (Rate design)Before the Oregon Public Utility Commission. 1997-8.Representing AARP.

In the Matter of the Petition of US West for a RulingClarifying the Effect of Rate Reductions on RefundObligations Docket UT 143 Before the Oregon PublicUtilities Commission. Representing AARP. 1997-8.

US West Communications, Inc. v. Oregon PublicUtilities Commission, CA Al0 1358, Before the OregonCourt of Appeals. Representing the Citizens UtilityBoard of Oregon and AARP. August 1998.

Practice Before Estate of Gregory Allen Haggard v. D. W. 's Spotting Service,Courts No. CV02-01349 (Umatilla County). Analysis of economic(Economics): damages. 2003.

Pamela Settlegoode v. Portland Public Schools, No.CVO0-313 ST, U.S. District Court for the District ofOregon. Written and oral testimony on economicdamages. 2001.

In the Matter of Columbia Grain, Inc. v. ILWU, et al, CaseNo. 99 1502 MA, U.S. District Court for the District ofOregon. Written testimony on the economics of Portland'sgrain shipment industry. 2000 i

Jane Largent Alfrey, personal representative of theEstate of Thomas Martin Alfrey v. Joseph Crabtree,Warden FCI Sheridan, et aL. No. U.S. DistrictCourt for the District of Oregon. Preparation ofdiscounted present value of lost earnings report. Onbehalf of the Estate. 1999.

Shiprack v. Keisling, Secretary of State of the State ofOregon No. 98C-17750 Review of statistical samplingmethodology for signature count to qualify initiatives.Fall 1998.

45

Aspenwall et al v. Parker NW Paving, Circuit Court forthe County of Multnomah. Calculation of gross value ofsand and gravel deposits. 1998.

Crostic v. Golden Pacific Homes, Multnomah CountyCircuit Court Action. Consumer Fraud. Before anarbitrator. Calculation of present value of damages.May 1998.

Green v. Sunpointe Associates, Civil Action No. C96-1542C (U.S. Dist. Ct. Western District of Washington).Fair Housing Act Class Action. Calculation ofdamages. 1997.

Gameau v. City of Seattle, Federal District Court."Seattle's Low-income Tenant: Relocation AssistanceOrdinance: A Review of Professor Heyne's EconomicAnalysis." On behalf of Evergreen Legal Services andthe City of Seattle in defense of the TRAO. January1995.

Pacific Northwest Bell v. Eachus et. al.(OPUC), Multnomah County Circuit Court.Affidavits & testimony in support of CUB's resistance to(1) Bell's request for a stay of a commission ratereduction order, and (2) Bell's request for a protectiveorder. On behalf of Oregon Citizens' Utility Board.(Spring 1990).

Azul Pacifico v. City of Los Angeles. Federal DistrictCourt for the Central District of California. Witnessstatement (33 pages) and oral testimony on theeconomics of mobilehome rent control. On behalf ofthe City of Los Angeles. (January 1990).

IN RE: John & Reta Martin: Chapter 12Bankruptcy. "Materials in Support of an Analysis of theAppropriate Interest Rate Under 11 USC Section1225(a)(5);" and "Moody's Corporate BondComposite: An Analysis in Light of 11 USC1129(b)." Fixed interest rate determination in support ofplan confirmation. Written reports. April1987. Bankruptcy Court (ND, Iowa).

IN RE: De Los and Donna Martins: "Materials inSupport of an Analysis of the Appropriate Interest RateUnder 11 USC Section 1129(b)(2)." Fixed interest ratedetermination in support of cramdown. Written

46

report. April 1987. Bankruptcy Court (ND, Iowa).

IN RE: Paul and Gretchen Pothoven: "Materials inSupport of an Analysis of the Appropriate Interest RateUnder 11 USC Section 1 129(b)(2)." Fixed interest ratedetermination in support of cramdown. Written reportplus testimony. April 1987. Bankruptcy Court (SD,Iowa).

"An Economic Analysis of Rules Adopting 6 Percentand $6000 Limits on Excludable Assets Essential forSelf-Support in Determining Medicaid Eligibility." Areport (affidavit) prepared for Legal ServicesOrganization of Indiana. February 1987.

IN RE: Merlin & Helen Theisen: "Materials in Support ofan Analysis of the Appropriate Interest Rate Under 11USC Section 1129(b)(2)." Fixed interest ratedetermination in support of cramdown. Writtenreport. February 1987. Bankruptcy Court (ND, Iowa).

IN RE: L.C. & Gladys Cole: Chapter 11Bankruptcy. "Materials in Support of an Analysis of theAppropriate Interest Rate Under 11 USC Section1129(b)(2)." Fixed interest rate determination in supportof cramdown. Written report plus testimony. February1987. Bankruptcy Court (ND, Iowa).

IN RE: Donald & Sharalee Kurtenbach: Chapter 11Bankruptcy. "Materials in Support of an Analysis of theAppropriate Interest Rate Under 11 USC Section1129(b)(2)." Fixed interest rate determination in supportof cramdown. Written report in lieu oftestimony. February 1987. Bankruptcy Court (ND,Iowa).

IN RE: Manta C. Noe and John & Carol Noe: Chapter11 Bankruptcy. "Materials in Support of an Analysis ofthe Appropriate Interest Rate Under 11 USC1129(b)(2)." Fixed interest rate determination in supportof cramdown. Written report plus testimony. February1987. Bankruptcy Court (ND, Iowa).

IN RE: Leland & Evelyn Eganhouse: Chapter 11Bankruptcy. "The Use of the Farm Profitability Index toIndex Annual Payments Under the ReorganizationPlan." Written report. July 1986.

47

IN RE: Robert & Joann Pestka: Chapter 11 Bankruptcy."Materials in Support of an Analysis of the AppropriateInterest Rate Under 11 USC Section 1129(b)(2)." Fixedinterest rate determination; written report. July 1986.

IN RE: Leland & Evelyn Eganhouse: Chapter 11Bankruptcy. "Materials in Support of an Analysis of theAppropriate Interest Rate Under 11 USC Sectiori1129(b)(2)." Fixed interest rate determination; writtenreport. July 1986.

IN RE: Wilbert Wuebker. Chapter 11 Bankruptcy."Materials in Support of an Analysis of the AppropriateInterest Rate Under 11 USC Section 1 129(b)(2)." Fixedinterest rate determination; written report. May 1986.

The Maine Association of Independent Neighborhoods,et. al. and Nancy Haggan v. Michael Petit Docket No.83-0360-B, The U.S. District Court for the District ofMaine. "An Economic Analysis of Rules Adopting 6Percent and $6000 Limits on Excludable AssetsEssential for Self-Support in Determining MedicaidEligibility." A report prepared for Pine Tree LegalAssistance, Inc. of Augusta, Maine. May1986. (Favorable Decision: U.S. Dist. Ct. D. Maine,April 23,1987. Docket No. 85-0174-B).

