ML17209B149

Affidavit Re Preparation of Response to Atty General Request for Info for Antitrust Review.All Matl Responsive to Request Considered in Response

ML17209B149
Person / Time
Site:	Saint Lucie
Issue date:	05/07/1981
From:	Mills M FLORIDA POWER & LIGHT CO.
To:
Shared Package
ML17209B147	List: ML17209B146 ML17209B148 ML17209B149 ML17209B150
References
NUDOCS 8106040377
Download: ML17209B149 (60)

Text

AFFIDAVIT OF MICHAEL MILLS Michael Mills, being duly sworn, deposes and says:

1.

My name is Michael Mills. I am an engineer in the employ of Florida Power

& Light Co.

("FPL").

I have been employed by FPL since January 4, 1971.

In 1975 I was employed in FPL's Power Supply department, where my duties involved familiarity with all interchange agree-ments in effect between FPL and other electric systems as well as involvement in the preparation of interchange agreements under negotiation during the time that I was assigned to that department.

I am now assigned to the West. Palm Beach District Office.

2.

In 1975, I was directed to work under the super-vision of Tracy Danese, who wa's Director of Public Affairs and, after May 1975, Vice President for Public Affairs, to prepare a document entitled "Information Reauested by the Attorney General for Antitrust Review Facility License Application" ("Information").

This document was prepared pursuant to 10 CFR Part 50, Appendix L ("Appendix L"), and was submitted to the Nuclear Regulatory Commission in Docket No. P-636A on July 14, 1975.

3.

Mr. Danese instructed me to prepare full and candid responses to each of the auestions in Appendix L.

I performed my responsibilities with that objective.

'8X68 Gggg7P>>'.

4.

I was able to assemble much of the material needed for the Information from readily available documentary sources.

In preparing responses to Questions 13 and 18, which I am informed'are in issue in this proceeding, I proceeded as follows:

a.

I systematically reviewed FPL's central files at its corporate headquarters in Hiami, Florida, for correspondence and other documents pertaining to each of the municipal and cooperative electric systems listed in FPL's response to Question 9 of the Information.

b.

I interviewed a number of individuals in the employ of FPL who I believed might have personal knowledge of any matter that was responsive to these questions.

The persons to be interviewed were selected on the basis of the documents which I located during my review of FPL's central files as well my own know-ledge gained while working in the Power Supply depart-ment of the persons and departments most likely to become involved in relationships of the kind described in Questions 13 and 18.

My efforts covered a spectrum of departments within FPL, and in my interviews I inquired whether the interviewees were aware of events which should be listed in response to either of Questions 13 and 18 and which were not known to me as a result of my review of FPL's central files.

I also asked'nter-

4 viewees for further information about specific matters, mentioned in the documents which I had located.

c.

During the course of the activities described in a and b, above, I conferred on many occasions with Mr. Danese, reported to him on the progress of my efforts, and discussed the substance of the responses with him.

5.

I believed that the procedures which I followed and which are described in paragraph 4, above, were sufficient to brina to my attention all material information responsive to Questions 13 and 18 of Appendix L which was then in the possession of FPL.

Ma.chael Mills Subscribed and sworn to before me this 7

day of May, 1981.

Notary Public NQIARY >>IRI.<C STAFF Of FLORIl)A AF ihKR IAY COMMI55IOFI KXtitES %PI

)2 IIIBI IQNPfP IHIP'XNIRAI It%

VNIIFRWRITFRS

APP EARANCES:

,'3I ERVINP VARNP JACOBS, ODOM

& KITCHEN, by Robert King High, Jr.,

Esq.,

and SPIEGEL 6 McDIARMID, by Joseph Van Eaton, Esq.,

Attorneys for the Plaintiffs.

LOWENSTEZN, NEWMAN, REZS 5 AXELRAD, by J. A. Bouknight, Jr.,

Esq.,

and E. Gregory Barnes, Esq.,

and COVINGTON 5

BURLZNG, by Joanne B. Grossman, Esq.P Attorneys for Defendant.

10 12 13 WITNESS I N D

E X

EXAMINATION BY PAGE

'1 OLAF PEARSON EXHIBITS Direct Direct Cross Redirect Ms. Grossman 3

Mr. Bouknight 220 Mr. Van Eaton 328 Mr. Bouknight 3S3 17 PEARSON EXHIBITS FOR IDENTZFICATION 0

21 22 9,'3 21 2e) 1 2

3 4

5 6

7 8

9 10 11 12 38 41 46 48 Sl S3 56 60 61 64'6 67 ZOYLUCK & GRAPES 1642 ALFRED I. duPONT BUILDING MIAMI, FLORIDA 33131

269 time in purchasing this power at wholesale, because it was not offered on the REA wholesale rate?

A.

No.

I 9,

Why didn't you proceed and purchase wholesale power following this meeting?

I would have to talk to the engineers 10 12 13 as to the reason behind that, as to whether their records would indicate as to 'reasons as to why we did not come in on.July 28 with a request for wholesale power.

9.

What happened following July 27, 1967 about the possibility of FPL purchasing or leasing the Homestead electric system?

14 I am not entirely positive of the dates that were involved.

There was one meeting held with 1G 17 Florida Power a Light representatives here in Miami, I

but that was early on and it may have been before 18 1967.

After that, there was a discussion

')0

~) <<)

<<) <<1 concerning that possibility and there was an exchange of information relative to, oh, the city's rate structure, kilowatt hours devoted to street lights and a number, a good deal of fiscal information.

There were a number of items that were requested and

,exchanged.

ZOYLUCK & GRAPES

!642 ALFRED I. duPONT SUILDING MIAMI,FLORIDA 33!3!

270 I don't believe all of those were ever completed.

As I recall now, the problem I had about those two points, as to whether or not there were other meetings concerning this point, I don' recall.

.Zt seemed to me there were, but whether one went into the other or not, I am not sure.

I know of at least two times this has been discussed.

~

\\

I believe there was at least one other.

9, And'ou don't recall it, going beyond 10 this preliminary discussion stage that you have described; is that right?

12 L

The first thrust we got was that yes, 13 it would be looked into.

We, the company, want, a resolution from the council.

15 Apparently they were concerned about IG 17 even considering this type of thing after some problem they had some place else.

I don't know if 18 it was Vero Beach or New Smyrna, they had quite a

20 problem somewhere up the line and they wanted a

resolution from council before they would even enter n o)

~ 0

~) 3 nS into any negotiations which they received from our council.

Then there was also a contact--and the sequence here, I think the resolution might have been a result of Mayor House contacting a

PPL representative 1

ZOYLUCK 5 GRAPES I642 ALFRED I. duPONT BUILDING MIAMI, FLORIDA 33I3I

~

v 1

E

~

271 and then the resolution..came..about, I believe. "

Prior. to. that,--however," there were:

discussions that did not require resolution but that:-

may have been also prior to the time that FPL had.

the problem upstate.

g.

But with respect,to the 1967 note that we were looking at a minute ago,. you.don't reca'll in 1967 or in the years immediately after that any 10 extensive consideration by the City of.Homestead.of the possibility of selling or..leasing their system

.to Florida.Power..

& Light, do you?

'L

.I.can.'t. recall such a thing until the. approach.ef Dr..'. House,'..whatever

.year that: may 14 ave 5een

~

~

4 4

~

Q, "-.Tet.me +how.ycnx another; piece-af paper 16 17

.nd ask

%he reporter. to-please mark <t. as Pearson Exhibit Number;. 60.

18

...-::(Thereupon, the. document-. reXerrecL to

.wa,s ynarked.for. identification ae Pearson.Exhibit Qo

.Numbor. 60. ) "..-,"

21 g.- -=:(By Hr., Bouknight):: Tg;s.:appears:..to be 22

.a, newspaper clipping with--at least on my copy--a date which i,s not legible, The. next.',to last. paragraph on 25

.the. glewspaper clipping enti<led;. ".City,- FPH Reach Truce,:" subtitled."In'ervice Battle,'"."and. the..next.. to ZOYLUCK & GRAPES Id42 ALFRED I. duPONT SUILDING MIAMI.FLORIDA 33I3I

IN THE UNITED STATES DISTRICT COURT IN AND FOR THE SOUTHERN DXSTRICT OF FLORX DAi MIAMI DIVISION 5

10 CASE NO. 79-5101-Civ-JLK THE CITY OF GAINESVZLLE AND THE GAINESVXLLE-ALACHUA REGIONAL UTILZTXES BOARD, THE LAKE NORTH UTILITIES AUTHORITYi the UTILITIES COVMISSION of NEW SMYRNA BEACH, the SEBRXNG UTXLZTXES COMMZSSXON, AND THE CITIES OF ALACHUA, BARTON, FT ~

MEADEi HOMESTEADi KISS IMMEEi MT ~

DORAi NEWBERRY i ST ~

CLOUDi STARKE, and TALLAHASSEE, FLORIDA g 1

Plaintiffs, 12 Vo 13 14 FLORIDA POWER

& LIGHT COMPANY, Defendant.

15 16 17 18 m ee m m ee 3F Homestead City Hall Homestead, Florida

Friday, 9:12 a.m.

March 27, 1981 I

19 DEPOSITION OF WILLIAMF.

DZCKXNSON 20 21 22 23 Taken on behalf of the Defendant. before Joannie

Fieger, Court Reporter, Notary Public in and for the State of Florida at Large, pursuant to notice.

25 ZOVLUCK 8c GRAPES 1d42 ALFRED I. duPOHT BUILDIHG MIAMI, FLORIDA 3313 I

27 L

Wf.ttkop, ye s.

Do you recall that he may have expressed a point of view that any connection with Florida Power

& Light. Company was not a good idea7

\\

He may have, I don't know that.

9, Were there different views among the 10 12 13 14 15 16 17 18 members of the city council at that time as to whether you ought to consider a proposal by Florida Power Light Company to purchase or lease the electri.c system7 L

If it were, in fact, a consideration,

/

and I don't recall it eyer being a consideration, I'm sure there must have been opposing views

~

I don' recall the, cf.ty taking any positf.on to seek selling the facility or leasf.ng it to FP&L.

