ML17228A338
| ML17228A338 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 10/29/1993 |
| From: | Jablon R SPIEGEL & MCDIARMID |
| To: | Rutberg J NRC |
| References | |
| NUDOCS 9311040249 | |
| Download: ML17228A338 (64) | |
Text
seem,max ooemmm ojsxas vnox svsxmc REGULAT~
INFORMATION DISTRIBUTIO SYSTEM (RIDS)
ACCESSION NBR:9311040249 DOC.DATE: 93/10/29 NOTARIZED:
NO FACIL:50-389 St. Lucie Plant, Unit 2, Florida Power
& Light Co.
AUTH.NAME AUTHOR AFFILIATION JABLON,R.A.
Spiegel
& McDiarmid RECIP.NAME RECIPIENT AFFILIATION RUTBERGiJ.
NRC No Detailed AffiliationGiven DOCKET g
05000389
SUBJECT:
Forwards FERC order noting
& granting interventions,proposed order directing network transmission services
& establishing further procedures.
DISTRIBUTION CODE:
Z998D COPIES RECEIVED:LTR ENCL SIZE:
TITLE: Antitrust Info Re Reg Guide 9.3 NOTES:
D RECIPIENT ID CODE/NAME DRP/ADR-2 PD2-2 PD INTERNAL:~R /
S PTSB REG FILE 01 EXTERNAL: NRC PDR COPIES LTTR ENCL 1
1 1
1 1
1 1
1 1
1 RECIPIENT ID CODE/NAME PD2-2 LA NORRIS,J OGC/AD 15-B-18 NSIC COPIES LTTR ENCL 1
1 1
1 1
1 1
1 D
D D
D NOTE TO ALL"RIDS" RECIPIENTS:
PLEASE HELP US TO REDUCE WASTEI CONTACT THE DOCUMENT CONTROL DESK, ROOM Pl-37 (EXT. 504-2065) TO ELIMINATEYOUR NAME FROM DISTRIBUTION LISTS FOR DOCUMENTS YOU DON'T NEED!
TOTAL NUMBER OF COPIES REQUIRED:
LTTR 9
ENCL 9
GCOROC SPIEOEI PC ROBERT C. MCDIARMID SANDRAJ. STRKSCL ROBERT A. JABLON JAMES N. HORWOOD ALANJ. ROTH FRANCCS K. FRANCIS DANIELI. DAVIDSON DANICLJ. OUTTMAN PCTKR K. MATT DAVIDR. STRAUS BONNIC S. BLAIR THOMAS C. TRAUGCR JOHN J. CORSCTT CYNTHIAS. SOOORAD GARYJ. NCWKLL RENA I. STKINZOR P. DANIEL8 RUNER SCOTT H. STRAUSS BCN FINKELSTEIN STCPHKN M. FKLDMAN MAROARCTA. MOOOLDRICK SPIEGEL & MCDIARMID I350 NEW YORK AVENUE. N,W.
WASHINGTON. D.C. 20005.4798 TELEPHONE I202I 879 4000 TELECOPIER (202 I 393.2866 DAVIDKOLKER LISA O. DOWDKN RISE J. PETKRS PETER J. HOPKINS RUSSELL F, SMITH, III KODWO OHARTEY.TAGOE DAVIDK. POM PER TERESA A. FKRRANYK MARKS. HKOCDUS
~SAMUEL8. JOHNSON
~ NCN1C1 YAOA1 ONLY OF COUNSEL ROBERT A. SAI TZSTCIN BRADLEYS. WCISS GUY MARTIN PHILIP K. CLAPP OOYC1NIICNYAFFAICC OICCCl01 INOT A 1 111 C1 OF YN1 OA1I VIA HAND DELIVERY October 29, 1993 Mr. Joe Rutberg U.S. Nuclear Regulatory Commission Washington, D.C.
20555-001 Re:
Florida Power
& Light Company, Docket No. 50-389A; Operating License No. NPF-16
Dear Joe:
The Florida Municipal Power Agency has filed a petition pursuant to 10 C.F.R.
5 2.206, seeking enforcement of the Florida Power
& Light Company St. Lucie Plant Unit No.
2 nuclear license.
For your information, I enclose a copy of the Federal Energy Regulatory Commission order in or' a
owe A e c Florida Powe
& i ht o
an
, Docket No. TX93-4-000, which may be relevant to FMPA's petition before the NRC.
In that order the FERC grants FMPA's request for network transmission services under Sections 211 and 212 of the Federal Power Act and establishes procedures to determine the rates, terms and conditions of such service.
The FERC rules that FMPA is entitled to network transmission under the FERC's authority to order transmission under the Energy Policy Act, but does not rule on whether FPL has violated FMPA's contractual rights to have FPL abide by its license conditions obligations.
These issues are pending before the District Court in orida Mu ici al owe A enc
. Florida Power
& Li ht Co a
Case No. 92-35-CIV-ORL-3A22 (M.D. Florida, Orlando Division).
.0.30OS7.
I 9311040249 931029 PDR ADQCK 05000389 N
I PDR cj9 I
Mr. Joe Rutberg October-29, 1993 Page 2
An argument is scheduled for November 22, 1993 on all motions pending before the District Court. It would be helpful if the NRC were in a position to rule on the Florida Municipal Power Agency petition or advise on jurisdictional issues before that time.
If you have any questions concerning the FERC order or
-=need additional information, please let me know.
Sincerely, Robert A. Jablon RAJ/kms CC ~
William M. Lambe Antitrust Policy Analyst Inspection and Licensxng Policy Branch Program Management, Policy Development and Analysis Staff J.A. Bouknight, Jr.,
Esq. (letter only)
David B. Raskin (letter only)
I UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION 6 5 fERC fg I g ~
Florida Municipal Power Agency Plorida Power
& Light Company Before Commissioners:
Elizabeth Anne Moler, Chair; Vicky A. Bailey, James J. Hoecker, William L. Massey, and Donald F. Santa, Jr. W ~
)
)
~ m rn Vo
)
Docket No. TX93-4-000
)
~CO+
)
ORDER NOTING AND GRANTING INTERVENTZONS; PROPOSED ORDER DIRECTING NETWORK TRANSMISSION SERVICES; AND
~a+
ESTABLISHING FURTHER PROCEDURES rn (Issued October 28, 1993)
On July 2, 1993, Plorida Municipal Power Agency (FMPA) filed a complaint in Docket No. EL93-51-000 against Florida Power Light Company (Florid power)
Zn its complaint FMPA req ests A7 rn that the Commission find that certain "access limitations'f existing transmission service agreements (TSA) pursuant to which Florida Power provides transmission services on behalf of FMPA's members (municipals) ~ are unjust, unreasonable and unduly discriminatory under section 206 of the Federal Power Act (PPA). g/
More specifically, FMPA requests that the Commission direct Plorida Power to provide a particular kind of transmission service; ~,
"network service," + by FMPA is the bulk power agent for its 26 municipal utility members located throughout the State of Plorida.
7/
16 U.S.C. I 824e (1988).
We note that there is no industry-wide accepted definition of "network service;" ~ Policy Statement Regarding Good Faith Requests for Transmission Services and Responses by Transmitting Utilities Under Sections 211(a) and 213(a) of the Pederal Power Act, As Amended and Added by the Energy Policy Act of 1992, 58 Ped.
Reg.
38,964 (July 21, 1993),
ZZZ PERC Statutes and Regulations 5 30,975 at 30,863-64 (good faith policy statement)
Zn this case, FMPA defines the term 'network service" to mean transmission service under which Plorida Power would transmit power without assessing multiple charges for each receipt/delivery point combination.
(continued...)