IN RE: Paul Kaufman: Chapter 11 Bankruptcy."Materials in Support of an Analysis of the AppropriateInterest Rate Under 11 USC Section 11 29(b)(2)." Fixedinterest rate determination; written report. April 1986.

IN RE: John & Marie McAllister. Chapter 11Bankruptcy. "Materials in Support of an Analysis of theAppropriate Interest Rate Under 11 USC Section1129(b)(2)." Fixed and variable interest ratedeterminations; written report plus testimony. March1986.

IN RE: Byron & Connie Greiman: Chapter 11Bankruptcy. "Materials in Support of an Analysis of theAppropriate Interest Rate Under 11 USC Section1129(b)(2)." Fixed interest rate determination; writtenreport. March 1986.

IN RE: Cyrus & Annette Hopkins: Chapter 11Bankruptcy. "Materials in Support of an Analysis of theAppropriate Interest Rate Under 11 USC Section

48

1129(b)(2)." Fixed interest rate determination; writtenreport plus testimony. March 1986.

IN RE: Daniel & Helen Wolf: Chapter 11Bankruptcy. "Materials in Support of an Analysis of theAppropriate Interest Rate Under 11 USC Section1129(b)(2)." Fixed interest rate determination in supportof the debtors successful cramdown effort. Writtenreport plus testimony. February 1986.

Practice Before Petition of PSI Energy for Authority to IncreaseRegulatory Rates Cause No. 42359, before the Indiana UtilityCommissions Regulatory Commission. Expert written testimony on(Economics): the issues of the rate treatment of trackers, affiliated

transaction issues, holding company issues, risk andROE, and executive compensation. On behalf of theCitizens Action Coalition of Indiana. 2003.

IN RE: Iowa Telecommunications Services, dlblalIowa Telecom Proposal for Modification of PriceRegulation. Docket No. RPU 02-4. Expert writtentestimony on the issue of targeted deregulation ofexchanges and predatory practices. On behalf of theIowa Association of Municipal Utilities. Summer 2002.

IN RE: Interstate Power and Light. Docket No. RPU02-3. Before the Iowa Utilities Board. Expert writtentestimony on the issue of mergers and rate averaging.On behalf of the City of Dubuque and others. Summer2002.

In the Matter of Pacific Gas & Electric (DiabloCanyon Nuclear Power Plant Nos. 1 and 2).Declaration and assistance with preparation ofContentions relating to the application to establish ahigh level nuclear waste facility at Diablo Canyon. Onbehalf various local groups. July 2002.

IN RE: Iowa Telecommunications Services, Inc.,Petition for Deregulation. Docket No. INU-01-1.Before the Iowa Utilities Board. Expert writtentestimony on the issues of "effectivecompetition,"deregulation, and the remedies for anti-competitive abuses. On behalf of the Iowa Associationof Municipal Utilities, October 2001.

49

Northern Indiana Public Service Company,Investigation into Electric Rates and Charges.Cause No. 41746. Before the Indiana Utility RegulatoryCommission. Expert written testimony on the issue offair value and fair return. On behalf of the IndianaOffice of the Utility Consumer Counselor. June 2001.

In the Matter of Private Fuel Storage, LLC for aLicense for an Independent Spent Fuel StorageInstallation Docket 72-22-ISFSI, ASLBP No. 97-732-02-ISFSI. Before the Nuclear Regulatory Commission.Expert written testimony on the issues of financialassurance, alternatives, no action, and NEPA. Onbehalf of the State of Utah. 1999-2001.

In the Matter of Investigation and Hearing onPossible Reduction in Rates and Charges ofEntergy New Orleans, Inc. for Electric and GasService in New Orleans Docket No. UD-97-1. Beforethe New Orleans City Council. May-June 1997. Expertwritten testimony on the franchise agreement. Onbehalf of the Alliance for Affordable Energy.

Petition of Northern Indiana Public ServiceCompany for Approval of a Natural Gas AlternativeRegulatory Plan. Cause No. 40342. Before theIndiana Utility Regulatory Commission. Expert writtentestimony on the proposal. On behalf of Citizens ActionCoalition of Indiana. February 1997. (Settled).

With Respect to Setting Rates Pursuant toFranchise for the Forest Grove Transfer Station.Before the METRO Council (Portland, Oregon).Preparation of studies and other materials. On behalfof the Metro Staff. 1996-7.

Hydro Resources Inc. Application to Construct andOperate the Crownpoint Uranium Solution MiningProject at Crownpoint, NM, Before the U.S. NuclearRegulatory Commission. Docket No. 40-8968. 1997.Expert written testimony on the economics of theproposal (issues related to financial capability, costbenefit analysis and need). On behalf of ENDAUM andthe Southwest Research and Information Center.

In Re Indianapolis Power and Light CauseNo.39938. Written rebuttal testimony on rate base, rate

50

of return, and estimation of plant value. Before theIndiana Utility Regulatory Commission. On behalf ofCitizens Action Coalition of Indiana. June 1995.

In Re Indianapolis Power and Light CauseNo.39938. Written testimony on rate base, rate ofreturn, and estimation of plant value. Before theIndiana Utility Regulatory Commission. On behalf ofCitizens Action Coalition of Indiana. April 1995.

Petition of PSI Energy, Inc. for Authority to RaiseRates Cause 39584 Written testimony on utilityincentive programs. Before the Indiana UtilityRegulatory Commission. On behalf of Citizens ActionCoalition of Indiana. July 1994.

In Re Kauai Electric Division Docket No. 94-0097.Written testimony on utility rate design, and low-incomeand conservation programs. Before the Hawaii PublicUtility Commission. On behalf of the Legal Aid Societyof Hawaii. March 1995.

Economic Development and Incentive TariffsRulemaking Supplemental comments on theefficacy and design of economic developmenttariffs. Before the Public Utility Commission of TexasProject No. 11434. On behalf of the Texas Ratepayers'Organization to Save Energy. January 1994.

In Re Request for Increased Rates for Denver WaterComment and Exhibits on Late Payment Fees, Low-income conservation programs, Rate Design andRate Shock. Prepared on behalf of ACORN. January1994.

Economic Development and Incentive TariffsRulemaking Prepared comments on the efficacy anddesign of economic development tariffs. Before thePublic Utility Commission of Texas Project No. 11434.On behalf of the Texas Ratepayers' Organization toSave Energy. May 1993.

In the Matter of the Application of MAUI ELECTRICCOMPANY, LTD. for Approval of Rate Increases andRevised Rate Schedules and Rules. Writtentestimony on the issues of conservation, low-incomerate design, late payment charges and rate shock.Before the Hawaii Public Utilities Commission Docket

51

No. 7000 on behalf of Legal Aid Society of Hawaii.November 1992.

Petition of PSI Energy, Inc. for Approval of itsPhase Environmental Compliance Plan. Preparedwritten testimony on the utility's proposed incentiveplans and allowance banking proposal. Before theIndiana Utility Regulatory Commission, Cause No.39346. On behalf of the Citizens Action Coalition ofIndiana. September 1992.