Q, Do you recall any discussf.ons with FP&L about that in the 1960's7 L

No, I don' recall that, Now, I'm trying to think back.

20 21 22 23 24 g,

Let me show you a piece of paper and, ask the reporter,

please, mark it as Dickinson Exhibit 6.

(The document referred to was thereupon marked "Dickinson Exhibit 6 for Identification.")

(By Mr. Bouknight)

Mr. Dickinson, this ZOYLUCK L GRAPES l642 ALFRED I. duPONT BUILDING MIAMI, FLORIDA 33131

I

~

~

~

. G~Jj Cg~~jp O~

>lCfAL{,"Qy

'\\

I 4

I 1NlifAL PGV/ER SUPPLY STUDY

~ ~

C)TY OF FOR.l PIF RCE, FLORIDA

~,

I

~

R.

YV. 8ECK ANO ASSOCIATES Analytical and Consulting Engineers

Boston, Massachusetts

Columbus, Nebraska

Seattle, Washington Denver, Colorado Orlando, Florida Phoen>x, Arrzona SEPT El'ABEs-'I970 ggy202 r

~

I

~

~

pt I-4 station service busses and the City's diesel units.

This would speed up considerably the restoration of service to the City' customers during such an event, by enabling the generating units to "get back on line" more quickly.

~- TEPYATIVE PO%'ER SUPPLY ARPANGEMENTS STUDIED Load Forecast An extensive analysis was made of the City's historical load ro;vth during the past ten years.

Based upon trends established in this alvsis and upon known economic and other factors which can be expected

.o have

a. bearing on the future loads of the City, we have projected the ass power a"..d energy demands of the City as follows:

T='B:E I-1 PROSPECTED PEAK LOAD CITY 0:":OB,T PI" BCE, LOBHDA Year 2 Xront.-.s =r." ng Seoter..ber 30 G "oss Summer

eak Demand Gross Gene ration V,~Vr.('000) 1970 1971 lo7~

1973 1974 1975 1976 1977 1978 lo79 1980 40,000(1)

-"-",000 48, 300 53, 000 58, SOG 64, 200 71, 000 7IS, 000 86,000 94, 500 104, 000

203, Z24,

Z45, Z70,

297, 326, 361;

397, 437,

481, 529, 600 (2)'00 900 300 800 900 500 100 800 100 500 1985 1989 167, 000 245, 000 850, ZOO 1, 247, 000 Footnote

( ):

(1)

Actual peak experierced during summer of 1970 pr'r to September;

however,

. peak o'2, 000 kw divas experienc'ed in September.

(-)

Ac ual gross energy generated during the year wa.s Z05, 600, 000 lsvh.

QQ7215

1-5

,.e r Suppl Alternatives Based upon the load forecasts de~eloped for the City, a

,aber of power supply arrangements for the City were studied in depth for'r the 20-year period ending in 1989 to determine the best economical d technically sound power supply program the City could reasonably achieve.

This included the investigation of six basic concepts, which are summarized as follows:

Cases 1.

Independent O eration The'independent operation plan, which consists of three alternative cases, is one in which the City would construct and own all of the necessary generation and transmission facilit es to meet its projected load and reserve reouirements, taking into account the operating practices attain-able '..der its irterconnectior. agreements.

Case lA (Base Ca.se) envisages a mixture of conver.tional base load steam and peaking gene "atio, with t..e 'rst base load unit in commercial operation by 1976.

Case lB {:-arly Additional Base Load Generation) is a rno" fication of Case 1=', ir. that the first base load unit is advanced to 19<-'..

Case IC (Utili"ation of Combined Cycle) involves the insta la-ion of a comb

.ed cycle unt at the exis ing power plant in wh'.ch a v;aste heat bc.'-ler would be fired from the exhaust gases o

a gas.uroine un.'t w.h the steam from the waste heat boiler being usec to operate existing steam turbines in the power plant.

Case 2.

Case 3.

Joint P:a.nin~ and Part.'citation in Future Generatin~ Units %faith Ve o Beach - Under his concept, the City would coordinate its future generat ng un't a.editions ~vith Vero Beach, such that each system

-.- ould install and own units on a "take your turn" basis with contractual a.rrangements for the purchase and sale of capa.-

city and er. rgy from such fut'e generating units being made betwe n the 'two systems.

With ths arrangement, each utility would be able to install base load generating units that are sub-stantially larger than it would install or: its oivn< thereby enabling both systems to enjoy the lower investment cost per kilowatt and lov er opera;in<

costs of la.rger generating units.

Joint Plann'ng and Ownership of F'uture Generatin Units With Vero Beach

- This alternative utilizes basically the same concepts as in Case 2, except that the City and Vero Beach would jointly participate in the ownership and operation of future base'load gener-ating units.

Each system would eEfectively own parts of each new base load unit jointly installed, either through joint financing (each system arranging Eor the financing of a fixed share of the unit),

or through making commitments for purchasing<

a share of the unit for its useEul lif.

As ivith Case 2, under this arrangement each utility ivould be able to enjo> the investment and operat'ng cost s vings a tainable with larger generating units.

337218

~

~

k

~

I1

',s

t Case~

4 Case 5.

I-6 Firm Power Purchases From the Florida Power 8: Li ht Co.

This alternative, which consists of two separate

cases, is one in which the Interconnection Agreement with Florida Power 4 Light Co. would be amended to include a firm power service schedule.

Under Case 4A (Short-Term Purchases With Addi-tional City Generating Units), the City would xnake periodic short-term purchases of firm power from the Company to enable the City to temporarily delay the installation of its own generating facilities.

Under Case 4B (Long-Term Purchases.

witn No Additiona C ty Generating Units), the City would continue to operate its existing generating facilities but would purchase all of ts additional power supply reauirements from the Company.

Ci". Particioa io-..

-.. Florida Power E: Light Co. Nuclear Generat'n~ "acil -.'es Under this alternative, the City would su-p ement its own generation expansion plans with purchases from the =lo"id-Po'ver

k. Light Co. of a fair share of the Company's nuclear g nera" ng facilities presently planned or under const uction, '-.." when made available to the City.

This fair sha=e oi nuclea" purchase amounts o 29~k'0 of the City's projected peak load commencing in 1975, and represents the same ratio as Company o;;..ec

.. clear facilities would bear to the Company's projected peak cema"d.

Case 6.

City Participation in a Potential Florida Municipal Power Pool Tne concept env'saged under this alternative is one in which the City would part c'pate a..d obtain all of its additional power supply reauirements from a potential majo" Florida municipal power pool that would be statewide, and would involve all municipally owned power systems north of and including Fort Pierce and Sebring.

The pa,rticipating systems would be interconnected by a 230 kv and 500 kv transmission network with large base load generating units installed at central locations to supply the combined needs of all the participa. ts.

The generating facilities would consist of large

nuclear, convent=:onal fossil-fueled and peaking type generation, all of which would be integrated with the existing generation of the participants.

Under this concept, each member utilityv:ould purchase its fa.'r share of each major generating addition as it became commercially available on the pool.

tt!

If I

tk tk I)I jkt'

~

A more complete description of each of the alternative power arrangements studied is contained in Section IV of this Report, together with a discussion oE the conclusions reached on each case.

For each oE the nine cases

studied, ar.nual costs of power were developed for each year of the 20-year period from 1970 to 19S9, together wiih the total present worth cost o-each case to enable economic comparisons between alternatives.

Certain

I-7 existing fixed costs, which are common to all of the cases studied, were not included in the total annual costs of the alternatives studied.

These costs were included, however, in the pro forma operating results for the Recom-rnended Power Supply Plan.

The total annual and present worth costs of each alternative axe summarized in Table IV-l, which follows at the end of Section IV. Of the nine cases

studied, the most economical alternative is Case 6 (City, Par

!cipation ir. Potential orida hfurlicipal Power Pool), the overall present worth costs being some 20% lower than those of Case lA (Independent Operat'on - Bas Case).

The City cannot, however, at this point in time ely on a lo d

Qlun c 3 1

ool to provide its powe" supply require-ments since such a Pool does r.ot presently exist, and a great deal of coordina.ed e=fo"t ar.d orga.'zation would be equired on the part of all potential participants befo"

'= becomes a reality.

Nonetheless, the City should, in o> " o-inion, st"'ve along with all of the other potential partici-pants in such a Poo'o

.=.ae

-.'.;is concept a rea.'ity, since it holds the

~ey to the lov.est atta=nao e power supplv costs to,a 1 participants.

The mos= e~=ensive of all the power supply alternatives studied was that o Case

-"B (:-:"r.. 1"lorida Power

&: Light Co. Power Purchases

- Long-te "m Pu"chase with Yo Add'tional City Gerierating Units),

in which.he 20-year present worth costs were some

$ 5. 0 million greater than the estima ed costs 'o" Case 1A..

It is our opinion, therefore, that this concep. should not oe co..sidered by the City as a xeasonable power supply alternative.

Of the other cases

studied, Case lA (Independent Operation Base Case) appears to be t? e best alternative that can be achieved at this time.

Case 2 (Joint Planning and Participation with Vero Beach} also showed economic bene its over other alternatives studied and, while such a concept c"nnot be readily achieved at this time, the City should, in our opinion, continue to endeavor in the future to bx;ing about this sort of joint power supply planning.

If difficul"yis encountered

.in financing the Recommended Pl" n on a timely basis, an altexnative plan could be utilized.

This alter-n"tive plan would be a modification of Case 1C, utilizing a gas-turbine with a waste heat boiler as the next base load addition before proceeding with essent'ally the same program of conventional steam generating unit additions as in the Recommended Plan.

<-COMMENDED POPOVER SUPPLY PLAN In arriving at the Recommended Power Supply Plan for he City, consideration was given to all of the power supply alternatives

~died, particularly that of Case lA (Independent Operation - Base Case).

gs described at the end of Section IV in the discussion of each of the alternatives, there are economic penalties and other problems to be over-come in each of the other cases studied when compared with Case lA.

yaking this into consideration, of all the cases

studied, Case 1A appears to b e the be st alte ma tive that can be achieved at thi s time.

