- 51 -
was increased to $5.9 million. The ER included a report of
construction action prepared on May 9, 1984, which is associated
with ER No. 6475. The report of construction action stated that
construction work started on May 1, 1984.56 Another report of
construction action prepared on February 27, 1987, stated that
the underwater intrusion detection was completed on February 25,
1987.
ER No. 4866, approved in late 1988/early 1989, authorized
$360,000 for the St. Lucie underwater intrusion detection system.
The ER stated in pertinent part:
[FPL] is committed to the * * * [NRC] for the
development of an underwater intrusion detection system
for the intake canal. This is a security measure.
* * *
This ER is necessary as the presently installed system
does not satisfy the requirements of the [NRC]. This
has caused an extensive effort in research and
development of this specialty system. This research
has identified the need to: Install an additional
sonar head and a surface detection system. These
additional requirements have made it necessary to fund
and perform these modifications.[57]
With respect to the modification and construction of the
underwater intrusion system, petitioner incurred capitalized
costs (tax basis) of $338,665 for equipment placed in service in
the 1990 taxable year.
56 Mr. Paduano testified that the construction work on the
underwater intrusion system began before 1986.
57 Mr. Paduano testified that this ER “added additional
detection capabilities.”
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