Comments: In the Matter of the Application ofRandy Heller for a Major Partition and Variance inthe Rural Residential-5 Zone. Written comments onzoning issues. Before the Columbia County, OregonBoard of Commissioners on behalf of the Scappoose-Spitzenberg CPAC. May 1991.

In the Matter of the Investigation into the PortlandExtended Area Service Region Docket UM-261.Supplemental written testimony on the issues of ratedesign and cross subsidization. Before the OregonPublic Utility Commission on behalf of the Citizens'Utility Board'of Oregon. February 1991.

In the Matter of: An Adjustment of Gas and ElectricRates of Louisville Gas and Electric Company.Case No. 90-158. Prepared written testimony on theissues of rate design, cost of service, and residentialconservation programs. Before the Kentucky PublicService Commission on behalf of the Attorney Generalof Kentucky. November 1990.

In the Matter of the Investigation into the PortlandExtended Area Service Region. Docket UM-261.Prepared written testimony on the issues of rate design,cost of service, and cross-subsidization. Before theOregon Public Utility Commission on behalf of theCitizens' Utility Board of Oregon. October 1990.

In the Matter of: Rate Adjustment of the WesternKentucky Gas Company. Case No. 90-013.Prepared written testimony on the issues of rate design,cost of service, and residential conservation programs.Before the Kentucky Public Service Commission onbehalf of the Attorney General of Kentucky. May 1990.

52

In the Matter of: Notice of Adjustment of Rates ofKentucky-American Water Company. Case No. 89-348. Prepared written testimony on the issues of ratedesign, cost of service, rates charges for public firehydrants, and residential conservation. Before theKentucky Public Service Commission on behalf of theLexington-Fayette Urban County Government and theOffice of the Attorney General of Kentucky. March1990.

In the Matter of the Investigation into the RevenueRequirements and Rate Spread of Pacific NorthwestBell Telephone Company, dlb/a US WestCommunications, Inc. Docket UT-85. Direct writtentestimony on telecommunications rate design. Beforethe Oregon Public Utility Commission on behalf of theCitizen's Utility Board of Oregon. May 1989.

IN RE: City of Sheldon v. Iowa Public ServiceCompany. Docket NO. SPU-88-7. Petition of the Cityof Sheldon for a certificate to establish a municipalelectric utility. Expert written testimony on valuationprinciples and associated regulatory issues. Before theIowa Utility Regulatory Board. On behalf of the City ofSheldon. March 1989.

In the Matter of the Investigation of Cost-of-ServiceStudies and the Rate design of ALASCOM, Inc.Docket U-87-25. Expert written testimony on intrastatetoll rate design and issues relating to the provision oftelecommunication services for the hearing impaired.Before the Alaska Public Utilities Commission. Onbehalf of the Alaska Consumer Advocacy Program.February 1989.

IN RE: Docket No. DPU 86-36. Investigation into thePricing and Ratemaking Treatment to be AffordedNew Electric Generating Facilities Which Are NotQualifying Facilities. Expert written testimony on theregulatory treatment of conservation and demand sidemanagement programs. Before the MassachusettsDepartment of Public Utilities, on behalf of theHampshire Community Action Commission (NationalConsumer Law Center). June 1988.

IN RE: Docket No. DPU 87-280. WesternMassachusetts Electric Company. Expert written

53

testimony on the cost effectiveness and economicjustification of certain demand side management pilotprograms. Before the Massachusetts Department ofPublic Utilities, on behalf of the Hampshire CommunityAction Commission (National Consumer Law Center)March 1988.

IN RE: Public Service Corporation of Indiana.Cause 37414 (Application to reduce rates). Expertwritten testimony on the issue of whether PSl's MarbleHill-related financial emergency continued, and whetherPSI should be allowed to temporarily reduce rates viacertain changes in accumulated tax accounting. Beforethe Indiana Utility Regulatory Commission, on behalf ofthe Citizens Action Coalition and the City of TerreHaute. April 1988.

IN RE: Public Service Corporation of Indiana.Cause 37414-SI (Investigation to determine whetherexisting rates ought to be reduced). Prepared writtentestimony on the issue of the financial condition of PSI.Before the Indiana Utility Regulatory Commission onbehalf of the Citizens Action Coalition and the City ofTerre Haute. April 1988.

IN RE: New York State Electric and GasCorporation. Cases 29541 and 29542. Expert writtentestimony on cost allocation and "economicdevelopment" rates. Before the Public ServiceCommission of the State of New York. July 1987. Onbehalf of the Public Utility Law Project. Albany, NewYork.

IN RE: Petition of CAC, City of Terre Haute, et al for'a Reduction in the Retail Electric Rates of PublicService Company of Indiana. Cause No. 38411Affidavit dealing with excess earnings. October 1987.

IN RE: Application of IBP, Inc. for a WaterWithdrawal Permit for its Proposed ManchesterPlant. Draft Water Use Permit No. 14,808. "Commentson the Public Health Impacts of Radium Contaminationin the Jordan Aquifer." Before the Iowa StateDepartment of Natural Resources. September 1987.On behalf of a coalition of local farmers andenvironmentalists.

54

IN RE: Western Massachusetts Electric Company.Docket No. D.P.U. 86-280. Expert written testimony onthe economics of conservation investments targeted tolow income and 'bad debt' customer subgroups. Beforethe Massachusetts Department of Public Utilities.March 1987. On behalf of the Hampshire Community

Action Commission (National Consumer Law Center).

IN RE: Iowa Gas Company Request for IncreasedRates. Docket No. RPU-85-22. Expert writtentestimony on rate design, interruptible rates forindustrial users, and the allocation of franchise/user feeexpenses. Before the Iowa State CommerceCommission. January 1986. On behalf of the City ofDes Moines.

IN RE: Proposal to Set Maximum Rates Small LoanCompanies Are Allowed to Charge Pursuant to IowaCode Section 536.13.1 (B) and 536.13(2). Docket No.ARC 5900. Before the Iowa State Banking Board.Written testimony opposing the proposal to increase themaximum rates to 36% per annum. October 1985. Onbehalf of the Iowa City Ratepayers Association.

IN RE: Union Electric Company Request forIncreased Rates. Docket No. RPU-85-9. Expertwritten testimony on the question of whether theCallaway Nuclear Facility was a cost effective source ofpower to Iowa, and analyzing the impact of theproposed rates .on economic development in Iowa.Before the Iowa State Commerce Commission. July1985. On behalf of the Cities of Keokuk and Ft.Madison and Lee County, Iowa.

IN THE MATTER OF: Application of Duke PowerCompany for Approval of a General Increase inElectric Rates and Charges. Docket No. 85-78-E.Technical appendices in support of the expert writtentestimony of David E. Osterberg. Before the SouthCarolina Public Service Commission. July 1985. Onbehalf of the Consumer Advocate of the State of SouthCarolina.