However, b;cause of a number of othe" factors which are described below, the ecommended power supply plan for the City is a modification of the Base Case 1A.

Until this past summer peak load period, the City' existing No.

7 turbine~e.e a or had not been operated at its full capa-bi]:ty during the sur.me, since the City' summer peak load heretofore h- =. o" =

c "= d he f-~. machine output.

During this past summer' operation, it was determ

.".ed that, because of the high cooling water

-empera-.ure, the No.

7 u"it should not be operated at an output greater than 30, 000 kw d'or susza'ne

periods, and that for short periods, by dropping

-.';.= vac'rn on "'.".e mac...ne, it can be operated at an output of 3",

~'0 kw.

This de-rating c'the rnachine s output from 38, 000 kw loiters the a...o.'. t of the Ci.y's base load steam capacity during the 1

m...e".'...o annual peak loac period, and as a result, it is our opinion that =he iis-.a la.'.on da-s, as envisa ed under Case 1A, of the next two base 'oa" steam u..i s to b installed at tne existing power plant, s'nould eac.'". be adva..ced "': one yea".

Th s situation is common to all those alter.".a-. ~es stu ied, such that the economic e.feet on each alter-native would be approximately the same.

GENERATION FACILITIES As s ated above, because of the de-rating of the City's existing No.

7 unit and the critical nature of the power supply picture during he next year, our recommended power supply plan is a modification of Case 1A (Independent Operation Base Case),

and involves the early installation of diesel peaking generation in 1971 and the advancement by one year of each of the next two base load generating units at the existing power plant.

In 1971, with a projected peak suer.mer demand of 44, 000 kw plus reouired reserves of 19, 000 kw, the installed caoacity requirement is 63,300 kw.

Two 2,750 kw diesel units

~

I I

~

l 1-9 I

4 would be installed at the existing power plant in 197'1, brirging the City's total generating capability to 68, 000 kw. Following

~ this, the City would utilize 5, 000 kw of capacity credit from Vero peach in 1973 and 1974, and in 1974 would install two additional 2,, 750 lnv diesel units, bringing the City's total installed capability in 1974 to 73,500 kw.

The 1974 diesel installation would be located at the site of the City's future Substation No. 2, which is discussed later in this Section.

This installation would be capable oE remote operation from the existing power plant via sup rvisory control.

In addition to adding to the City's generating capability, these diesel installations would provide emergency back-up to this future substation in the event of a failure of trans-m ssion o" substation facilities.

Th ro gh 1974 the City would, therefore, ha ve in three units 57, GOO kw of steam-electric

<enerat'n~ capacity and 16, 500 kw of diese'-elect ic capacity in six units.

These diesel un ts have a low '

cost Q'Qlck s'art capability (the existing units have been started ir 57 seconds),

proven reliability of starting when "ecui ec, an great iex'bi ity n operation under varying load a..d e=;.ergercy cond.'-.'c=-s.

They are, therefore, the ideal type of genera-.o.= add'tio."s 'or reserve and peaking capacity.

The City shou'I"

= ways ma.'.nta.'-..

a reasonable ba ance of this type of gener-at'on in:he Eorm o: dese'r.;:.s or gas turbines, as well as making ma.'or st am-elec

'c p'ant add~. ors as needed to meet base load As in"icat d on Plate I-l, which follows at the end of his Section, the City v:ould install its next 38, 000 kw steam-electric 'se loac genera.ing unit at the existing power plant for commercial operation not later thar 1975.

In order to assure this unit's availability by 1975, we recommend that a one-year allowance be made Eor st ikes, financing delays and other factors.

The unit should, therefore, be scheduled for 1974 if a. satisfactory financing plan can. be deve'oped consistent with such a schedule.

~o provide the necessary space for this unit, the

'vestern end oE the existing power plant, which contains the first four generating units and four boilers (three of which have already been retired), would be demolished..

Funds have been provided Eor this demolition work in the $ 5,450, 000 Series 1969 of the Electric and Vfater Utility Revenue Certificates, and this phase of the work should commence during the llutter part of 1971.

lVith the addition of the 38, 000 kw steam unit, the City's total generating capability

would be 111, 500 kw by 1975, which would provide sufficient gener-ating capacity to meet the City's load and reserve eauirements until 1979 when 5,500 kw of diesel-electric capacity.~ould be added at the site of future Substation No. 3.

Our Recommended Plan actually only extends for the ten-year period 1970-1979.

Beyond this point, any of the other more attractive alternatives might actually be developed such as participation in a potential Florida Municipal Power Pool or closer planning and joint participation with Vero Beach in generating unit additions.

Even though our studies show that Eor the period 1980-1989 such alternat'.ves would be more attractive, they are still nonethe'ess, more speculative than the City independently planning for its o;vn futur needs.

'tVe have, therefore, show~ and discuss hereinafter

-uch a ion~-range independent plan which the City can evaluate aea'ns=

such ot"..er a'ternatives during this period 1980-1989..

By 1980, u=.-cer independent planning, the City would reou re

-.s thi "d 8, 000 kw generating unit to be installed at the ex's ng "-er plant.

-'. "'.".='s time, the City would have a projected peak. de..=ndeius "e" '"~" "eserves of 125, 000 kw and its total general~.".=- capaoi ity would oe 117, 000 kw.

The 38, 000 kw unit'n 1980 wou d i..c"ease

>'re Ci".y's ins aQed capacity to 155, 000 kw. If the City' load should gro'~ at a, grea. e" rate than inat projected between now and

~ 1980, then t." s 1980 un.t a"""tion could well be a 44, 000 kw (52, 000 kw gross

=".'.".g, genera>ng un't, or if the joint systems of the City and Vero Beach coord nate the planning of the'r generating additions, then the '1980 unit could be a 66, 000 kw.(~, 000 kw gross rating) addition, with con-tractual a" range.

ents for."he sale oE unit power to Vero Beach.

Plate I-2, which follows at tne end, of h's Section, is a plot plan of the exist.:n~ power plan. layout and sho~vs the proposed locations oE the d'.esel un'ts in 1971 and the base load steam generating units in 1975 and 1980.

Based upon preliminary studies, it is our opinion that the existin" plant site can accommodate two additional units in the size range of 33, 000 kw - 44, 000 kw'nominal rating) and 66, 000 kw (no m ral rating).

In 1982, under independent planning, with a projected peak dcrnand of 125, 000 kw, the City would require additional peaking type generation to meet its reserve obligation.

5, 500 1~v of diesel capacity would be installed during this year at a remote substation, followed in 1983 and 1984 y:ith additional peaking and reserve capacity installations also at remote substations.

The 1983 installation would add 11,000 kw of capacity to the City's system and the 1984 installation

would add 16, 500 kw of capacity, bringing the City's total dependable capability in 1984 to 18S,000 kw.

This peaking and reserve generation could also. be in the Eorm of gas turbines, and an evaluation would have to be made at the time to determine the best type peaking capacity from both an economic and a reliability standpoint.

In 1985, under independent planning, with a projected summer peak demand of 167,000 kw, the City would require addi-tional base load generation and a 75, 000 kw steam generating unit would be added at a new power plant site, bringing the total installed capabii'tv on the City's syste... to 263,000 kw.

Detailed site investi-,

c ations were beyond the scope of this Initial Power Supply Study; however,:t is anticipated hat the new power plant site would be loca ed between the C'.ty anc Vero Beach near the County line on the west s de cf Indian R ve".

In 1986, it was assumed. that the City' exis '.ng ~, 000 kv'

.it Xo.

5 woula be retired, reduc'ng the City' total installed generat::ng capab'.lity to 255,000 kw and its total steam-electric capacity to 200,0""" k'v.

In 19SS, un-

." independent planning, ivith a projected summer peak dema-.." o'22, 000 kw, and a total generating capacity reouiremen. 'rclu~ ng

= s; e of 26o, 000 kw, the City would install ZZ, 000 kv o; peaking ca-acitv, bringing its total installed capability to Z77, 000 kw.

This ge. "ating ad"tion would be fo!lowe6 in 1989 with a seco..d 75, GGG =.- steam-electric base load unit at the new power p!ant site, bringing he City's total installed capability to 352, 000 kw.

Table I-2, wh ch follows, presents a summary oE the generati.";g faci!i ies p oposed under the Recommended Plan through 1979 and uncer indepencenc planning from 1980 through 19S9.

~ l ZN THE UNITED STATES DISTRICT COURT ZN AND FOR THE SOUTHERN DISTRXCT OF FLORIDAi MIAMI DIVXSION CASE NO. 79-5101-Civ-JLK THE CITY OF GAINESVILLE AND THE GAENESVXLLE ALACHUA REGIONAL UTILITIES BOARDS THE LAKE NORTH UTILITIES AUTHORITY, THE UTILXTIES COMMISSION OF NEN SMYRNA BEACH'HE SEBRING UTILITIES COMMISSIONi AND THE CITIES OF ALACHUA, BARTONi FT ~

MEADEi HOMESTEAD g KISSIMMEEg MT ~

DORA p NEWBERRY g ST ~

CLOUD J STARKE AND TALLAHASSEE'LORIDA/

VOLUME X 10 ve Plaintiffs, 12 13 14 FLORIDA'OWER & LIGHT COMPANYg Defendant.

wm m ae m mm m m mwwmm>> mwmwm mmm mm mwmwmmm m mmm m 3E 15 16 17 18 15 th F1 oor Confex ence Room Southeast National Bank Building Miami, Florida Wednesday, 1:40 p.m.

April 22, 1981 19 20 21 DEPOSITION OF HENRY CLAY PETERS i JR Taken on behalf of the Defendant before Joannie Fieger, Coux't Reporter, Notary Public in and for the State of Flox'ida at Large, pursuant to Notice of Taking Deposition.

25 ZOYLUCK 5.

GRAPES 5d42 ALFRED I. duPONT BUILDING h4IAMI, FLORIDA 3353 I

20 I can't say if this is the first or 2

'not, I don't remember.

Do you remember any consideration of that by the city prior to February 19, 1972, while you vere acting director of utilities or director, of utilities?