Docket No. TX93-4-000 2
which FMPA means "a transmission arrangement that would enable
[FMPA] to distribute a given quantity of transmission network usage among various delivery points, without paying multiple monthly or yearly transmission charges." +/
Zn the event the Commission does not deem appropriate the relief FMPA requests under section 206, FMPA requests, in Docket No. TX93-4-000, that the Commission isoue an order requiring Florida Power to provide network service for FMPA and its
~ (...continued)
For example, under FMPA's definition of network service, if a power supplier had two resources (Unit A and Unit B, each with a capability of 100 MW) and two customers (Customer X and Customer Y, each with a load of 80 MW), the power supplier would pay for no more than 160 MW of transmission service, the maximum combined load of both customers.
FMPA argues that, under the Florida Power's consistent practice of offering point-to-point service, Florida Power might agree to transmit power from Units A and B to Customer X and Y, but Florida Power would make the power supplier pay for 320 MW of transmission service, ~,
80 MW of transmission service from Unit A to Customer X, 80 MW of transmission service from Unit B to Customer X, and 80 MW of transmission service from Unit A to Customer Y and 80 MW of transmission service from Unit B to Customer Y.
FMPA Complaint at 25.
FMPA's complaint, and its application for transmission services under sections 211 and 212, discussed ~gwere submitted as one pleading.
We clarify that )ust as a complaint cannot be filed as part of a motion to intervene, ~, ~,
Bntergy Services, Inc.,
52 FBRC 5 61,317 at 62,270 (1990),
a complaint should not be combined as part of an application for transmission services under section 211 and 212 of the FPA.
Zn this instance, since the Secretary separately docketed the complaint and application, we will not.re)ect those portions of FMPA's pleading that comprise its complaint and require refiling.
- However, we expect future applicants to follow the correct procedures.
The Commission will refer to those sections of the pleading that concern FMPA's request for transmission services under sections 211 and 212 as PMPA's Application and those sections that refer to FMPA's request under section 206 as FMPA's Complaint.
We will refer to the attachments to the pleading simply by their Appendix designation.
Docket No. TX93-4-000 3
members.
FMPA requests such an order pursuant to sections 211 and 212 of the FPA, Q/ as amended by the Energy Policy Act of 1992 (Energy Policy Act). f/
As explained below, we will grant FMPA's request for network transmission services in Docket No. TX93-4-000 and will establish further procedures to establish the rates, terms and conditions of such service.
We will address the matters raised in Docket No. EI93-51-000 in a subsequent order, if the matters raised therein are not ultimately mooted by our action in Docket No.
TX93-4-000.
FMPA and its members own interests in generating units which are used to meet a portion of the members'ower supply needs.
FMPA and its members also purchase partial requirements power and various interchange services (economy, short-term firm and emergency services) from Plorida Power, Florida Power Corporation (FPC) and Tampa Electric Company (Tampa).
Plorida Power and PPC also provide FMPA and its members with certain transmission services.
During the 1970's and 1980's, a number of Plorida cities instituted legal proceedings before federal courts and the Nuclear Regulatory Commission (NRC)
(and its predecessor, the Atomic Energy Commission, or AEC).
Those proceedings
- involved,
..LGfZZ~, antitrust claims against Florida Power.
In 1980, the Department of Justice, the NRC staff and Plorida Power entered into a settlement agreement as part of the St. Lucie nuclear licensing proceeding before the NRC.
As a result of the settlement, Plorida Power agreed to a license condition which required it to provide certain transmission services to utilities in Plorida (license conditions). ~
Plorida Power also agreed 16 U.S.C.A.
55 824$ -824k (West 1985
& Supp.
1993).
Pub. L. No. 102-486, 106 Stat.
2776 (1992).
These interests include a 75 MW interest in Florida Power's St. Lucie Nuclear Unit No.
2 (St. Lucie),
a 110 MW interest in the Orlando Utilities Commission's (OUC)
Stanton Energy Center Unit No.
1 (Stanton
- 1) and a 120 MW interest in the planned Stanton Energy Center No.
2 (Stanton
- 2).
FMPA has attached copies of the September 12, 1980 Joint Motion of Department of Justice, NRC Staff and Applicant tPlorida Power] to Approve and Authorize Implementation of Settlement Agreement, the appended (continued...)
PROP OF REFEREI'ICE AND INFORMATION CENTER DO NOT REMOVE Docket No. TX93-4-000 to support Florida legislation which enabled FMPA to issue revenue bonds.
As a result, FMPA has been able to participate in the ownership of interests in the noted generating units and other activities in connection with its role as a power supplier to its members.
Before finalizing its power supply arrangements, FMPA needed certain transmission agreements with Florida Power in place.
Accordingly, FMPA signed various transmission agreements (TSAs) with Florida Power. g/
In the late 1980's, FMPA began investigating the feasibility of integrating and coordinating its resources.
As a result of FMPA's unsuccessful efforts to form a Florida-wide power pool or a FMPA-Florida Power power pool, FMPA designed its Integrated Dispatch and Operations (IDO) Pro)ect through which FMPA hopes to
- dispatch, operate and plan power supply resources for participating members on an integrated basis. ~
In September,
- 1989, FMPA sent a proposed TSA and, concomitantly, a
formal request for network transmission service for the IDO Pro)ect to Florida Power.
FMPA and Florida Power negotiated and exchanged information over approximately two years, but the parties were unable to reach agreement concerning the terms of such transmission service. 'n December,
- 1991, FMPA instituted legal proceedings against Florida Power in Florida state court (removed by Florida Power to the federal district court for the Middle District of Florida) in which FMPA asserts claims to 9/(...continued)
Stipulation, contained in Appendix 21, and a copy of the St. Lucie Plant Unit No.
2 Construction Permit (No.
CPPR-144, Amendment No. 3), issued by the NRC on April 24, 1981 (~, the license conditions),
contained in Appendix 23.
g/
The TSAs that have been accepted for filing by the Commission are Rate Schedule FBRC No.
72 (St. Lucie Delivery Service Agreement),
dated June 27, 1983; Rate Schedule FBRC No.
92 (Stanton Transmission Service Agreement),
dated November 25, 1986; Rate Schedule FBRC No.
93 (Stanton Tri-City Transmission Service Agreement),
dated November 25, 1986; and Rate Schedule FBRC No.
109 (Restated and Revised Transmission Service Agreement),
dated October 2, 1990).
1Q/
FMPA Complaint at 1.
The municipals which receive their power supply from FMPA through the IDO Pro)ect are all located within or adjacent to Florida Power's territory, or are interconnected directly or indirectly with Florida Power's transmission system. ~ at 13-
Docket No. TX93-4-000 5
relief under contract law, Florida antitrust statutes
- and, as amended after removal, Federal antitrust laws.
11/
Recently, in Docket Nos.
ER93-465-000 and ER93-922-000, Florida Power filed a new transmission tariff which provides for point-to-point services and revised rates for virtually all of its requirements tariffs, transmission agreements and interchange agreements. ~/
Zn these filings, Florida Power completely restructured its wholesale power and transmission arrangements with utilities in Florida.
FMPA intervened in Docket No.
ER93-465-000 and filed various pleadings,
- alleging, among other things, that Florida Power's failure to include network service in its proposed transmission tariff violates the NRC license conditions. ~/
Florida Power responded that the proceeding in Docket No. ER93-465-000 was not the appropriate forum for FMPA's requests for relief.
FMPA, in turn, filed its requests under sections 206 and 211 that the Commission direct Florida Power to provide network transmission service.
The case is docketed as Florida Municipal Power Agency
- v. Florida Power and Light Co.,
Case No. 92-35-Civ-Orl-3A22; the trial is now scheduled to begin in January 1994.
FMPA states that it has also filed a petition with the NRC for a determination of its rights under the license conditions, in order "to leave no escape route for
[Florida Power's]
forum evasion tactics.'MPA Complaint at 18.
Florida Power
& Light Company, 64 FBRC $ 61,361 (1993).
~ g~ note 8 and accompanying text.
FMPA raises the same allegation in Docket No. BL93-51-000, as discussed below at notes 20-32 and accompanying text.