IN RE: Rules Regarding Permissible AdditionalCharges for Involuntary Unemployment InsurancePremiums. Docket No. ARC 5249. Before theAdministrator-of the Iowa Consumer Credit Code.

55.

Written testimony on the impact of this type ofinsurance on consumers. February 1985.

IN THE MATTER OF: Union Electric Company.Docket No. 84-0109. Expert written testimonycomparing the cost of power from Callaway NuclearStation to other sources of power; utility planning; andthe treatment of excessive costs. Before the IllinoisState Commerce Commission. September 1984.. Forthe Governor's Office of Consumer Services (Illinois).

Proceeding on Motion of the Commission'as to theRates, Charges, Rules and Regulations of NiagaraMohawk Power Corporation: Case Nos. 28798,28799, 28800. Before the Public Service Commissionof the State of New York. Expert written testimony onthe disposition of the savings from the availability offederal hydroelectric power on the Niagara-Mohawksystem. September 1984. For the Public Utility LawProject (New York).

IN RE: Northwestern Bell Telephone Company.Docket No. RPU-84-7.' Expert written testimony ondiscriminatory allocation of costs, cost causation, andthe jurisdictional treatment of jurisdictionallyunnecessary costs. Before' the Iowa State CommerceCommission. June 1984. For the coalition for Fairutility Rates and the ISU Government of the StudentBody.

IN RE: Wisconsin Power and Light Company.Docket No. 6680-UR-14. Expert written testimony onrate of return. June 1984. Before the Wisconsin PublicUtilities Commission. For the Citizens Utility Board.

IN RE: Young Radiator. NPDES Permit 04-07-1-02.Report submitted on the sufficiency of the terms of theproposed permit. Before the Iowa Department of'Water, Air and Waste Management. April 1984. For:Local Citizens, Centerville, Iowa.

IN RE: Peoples Natural Gas Company, Division ofInterNorth Inc. Docket No. RPU-83-20. Expert writtentestimony on conservation funding and the regulatorytreatment of excess capacity. Before the Iowa StateCommerce Commission. October 1983. For the IowaRatepayers Association.

56

IN RE: Iowa Electric Light and Power Company.Docket No. RUP-83-23 (TF-83-264). Expert writtentestimony on utility planning and excess capacity.Before the Iowa State Commerce Commission.September 1983. For the Iowa RatepayersAssociation.

IN RE: Iowa-Illinois Gas and Electric Company'.Docket No. RPU-83-22. Supplemental writtentestimony on the issue of the prudency of companymanagement. Before the Iowa State CommerceCommission. October 1983. For the Iowa RatepayersAssociation.

Iowa Power and Light Company; Iowa SouthernUtilities Company; and Iowa Illinois Gas andElectric Company. Docket No. RPU-82-39. Expertwritten testimony, on the natural gas purchasingpractices of the above listed utilities. Before the IowaState Commerce Commission. September 1983. Forthe Iowa Ratepayers Association.

In the Matter of the Application of Otter Tail PowerCompany for Authority to Establish IncreasedRates for Electric Service in South Dakota. DocketNo. F-3418. Expert written testimony before the SouthDakota Public Utilities Commission on the issue of ratedesign (the OSL Rate). July 1983. For the CitizensOrganized for the Purpose of Equality (COPE),Sisseton, South Dakota.

IN RE: Petition for a Special Exception for theConstruction of a High Voltage Transmission Linewithin Iowa City, Iowa. Expert written testimony onutility planning. Before the Iowa State CommerceCommission. November 1982. For the Iowa CityRatepayers Association.

Prepared written testimony in Docket No. FCU-82-5before the Iowa Commerce Commission on thesubject of the regulatory treatment of winter utilityshutoffs. December 1982. Citizens/Labor EnergyCoalition.

IN RE: Rate Making Treatment of Excess ElectricUtility Generating Capacity. Docket No. RMU-82-4.Expert written testimony on rate making treatment of

57

excess electric utility generating capacity. Before theIowa State Commerce Commission. November 1982,p. 27. Community Action Research Group.

IN RE: Petition for Franchise of 4.2085 Miles of72,000 Volt Transmission Line in Clayton County,Iowa. Docket No. E-1 9540. Supplementary writtentestimony on utility planning and forecasting. Beforethe Iowa State Commerce Commission. April 1982.

IN RE: Iowa Public Service Company. Docket No.RPU-81-8. Supplemental direct written testimony onrate of return, excess capacity and utility planning.Before the Iowa State Commerce Commission.September 1981, p. 14. Woodbury County CommunityAction Agency and Citizens/Labor Energy Coalition.

IN RE: Iowa-Illinois Gas and Electric Company.Docket No. RPU-81-5. Expert written testimony onutility planning and forecasting. Before the Iowa StateCommerce Commission. September 1982. On behalfof Iowa Planners Network.

IN RE: Iowa Public Service Company. Docket No.RPU-81-8. Expert written testimony on rate of returnand other issues. Before the Iowa State CommerceCommission. August 1981. On behalf of WoodburyCounty Community Action Agency and Citizens/LaborEnergy Coalition.

IN RE: Iowa Power and Light Application for aRevision of Rates. Docket Nos. RPU-78-23 and RPU-80-36. Expert written testimony on rate design. Beforethe Iowa State Commerce Commission. February1981. On behalf of the Citizens/Labor Energy Coalition.

IN RE: Iowa State Commerce Commission RulesRegarding Rates for Cogeneration and Small PowerProduction. Statement of David Osterberg andMichael F. Sheehan on rates for Small PowerProducers under Section 210 of the Public UtilityRegulatory Policies Act of 1978. Before the Iowa StateCommerce Commission. January 1981. On behalf ofContinental Hydro Corporation.

IN RE: Iowa Electric Light and Power's Request forAuthorization to Construct a 650 MW Coal-firedGenerating Plant at Panora, Iowa. Written testimony

58

providing a critique of certain aspects of the applicant'sdemand forecasting methodology (with DavidOsterberg). Before the Iowa State CommerceCommission. November 1980.

IN RE: Rules Requiring the Filing of Certain "Cost-of-Service" Information with the Iowa StateCommerce Commission. Written testimonyevaluating the Rules proposed by Commission Staff.RMU-80-1. Before the Iowa State CommerceCommission. Legal Services and Citizens/LaborEnergy Coalition.

IN RE: Rate Increase Request by Iowa Power andLight. Written testimony evaluating: 1) the economicrationale for special rates for certain electric appliances;2) the justification for proposed changes in customercharges; and 3) various alternative block rates. Beforethe lowa State Commerce Commission. March 1981.

Service on Columbia County Solid Waste Advisory Committee.Government 1998-Present. Columbia County, Oregon.Commissions &Committees: Conservation Acquisition Council, Columbia River

People's Utility District (Columbia County, Oregon).1992-6.

AT&T National Consumer Advisory Panel (1990-1995)

Research Advisory Committee, National RegulatoryResearch Institute, Ohio State University, Columbia,Ohio. 1990-1993.