'72 is the date that strikes methat sticks in my mind.

I can't remember anything prior to 9 it, no.

10 Do you recall the circumstances in 12 vhich Mr. Berry wrote this letter?

L "It will be necessary for increased 13 capacity to keep pace with load growth," it says.

14 Let me show you another document which 15 was marked yesterday as Pearson Exhibit 69.

16 17 18 MR.

VAN EATON:

Off the record.

(Discussion off the record.)

MR.

VAN EATON:

Go ahead and take the 19 time to read the whole document, if you would.

20 21 THE WITNESS:

This is sometime after.

(By Mr. Bouknight)

Mr. Peters, that 22 appears to be a'letter dated February 26, 1972, to you 23 from Mr..Berry.

Did you get that letter from Mr. Berr

?

25 A.

Yes~.X did;:..

Is -it-accurate that as of February 26, 1OYLUCK 8c GRAPES t642 ALFRED I. duPOHT BUILDIHG MIAMI, FLORIDA 33I3$

3G 1

1972, "There is no way of knowing at this time whether 2

or not the city council will wish to explore the 3

alternative of interconnection"?

We didn't know at the time whether we' wish to explore, is all I know.

Q, Is it in accord with your recollection that you didn't know at that time whether the city 8

council wanted to explore the alternative of inter<<

connection with FP&L?

10 Seems to me at that particular time 16 there was some talk about an offer from Florida Power

& Light to buy or lease or something of that sort, and that' they were talking about an offer from Florida Power

& Light to buy, so that is the reason he said that he didn't know whether the city council wished to explore the interconnection at that time.

Q.

What is your basis for believing that 20 in 1972 there was an offer pending by Florida Power Light to purchase the Homestead electric system?

L

-X didn't say there was an offer.

I 22 23 said probably the council had probably asked Florida Power

& Light to make a proposal.

. Q.,

Xs., it true-that at that time.it was....,.

unclear whether. the city council wanted you to explore the alternative of. gnterconnectien,

.at.least,&.your XbvLUcK 8c GRAPEs

'f542 ALFRED I.'duPONT SUILDING 4ll! Ut 'ct Asia

~

3

't 1

mind?

At that time they did not want me to explore the interconnection.

You wouldn'0 have done so under those circumstances; would you?

Not under those circumstances because I had different thoughts and ideals from Mr. Pearson.

Mr. Pearson at times wanted thought the best alternative or to benefit the City 'of Homestead would be to sell.

I never wanted to sell the City of 16 17 18 Homestead the light plant to Florida Power

& Light.

\\

I'e always felt that somehow theas they used to call itthe white elephant could turn into a goose that laid the golden egg.

I had plans for my system and I needed time for those plans to materialize.

I would like to say, I was notI disagreed with Mr. Pearson on many times when he wished to sell out our light plant along with some of 20 the council.

Q.

At that time, then, as you recall, the 24 city council and the city manager were actively considering the possibility of asking FPL to make a

proposal to acquire the system?

~'-L=:- - '-I -can. t -say 'that it would. be all -the city caunci3.

- =I -'would w'ay -4t:auld be Mr ~ -'Pearson,-:

20YLUCK 8c GRAPES T642 ALFRED !. duPONT BUILDING

32 sometime through his own ideals, or maybe one or two 6

10 councilmen, but certainly not the majority.

I have never seen the majority of the council when they wanted to even look at a proposal from Florida Power

& Light.

g.

At that time you understood that council didn'. want to explore the possibility of interconnection until that decision was worked out among the council?

That's right, until t:hat situation was, worked out.

12 13 14 15 16 17 18 19 20 21 22 24 25 Was there any particular reason, Mr. Peters, why the subject of exploring an inter-connection wi,th Florida Power

& Light didn't come up between the time that you became acting director of

~utilities in 1970 and this period in 1972?

MR.

VAN EATON:

Let me object.

That assumes a fact not in evidence.

(By Mr. Bouknight)

You may answer.

We might; probably had correspondence between '0 and '2, but none that I remember.

Q.

You can'. think of any particular reason why there wouldn't have been consideration of this during that time period; is that right?

L Consideration. of. what, sir?

ZOYLUCK 8c GRAPES 1642 ALFRED I. duPONT BUILDING MIAMI,FLORIDA 33131

33 k

Q.

Of the possibi.lity of interconnection..

A.

There was no,possibility of i,nter-connection duri,ng that time.

Florida Power

& Light 4

refused us interconnection.

Mhen, to your knowledge, did Florida Powex' Light refuse you interconnection?

L Mell, not exactly refuse us, but never could get together on i.t, hack pxolonged i,t and would keep making more engagements for meetings.

It wasn' until FP&L was put under the regulation of public service->>I mean FERC, Flox'ida Power Commission then I mean Fedexal Power Commission then, excuse me. It was not until Florida Power

& Light was put under 14 Federal Power Commission and that seemed to turn 17 things around and they really 'ot serious about the interconnection.

Mr. Peters, exactly when was it that 18 you were involved in or witnessed any event that, 19 indicated that Florida Power

& Light either was 20 unwilling to i,nterconnect or was delaying on the 21 sub) ect of interconnectionP 22 Mell, I felt that they were delaying it 23 because I could never get an agreement with them.

24 Have you testified<<

25 A.

Not until after the Grid Bi,ll went ZOYLUCK & GRAPES 1642 ALFRED I. cIuPONT BUILDING A55AAII. FLORIDA 33535

34 into effect and after they went under regulation with Federal Power Commission--

g.

Let '

see if we can divide the times-on wholesale power.

Let's see if we can divide the time

periods, Mr. Peters.

Let's talk about the time period beginning when you assumed the position of acting director of utilities and ending in February of 1972

'0 Can you tell us about anything that 12 13 14 15 happened during that time period.that indicates that Florida Power a Light either refused to interconnect with you or was delaying an interconnection with you?

I can't remember the<<-I can't recall 16 17

-18 19 20 21 22 Q,

You can'0 recall any such event?

L No

Sir, now let me show you another document which was marl ed yesterday as Pearson Exhibit No. 70.

Pearson Exhibit 70 appears to be a

memo to file on Florida Power a Light interoffice 24 25 correspondence from Frank Thompson - South Dade dated December 19, 1972.

Zt purports to describe a

meeting whRh Mr. Thompson had with Mr. Berry who was

~ZOVQJCK & GRApES 1442 ALFRED. I. duPOHT BUILDING

~" ~. MIAMI, FLORIDA 33131

~ w 35 acting as Homestead's consulting engineer.

My first question, Mr. Peters, is, do you have any recollection. of any approach that the city made to Florida Power 6 Light Company about interconnection between February of 1972 and this meeting in December of 1972 that is described in this 0

memorandum?

10 Any correspondence?

Or any kind of contact.

Between February

'72between when?

12 13 February

'72 and December

'72.

You might want to read this memorandum, I

and particularly the next to the last sentence which 15 16 I will read into the record, "He further stated that some people within the city government are opposed to'nterconnection for certain reasons which are unclear 18 19 20 21 22 to him."

Well, that may be true.

You'e not ever going to get a hundred percent council.

Probably always some people that disagree or agree with interconnections.

Let me ask you this and then I want to 24 25 come back to that question.

Xs it your recollection that in December of l972 the disigreement within the city XOYt.UCK & GRAPES 1642 ALFRED I. cIuPOHT SUILDWG MIAMI, FLORIDA 33I31

a I

)

54 Let me show you a letter which I'd ask the reporter,

please, to mark as Peters'xhibit No. l.

(The document referred to was thereupon marked "Peters'xhibit 1 for Identification. " )

(By Mr. Bouknight)

Peters'xhibit 1

'\\

appears to be a letter on Smith and Gi,llespie stationery dated May 2, 1975, written to Mr. R. T.

10 Culberson, chief engineer, Florida Power E Light

Company, signed by Mr. James J. Berry and showing copies to, among others, Mr. Peters.

13 Do you recall receiving this letter from Mr. Berry, Mr. Peters2 16 17 18 19 20 21 22 Yes, sir.

Let me ask you this:

After the inter-connection agreement was signed on May 1,

1974, what I

steps did the city take to move ahead with its work on that interconnection?

L Zt was signed May 19742

Yes, sir.

Hell, steps were taken to bid construction of the interconnection.

24 25 How long.did that take2

..Seems=to me it took about three years-Do.you know why it took that long>>--

XOYLUCK & GRAPES I~2 ALFRED I. cIuPOMT BUILDING JAIAMI, FLORIDA 5BIQI

~ g

~

~

~

~

for the completionbefore the construction was completed.

Just the bidding pxocess, how long did it take for you to get contracts in place to do the work that the city needed to do?

I don't recall when they put out invitations to bid to the contractors.

I don' recall the date.

Do you xecall at the time that the 10 12 13 15 16 17 18 19 20 negotiations were completed in January of l974 when the city pro)ected that the interconnection would be activa ed2 MR. VAN EATON:

Could you read back that question, please.

A.

I'd say that this gust gives you the advertising for bids for the oil-filled equipment and circui.t switchexs.

This is not a bid of the contractors itself.

Zt's advertising bids for equipment, but it,'s not advextising bids for the contractor.

22 MR.

VAN EATON:

Let the record show that he was referxing to Peters'xhibit No. 1.

C 24 25 MR. BOUKNIGHTT Would you read back the, question that 1 asked a minute ago.

(QMerstion read. )

..ZOYLUt:K-8c GRAPES 1542 ~RED: I.-duPOKT BUILDIKG

~

I I

56 (By Mr. Bouknight)

I guess that wasn' a very clear question.

Let me ask it this way:

As of January 1974 when did you think you'd be able to complete this interconnection so it could be activated?

By 1978

'ou didn't expect it to be any earlier than that2 No g I didn '

have--yes, I did, as a

14 15 16 matter of fact.

Ne did have problems with contractors dragging the work out and it was anticipated, I think, to be from start to finish about a two-year pro)ect.

Zt seemed to me it drug out about three years.

Is that the answer you wanted2 Yes.