Docket ¹; TX93-4-000 6
N w
Trnm i
In its complaint, FMPA states that it now seeks prospective relief to enable it to implement its IDO Project, which FMPA estimates will achieve economies of approximately
$ 10 million annually. ~/
FMPA explains that it has created several power supply pro5ects to date and that it has made numerous requests for network transmission service in connection with its projects prior to the IDO Pro)ect.
However, according to FMPA, Florida Power has steadfastly refused to provide such service. ~/
FMPA states that it had made numerous requests for network service in the years preceding its request for such service in connection with the IDO Project, and that, whereas
"[n]etwork transmission service was desirable, but not essential,"
to earlier FMPA projects, network service "is essential to permitting FMPA to integrate its resources" as proposed in the IDO Pro)ect. ~
FMPA states that "in light of the time constraints on FMPA's economic resource commitments and the controlling necessity to obtain some form of timely transmission commitment from Florida Power, FMPA was forced to accept point-to-point service limitations in those TSAs."
FMPA states that the "open access" transmission tariff in Docket No. BR93-465-000 does nothing to alleviate its concerns because that transmission tariff provides only for point-to-point service.
1R/
- Thus, FMPA requests that the Commission, pursuant to its authority under section 206, find that the rates, terms and conditions under the existing TSAs and under the transmission tariff in Docket No. BR93-465-000 are un)ust and unreasonable because the agreements provide for only point-to-point transmission service.
n/
As noted above, we wi11 address the matters raised in FMPA's complaint in a subsequent order, in the event such matters are not mooted as a result of our action in this proceeding.
We have described the complaint, and Florida Power's
- answer, here merely to provide a more complete understanding of the matters raised by FMPA in its application for transmission services and Florida Power's response.
FMPA Complaint at 1.
~ at 1-4.
~ at 12 n.8.
1R/ ~ at 35-36.
~ at 26.
Docket No. TX93-4-000 7
The primary basis upon which FMPA requests relief under section 206 is its argument that Florida Power's refusal to provide network service violates Florida Power's obligations under the license conditions which, FMPA asserts, require Florida
- Power,
~in~ ~i
, to provide network transmission service.
~/
Zn support, FMPA argues that Article X of the license conditions requires Florida Power to provide transmission "between two or among more than two neighboring entities, or sections of a neighboring entity's system which are geographically separated, with which, now or in the future,
[Florida Power] is interconnected." ~/
FMPA argues that the "among" requirement in the preceding quoted phrase has been given a specific, well-established meaning by the AEC and the NRC; that is, to require "transmission from any member of a coordinating group to any other member of such group," where "[f]oreach coordinating group of entities there shall be a single transmission charge." ~/
FMPA argues that Florida Power, in agreeing to the license conditions, obligated itself, among other things, to provide network transmission service to its neighboring utility entities for a single charge. ~/
~/
FMPA argues that the license conditions 'establish the
'basic rules'overning transmission service which the United States government, and Florida Municipal governments, have considered necessary lest [Florida Power's]
abuse of its monopoly power create a situation inconsistent with the antitrust laws, and ~~p
~ at 43 (emphasis added).
~/ ~ at 18; ~~ Appendix 23 at 24.
FK?A Complaint at 8.
Xn support of its argument that the meaning of the 'among" requirement is well-established, FMPA cites, Q~ ~,
Zn the Matter of Louisiana Power and Light Company (Waterford Steam Generating Station Unit No. 3),
8 AEC 718,
- 733, 744 (Atomic Safety and Licensing Bd. 1974), ~~,
1 NRC 45 (i@y 1 M.
In further support of its interpretation, FK?A states that the AEC explained that the purpose of this among requirement "is to prevent multiple transmission charges for transmission of a contracted transmission entitlement among a coordinating group of two or more
!.'li (Cjtjlla dl151MII RQKRX 8 AEC at 737).
FK?A Complaint at 11.
FMPA states that it qualifies as a 'neighboring entity" under Article Z(c) of the
~
(continued...)
Docket No. TX93-4-000 8
However, according to FMPA, the existing TSAs fail to satisfy the "among" requirement since they only provide for transmission "between" pairs of delivery points (~, point-to-point transmission service). ~/
FMPA notes that Florida Power "effectively offer[s] transmission
'from A to B and from B to A,'ith further permutations for C, D, etc.," but complains that it does so "all for a separate charge." ~/
Also in support of its section 206 complaint, FMPA argues that the Commission clearly has the authority, "and indeed has a
duty," to enforce the license conditions in ensuring that transmission rates under the existing TSAs are )ust and reasonable and are consistent with the license conditions. ~/
Citing n
Bl n
, ~/
FMPA argues that "the Commission has consistently held'hat Antitrust Conditions must be considered where relevant to rate proceedings.'/
FMPA also argues that the Commission's jurisdiction to enforce the license conditions is concurrent with the )urisdiction of the
~ (...continued) license conditions. ~ Appendix 23 at 1-2.
Zn
- addition, FMPA notes that it is specifically named as a "neighboring entity" in Article X(d). ~ ~ at 27-28.
~/
FMPA notes that Florida Power has stated that the existing TSAs 'combine some features of point-to-point service with features of network service and thus provides FMPA with considerable flexibility." ~ FMPA Complaint at 31 n.25 (~~g Florida Power's April 27, 1993 Answer in Docket No. BR93-465-000, contained in Appendix 28 at 32).
FMPA responds that 'whether
[the existing TSAs] are marginally more flexible than absolutely rigid point-to-point service is not the issue.
The TSAs contain substantial point-to-point restrictions which preclude economic coordination and breach
[Florida Power's]
license conditions."
FMPA Complaint at 31 n.25.
~ at 27.
~ at 39-40.
49 FBRC
$ 61, 116 at 61, 497 (1989) (~) (finding that nuclear licensing conditions agreed to by Pacific Gas and Blectric Company (the "Stanislaus Commitments' were within the Commission's purview).
2k/
FMPA Complaint at 42.
Docket Ho. TX93-4-000 9
courts and the NRC.
~2 /
According to FMPA, although the FERC is not required to enforce a commitment entered into before a
"sister agency,"
FMPA's members are third-party beneficiaries to the 1980 settlement and thus to the license conditions. ~/
Moreover, according to FMPA, the Commission should enforce Florida Power's license conditions because to do so would further the competitive objectives of the Energy Policy Act 'and would give effect to national policy embodied in other statutes that promote competition beneficial to the public interest. ~/
- Finally, FMPA argues that the license conditions "must
. be filed pursuant to FPA 5 205(c) since thefy]
. affect Florida Power's )urisdictional rate schedules." ~/
Also in support of its request for relief under section 206, FNPA argues that the point-to-point restrictions in the existing TSAs are unreasonable "because they prevent efficient coordination and integration among
[transmission dependent utilities], unnecessarily increase electricity costs, and impair competition." ~
More specifically, FMPA argues that the rates under the existing TSAs are unduly discriminatory and anticompetitive because FMPA is required to pay a postage stamp rate reflecting a share of the total cost of Florida Power's transmission grid for each receipt and delivery point combination, when Florida Power does not incur such multiple
~/ ~ at 50-51.
~ at 37-39.
FMPA argues that, in fact, the Commission has the authority to directly enforce Florida Power's agreement to abide by the license conditions. ~ at 45-48 (~~, ~1~; ~, United States acting by and through the Western Area Power Administration v. Pacific Gas and Blectric Company, 714 py..
(.. al.
9)
(finding that, where the Department of Justice dropped its antitrust investigation of Pacific Gas and Blectric Company (PG&8) in exchange for PG&B's agreement to accept the Stanislaus Commitments as conditions attached to its Diablo Canyon nuclear power license,,
neighboring entities to whom PG&B was obligated to provide transmission services under the Stanislaus Commitments were entitled to sue as third-party beneficiaries of the contract if state law permitted; Wl 1 6);
F.Supp. at 1043, 1047-50, 1053-54.