Citizen Planning Advisory Commission, ColumbiaCounty, Oregon 1990-Present

Rate Advisory Committee, Columbia River Peoples'Utility District (Columbia County, Oregon). 1990-6.

Community Energy Management Advisory Board,Energy Policy Council (State of Iowa) 1984-87.

Iowa City, Iowa: City Franchise Commission (1983-4).

59

Recent Studies: Fair Housing Plan: An Analysis of Impediments andStrategies to Address Them Prepared for the Officeof Community Development of Washington County,Oregon, and the City of Beaverton, for presentation toHUD. July 2004. With Roger Colton.

Project Labor Agreements in Iowa: An ImportantTool for Managing Complex Public ConstructionProjects Prepared for the Iowa Policy Institute. WithRalph Scharnau (In Press January 2004).

A Survey by Oregon Counties of Transfer StationPractices and Arrangements For the ColumbiaCounty Solid Waste Advisory Committee. 2003.

A Survey of State Prevailing Wage PracticesPrepared for the Fair Contracting Foundation forPresentation to BOLI. December 2002.

Funding a Selective Increase forAssistant and SeniorAssistant Attorneys General. A Review of the DOJBudget. Prepared for the Oregon Association of JusticeAttorneys, June 2001 (in support of collectivebargaining).

Review of the Supply of Aggregate in Columbia County,Oregon, Prepared for Transwestern Aviation forpresentation to the Columbia County Board ofCommissioners. November 2000

Bull Run Versus Willamette River Water: A Review ofthe Costs of Alternatives for Wilsonville and TigardPrepared for Wilson and Tigard Citizens for Safe Water.August 1999.

BOLl's Treatment of Laborer, Truck Driver andCarpenter Classifications in its 1999 Prevailing WageDetermination Prepared for the Fair ContractingFoundation, Portland, OR. April 1999.

Method for Calculating Gross Value of a Sand andgravel Deposit in the Ground Draft March 1999

Principles for Valuing a Municipal Distribution Utility in1998 APPA May 1998.

An Investigation into the Elements of Regulatory

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Success and Failure: Ten Studies Prepared on behalfof METRO (the three county planning agency for thePortland, Oregon region). 1997.

Fair Housing Plan: Analysis of Impediments andStrategies to Address Them (With Roger Colton)August 1996. On behalf of Washington County and theCity of Beaverton, Oregon.

Lone Star's Plan to Strip Mine Columbia CountyFormal economic study presented to the ColumbiaCounty Planning Commission in In Re Applications PA4-96, 5-96, 6-96 for map amendments and zonechanges from agriculture and industry to surfacemining. On behalf of the Scappoose-SpitzenbergCPAC. November 1996.

In the Matter of the Application of WEBCO for Approvalof the Preliminary Plat for the Brookfield Subdivision.Before the City of St. Helens, Oregon. Study presentedon behalf of the Friends of Good Planning. November1996.

The Comparative Economics of Nebraska RevisedStatutes §70-1010 A study dealing with the statutorystandard for compensating rural electric providers whenmunicipal electric utilities expand to keep pace withurban growth. Presented to the Natural ResourcesCommittee of the Nebraska Legislature. October 1996.

Home-Based Enterprise in Oregon: Improving LocalRegulation of an Important Economic Asset Winner ofthe Cascade Policy Institute's 1996 Oregon BetterGovernment Competition. September 1996.

Fiscal Stability and Risk Management Over Time:Planning for Reasonable Fund Balances and ReservesJanuary 1996.

County Sponsored Water Districts to Facilitate theConstruction of High Density Rural Subdivisions: AnEvaluation Presented to the Columbia County Board ofCommissioners on behalf of the Scappoose-Spitzenberg CPAC. November 1995.

Fair Market Value for the Franchise: Law andEconomics of Franchise Renewal in Louisville Onbehalf of the Legal Aid Society of Louisville, KY. March

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1995.

Transfer Stations, Curbside Haulers, Landfills: Surveyof Costs June1996.

Comparison of Regulatory Standards for RateRegulation of Transfer Station Franchisees December1995

Environment and Jobs: The Employment Impacts ofFederal Environmental Investments NationalCommission for Employment Policy: Washington, D.C.,April 1995. Research Report No. 95-02. With SkipLaitner, Marshall Goldberg, and Marc Baldwin.

Growing Cities: Valuation and Compensation Issues inDealing With Rural Electric Co-ops, Prepared on behalfof the American Public Power Association. (With RogerColton and Richard Cvarak) August 1995.

An Assessment of Low-Income Energy Needs inWashington State Prepared on behalf of theWashington State Department of CommunityDevelopment. November 1993. pp.319. (With RogerColton, Skip Laitner, Adrienne Quinn, Scott Foster, andGregory Holmes).

Economic Development Utility Rates: Targeting,Justifying, Enforcing. November 1993 (With RogerColton).

Environmental Site Assessment: Leasehold Site forNew Library, Government Block, Scappoose, OregonPrepared on behalf of the Scappoose Public LibraryDistrict. October 1993.

Of Sunflowers and Dandelions: A Comparative Analysisof Low-Income Rate Discounts May 1993.

Affordable Housing and Section 8 Utility Allowances: AnEvaluation and a Proposal forAction. Part I: Adequacyof Annual Allowances March 1993 (With RogerColton).

Affordable Housing and Section 8 Utility Allowances: AnEvaluation and a Proposal forAction. Part 11: Adequacyof Monthly Allowances March 1993 (With RogerColton).

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Affordable Housing and Section 8 Utility Allowances: AnEvaluation and a Proposal for Action. Part 111:Individualized Relief March 1993 (With Roger Colton).

Major Telecommunications Problems for Consumers:An Agenda for Consumer Advocates Prepared forTURN. November 1992.

Valuation and Compensation Issues in Establishing aMunicipal Electric Operation: A Manual for ProfessionalStaff Prepared for the American Public PowerAssociation (Draft: May 1992).

Financial Plan and Review of Options Prepared onbehalf of the Scappoose (Oregon) Public LibraryDistrict. April 1992.

Externalities and Least Cost Planning in Wisconsin:The Question of Job Impacts Prepared for EconomicResearch Associates, Eugene, Oregon. March 1992.

The Impact of the Clean Air Act Amendments of 1990on Missouri Prepared for Economic ResearchAssociates, Eugene, Oregon. September 1991.

Energy Efficiency, Economic Development and theFunding Problem Prepared for Economic ResearchAssociates, Eugene, Oregon. November 1991.

Energy and Economic Development: Tuning AgencyPowers to New Opportunities Prepared for EconomicResearch Associates, Eugene, Oregon, 1991.

A Preliminary Assessment of the Local Economic andFiscal Impacts of a National Forest in Southern IowaPrepared for the Iowa Natural Heritage Foundation,January 1990. (With David Osterberg, Skip Laitner, andPeter Fisher).

An Analysis of the Finances of the State of Iowa.Prepared for the Iowa United Professionals. February1991.