Mr. Peters, do you know why it was that with an agreement having been reached in January I

18 of 1974 and the agreement actually having been 19 executed on May 1st.of 1974 that it wasn't until May 20 of 1975 that you were advertising for bids on these 21 items that are discussed in Peters'xhibit l?

MR VAN EATON: I instruct the witness 24 25 not to speculate as to any answer.

MR.

BOUKNIGHTx My recollection was that Mr Peters was there at the time.

1OYLUCK 8 GRAPES 1d42 ALFRED I. duPONT BUILDING MIAMI, FLORIDA 33131

~

c t

~

I MR.

VAN EATON'll X'm saying is that if you can't remember,

.Mr. Peters, you don't have to speculate as to an answer.

THE WITNESS:

Just wait a minute.

Well, if X recall, Florida Power Light is the one thatthey bid this equipment for us so they get this equipment for us.

Seemed to me they bid it for us, Florida Power

& Light bid it for us.

10 12 13 14 15 16 17 18 19 20 21 22 25 This is equipment only.

Q.

(By Mr. Bouknight)

What, X'm asking is, do you have. any impx'ession that after this agreement was signed in May of 1974 that any delay in getting the interconnection in place was attributable to Florida Powex

& Light Company'o.

X would not. say that any delay was r

any fault of Florida Power

& Light Company as far as completion of the intexconnection.

Due to construction.

Due to construction or was it anything else' No, not anything else that X can recall Xs it the case that after the agreement I

was signed on May 1,. 1974, it took some time for the City of Homestead to work out the arrangements fox financ~ncn the equipment that it waa committed to

'I'

'~'XOYNCKi8C-CRAPES

'l642 AIFRED'4r'dUPOHT SUII DING

~ ~ a

~

~ 0 Aalu a ace'N

~

s

~

~ 1 1

purchase?

Z'm trying to remember whether this 3

equipment was supposed to be paid half by Florida 4

Power a Light and half by Homestead.

Q'n any event, Mr. Peters, it was necessary for Homestead to sell some bonds to pay for its portion of the interconnection; wasn't it?

A.

Well, Homestead paid for gust about all 10 of the interconnection.

There was very little equipment that Florida Power

& Light bought in the interconnection.

1'2 Did Homestead have to sell some bonds 14 in order to pay for this equipment2 L

Homestead had to float bonds to pay for the whole interconnection.

That

$ 5,500,000.

Z mean, is that the one?

17 19 that exhibit?

MR.

VAN EATON:

Would you like to see E

THE WTTNESS:

Yes.

Was that the one on 21 the interconnection?

Q, (By Mr. Bouknight)

Mr. Peters, Z did examine that.

Z don'0 think it is, but you are welcom a

to look at it.

24 A.

Zt was a

$4,000,.000 hond issue.. we..'re about then..

Zt was a

$4,000'00 Pond imbue;: if=2 ZOVt.UCK Sc GRAPES

!642-ALFRED I, duPONT SUILDING MIAMI,'LORIDA 33131

recall, and we paid for most all the interconnection through that bond issue.

Mr. Peters, did it-What you must undexstand here is this wasn't the bid for the whole interconnection.

This 6

was )ust a bid for some small amount of equipment, oil-fille equipment and circuit switchers, and we 'e 8

not talking about a great deal of money here.

9 Is it your recollection that othex 10 equipment was bid earlier than that?

12 Oh, yes.

Do you recall if this was all done 13 promptly after May 1, 1974, or was there a delay?

14 It was done pretty promptly after that..

15 Sometimes we even bid we have been knownI can' 16 recall this incident, but we have been called to even 17 make bids on equipment or packages for expansions 18 even be fore the bond issues are complete.

Mr. Peters.,

I'm very pleased to be able 20 to show you a piece of paper which is entitled 21 "Official Statement, Ci,ty of Homestead,

Florida, 22

$ 4,000>000 electric and water revenue

bonds, series 24 25 1975," dated October 29, 1975.

I ask you, sir, if that fi the official statement or a true copy of the official statement

...ZOYLVCK 8 inaVCS 1542 ALFRED I. dQPONT BUILDING

~

~

~

60 1

or a true copy of the official statement which the 2

City of Homestead issued to finance the interconnectio with Florida Power

& Light Company?

A, It is, yes.

Q, Why did it take you all-MR.

VAN EATON:

Excuse me, Lon< are we going to mark this as an exhibit?

MR. BOUKNIGHT:

Yes.

I'd ask,

please, that it be marked as Peters'xhibi,t 2.

10 12 13 14 (The document referred to was

'thereupon marked "Peters'xhibit 2 for Identification.")

THE WITNESS:

Yes, sir, I said it is.

Q, (By Mr. Bouknight)

Why did it take the city from May 1, 1974, to October 28, 1975, to sell 16 these, bond 17 h.

Well, I think that's a relatively short time to sell them.

19 Q,

You regard this as a normal time that it would take the city to finance something of this sort?

22 24 25 Q,

problems with That's six months?

No, that's 18 months.

Eiggteen months.

Well there is. -. =

.interviewing.your. bond issue peop1a -that KOVLUCK 8c GRAPES 4642 AlfRBD I. duPONT BUILDlNG QfAM(. Ft.ORIDA 32125

61 you want to do the work.

Sometimes that takes delays and then the bond issue itself.

Seems to me it's pretty hard to get a

bond issue any earlier than eight, nine months.

Q.

Did the city start its preparations for this bond issue before the contract was executed on May 1, 1974?

Do you reca112 10 12 14 15 16 17 18 19 20 21 22 Z don't recall that.

MR.

BOUKNZGHT:

Off the record.

(Discussion off the record.)

(By Mr. Bouknight)

Mr. Peters, this May 2, 1975, letter from Mr. Berry indicates that "Zt is expected that the City of Homestead and Florida Power

& Light Company should be able to effect the interconnection on or about September 30, 1976."

Zs that consistent with your recollec-tion of what the city expected as of May 1975?

A.

Z would, say so.

Zn fact, when was the interconnection effected?

A.

Mould you make that a little bit more clear er2 24 25 Yes.

Nhen was the interconnection completed so that you,-could-energize it> in fact, looking back and.knowing-what you.-.know.-now2-,---

aJ

~

ZOYLUCK & GRAPES

.1d42 ALFRED f. duPOIIT, BUILDIIIG MIAMI,I:LORIDA 33131

Seemed to me it was '78.

Was that delay attributable to the difficulties you spoke of with some of the contractors A.

Yes.

They ran over completion time.

Quite a bit over completion time.

Say, six months, maybe longer.

I can't recall.

What contractor are you talking about?

A.

Can't remember the name.

10 Does ANECO-What I want to say is there was two contractors.

There was WONTECO who was one of them>>

12 How about A-N<<E-C-O, does that sound 13 like one of them?

14 15 16 ANECO, that's it.

Let me show you a document-->>

That was not the first contractox.

17 ls 19 20 22 24 25 The first contractor was from Tifton, Georgia, but I can't xemember the name of the company.

Did you have to fire that first contxactor?

No.

The fixst contractor sold out to ANECO.

Now it's coming back to me.

Sold out to ANECO and then ANECO had some real problem with supervision and xeal problems building our lines.

As a matter of fact, Mr. Clyde Booth 7OYLUCK 8c GRAPES I642 ALFRED I. cIuPONT BUILDING

I

~

g

~

63 had to go out and our engineer had to go out and supervise ANECO's gob to get it done.

Did ANECO agree that the problem was 6

10 their fault or did they argue that the city had continually made changes in specifications of what they were supposed to do?

L I don't recall what changes the city made and the specifics on it, but X do know that through their own house, not being able to keep enough people on the job and not being able to keep a

12 13 14 15 16 17 18 19 20 supervisor on the gob, that we gust didn't get any-thing done.

That's a proven fact.

Let me show you-That's in the notes of Mr. Clyde Booth.

Where does Mr. Clyde Booth live now?

Homestead.

g.

Who is he employed by or is he retired?

Employed by the City of Homestead.

9, He is still employed by the City of Homestead?

Yes.

Q,

- What is his position?

He's my inspecting engineer.

25 We'e got two new diesels.

Ne've got a new installation going in and he's inspecting the XOYLUCK 8c CyRAP95 1642 ALFRED I. 81IPOHT BUILDIHG HAMI. FLORIDA 33131

~

~,

')

1 installation.

Q, Is that the same Clyde Booth who at one 3

time worked for Maurice Connell f Associatesf It is.

Let me show you a document and ask the 6

reporter, please, to mark this as Peters 'xhibit 3.

10 (The document referred to was 1

thereupon marked "Peters'xhibit 3 for Identification.")

9.

(By Mr. Bouknight)

Peters'xhibit 3

appears to be on the stationery of Smith and Gillespie Engineers, Inc.,

a letter dated June 2,

1978, to a Mr..xee R. Sims, Jr.,

ANECO, from a Mr. David A. Jones of Smith and Gillespie Engineers, Inc., showing a copy to Mr. Peters.

17 18 Mr. Peters, did Mr. Jones of Smith and Gillespie write this letter on behalf of the City of

!'omesteads 19 20 A.

Xes.

Let me show you a second document whi.ch I will ask the reporter,

please, to mark as Peters'2 Exhibit 4.

23 24 (The document referred to was thereupo'n marked "Peters

'xhibit 4 for Identification. ")

XOYLUCK 8c GRAPES 1642 ALFRED I. duPONT BUILDING

~ I

~

~

~ )

~ ~

65 (By Mr. Bouknight)

This appears to be a letter on the stationery of ANECO Company addressed to Mr. Jones of Smith and Gillespie Engineers dated June 12, 1978.

Have you seen this letter before, Mr. Peters?

L I gust don'. recall this letter at all.

7 I may have seen it, but I gust>>

Q, Fair enough.

10 (Thereupon Marta Manildi, Esq.,

enters the room. )

(Short recess taken.)

12 13 on this?

THE WITNESS:

May I feel free to speak 14 15 16 17 18 19 20 21 22 24 25 Q.

(By Mr. Bouknight)

On the exhibit?

I don'0 think I'e asked you 'a question yet.

A.