31/
FMPA Complaint at 39-44.
22/ ~ at 48.
~ at 52.
Docket No. TX93-4-000 10 costs to serve its native load customers from multiple resources.
FMPA also argues that point-to-point transmission service results in an accumulation of transmission charges such that the price is "many times in excess of the lowest reasonable cost-based rates,"
contrary to recent Commission precedent. ~/
FMPA also argues that such discrimination gives Florida Power a substantial competitive advantage in bulk power markets, impairs FMPA's ability to compete with Florida Power and deprives new entrants of a competitive market for their generation. ~
FMPA argues that nothing in the existing TSAs precludes Commission'modification or replacement of those agreements.
In
- support, FMPA states that the TSAs contain a "Unilateral Changes and Modifications" clause which expressly reserves to both Florida Power and FMPA the right to request changes to the terms, conditions and charges of the TSA. ~/
In any event, FMPA
- notes, the Commission retains its authority under section 206 of Q/ ~ at 27-31, 55-61.
~/ ~ at 57.
~/
In support, FMPA cites Public Service Company of Colorado; 62 FERC 5 61,013 (1993),
and Public Service Blectric S Gas
- Company, 63 FERC
$ 61,200 (1993),
ggggy4
~~g, No. 93-1411 (D.C. Cir. filed June 23, 1993).
FMPA Complaint at 56, 58, 62-65.
FMPA argues that competitive bulk markets can be developed only if transmission dependent utilities have access to transmission systems of the surrounding transmission owners on an equal basis, both in terms of price and quality, as that en)oyed by the transmission owners.
~ at 63-65 (~~~lg, ~~ ~, Public Service Company of Indiana, Opinion No. 349, 51 FBRC $ 61,367 i ~. li i I
61,260, 53 FERC
$ 61, 131 (1990),
Northern Indiana Public Service Company v.
- FERC, 954 F.2d 736 (D.C. Cir.
1992) (~)).
FMPA Complaint at 11-12.
FMPA acknowledges that there is a limitation on its claimed section 206 rights in Rate Schedule 109, gg~ n.9 (which purports to limit until May 1, 1994 the grounds upon which FMPA may unilaterally seek modification), but notes that even this TSA contains two broad exceptions; ~, that FMPA may apply for a rate change and/or for a superseding or replacement TSA, at any time. ~ at 67-68.
Docket No. TX93-4-000 11 the FPA to replace rates that are contrary to the public interest.
397
,2.
FMP '
li i
r 21 an 212 FMPA states that, although it believes the Commission has
'ample authority" to direct 'Florida Power to provide network transmission service for FMPA's ZDO Project (without imposing multiple charges for transmission among multiple points) under section 206, ~/
FMPA requests an order requiring network service under sections 211 and 212 of the
- FPA, as amended by the Energy Policy Act.
FMPA argues that such an order would be in the public interest because, ~~ ~, Florida Power would be required to provide transmission service in accordance with its contractual obligations under the license conditions, consistent with antitrust laws.
FMPA also argues that such an order would allow FMPA to integrate its generating resources in an economic and efficient manner and would permit. real competition without handicapping Florida Power's competitors. ~
FMPA argues that it has met the prerequisites under sections 211 and 212 for an order requiring wheeling.
FMPA states that it and its members are "electric utilities" and that Florida Power falls within the definition of a "transmitting utility."~/
FMPA also states that it has made a formal request for transmission service more than 60 days prior to filing its application under sections 211 and 212, as required by section 211.
Specifically, FMPA explains that it:
(1) requested the transmission service in writing on September 8,
1989 and, over the following two years, exchanged information and attempted to negotiate with Florida Power; (2) instituted legal proceedings against Florida Power and submitted numerous pleadings requesting network service in the context of that legal action; 5QJ and (3) submitted another written request to Florida Power for network service on March 25.,
1993. ~
~ at 66-70.
PMPA Application at 70.
~ at 70-72.
Qgg 16 U.S.C.
55 796(22) and (24)
(West Supp.
1993) for definitions of 'electric utility'nd "transmitting utility,'espectively.
Qgg gggrg note 11.
FMPA Application at 72-73.
Docket No; TX93-4-000 12
. FMPA argues that no reliability i'ssues would be invoked by Florida Power's provision of network service to FMPA's members.
FMPA states that although Florida Power has the burden to show that the transmission service ordered would "unreasonably impair the continued reliability of electric systems affected by the order" under section 211(b), Plorida Power's actions "make it clear that any reliability argument it now puts forward is a red herring." ~/
In support of this assertion, FMPA references, Plorida Power's March 29, 1993 letter to FMPA, stating that "the dispute in this case is not about service[;
t]he existing contracts offer transmission service that would permit FMPA's member Cities, if they choose, to operate their generating resources as a 'network.'" ~
FMPA also references a statement of a Florida Power witness (Plorida Power's Manager of Inter-Utility Relations) during negotiations after the 1989 request for network service in which the witness made a counteroffer which:
(i) contained terms and conditions that would result in the same physical operation of FMPA's units as FMPA's proposal; and (ii) could be accommodated as long as FMPA informed Florida Power of the maximum transmission demands at each delivery point. ~
PMPA notes that the Plorida Power witness characterized Plorida Power's proposed counteroffer as "workable operationally,'nd thus negated the need for Plorida Power personnel to evaluate the impact on Plorida Power's system prior to presenting the counteroffer to FK?A. ~
FMPA adds that it has been willing to discuss with Plorida Power any legitimate reliability concerns, and remains willing to do so.
- Pinally, PMPA argues that even if Florida Power could demonstrate any impact on the reliability of its transmission
- system, Florida Power must be held accountable for failing to properly plan its transmission system in a manner that would
~ at 73.
~ at 74 (~~g a letter dated March 29, 1993 of Plorida Power's Counsel; ~ Appendix 35 at 1).
PMPA Application at 74-75 (~~g a letter dated April 27, 1990 of William Locke, Jr.; ~ Appendix 36, Bxhibit B; and affidavit dated May 14, 1992 of William Locke, Jr.; ~ Appendix 47 at 20-23).
PMPA Application at 75 (~~ a deposition of William Locke, Jr.; ~ Appendix 9 at 107-11).
PK?A Application at 76.
Docket ¹. TX93-4-000 13 allow it to reliably meet its obligation to provide network service under the license conditions. 59/
FMPA argues that a Commission order under section 211 requiring network transmission service would not be barred due to any contract or rate schedule under which Florida Power provides power services to FMPA or its members.
FMPA states that Florida Power sells partial requirements gower to three of its member cities, but states that these contracts do not require Florida Power to provide any energy that FMPA does not schedule.
FMPA notes that the rate schedules also specify contract demands and that such demands can be reduced over time.
FMPA states
- that, given that Florida Power is only required to provide FMPA with energy that FMPA chooses to schedule (and, then, within the limits of contract demands specified at that time, which can be reduced over time), it is "extremely unlikely that Section 211(c)(2)(A) will ever come into play --
PMPA would have to seek to use network transmission to replace energy it had a1x~y.
scheduled.'
Also in support of this argument, FMPA states that it is not a party to any of the rate schedules under which Plorida Power provides power services to FMPA's members (PMPA notes that Florida Power insisted on contracting directly with the municipals). M/
FMPA argues that nothing in the language of section 211 bars the Commission from ordering network transmission service, rather than point-to-point transmission service.
To the contrary, FMPA argues that a Commission order which denied FMPA transmission access on a basis not equal to Florida Power's own access to its In support, PMPA argues that Article X(c) of the license conditions requires Florida Power to keep neighboring entities informed of its transmission planning and construction programs and to include in those plans transmission capacity sufficient to meet to needs of the neighboring entities, sub)ect to adequate notice by the neighboring entities and contracts to reimburse Plorida Power. ~ Appendix 23 at 26.