Low-Income Weatherization as a Stimulus to EconomicDevelopment in Washington. Prepared for theWashington State Department of Community.Development. January 1991 (With Skip Laitner).

The Economics of Energy Efficiency Building Codes for

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Cities With Municipally Owned Utilities Prepared undercontract to Economic Research Associates, Eugene,Oregon. August 1990.

Elements of a Standard Minimum Program for LowIncome Ratepayers in Utility Rate Cases. A discussionpaper for general circulation. May 1990.

Incentive Rates for Large Manufacturing Concerns: AReview and a Proposal. Prepared for the TexasDepartment of Agriculture. November 1989.

Regional Citizen Advisory Groups to Multistate UtilityHolding Companies: A Public Interest Review.Prepared as part of a Michigan Divestiture ReviewFund study of the pros and cons of an AmeritechCitizen Advisory Group. March 1989.

Making Allies of Law, Labor and the Environment: AnExposition for Labor Lawyers. Prepared for theLawyers Coordinating Committee of the AFL-CIO.(With Matthew Glasson and Peggy Hillman). May1989.

Issues in Demand-Side Management Prepared for theDepartment of Public Service, State of Vermont.February 1989.

The Problem of Mass Evictions in Mobilehome ParksSubject to Conversion. Prepared for Oregon LegalServices for presentation to the City Council of the Cityof Forest Grove, Oregon. February, 1989.

The Monopolies' Campaign to Fleece POTS: Can PlainOld Telephone Service Be Saved?: SomeRecommendations. Prepared for the Citizens ActionCoalition of Indiana. October 1988.

An Analysis of Davenport City Finances (Revised).Prepared for the Davenport Association of ProfessionalFirefighters, for presentation to an Iowa PublicEmployment Relations Board arbitrator. Davenport:September, 1988.

An Analysis of Davenport City Finances (Revised).Prepared for the Union of Professional Police, forpresentation to an Iowa Public Employment RelationsBoard arbitrator. Davenport: September, 1988.

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The Problem of Political and Administrative Corruptionin State Economic Development Programs. Preparedfor the Association for Ethical Government. July 1988.

Of Ratebases, Subscriber Line Charges, and OtherStrange Beasts: The Public Interest Economist as Ms.Goodwrench in Energy/Utility Litigation. Prepared forthe National Consumer Law Center for presentation tothe NLADA Conference, Berkeley, California. July1988.

An Analysis of Davenport City Finances. Prepared forthe Davenport Association of Professional Firefighters,for presentation to an Iowa Public EmploymentRelations Board factfinder. Davenport: June, 1988.

An Analysis of Davenport City Finances. Prepared forthe Union of Professional Police, for presentation to anIowa Public Employment Relations Board factfinder.Davenport: June, 1988.

Economic Vitality for Iowa: A Choice of Programs andPhilosophies. Prepared for the Alamakee CountyAlmanac: May 1988. (With David Osterberg).

The Monopolization of the Meatpacking Industry:Tactics and Results, 1978-1983. (With DavidOsterberg). Fall 1987-Spring 1988.

The Iowa Department of Transportation RISE Grant tothe City of Manchester/Manchester Enterprises, Inc.: ACase of Official Misconduct. A Complaint to the IowaAttorney General. (66 pages) July 1987.

Francis Lauer Youth Services, Cerro Gordo County,Iowa. An Analysis in Support of the Transition FromCerro Gordo County Agency to Non-Profit Corporation.Presented to the Cerro Gordo County Board ofSupervisors on Behalf of Francis Lauer YouthServices. (52 pages). July 1987.

Predatory Competition, Jobs, and the Supply ofHogs: The Role of State Assistance in the Collapse ofthe Independent Hog Packing Industry in Iowa.Presented to the Iowa Transportation

Commission. May 1987.

Combining Fire and Ambulance Service to Improve

65

Service and Lower Cost. Prepared for the DavenportAssociation of Professional Firefighters (Local 17,International Association of Firefighters). March 1987.

Of Market Rates and Indubitable Equivalents: Law andEconomics in Determining the Appropriate Interest Ratein Farm Chapter 11 Cramdowns. January1987. 80pp. (With Roger Colton).

Researching the American Corporation: Purposes andMethods. January 1987. 50pp.

Local Regulation of Utilities in Nebraska: A Guide forLocal Officials. Prepared for the Nebraska StateEnergy Office. Lincoln, Nebraska. December1986.150pp.

A Comparison of Base Wages Plus Fringe Benefits atVarious Plants (in the meatpacking industry). Preparedfor the United Food and Commercial Workers Local222. November 1986.

PubliciPrivate Enterprise as an Economic DevelopmentStrategy for States and Cities Prepared for theEconomic Development Administration of the U.S.Department of Commerce. July 1986. (With Peter S.Fisher and Roger Colton).

Evaluation of the Energy Management Technician PilotProgram, Prepared for the Iowa State Energy PolicyCouncil. June 1986.

The. Future of Pork Packing in Monmouth, Prepared forthe City of Monmouth, Illinois, and the IllinoisDevelopmentFinance Authority. June 1986.

An Analysis of Davenport City Finances (Revised)Prepared for the Iowa State Policemen's Association,Local #2. April 28, 1986.

An Analysis of Davenport City Finances (Revised),Prepared for the International Association ofFirefighters, Local 17. April 18, 1986.

The Des Moines-ICA Sewage Treatment Facilities Plan:The Economic Ramifications of a 1991 CompletionDate Prepared for the City of Des Moines forpresentation to the U.S. Environmental ProtectionAgency. April 1986.

66

Municipal Regulation of Cable TV Holding CompaniesAfter the Cable Communications Policy Act of 1984:(Heritage Corporation and the Siege of Block 80)Prepared for the Iowa City Ratepayers Association.April 1986.

An Analysis of Davenport City Finances. Prepared forthe International Association of Firefighters, Local 17.February 1986.

An Analysis of Davenport City Finances: PreliminaryReport. Prepared for the Iowa State Policemen'sAssociation, Local #2. February 1986.

An Analysis of the Finances of the City of CouncilBluffs. Prepared for the Fraternal Order of Police,Council Bluffs Lodge #1. January 1986.

Telephones for People: Providing for the Old, theYoung, the Rich, the Poor, the Middle, Business andWorkers, Cityfolks and Farmfolks. Minority Report ofSix Members of Northwest Bell Citizens Council #2.October, 1985.

Thinking About Inter-Class Telephone Subsidies: (TheTale of the Gardener's Pay). Prepared for the IowaRatepayers Association. April 1985.

The Great Gumdrop Monopoly: A Parable. Preparedfor Northwest Bell Citizen Council #2, April 1985.

Universal Service: Materials for Discussion. Preparedfor Northwest Bell Citizen Council #2, April 1985.

The Economic Impacts of a Prevailing Wage Law forIowa State Construction Projects. Prepared for theIowa State Building and Construction TradesCouncil. February 27, 1985. (with Peter S. Fisher).