We were talking about this issue right

here, ANECO.

MR. BOUKNIGHT:

What was said )ust before we left.

(Questions and answers read.)

(By Mr. Bouknight)

My question, Mr. Peters, if you'd look at page 2 of this letter which is Peters'xhibit 4, does this-MQ~

VAN EATON:

That is;the June 12th letter; isn!t it;-Mr,:Bouknight2"-.

XOYLUCK dc GRAPES 1d42 ALFRED t. duPONT BUILDING LAILlll CI Aulflk 0'%1%1

I

~ I, ~

1 MR.

BOUKNIGHTs Yes, it is.

g, (By Mr. Bouknight)

And look at some of the materiaL on pages 3 and 4 ~

Does this refresh your 4

recoLlection as to vhether there vas a dispute between Homestead and ANECO as to whose fault this delay wasP L

Nell, there was a dispute between Smith 14 and Qillespie representing the City of Homestead and ANECO on change orders, and what they did was we did penalize them for delay of lost pxoductivity here.

I don't knov vhat the penalty was for each day, but I do know that this is a true figure, vas in the neighbo hood o

around

$50,000 penalty for the delay on theix part.

Like I said before, I don't recall 16 17 ever seeing this document and I don', necessarily agree with ANECO's document on the change orders, but r

I.do agxee with this document on the loss of 18 productivity.

The 49,322, I can recall that.

. 19 MR.

VAN EATON>

Can we go off the 20 record for gust a second.

21 (Discussion off the record.)

(By Mr. Bouknight)

Mr. Peters, would 24 you take a look at Pearson Exhibit 76 which is that big fat exhibit.

May I direct the vitness'ttention to

~ ~

ZOYLVCK &-GRAPES

!642~RED I. duPOHT SUILDIHG MIAlAI,fLORIDA 3313 I

67 10 memorandum fox discussion No.

7 which appears in the document which has been marked Pearson Exhibit 76 and that is entitled "To Special Committee to Review Interconnection, City of Homestead, Florida; from James J. Berry; sub) ect, the effect of different alternatives on cost." It is dated February 25, 1974.

I would direct your attention,

please, Mr. Peters, to page 3 of this exhibit, and that table appears to discuss the possible in-service dates for the interconnection between Homestead and Florida 12 13 14 15 Power 6 Light Company.

I'd ask you first, are you familiar with this work that Mr. Berry apparently did in February of 1974?

I'm familiar somewhat with it.

16 17 18 19 20 21 22 24 25 g.

Is it true that at that time the city believed that it had alternatives available to it I

which would provide for having this interconnection completed and in service by January of 1975?

MR.

VAN EATON: I'd like the witness to go ahead and take a look at. the whole memorandum for discussion No. 7, if you ~ould.

MR.

BOUKNXGHTs The witness is free to do that.

'My question is, if to his knowledge, it s

'I i true that that's what the city thought then.

p

~ ~

~

~

l I-:ZOYLUCK &,-GRAPES 1tI42 QLFRjD.I. duPONT BUILDING hUAI4I, FLORIDA 33131

~

i MR.

VAN EATON:

The reason I would like

.the witness to go ahead and take his time and feel free to read it is so that, he's clear that, in fact, 4

the city even did consider itself to have any alternatives at that time.

THE WITNESS:

Okay.

What' the question again?

MR. BOUKNIGHT:

Would you read the 10 question back, please, ma'm.

(Question read.)

12 13 MR.

VAN EATON:

Mr. Bouknight, I am going to ob)ect.

That question is too vague.

It leaves open the question of whether you'e asking 14 whether the city had alternatives to bui1.ding a tie, 15 any alternative it coul.d think of or whether it had 16 alternatives that would result in an equivalent inter-17 connection.

19 20 21 (By Mr. Bouknight)

Mr. Peters, I don' think that objection has much merit.

Let me state in a way that there can be no doubt in your mind.

As of February of 1.974, did the City 24 of Homestead believe that the interconnection which had been negotiated between Homestead and Florida Power

& Light Company could be installed by early l975 if Homestead did certain things to do thatV

,'OYLUCK,5.

GRAPES..

1d42,ALFRt'0. I, duPONT BUILDING MIAMI.FLORIDL

'5%1'Al

~

~

69 I don't believe it could have been installed by 1975< no.

Do you have any opinion or do you think 4

Mr. Berry was )ust wrong about that?

I think he was wrong with his timing.

Did you think then-He ran into many complications and he may have thought so, but then he ran into complication Maybe with the council on making decisions on what some of these alternatives should be.

Let me see if I understand you 13 correctly.

Do you mean that Mr. Berry thought, honestly thought that at the time, but that he didn' anticipate the amount of time that would be consumed 16 in getting decisions from the Homestead City Council?

17 18 MR.

VAN EATON: I ob)ect.

I don' think you have established that the witness even knows 19 what Mr. Berry was thinking at that time.

20 21 question.

(By Mr. Bouknight)

You may answer the I really can'0 recall what Berry was 23 thinking at that time.

What did you think then?

25 A

Well, I don't think we could have 2OYL.UCK &, GRAPES Id@2 ALFRED f. duPONT BUILDING hllAMI, FLORIDA 33I3I

~

y

~

~

~.

completed it by then.

I think it would have taken 2

much longer than that to complete Because of the necessity of getting 4

decisions from the city council or for some other 5

reason?

Are you talking about well, when you t

look and see. that the council hasn't made decisions, 8

you'e got a special committee here to review inter-connection or alternatives, you had a bond issue that 10 had to be floated.

At that time I didn't feel like you could complete the interconnection itself by 1974.

12

'75?

13

'75, excuse me.

I always thought it 14 would take probably '77,

'7S.

15 Is it true that Homestead was responsible for doing the great bulk of the work that was involved in installing the interconnection, construction work?

19 L

Yes.

Homestead did the. bulk of the work.

21 Did Florida Power

& Light also have some 24 25 work that they had to do?

P Florida Power a Light had to do some work or agreed to do some Work for us on the metering part of it.:.

, 20YCUCK h GRAPES I6i2 ALPRED.I.. duPONT BUILDING LlIAUI Cl Aultll 1%1%1

71 Did Florida Power

& Light need Co know what the construction schedule was likely to be in 3

order to time their own work2 I don't recall Florida Power

& Light ever asking what the completion date was going to be.

I think we worked with them and we told them when we would need for them tothey were supposed to obtain some equipment for this metering and we gave them some<<-well, Chere wasn't a true date.

I don' remember what date we told them, but we gave them the closest date that we knew of for them to come in and I2 13 14 put their equipment install their equipment in.

12t Let me direct your attention,'lease',

sir, to Peazson Exhibit 75 which, I believe, we showed 16 you awhile ago.

It appears to be a letter dated 17 18 J'anuary 15,

1974, from Mr. R.

G. Mulholland, Florida Power

& Light Company, to City of Homestead, care of 19 Mx. Pearson, City Manager.

20 The second paxagraph of that letter refexs to completion of the interchange facilities scheduled for Maxch 1975.

24

, My question is, Mr. Peters, did anybody

.at Homestead tell Mr. Mulholland in early 1974 that U

that date was wrong?

EOVLUCK & GRAPES 164K ALFRED I. EIuIEOHT SUILDIHG MIAMI,FLORIDA 33131

1

~

~

~ I 72 hack.

MR. VAN EATON:

Could you read that date was wrong.

(Question read.)

THE WXTNESS:

No, nobody told him that 9

10 i2 13 14 15 16 17 18 20 21 22 24 Q.

(By Mr. Bouknight)

Did'the City of Homestead think in January of 1974 that that date was wrong?

L Well, at the time that they quoted this date>

they didn't contemplate all the problems with ANECO fox delays.

g.

Did they also at that time contemplate a little faster internal decision-making process than what actually happened2 You mean from I.his 1975?

g.

No, sir.

Zn 1974 when the city was making its pro) ection of when the interconnection would be completed, I believe you'e said that they believed that this March 1975 date was realistic but that there were things they didn't anticipate.

Right.

Was one of the things that they didn' anticipate the fact that it took longer to get the approvals needed from the Homestead City Council than people thought it was going to take in January of 1974 XOVLUCK & GRAPES lb42 AlFRED I. duPONT BUILDING MIAMI,FLORIDA 33131

~

~

~

~

73 You'e speaking of the decision the council made with the special committee?

9, Yes, sir, and the other deci.sions as I 4

understand they had to make.

Do I understand correctly that the city council-I'm not so sure excuse me, I'm not so sure the city council ever made a decision on this special committee report.

The city. council did have to make a

decision to execute the interconnection agreement 11 before it could be executed; didn't it?

12 13 L

Yes.

g.

Didn't they also have to make decisions 14 on bids before you could advertise for bids on 15 equipment and services?

16 17 Yes.

Q.

Didn't they also have to make decisions 18 before you could accept a bid and enter into any 19 contracts on the basis of those bids?

20 Nell, I think we vent into the contract 21 before vith PPhLyou'e talking about the bid 22 contracts?

I Q

Yes, sir.

24 25 That's true, g.

Didn't the city council also have'o ZOYLUCK &, GRAPES 1642 ALFRED I. duPOHT BUILDING MIAMI,FLORIDA 33131

1I

~

~

~

~

~

I take several formal actions before bonds could be sold to pay for the interconnection?

A.

I don't understand what you mean by

'several acts."

10 For example, was it necessary--

L You said several decisions?

Yes.

Has it necessary, for example, for the city council to authorize the attorneys to initiate litigation in order to have the bonds validated?

12 13 14 15 16 17 18 19 20 21 22 L

They did authorize the city attorney to have the bonds validated, yes.

Did they also have to take action approving the bond resolution before the bonds could be sold?

L Right, yes.

g, Zs it true that one of the reasons why this date of March 1975 for completion of the inter-

'onnection proved to be too optimistic was that it took longer to get the city council to take all those actions than people thought it was going to take as of January of 19742 I still don't think the. loss of time

'I was caused by council.

I think the loss of time was caused by the bond issue length and construction iOYLUCK 5.