FMPA Application at 83; ~~ ~ at 82-84.
PMPA argues that this interpretation is consistent with the competitive goals of sections 211 and 212.
In
- addition, PMPA argues that section 211(c) (2) (A) "could never pose a complete or permanent bar to a network transmission order;
[e]ven assuming (incorrectly) that it could limit PMPA's use of Section 211 transmission, such transmission would be unavailable only during a specified period and for specified purposes.'
at 84 (footnote omitted).
~ at 84 n.83.
0
~
Docket No. TX93-4-000 14 transmission system would be inconsistent with the language and "pro-competitive" intent of sections 211 and 212.
FMPA argues that the competitive goals of sections 211 and 212 also would be furthered because an order requiring Florida Power to provide network service in this instance would promote efficiencies in transmission and generation markets, thus allowing FMPA to reduce its operating costs by integrating its generation resources.
2X/
FMPA suggests several alternative
- remedies, including that the Commission:
(1) require Florida Power to modify the transmission tariffs, if refiled, in Docket No. ER93-465-000 to provide for network transmission service; (2) modify the existing TSAs for transmission service to FMPA's members to provide for network service (or replace them with superseding TSAs with point-to-point limitations removed);
and (3) pursuant to the Commission's authority under sections 211 and 212, order Florida Power to provide a new transmission service priced on a different basis than point-to-point service.
Notice of FMPA's complaint and section 211 application was published in the Federal Register, M/ with comments due on or before August 23, 1993.
B.
Florida Power states that although it believes it has "legitimate rights" under the existing TSAs, it is willing to allow the existing TSAs to be superseded by new arrangements established by a final court order under sections 211 and 212 of the FPA. ~
In any event, Florida Power argues, the Commission should re$ ect FMPA's complaint "because the existing TSAs, which FMPA freely executed, cannot be shown to be unjust and unreasonable, a condition precedent to. a Section 206 action." M/
Moreover, Florida Power states that section 206 does not permit FMPA to escape its existing contractual obligations because it has decided that'it wants different services than it contracted
~ at 84-86.
58 Fed.
Reg.
38,123 (1993).
Originally, the comment due date was August 9, 1993.
On July 22, 1993, Florida Power requested an extension of time until August 23, 1993 to respond to FMPA's complaint.
Florida Power stated that FMPA's counsel represented that FMPA did not oppose this request.
By notice issued July 23, 1993, the Secretary granted this request.
Florida Power Answer at 2, 62.
~ at 2-3.
Docket No. TX93-4-000 15 to purchase, and this fact does not change just because Florida Power is subject to NRC license conditions -- particularly license conditions that were already in effect when FMPA negotiated and executed the existing contracts.
57/
Florida Power also argues that FMPA's request for an order directing Florida Power to provide network service under section 211 should be re)ected because FMPA has not made a proper good faith
- request, as section 211 requires.
w Florida Power argues that FMPA's section 206 complaint should be dismissed because:
(1) the license conditions do not require Florida Power to provide network service for a single charge; (2) the existing TSAs, which were negotiated after and, therefore, implement the license conditions, were entered into willinglyby FMPA as deliberate business decisions; (3) section 206 does not permit FMPA to reform the existing TSAs merely because it has since embarked on the EDO Pro)ect and decided, after the fact, that it no longer wishes to purchase the services it contracted for; (4) the TSAs are )ust and reasonable for the services they were designed to provide, and in fact offer PMPA considerable flexibilityto coordinate its members'oads and resources and to take full advantage of dispatch efficiencies; and (5) the TSAs are not unduly discriminatory and have caused FMPA no competi'tive injury.
With respect to the license conditions, Florida Power argues that the "between
. or among" language upon which FMPA relies is not NRC boilerplate, does not have one uniform meaning in all of the various NRC license conditions in which it is found, and does not require network service at a single charge.
Xn Florida Power's view, that language merely requires it to deliver power between or among several systems
-- which Florida Power does under the existing TSAs. ~
Zn fact, according to Florida h ~11 dent y
th
- relies, which contain "between...
or among" language, also contain a separate
- sentence, absent from Florida Power's license conditions, which expressly requires that there be a single charge for transmission among coordinating groups.
As a result, Florida Power contends that:
(1) the NRC recognized that
'among,'y itself, did not convey the concept of a single transmission charge; and (2) the negotiators of FPL's license conditions, who FMPA itself states knew and understood the precedent concerning the wording of Louisiana Power's license conditions, deliberately omitted the "single charge" language za~ at 42-44.
1
Docket No. TX93-4-000 16 from Florida Power's license conditions because they did not 11 ht p
h OUJI1$
~/
For all of these
- reasons, Florida Power contends that the license conditions do not require network service at a single
- charge, and that FMPA's contrary claims must be rejected.
With respect to the TSAs, Florida Power states that they were negotiated by competent and experienced utility personnel and counsel for each side, were the product of give and take, and implemented the license conditions by means which were acceptable (if not optimal) to both parties.
As a result, FMPA made a
conscious "business decision" to sign the TSAs, rather than attempt to seek recourse under the license conditions before the NRC or this Commission. ~
- Indeed, Florida Power notes that on deposition in the pending federal district court litigation, FMPA acknowledged having made a calculated determination that it was more advantageous to accept the benefits of Florida Power's service agreements than to litigate, ~/ given that in the compromises ironed out by the negotiators, FMPA "obtained as least as much in concessions from Florida Power" ~ as it would have achieved if it had sought to enforce the license conditions or had required Florida Power to file an unsigned contract unilaterally with this Commission. ~
- Further, Florida Power contends that FMPA's central problem with the existing TSAs is not that their terms and conditions are unjust and unreasonable, but rather that FMPA simply wants different services than those which the TSAs were designed to provide, now that FMPA has embarked on the IDO Project, which completely revamps FMPA's transmission arrangements. ~
According to Florida Power,
- however, the fact that FMPA no longer wishes to purchase the services it contracted for in the TSAs does not make the TSAs unjust and unreasonable for the purposes for which they were intended, and does not permit FMPA to evade its contractual obligations under them. ~
In addition, Florida Power contends that the TSAs are just and reasonable for the services they were designed to provide, QJ ~ at 10-11, 44-47; gag ~ @gag, note 22.
~ at 20-22; m alga FMPA Complaint at 10-11.
Florida Power Answer at 20-22 and Tabs G, D.
~ at 40.
~ at 21.
~ at 17.
~ at 3, 18.
Docket No. TX93-4-000 17 and in fact offer FMPA considerable flexibilityto coordinate its members'oads and resources and to take full advantage of dispatch efficiencies.
In support of its assertion, Florida Power notes that its All-Requirements Transmission Service Agreement ~/ with FMPA, which terminates in the year 2022, permits FMPA to:
(1) integrate existing and future generation entitlements and loads of the applicable members and to incorporate those members generation and loads'into the Orlando Utilities Commission control area; (2) replace its existing resources with lower cost generation on an hourly basis, at no additional charge; (3) substitute new generation for existing generation on ninety days'otice without additional charge; (4) add new generating resources to meet load growth; (5) designate certain resources for peaking use and to vary transmission payments for those generators on a monthly basis; (6) redesignate contract demands associated with its peaking resources from year to year; (7) use its interchange agreements with other utilities to buy and sell capacity and energy on behalf of the All-Requirements cities; and (8) obligate Florida Power to provide transmission service for any excess demand on the system. ~
Further, Florida Power notes that its St. Lucie-Delivery Service Agreement, ~/ Stanton Transmission Service Agreement, ~
Stanton Tri-City Transmission Service Agreement, ZQJ and
~/
All-Requirements Transmission Service Agreement, FBRC Blectric Rate Schedule No. 84, as amended by the Restated and Revised Transmission Service Agreement, FBRC Blectric Rate Schedule No. 109.
Florida Power Answer at 12-14.