A Primer on Bypass. Prepared for Northwest BellCitizen Council #1, January 1985.

Materials on Telephone Rates: The ConsumerPosition. Prepared as Part I of a manual on telephoneregulation for consumer groups. January 1985.

An Analysis of Davenport City Finances: A PreliminaryReport. Prepared for the Iowa State Policemen'sAssociation Local 2. January 1985.

67

Combining Fire and Ambulance Service. Prepared forthe City of Rock Island on behalf of the Rock IslandFirefighters Local 26. October 1984.

Designing Electric Rates to Conserve CommunityResources, Enhance Local Productivity and Stem theOutward Flow of Energy Dollars: The OSL Rate DesignProposal for Nebraska. Prepared for the NebraskaEnergy Office.. (With Skip Laitner). October 1984.

An Analysis of City Finances: Burlington, Iowa.Prepared for Local 301 International Association ofFirefighters. March 1984.

An Analysis of Dubuque City Finances. Prepared forthe Operating Engineers. March 1984.

An Analysis of City Finances: Burlington, Iowa.Prepared for Local 828. The American Federation ofState, County and Municipal Employees. March 1984.With Peter Fisher.

Source Reduction in Hazardous Materials Regulation:A Strategy for Both Economic Development and theEnvironment. Prepared for the Select Advisory Panelon Hazardous Waste Management of the IowaDepartment of Water, Air, and Waste Management.February 1984.

The Electric Ratepayers Protection Act: An Evaluation.Prepared for and presented to the Consumer ProtectionCommittee of the Missouri Legislature. January 1984.

Investments in Energy Engineering and Technology atthe Local Level: Planning an Assist from StateAgencies. Prepared for the Nebraska Energy Office,February 1984.

The Impact .of Increasing Concentration in theMeatpacking Industry on Iowa's Livestock Producersand Communities. Prepared for Reports on the IowaEconomy. June 1983.

Policy Options for Dealing with the Impact of ContinuingEnergy Price Increases on the Iowa Economy for theIowa State Legislature. February 1983 (LEAG).

An Analysis of Proposals for the Reform of the Iowa

68

Tax System (with Peter S. Fisher). December 1982.

Reforming Iowa's Individual Income Tax to More FullyAccount for Tax Shelters (with Peter S. Fisher).October 1982.

The Iowa City Electric Franchise: A Report to the CityManager. January 1982.

A Comparison of Major Cities in Iowa and SurroundingStates by Income, Wage Levels, and Housing and FoodCosts. March 1983.

IBP at Stanwood: Estimating the Regional Impact.February 1983.

A Program of Progressive Tax Policies for the State ofIowa (with Peter S. Fisher). February 1982.

Municipal and Cooperative Operation of BranchRailroad Lines in Iowa: Two Alternatives toAbandonment For the Iowa State Legislature (PeterFisher and Michael Sheehan). December 1980.

Book Reviews: Review of Walter Adams and James W. Brock, AntitrustEconomics on Trial: A Dialogue on the New LaissezFaire, In The Journal of Economic Issues (December1992).

Review of James A. Gross, Teachers on Trial: Values,Standards & Equity in Judging Conduct andCompetence. In The Joumal of Labor Studies.Summer 1990.

Review of Ronald M. Green and Richard J. Reibstein,Negligent Hiring: Fraud, Defamation, and OtherEmerging Areas of Employer Liability. In The Joumal ofLabor Studies. Fall 1989.

Review of Lawrence E. Rothstein, PlantClosings: Power, Politics, and Workers, in The Journalof Economic Issues. March 1988.

Review of John Munkirs, The Transformation ofAmerican Capitalism: From Competitive MarketStructure to Centralized Private Sector Planning, in TheJournal of Economic Issues, March 1986.

Review of Claes Brudenius and Mats Lundahl,

69

Development Strategies and Basic Needs in LatinAmerica, in The Annals of Regional Science, July 1985.

Review of Samuel P. Epstein, et al., Hazardous Wastesin America, in The Environmental Professional, V.6,#1. 1984.

David Morell and Christopher Magorian, SittingHazardous Waste Facilities: Local Opposition and theMyth of Preemption, in The Environmental Professional,V.5, #3/4. 1983.

Staughton Lynd, The Fight Against Shutdowns:Youngstown's Steel Mill Closings, in The Journal ofEconomic Issues, September 1984.

Michael S. Baram; Alternatives to Regulation:Managing Risks to Health, Safety and the Environment,in The Environmental Professional, V.5, #314. 1983.

Richard A. Berk, et al., Lessons in Conservation fromthe Great California Drought, in The Water ResourcesBulletin. October 1983.

Review of Lawrence B. Lee, Reclaiming the AmericanWest: A Historiography and Guide, in The WaterResources Bulletin, V. 18, #4. August 1982.

Review of Mario Barrera, Race and Class in theSouthwest, in The Journal of Economic History, V. 42,#2. June 1982.

Review of Robert D. Friedman, Sensitive Populationsand Environmental Standards, in The EnvironmentalProfessional, V. 3, #3. 1982.

Review of E. Englebert's California's Water Planningand Policy, in The Water Resources Bulletin. October1981.

Review of Charles T. Unseld, et al., eds., SociopoliticalEffects of Energy Use and Policy. Washington, D.C.:National Academy of Sciences, 1979, in The Journal ofEconomic Issues. December 1981.

Review of W. W. Robinson, California Land, In TheJournal of Economic History. June 1980.

Review of Wm. C. Peters, Exploration and MiningGeology, in The Journal of Energy and Development.

70

Autumn 1980.

Review of Burnham, P. Beckwith, The Theory of Freeor Communist Distribution, in The Social ScienceJournal. January 1981.

Review of Russ Talbot, The European Community'sRegional Fund, in The Annals of Regional Science.July 1980.

Review of Louis P. Cain, Sanitation Strategy for aLakefront Metropolis: The Case of Chicago in TheWater Resources Bulletin. April 1980.

Review of M. R. Goodall, et al., California Water: ANew Political Economy in The Water ResourcesBulletin. February 1980.

Review of Shabad and Mote, Gateway to SiberianResources: The Baikal-AMVR Mainline, in Growth andChange. July 1979.

Review of N. Birnbaum, ed., Beyond The Crisis, Historyof Political Economy, in History of Political Economy,Vol. 11, No. 1. Spring 1979.

Review of Mathematics of Environmental Processes, inJournal of Energy and Development, Vol. 3, No. 2.Spring 1978.

Review of A. Zaubermann's, The MathematicalRevolution of Soviet Economics, in History of PoliticalEconomy, Vol. 8, No. 2. Summer 1976 (H. Shermansecond author).

Post Graduate Oregon Land Use Law, OSB. Portland, OregonCourses: December 1996.

Advanced Insurance Issues Facing OregonBusinesses. OSB Portland, Oregon September 1996.

