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to be completed in the fourth quarter of 1986. A section of the
BI labeled “purpose and necessity” states that “Recent concerns
with PCB fluids and by-products of PCB’s resulting from fire have
made it advantageous to replace these transformers before end of
life.”
The record contains copies of ER Nos. 1997, 3042, 3043,
3331, 3337, 3498, 3567, 3568, 4210, 4211, 4213, 3971, and 4455,
which authorized the expenditure of funds to “replace the
existing generator grounding transformer (containing PCB
contaminants) with a PCB free transformer”37 at FPL’s power
plants.38 Similarly, ER No. 4440, processed on December 8, 1988,
authorized $341,396 to “replace Pressurizer Heater P.C.B. oil
filled transformers with Non-P.C.B. dry type” at St. Lucie Unit
2. A section of the ER labeled “purpose and necessity” states
that “Having transformers on site filled with this oil containing
P.C.B.’s in this Regulatory, Environmental, and litigious climate
is a liability” for FPL.39
With respect to the replacement of PCB transformers,
petitioner incurred capitalized costs (tax basis) of $886,616,
37 Although not all of these ER’s contain the exact quoted
language, they each contain similar language.
38 Mr. Butts testified that these ERs were the result of the
PCB rule.
39 Mr. Butts testified that this ER was the result of the
PCB rule.
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