FERC Electric Rate Schedule No. 72.
The St. Lucie Delivery Service Agreement terminates on the earlier of the final retirement of the St. Lucie Units No.
1 and 2
or the latest stated maturity date of any of the original bonds issued by FMPA to finance its ownership interest in Unit No. 2. ~ ~ 18 C.F.R.
5 35.15 (1993).
FBRC Blectric Rate Schedule No.
92 (Nov. 25, 1986).
The Stanton Transmission Service Agreement terminates on the earlier of Stanton Unit No. 1's retirement or December 31, 2022.
Qgf;~ 18 C.F.R.
5 35.15 (1993).
29/
FERC Blectric Rate Schedule No.
93 (Nov. 25, 1986).
The Stanton Tri-City Transmission Service Agreement terminates on the earlier of Stanton Unit No. 1's retirement or December 31, 2022. ~ ~ 18 C.F.R.
5
- 35. 15 (1993).
Docket No. TX93-4-000 18 Agreement to Provide Specified Transmission Service
~7 / all provide FMPA additional flexibilityto redesignate delivery points, obtain replacement transmission service when its generating entitlements are wholly or partially unavailable, change its contract
- demand, and engage in transactions which enable FMPA to achieve hour-to-hour dispatch efficiencies.
Q7 /
For all these
- reasons, Florida Power contends that FMPA is plainly wrong in asserting that Florida Power provides it nothing but inflexible, point-to-point service. Q/
Moreover, given the flexibilitythat Florida Power sees in the TSAs, Florida Power views the instant dispute as one involving price, not service,
- since, according to Florida Power, the existing contracts offer transmission service that would permit FMPA's member cities to operate their generating resources as a network. ~/
- Zndeed, Florida Power contends that what FMPA actually seeks here is:
(1) the ability to purchase transmission service on an hourly basis, without limitation; (2) the unfettered right to first priority use of Florida Power's transmission system (even above Florida Power);
and (3) the ability to dispatch its resources at will, all with no reservation charges for firm capacity. 25/
Zn fact, according to Florida Power, FMPA's own feasibility studies for the ZDO FBRC Blectric Rate Schedule No.
86 (Apr. 24, 1986).
The Agreement to Provide Specified Transmission Services has a perpetual term sub)ect to a two-year cancellation notice provision.
~7 /
Florida Power Answer at 14-16.
~ at 12-14.
gap Florida Power's Third Motion for Summary Judgment and counsel for Florida Power's March 29, 1993 letter to counsel for FMPA, attached as Appendices 46 and 35 to FMPA's Complaint.
Florida Power Answer at 24-25 and 50, n.57.
Zn this context, Florida Power also argues (gag;~ Otter Tail Power Ccepany v. United States, 410 U.S. 366, 375 (1973); Richmond Power E Light Company v.
- FBRC, 574 F.2d 610 (D.C. Cir. 1978);
New York State Blectric &
Gas Corporation v.
- FBRC, 638 F.2d 388 (2d Cir. 1980),
81 d
1 fd Light Company v.
- FBRC, 660 F.2d 668, 673 (5th Cir.
98).~.9..6())
I h
Commission lacks authority under section 206 to take Florida Power's existing transmission service and transform it into a different or additional service.
Florida Power Answer at 55-58.
Docket No. TX93-4-000 19 Project show that unless FMPA is able to buy transmission service to integrate its generation and load without payment of any reservation charges
-- ~, buy firm service priced as hourly non-firm service -- the IDO Project does not produce economic benefits.
~7 /
For all of these
- reasons, Florida Power reiterates that FMPA is merely seeking to "toss aside existing contracts because FMPA now wishes to pursue an IDO Project that FMPA believes is not compatible with the contracts it,negotiated and signed before the IDO Project was created." ~7/
Florida Power argues, however, that "[s]ection 206 does not provide a mechanism for purchasers to escape their contractual obligations because they are no longer happy with the economic consequences of their contracts." ~/
For these reasons as well, Florida Power contends that FMPA's section 206 complaint must be rejected.
With respect to FMPA's discrimination and competition claims, Florida Power argues that the Commission has uniformly held, under circumstances quite similar to those present
- here, that point-to-point transmission pricing is not unjust, unreasonable or unduly discriminatory.
2QJ Moreover, Florida Power contends that no plausible argument can be made that it gained a competitive advantage under the existing TSAs.
- Indeed, according to Florida Power, in the last ten years, FMPA has successfully implemented the All-Requirements Project, the Stanton Project, the Tri-City Project and the St. Lucie Project, and as a result of these projects, Florida Power's share of energy sales to FMPA's members in Florida Power's service territory has declined from approximately 50 percent in 1981 to less than 15 percent.
According to Florida Power, these facts show that FMPA has been able to compete very effectively with Florida'Power.
9QJ For these reasons as well, Florida Power urges that FMPA's section 206 complaint be rejected.
Finally, Florida Power. argues that it need 'not file the license conditions with the Commission, since:
(1) the existing TSAs govern Florida Power's transactions with FMPA and its M. at 24-26.
~ at 34.
~ at 31.
29@ ~ at 51-55 (~~~~ Wisconsin Blectric Power Company, 46 FERC
$ 61,109, ~~ f~~, 48 FBRC
$ 61,247 (1989);
- PRE, aggxg Entergy Services, Inc.,
63 FBRC 5 61,205 at 61,147 (1993);
and Northeast Utilities Service
- Company, 62 FERC
$ 61,294 (1993)).
~ at 22-23, 50.
Docket No. TX93-4-000 20
- members, not the li.cense conditions; and (2)
FMPA has attached a
copy of the license conditions to its complaint. Jl/
2.
w A l With respect to the application under sections 211 and 212, Florida Power states that it has consistently been and remains Florida Power's posi.tion that it vill negotiate to replace the existing TSAs with a single agreement providing comprehensively a
"form of 'network'ervice" so long as (1) Florida Power's system reliability i.s not )eopardized; (2) Plorida Power receives fair compensation and its other customers do not subsidize FMPA; and (3) the arrangement allows Plorida Power to prudently plan and operate its transmission system. 3'lorida Power states that because it believes sections 211 and 212 provide a process for establishing rates, terms and conditions of transmission service for PMPA that are consistent with such ob)ectives, Plorida Power will respond to a specific good faith request for network service and will provide servi.ce pursuant to sections 211 and 212.
Plorida Power argues that FMPA's application for wheeli.ng under section 211 raises three threshold issues:
(1) whether transmissi.on service ordered under section 211 includes network
- service, and how network servi.ce should be defined; (2) whether section 211 can be used to override existing valid contracts for transmission service; and (3) what are the minimum components of a good faith request for transmission service 'and whether FMPA has met those standards. ~
With respect to the first issue, Florida Power states that it does not contest the Corned.ssion's determination in its policy statement concerning good faith requests that section 211 encompasses requests for "network'ype transmission services."
Florida Power states that the issues that remain to be decided under sections 211 and 212, assuming Plorida Power and FMPA are unable to agree, are what constitute the rates, terms and conditions of 'a 'network'ype service" that meet the reliability and public interest standards of section
- 211, and the rate standards of section 212. M/
~ at 58-61.
~ at 2.
~ at 61.
~ at 62.
m/
za.
Docket No. TX93-4-000 21 With respect to the second issue, as discussed above, ~/
Florida Power maintains that it has rights under its existing TSAs and states that it does not believe that section 211 overrides existing transmission service agreements.
- However, Florida Power argues that its willingness to allow the existing TSAs to be superseded by new arrangements established pursuant to sections 211 and 212 should moot the need for the Commission to act, on FMPA's complaint. ~
With respect to the third issue, Florida Power states
- that, although it is prepared to provide expanded transmission services to FMPA pursuant to an order under sections 211 and 212, Florida Power does not believe FMPA's request for transmission service satisfies the minimum requirements of a good faith request that is a prerequisite to the exercise of the Commission's authority under sections 211 and 212. M/
Therefore, Florida Power
- argues, FMPA's section 211 request should be re)ected at this time.