GRAPES 1442 ALFRED L duPONT BUILDING MIAhll FLORIDA 33131

~ '

~

S 75 period and the problems we had with ANECO.

Was the company that you told us awhi,le ago that was bought, out, by ANECO Gibson Electric2 Gibson, that's the one X was trying to think of, yes.

Mr. Peters, from the time that the 10 I2 13 interconnection was put in place until today, has there ever been an indication when the city wanted power delivered to it by Florida Power

& Light Company under the SR or PR rates when you couldn't get as much power as you wanted?

MR. VAN EATON:

Could you read that

'question back again, please.

15 16 17 18 19 20 22 (Question read.)

MR.

VAN EATON:

X am going to object to that.

That seems to be vague.

X don't understand what you mean by, "Did the city always get what it wanted2" Are you excluding FP&L's attempts to take the city off the SR and PR rates2 MR.

BOUKNXGHT:

X gust want the witness to answer the question.

24 THE WXTNESSE X got the power on Florida Power

& Light X'as supposed to get.under the contract agreement on the SR and the PR.

-IOYLUCK 8a GRAPES l642 ALFRED I. duPONT BUILDING AIIAMI,FLORIDA 33131

we didn't actually ask Florida Power 6 Light Company 2

for transmission service.

Anytime you wanted transmission service 4

during this period you asked for it; is that correct2 MR VAN EATON:

Objection.

He testifie 6

he didn't recall any, period.

(By Mr. Bouknight)

Would you answer the question.

Nell, seems to me that you wouldn' very well be able to obtain transmission unless you requested it.

12 Q.

Would your answer be affirmative to the questions'4 15 lL.

Yes, we requested it.

Do you recall any occasion arising in which. the city considered entering into any kind of a 17 18 transaction with the city electric system at Key West2 I

A.

There was some negotiations, a pig-in-21 a-poke situation where we talked about interconnecting with Key West.

Were there some technical problems that would have been involved in that?

24 25 Bridge.

A.

Technical problems is the Seven Mile There's qog.any.transmission over that ZOYLVCK dr.

GRAPES 1642 ALFRED I. cIuPONT BUILDIHG MIAMI.FLORIDA 33131

10 12 13 14 15 16 17 18 19 20 21 seven miles of ocean, is there?

That's correct.

Q You used the phxase "pig in the poke."

Do I understand corxectly that you didn't regard this as something that was considered very seriously at that time?

h.

Well, I think it was kind of a stab in the dark becau'se we cextainly wouldn't ob)ect to interconnecting with Key West, but there was a problem of bond issue for Key Nest.

They'e never Key Hest is notis not in very good financial condition'nd in my opinion it would be pretty hard for Key Hest to borrow enough money, particularly at that time, to build a 38-mile transmission line, because that would be instead of the seven-mile transmission lihe over the Seven Mile Bridge.

The actual distance of that transmission line would be 38 miles to tie into Marathon which is Florida Keys Electric.

9,

~

Can you tell me what the Florida Municipal Power Agency is?

Florida Municipal Power Agency is an 24 agency of point venture with all cities on generation paxticipation, transmission,. connections or

-'participation in transmission, paxticipation in fuel supply for this ~nicipal: electric.system.

-It is.an XOYLUCK dc GRAPES

1642 ALFRED I. duPOKT SUILDIKG I, FLORIDA 33131

UN1TED STATES OF AMERICA FEDERAL POWER COMMISSION Florida Power

& Light Company

)

Docket No. E-8008 PRESIDING ADMINISTRATIVE IAW JUDGE'S INITIAL DECISION ON RATE INCREASE, SERVICE CONDITIONS, AND INTERCONNECTION (November 26, 1974)

TABLE OF CONTENTS PROCEDURAL BACKGROUND.

II.

GENERAL BASIS FOR THE PROPOSED INCREASE.

III.

RATE OF RETURN

~

Applicant's Presentation Cooperatives 'res enta tion Staff's Presentation 0

8

~

~

~

10

~

~

~

14 Discussion and Conclusions 17 IV.

ALLOWANCE FOR FUNDS USED DURING.

~

~

~

~

~

19 CONSTRUCTION Discussion and Conclusions 24 V.

RATE BASE.

27 Year-End vs. Thirteen-Month Average...

28 Depreciation Reserve Adjustments....

30 Nuclear Fuel..............

30 Construction Work In Progress......

32 Working Capital.............

34 DC 35

60 N

S na Beach takes issue with FP6L on'everal ew myrn sad-The City asserts that it does not wish to be sa-poxnts.

e i y dl d

'th xpenditures for an interconnectzon of gre e

wz e

tl

capacity, an and therefore greater cost, than is presen y

inter-needed.

It argues that FP6L would benefit from an in er-connection, since e

th City would be willing to maintain a s stem b

h t 15 percent generating reserve on its own system, b

t s stem'ut t at even z

suc re e

f ch reserve could not be maintained, the City would includin b

bl t d to ay the Company greater revenues (inc eo zga e

op paymen or t for reserves).

It contends that FP&L as ma e n that the investzga won t'o and presented no credo.ble evidence rkable d

hree-terminal interconnection would be unwor e

propose t ree-e in the New Smyrna Beach area; that there are ree-e lines satisfactorily in operation throughout the country; that such operation is merely a matter o

p g

protective relaying equipment; and that FP6L's position is based on rig>.

po z.cy, r

'd 1'ther than any study of the proposal.

The City does not deny that interconnection from a 1 1's simpler than a three-terminal line.

two-termxna one z.s ted b the latter, M'th respect to operating problems presente y t e a

e the City's witness, Mr. Peter M. Collet, has te, r

stified about "schemes sugges e

y t d by two manufacturers of protective de-c f-

" h h

ut forward solutions which have 'to be speci-vices w xc pu o

a d that "there is ically tailored" to the particular case; and a

equipment available that is an approach to the problem."1/

The evidence and the arguments presented by the Company and the Staff are persuasive that the interconnection pro-osed b

the City should be disapproved.

The Commission, under the provisions of Section 0

2 2~~~

is without authority to compel such an interchange, unless it could be found that it would not impair the ability of FP&L to render a equate service to its cus ome t

ts customers.

The record herein does not permit

~

~

a findin.

Although not unique, the three-terminal t

onnection is apparently of unconven g

tional desi n and not widely accepted by the industry; and, as suc u h its im-b the Company would be contrary to its oper-ating policies and practices.

The City has failed to sustain 1/ The City's initial brief, p. 15.

it to Al in un es.

thi no:

re; th.

pri in co'n Co su Ne puis

plth, al

'e ju he ca se co ux sa pr 2C s5 re ag cx aI pI

~

I f

~

~

'1

~ its burden of proof by showing that its proposal conforms to the required s ta twtory standards.

On the other hand, Alternative A put forth by FP&L appears to be an appropriate interconnection.

The Company is willing to establish vol-untarily that interconnection; and no order is, therefore, nec-essary to effectuate that proposal.

It is worth noting that the three-terminal line interconnection, should the relaying not work properly, may well cost more in the long run, by reason of substantial

'damage to equipment and outages, than the two-terminal line interconnection proposed by FP&L.

Neither FP&L's Alternative B, nor the City's latest proposed alternative high voltage interconnection, set forth in Appendix A to its initial brief, need be dealt with and considered herein.

The former has been abandoned by FP&L; and the latter has been objected to, and challenged by, the Company as being a post-hearing proposal without any record support.

On September 19,

1974, the Utilities Commission of New Smyrna Beach filed a motion to reopen the record for the purpose of submitting additional testimony concerning the new issues raised by the pleadings contained in its briefs.

This proceeding has been pending since January 29, 1973.

All of the parties have been afforded ample opportunity to present all evidence they deemed relevant and material.

The record herein was closed on February 28, 1974.

Since no adequate justification has been advanced for the reopening of the hearing at this late date and for further prolonging this

case, the motion will be denied.

It is observed that the parties are still free to settle their differences and reach an amicable agreement concerning the interconnection matter, and they are again urged to do so.

However, in the event of a lack of a mutually satisfactory conclusion of this matter, the City may file a proper application, pursuant to the provisions of Section 202(b) of the Act and of Sections 32.1-32.4 of the Commis-sion's Regulation promulgated thereunder, for appropriate relief in a separate proceeding.

In fact, the Commission appears to have been quite liberal in exercising its dis-cretion to allow the City to proceed in this proceeding, arising under Section 205 of the Act and involving mainly proposed increased rates and charges, to, determine also the

~

~

Volume No.

3 OFF1CIAL STENOGRAPHERS'EPORT BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION SUBJKCT In the Matter of:

FLORZCA POWER 6c LIGHT COMPAHY DOCKET NO, ER78-19 (Phase II)

Held at Washington, D. C.

Wednesday, November 14, 1979 PAGES TO 166 Columbia Reporting Company OFFICIAL REPORTERS 300 SEVENTH STREET, S.'IIt.

WASMNGTON, D.C. 20024 TEI EPHONE SS~OSO

107 1

2 3

6 7

8 9

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 03 54 exactly the opposite to the inference so tortuously wrung out of this letter by Dr. Taylor.

We did, in fact, inform New Smyrna Beach in a letter dated June 30, 1975 "that FPL is agreeable to providing such transmission service in accordance generally with the principles outlined below."

The letter was in response to a request to transmit Crystal River power (Exhibit 3 (RJG-8)).

In a concurrent letter dated June 26, 1975, counsel for New Smyrna Beach stated:

"I recognize that FPRL does not desire at this time to offer transmission services

broadly, covering all its interconnected systems and their resources.

It would be sufficient for disposition of the immediate matter that the transmission service for Crystal River No.

3 be accomplished on the basis of a specific contract covering the amount of the entitlements to be transmitted.

Within the specified

capacity, FPRL would also transmit any replacement capacity and energy required during periods when Crystal River is not operating.

This should be a

relatively simple matter to resolve."

(Exhibit I

(RJG-9)).

I fail to see how FPL's documented provision~otransmission service to New Smyrna Beach for each and every specific transaction they have presented to us constitutes a refusal to deal.