National Park and Public Land Ecosystems: Meetingthe Challenge of Common Boundaries and ConflictingMandates. Sponsored by the Center for Environmentaland Resource Law. Snowbird, Utah. April 1995.(Paper presented: "Whose Goals and WhoseAlternatives? How Bad Can a Private Goal Be and StillDefine the EIS Under NEPA?)

71

Federal Civil Litigation in Oregon, OSB. October 1994.

Economic Considerations in Managing HazardousWaste, The Tenth Annual Hazardous Waste Law andManagement Conference. Sponsored by theNorthwestern School of Law. October 1993.

Spanish Language Refresher: 120 hours. El CentroCultural. Hillsboro, Oregon. 1988-9. (Certificate).

Natural Gas Regulation Training Conference, NationalConsumer Law Center, Pittsburgh, Pennsylvania,November 1982.

Faculty Workshop Program on Breeder ReactorTechnology, Argonne National Laboratory, Argonne-West, Idaho Falls, Idaho, August 2-5, 1982.

Workshop on Appraisal of Utilities and RailroadProperty for Ad Valorem Taxation. National TaxAssociation -- Tax Institute of America. Wichita StateUniversity, July 27-30, 1981. (Certificate)

Simulation Modeling and Analysis. Institute forProfessional Education. Los Angeles, September1978. (Certificate)

Employment Current: Managing Partner: Osterberg & Sheehan,History: Public Utility Economists, Scappoose,

Oregon & Mount Vernon, Iowa.

Partner: Fisher, Sheehan and Colton,Public Finance and General Economics,Scappoose, Oregon, Iowa City, Iowa, andBelmont, MA.

Private practice of law (land use, utilityregulation, low-income issues, and theenvironment)

1989-92 Counsel, Telecommunications Law Project,Citizens' Utility Board of Oregon, Portland,Oregon.

1979-84 Assistant Professor, Graduate Program inUrban and Regional Planning; and

72

Research Associate at the Institute ofUrban and Regional Research, TheUniversity of Iowa, Iowa City, Iowa 52242.

1979 Lecturer, Graduate School ofAdministration, UCR, (Analysis ofProjects). (Winter)

1976-9 Lecturer, Department of Economics,California State College at San Bernardino.

1978 Consultant, Richard Terry &Associates, Impact of Federal SewerSizing Limitations on Economic Growth inthe West San Bernardino Valley.

1977-8 Research Associate, UCR-USDA (ForestFire Damage Functions).

1977 Water Resource Consultant, Janczyk& Sheehan, Riverside (water qualityproblems in the Santa Ana and SanJacinto watersheds).

1976-7 Holder of a Regent's Fellowship, UCR.

Spr 1976 Research Assistant (GeothermalDevelopment Project), Department ofEconomics, UCR.

1976 Teaching Assistant(Microeconomics), Department ofEconomics, UCR). (Fall, Winter)

Spr 1975 Research Assistant to Professor K. C.Kogiku in applied mathematical economics.

1975 Holder of a Regent's Fellowship.(Fall, Winter)

1975 Associate-in-Economics, Departmentof Economics, UCR (to teach one course inlabor economics). (Winter)

1974-76 Instructor, Chapman College(Microeconomics, Macroeconomics,Statistics, Development, ComparativeSystems, Cycles and Growth, UrbanEconomics, Decision Theory, QuantitativeMethods, and Operations Research).

73

1974 Consultant, A. A. Webb Associates, Inc.,Consulting Engineers, Riverside (urbaninformation systems).

1973-4 Teaching Assistant (Economic Statistics),Department of Economics, UCR.

1970-2 Dean's Statistical Clerk, Dean JamesEarley, College of Social and BehavioralScience, UCR.

1969-70 Assistant to the Hospital Administrator,Patton State Hospital.

1967-69 Electrician, Timna Copper Mines.

1963-66 U.S. Marine Corps.

Honors andAwards:

Winner, Cascade Policy Institute Better GovernmentCompetition 1996, for the study, Home-BasedEnterprise in Oregon: Improving Local Regulation of anImportant Economic Asset September 1996.

Fullbright Fellowship to Pakistan for 1979-81 awardedAugust 1979 (declined).

Affiliations: Association for Evolutionary EconomicsAssociation for Institutional ThoughtOregon Bar Association

-%gen~sheehanrres

74

CERTIFICATE OF SERVICE

Pursuant to 10 CFR § 2.305 the undersigned attorney of record certifies that on January

7, 2005, the foregoing Direct Testimony of Michael F. Sheehan on behalf of Nuclear Information

and Resource Service and Public Citizen was served by electronic mail and by first class mail

upon the following:

G. Paul Bollwerk-, IIIAtomic Safety and Licensing Board PanelU.S. Nuclear Regulatory CommissionWashington, D.C. 20555-0001e-mail: gpbenrc.gov

Dr. Paul B. AbramsonAtomic Safety and Licensing Board PanelU.S. Nuclear Regulatory CommissionWashington, D.C. 20555-0001e-mail: pba~nrc.gov

Dr. Charles N. KelberAtomic Safety and Licensing Board PanelU.S. Nuclear Regulatory CommissionWashington, D.C. 20555-0001e-mail: cnk~nrc.gov

James Curtiss, Esq.David A. Repka, Esq.Winston & Strawn1400 L St.Washington, D.C. 20005-3502e-mail: jcurtiss~winston.com

drepka~winston.commoneillewinston.com

John W. Lawrence, Esq.Louisiana Energy Services, L.P.2600 Virginia Ave., N.W.Suite 610Washington, D.C. 20037e-mail: jlawrenceenefnm.com

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Office of the General CounselU.S. Nuclear Regulatory CommissionWashington, D.C. 20555-0001Attention: Associate General Counsel for Hearings, Enforcement, and Administratione-mail: OGCMailCenter(nrc.gov

Ibc~nrc.govabc 1 @nrc.govjthgnrc.govdmrl @nrc.govdac3 nrc.gov

Office of Commission Appellate AdjudicationMail Stop 0-16C1U.S. Nuclear Regulatory CommissionWashington, D.C. 20555-0001

Tannis L. Fox, Esq.Deputy General CounselNew Mexico Environment Department1190 St. Francis DriveSanta Fe, NM 87502-1031e-mail: tannis-fobknmenv.state.nm.us

Glenn R. Smith, Esq.Christopher D. Coppin, Esq.Stephen R. Farris, Esq.David M. Pato, Esq.Assistant Attorneys GeneralP.O. Drawer 1508Santa Fe, NM 87504-1508e-mail: ccoppingago.state.nm.us

dpatoeago.state.nm.usgsmrith ago.state.nmr.ussfarris~ago.state.nrn.us

SecretaryU.S. Nuclear Regulatory CommissionWashington, D.C. 20555-0001Attention: Rulemakings and Adjudications Staff (original and two copies)e-mail: hearingdocketenrc.gov

Lindsay A. elJr.618 Paseo de Peralta, Unit BSanta Fe, NM 87501(505) 983-1800

*(505) 983-0036 (facsimile)e-mail: lindsay(lindsaylovejoy.com

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