In support of this argument, Florida Power alleges that FMPA has presented different versions of its IDO Pro)ect to Florida Power and has been consistently vague about the parameters of the service it desires. ~
Florida Power also alleges that, to date, FMPA has not been willing to provide much of the critical information Florida Power needs in order to evaluate and respond to FMPA's request for network transmission
- service, and,
- thus, has presented Florida Power with a "moving target." ~/
Specifically, Florida Power states that it requires the following information:
(1)
A designation of each municipal system to be covered by the requested service and ten-year projections of peak loads served by each delivery point for the relevant municipals.
gap gggr~ note 55.
Florida Power Answer at 2, 5, 62.
While Florida Power's answer is not entirely clear, ~ at 5, it appears that Florida Power may be willing to voluntarily agree to supersede the existing TSAs with the transmission services ordered by the Commission under sections 211 and 212.
Accordingly, we intend to hold Docket No. BL93-51-000 in abeyance pending the outcome here.
~ at 61, 63-67.
QJ ~ at 3-4.
Rgb ~ at 5.
Docket No. TX93-4-000 22 (2)
(3)
A designation of each FMPA generating resource that FMPA will or may utilize to serve the loads. in the municipal systems described in (1) above, and the maximum quantity of power available to FMPA from each such resource, as well as the information set forth in a questionnaire attached to Florida Power's answer (which asks for information concerning heat rate, fuel
- type, maintenance schedules, real and reactive power capabilities of each unit and interchange schedules for each participating member by existing and future
- contract, expected interchange and maximum and minimum imports). [~/]
A designation of all planned or projected FMPA generating resource additions (and/or substitutions) for the next ten years, the size and location of each
- resource, and the characteristics of each resource
(~, baseload, intermediate and peaking);
additionally, the information requested in (2) above for such planned resources (to the extent it is available).
(4)
Any studies or other data showing FMPA's anticipated
- dispatch, or use of, existing and planned generating resources, including anticipated retirements or long-term shutdown options; additionally, any studies or other data showing the impact of FMPA's proposal on Florida Power's transmission system.
(5)
A model of each participating FMPA member's transmission system in a specified computer format with information concerning transmission line impedances, compensation
- devices, auto transformers and load pro)ections and power factor (leading and lagging) for each substation.
[22/]
Finally, Florida Power requests that the Commission require FMPA 'to state whether it has a ~~ transaction in mind to which it is prepared to commit in lieu of the Existing TSAs,"
~ because if FMPA is not willing to abide by the Commission's determination under section 211, or may change its plans about implementing the XDO Pro)ect, "the Commission should have the ability to consider whether FMPA has made a ~ ~,
good faith request for transmission service that warrants the ggg Attachment 2 to Florida Power Answer, at 1-8.
2?J ~ at 4-5.
~ at 5.
Docket No. TX93-4-000 23 initiation of a proceeding under Section 211." 94/
In support of this request, Florida Power states that, in the past, FMPA typically has "played cat and mouse" with Florida Power; ~/
that is, FMPA would request a particular transmission service of Florida Power, negotiate and enter into an agreement with Florida
- Power, and then change its mind about going forward with the project that was the subject of the agreement at issue.
Florida Power argues that, to the extent FMPA has a specific project in mind for which it desires network service, FMPA should provide information in sufficient detail to enable Florida Power to develop a transmission service proposal which will fairly compensate Florida Power.
Florida Power states that if FMPA is dissatisfied with Florida Power's proposal, 'it can at that time file a request for an order under section 211. ~/
On September 9, 1993, FMPA filed a motion for leave to file opposition to Florida Power's answer two days out of time and, separately, a response to Florida Power's answer.
FMPA explains that it was unable to meet the September 7,
1993 deadline "[d]ue to the scope of the tasks involved in preparing" its response to Florida Power's answer (including the preparation of an affidavit and supporting materials),
as well as pleadings in Florida Power's "open access" transmission tariff filing (Docket No.
ER93-465-000) and in the federal district court action. 92/
In its response to Florida Power's arguments regarding FMPA's request for relief under section 206, FMPA reiterates its arguments that, ~~ ~, Florida Power is obligated to provide network transmission service under the license conditions and,-
therefore, is evading its contractual obligations by failing to file with the Cemnission a transmission agreement that will implement this obligation. ~
In addition, in responding to Florida Power's argument that FMPA has effectively waived the right to enforce the license conditions, FMPA argues that it "did not agree to any waiver or extinguishment of its Antitrust Condition rights to network transmission. '
In support,
~at 6.
~ at 66.
~ at 5-6) 66-67.
92/
FMPA Motion for Leave to File Out of Time at 2; ~
gggZa note 11.
FMPA Response at 2, 19-21.
~ at 22.
Docket No. TX93-4-000 24 FMPA argues, among other things, that "the TSAs cannot have been intended to replace the Antitrust Conditions because they do not purport (either as a group or individually) to set forth the totality of the transmission Florida Power is obligated to sell to FMPA." ~/
Also in support, FMPA rejects Florida Power's argument that the existing TSAs do not contain broad waiver clauses that provide a basis for the modification or replacement of the existing TSAs. ~/
In response to Florida Power's stated willingness to allow the existing TSAs to be superseded by new arrangements that will provide some form of network service under sections 211 and 212,
~/
FMPA notes that Florida Power has not yet filed any such arrangement and argues that, yet again, Florida Po~er is evading its obligations to provide network transmission on behalf of FMPA's members.
193/
FMPA urges the Commission to recognize Florida Power's assertion that it has consistently been willing to negotiate a form of network service "for what it is -- a sham designed to evade FBRC )urisdiction and further delay provision of network service.'
FMPA reiterates that it and its member cities have repeatedly requested network service since the license conditions became effective, and that Florida Power has consistently refused. ~
FMPA argues that, rather than
~/ ~ at 24 (footnote omitted); gap ~ ~ at 33.
~/ ~ at 25-26, 29-31.
Zn support, FMPA argues, ~~
1 td 'i misplaced because Florida Power "ignores the [~~
~] court's primary holding that to the extent PG&E's requirements contracts provided for service modifications (through alternate power clauses),
PG&B had been obligated to make such modifications to implement its license conditions.'
at 29.
FMPA argues that certain clauses in the existing TSAs, like h
1 p
1 t~,
'p "escape clauses[s]" requiring [Florida Power] to agree to service modifications that implement the Antitrust Ch t RL (cilME~.
F.Supp. at 1052).
~ ~ gggyg notes 55, 82.
~
FMPA Response at 2-10.
~ ~ at 4 (~~g Florida Power Answer at 2).
~
FMPA Response at 19, 31-32.
In support, FMPA provides, as an attachment to its Response, an affidavit of its consultant who participated in negotiations with Florida (continued...)
Docket No. TX93-4-000 25 accept Florida Power's "transparent evasive maneuver and invitation to further interminable delay,"
~1 / the Commission should hold Florida Power to its offer to provide such service and summarily direct Florida Power to file a transmission tariff or rate schedule for network service.
FMPA states
- that, once Florida Power makes such a filing, the Commission can focus on "the real issue for decision by this Commission:
the rates, terms and conditions for network service." ~/
FMPA also argues that Florida Power's claim that FMPA has not provided sufficient information upon which to analyze FMPA's request for network service is "preposterous," ~ and "reflects at best a sudden case of amnesia." ~
In
- support, FMPA states that it has provided:
detailed information over the two years of negotiations (following FMPA's formal request for network service in 1989); the studies Florida Power
~ (...continued)
Power.
The consultant states that, on September 8, 1989, FMPA formalized its previous informal discussions with Florida Power with respect to the IDO Pro)ect.