Q Dr. Taylor'has cited three other instances of alleged refusal to wheel; the first of these (p. 11, line 16) is allegedly contained in a letter to JEA dated February 26, 1971.

Does that letter constitute a refusal to wheel?

A No.

A more thorough examination of this incident is revealing.

The January 27, 1971 letter from J. K. Wiley of JEA to H. W. Page of FPL, referred to in the February 26, 1971 letter is omitted from Dr. Taylor's testimony.

That letter, Exhibit i'C'i (RJG-10), reveals that JEA proposed that FPL and JEA transmit power through each other's system and that "Payments for the service of transmitting power will, under normal conditions, be at no cost, on the basis that both parties will be transmitting power through the other party's system on an equitable basis...."

At that time FPL was interconnected with JEA at two points.

One of the points, the Robinwood interconnection had been located east of the St. John's River at higher cost to FPL, to accommodate JEA.

The result of that interconnection was to cause normal power flows through the JEA system to the portion of FPL's system lying to the north and west of JEA.

Such power flows resulting from multiple interconnections are a nor mal consequence of interconnected system operation and could, in no sense, be interpreted as JEA "wheeling" for FPL.

JEA was not interconnected with any system other than FPL.

108 1

2 3

'6 7

8 9

10 11 12 13, 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 Therefore, JEA was not in a position to wheel "third party" power from any other system to or from FPL.

Since they could not wheel third party power and since the power flows through JEA from one part of FPL's system to another was the normal consequence of interconnection and was not wheeling, JEA was not in a

position of providing any equitable consideration in return for FPL's transmitting JEA power at no cost.

One only has to read further on in the letter to find set forth several instances of power purchases by FPL from three other utilities to resell to JEA.

In short, power from other utQities was delivered to JEA using FPL's tranmission system.

The electrical phenomenon and its impact on the FPL system is exactly the same as "wheeling".

What the letter does not disclose is that it was normal practice at that time, before FPL was held to be jurisdictional under the Federal Power Act, to charge for the service using a% or flat adder on to the power cost.

As the letter plainly says, these kinds of transactions were regularly and customarily taking place in Florida.

The only distinction is the way in which the service was priced and the nomenclature used.

The net effect is identical to the transaction we today call wheeling service.

JEA enjoyed the economic benefit of Orlando's power, Tampa Electric's power, and even Lakeland's power.

That can hardly be said to be a refusal to deal.

The issue boils down to one of pricing. FPL preferred to pr ice on the basis of an adder rather than transmit power at no cost which is what JEA requested.

Dr. Taylor alleges another refusal t involving Homestead.

Did FPL Homestead?

o wheel at p. 12, line 5, refuse to wheel for Dr. Taylor alleges another refusal to wheel at p. 12, line 31, involving Vero Beach.

Did FPL refuse to wheel for Vero Beach?

No.

What Dr. Taylor has

done, as he has consistently done throughout his testimony, is to extract an example of involved and lengthy internal speculations over alternative positions with respect to dealing with Homestead, long before a

Company position was decided.

FPL invariably considers and discusses a wide variety of policy positions before embarking on any particular course of action.

Refusal to deal cannot possibly be inferred from speculation.

The relevant question is, what power did Homestead want to wheel and what transactions were refused?

The answer is none.

No transactions were contemplated by Homestead and no transactions were involved in the discussions with Homestead.

No request for transmission service was made.

No refusal of transmission service occurred.

The discussions related to interconnection.

An interchange agreement was negotiated and an interconnection was made.

There has been no refusal to deal.

Draft 1-22-71 AGREEMENT SECTION 0.1 THIS AGREEMENT, made and cnlcred into this day of g

1 971, by ond between the Jacksonville Elect'rlc Authority/ 0 Florida body, politic ond corporate, hereinafter called the AUTHORITY@ ond Florida Power ond Light Company, a privote corporotion organized and existing u'nder the laws of the State of Florida, herein referred to as the COMPANY; W I T N E S S E T H an interchange ogreement dated'nterchange of electric energy and capacity; and SECTION 0.3 WHEREAS, the AUTHORITYand the COMPANY desire to supple-ment the soid interchange ogreement with this AGREEMENT; and SECTION 0.4 WHEPEAS, the AUTHORITYand the COMPANY desire to transmit SECTION 0.2

'WHEREAS, the AUTHORITYand the COMPANY have entered into p

1 963'or the purpose of the power through eoch others electric system For the express purpose of the use of soid power for the otner party's purpose in order to promote and secure reliability and k

to avoid duplication o, electrical facilities, with the intent being that economics to e

both parties will be achieved; and SECTION 0.5 NOW, THEREFORE, in consideration of the foregoing premises and of the mutual benefits to be obtained from the covenants herein set forth, the parties hereto do hereby ogree as follows:

AIITICLE I TERM OF AGREEMENT day of

, 1971, an of the existing AGREEMENT dated

, 1963,.which provides for SECTION 1

~ 1 The term oF fhis AGREEMENT shall commence on fhe d shall continue in effect for fhe remaining ter'm cancellofion upon one year's written notice from one party fo the other.

ARTICLE II TRANSMITTED POY~'ER SECTION 2.1 By mutual agreemenf between fhe parties, one party may fransmit power through the other party's system, pro'vided that such tronsmitfed power will not Ieopar iz eopardize fhe service reliability oF the other party's electrical system.

Power to be fransmiffed fhrough one party's electricol system moy be power which is received from onofher electric utilityfrom which power has been negotiated for by fhe ot er par fy.

ARTICLE I! I PAYMENTS SECTION 3.1 Payments for the service oF tronsmifting power will, under'normal conditions, be ot no cost, on the basis that both parties will be transmiffing power through fhe other party's system on an equitable bosis; however, under extremely un<<

usual circumstances, where it is mutually ogreed by both parties that one party wou d 0

suffer economic camages in the form oF undue electrical losses due to the tronsmitting of power oyer that party's system, fhen compensation to the damoged porty would be

C,'

~

V set at that time.

The basis for setting such compensation will be mode'n an energy basis which would compensote the injured porty for increased losses on its electrica system.

Such payments will be mutuolly agreed to in advance by a letter of agree-ment which would become a part of this AGREEMENT during the duration of the tronsmitfing of powe'r.

It is hereby agreed that the transmitting of power by t e

Florida Power and Light Company throvgh the JEA electrical system, under normal system conditions, will not cause economic damages through fhe time period of June 1, 1975.

IN V/ITNESS WHEREOF, fhe parties hereto have caused this AGREEMENT to be executed by their duly authorized officers, ond copies delivered to each party, as of the day and year first above stated.

From:

Lee S. Nelson, Commlscloncr

/o /g g o

<<C ri I gi c'

To:

'ayor, Coizmissioners and Electric Superv'ory Personnel.

Sub]::?'.eetlnE vith Flor'da Power and Light officials on ipuesday morninc,,

13 Octo'oer, 1970 I'.

Those 'n e terdance were =PL Officials Hr Richard Hill,,V'ce Browninp, Di zision =nSlneer, two.. epresent" t ves from P..:1.

Beck, Consultin" =n"'neers ana N".. ':!ilton Davis,

!'.r Robert Skinner and Lee S. Nelson represent'nS the City o. Fort Pierce.

D'scuss<<or.

c'en ered around the temporary tie 1'ne end he pro-posed pe"-aren-tie

~ine'ith FPL, vith rcsu'ts es follows:

1. The temporary tie line ray be used as lonC es needed "o

powcz from :PL to the City but it cannot. be used for power fro=

the City to FPL. 7t wa ag eed :hat FPL vill eke e urthe.

study of the possibility of a direct connection vlth the City ove

. the e parer'ine.

2. Said te"porery or pe.arent tie line shall be used only "or erne>>agency service to the C'y.

3. FPL hes not and."+11 not cor..'t itself to fl>>m power although 't may be considered 1

erd when FPL hes.aclt'ies for. power 'n excess of 's directly connected customer reeds.

4. FPL will assis Foz Pierce at all times in the event of en emerSency.

5 ~ within the inde ini e future, probably within Q.ve,'a s :PL plans to ircreese its line capacl y from 69 iP o

1~>8 V end

<< t vas 1earnea for, the fi.s ime that the C<< y, havirc constr 'c.ed e permanent 1'ne et a cost o

~q620,000.00 vould then be faced with an addi,io".>1 approx'te outlay of 'j)00,000.00 o

donver~ its oe ie line to accep

.he 1)U ZV corversion by FK,

6. The suggestion that FPL beez a pe".,t of the cost for a te p-orery or pe...anent connect'on wes dered since e leal "s ana by" charge by FPL for e'ntelning 'nsten automa lc power 's not e part of the cu>>"en ecreement.

Such"stana by" cherce mich amour.-

to as much as o100,000.00 pez yea>>,.

Xt is noted, elthouch rot discussed et the meeting w<<th FPL that the 69 KV correction vi h Vero Beach has servea bo h c'es many tines arith no apparent proc'em el hou"h it does not cor. a'.".

ne automatic sv'h:"ear for 1rstenteneois power to el-.her co=munl.y.

This omission ls a pert of the agreement vi.h Vero Beech an" it'S fur'hee. ncted, eCCOrdlrp tO the Sup't Of the VerO paver plant, that thel nev 380007il generator vil'e on the line e

ly in the summer of 1971, thereby serving the Fort Pierce Vero Beach power recui ements o a greater advantage.

~o A further iec to be no ed is that the R.:f. Beck Company piers to z ecommend the lnmedl te lrs "llation of aaditional Diesel generators at the Fort Pierce power. plant thethe 'lt bc Diesel urlts or. a tie line a t'me lap of at least nine months 's indica ed.

.'.;c";,

..,.g.",.'.'.".... '...-.. -,, ~,-:~,",.'...'...'.s;;:.:?'"-:;..:. ':. '-:, "::...:;

~(. ',.'-,

w:.:".::::. ~:

~.-"-

f,',

~

M ~;I a

~

.. ~,. '.

~,m ',.'.a....'. '<, ~, '>> ~ ~

~

~ <<.

W r'.".. I'

~ 'a!

e'

.r

~,W 'e s,':>>

~

~

i~

~.