The consultant also states that the written request, which included FMPA's proposed rate schedule, was followed by months of meetings, several Florida Power requests for information to enable Florida Power to study the 'proposal, and FMPA's responses to those requests providing the detailed information requested and offering to provide more if needed.
FMPA states that the consultant's affidavit shows that "[d]espite months of study and meetings, and numerous significant concessions by FMPA in an attempt to be responsive to [Florida Power's]
- concerns,
[Florida Power]
never, in two years of negotiations, budged from its refusal to sell network service." ~ at 7 (~~g Affidavit of Albert Malms5o; gap Appendix A to FMPA Response at 4-11).
Also in support, FMPA submits a Florida Power motion filed in the federal district court proceeding in which Florida Power argued that FMPA cannot claim that it was ever led to believe that Florida Power would provide network service because, for more than five years prior to the filing of FMPA's complaint in the district
- court,
'PPL's responses to requests for network service were not merely 'no,'ut 'hell no.'"
gag, Attachment 4
to PK?A Response at 10.
~
FMPA Response at 5.
~~at 6.
~ ~ at 10.
192/ ~
Docket No. TX93-4-000 26 performed concerning the impact of the IDO Project on Florida Power's transmission system; and "enormous amounts of information" in connection with the pending court case.
~1 /
Moreover, according to FMPA, Florida Power's own documents, affidavits and depositions "demonstrat[ej
. that [Florida Power]
knew precisely what FMPA was requesting and could analyze that request to death." ~/
FMPA argues that there is no merit to Florida Power's contention that FMPA constantly changed its proposal and thus presented a 'moving target," because any changes to FMPA's proposal reflect PMPA's efforts to respond to Florida Power's concerns in order to reach mutually agreeable terms and conditions. ~
- Finally, FMPA states that it has provided or offered to provide all of the information which Florida Power now claims it requires to evaluate FMPA's request for network service.
Specifically, according to FMPA, between 1989 and 1991, the following information exchanges occurred:
(1) in a September 8,
1989 letter to Florida Power, FMPA submitted a detailed proposed contract which contained, among other things, a list of the specific systems involved, provisions for identifying specific resources to be transmitted, provisions for adding new resources, provisions for identifying specific delivery points, and provisions for adding new system delivery points; (2) at an October 13, 1989 meeting, Florida Power stated that it would evaluate FMPA's proposal using the Florida Coordinating Group (FCG) transmission model and data base, and requested additional data needed to perform the analysis; (3) in a November 2, 1989 letter to Florida Power, FMPA provided the information requested in (2) above, for all IDO systems interconnected to Florida Power, including:
pro)ected monthly loads for 1990; projected seasonal peak and energy requirements for ten years beginning in 1990; a list of and information on the specific generating units and resources to be transmitted (including name, location, type of unit, fuel type, in-service date, retirement date, summer and winter net capability, and method of fuel transportation);
information on resources expected to be used for the next ten years; pro)ected loads on
~ zc.
111/ ~
~ ~ at 12, 16-17; ~ gggxa note 90.
Docket No. TX93-4-000 27 (6)
(8)
(9)
Florida Power system interconnections for ten years (including normal conditions, largest internal generating unit out, all internal resources off line and all internal resources on line at full output during minimum loading conditions);
and projected operation of each resource during summer and winter peak hours for next ten years; in November,
- 1989, FMPA received a telephone call from Florida Power asking for more information; in a November 14, 1989 letter to Florida Power, FMPA provided the information requested by Florida Power in (4) above, including:
projected monthly loads for the IDO systems not interconnected with Florida Power (West System); projected West System summer and winter peak demands for the next ten years; information on the generating units expected to be used to meet West system loads and reserve requirements in the same detail as already provided for internal resources; and heat rate information on each internal and West System resource; in November or December,
- 1989, FMPA received a
telephone call from Florida Power asking that load data be provided for each individual West System; in a December 14, 1989 letter to Florida Power, FMPA provided the requested information and told Florida Power to let FMPA know if Florida Power needed any additional information; in a January 22, 1990 meeting, Florida Power presented the first version of its study document "Impact of Proposed FMPA Integrated Dispatch Arrangement on
[Florida Power] Transmission System.'lorida Power explained the document (which showed dispatch of IDO resources, ZDO system loads, and impacts on Florida Power transmission constraints under various conditions),
and stated that additional work was
- needed, including an analysis of local transmission impacts.
in a February 21, 1990 meeting, Florida Power provided a revised draft of the study presented January 22, 1990 and a draft report entitled "Impact of Proposed FMPA Integrated Dispatch on (Florida Power] Regional Transmission Facilities, Preliminary Findings."
The meeting focused on FMPA's exception to certain assumptions underlying the analysis.
Florida Power stated that to finalize the studies it would need to determine modifications that would be needed to Florida
Docket No. TX93-4-000 28 Power's transmission system to eliminate any possible impacts of the IDO arrangement, and Florida Power also stated that it would start on this process; and (10) in February,
- 1993, FMPA gave Florida Power its consultant's analysis of economic damages that FMPA has incurred due to its inability to implement the IDO, including details of the production cost model which simulates the operation of the IDO Project had it been in place between 1988 through 2006 (~,
a summary of the results, 23 hard-copy volumes of backup data, and some of the calculations and data in electronic form),
and offered to furnish hourly data for any period Florida Power specified.
Florida Power never requested the hourly data. [~/]
FMPA concludes that "there is simply nothing to [Florida Power's]
claim that it has lacked the information necessary to understand and analyze FMPA's requests." ~
FMPA also argues that, since FMPA has made an adequate good faith request more than 60 days before filing its application (in this proceeding),
thus providing Florida Power with a "full opportunity" to study FMPA's request,
"[n]o purpose consistent with the
[Energy Policy] Act would be served by imposing an additional "waiting period" before addressing the merits."
~/
D.
On August 9, 1993, the American Public Power Association (APPA) filed a motion to intervene.
APPA requests intervention, despite the fact that it would not be directly affected by the outcome of this proceeding, because of the possible precedential
~ ~ Affidavit of Albert Malms)o, Appendix A to FMPA Response at 5-10.
~/ FMPA Response at 15.
~ ~ at 18.
FMPA concedes that some of the data may need to be updated.
FMPA argues that, even if this is the case, to force FK?A to "go back to 'square one,'s
[Florida Power] urges" would be inconsistent with the goal -of the Energy Policy Act. ~ at 18-19 n.27.
As discussed
- below, we are affording FMPA and Florida Power a period of 60 days to negotiate the rates, terms and conditions of the network transmission services we are ordering.
FMPA shall update the data previously provided to Florida Power within 15 days of the date of this order.
Docket No.
TX93 000 29 effect of this case.
In support of its request, APPA states that its members include utilities that own transmission facilities as well as transmission-dependent uti1ities, and that APPA was an active participant in the debate over the transmi ssion access provisions of the Energy Policy Act. ~/
On August 9, 1 9 9 3, Tampa B1ectric Company (Tampa) filed a motion to intervene. ~7 Tampa states that it wou1d be directly affected by the outcome of this proceeding because it is directly interconnected with Florida Power and purchases transmi ss ion services from Florida Power.
On August 9,
Texas Utilities acknowledges that it will not be directly affected by the outcome of this proceeding, but requests that it be allowed to intervene because "the Commission has yet to issue any order requiring transmission servi ces pursuant to Section 2 11,
[and] the Commiss ion' disposition of the issues in this proceeding may have significant precedent ia 1 effect... binding on a 1 1 transmitting uti1ities. "
~/ Also in support of its request, APPA cites, Indiana Michigan Power Company and Ohio Power Company, 64 FERC
$ 61, 184 at 62,552 (1993)
(
).
Tampa is a public utility, organized and existing in the State of Florida, which sells electric power at wholesale.
Texas Utilities is engaged in the generat ion, transmission distribution, purchase and sale of electric energy and serves approximately one -third of the State of Texas.
Texas Utilities is not interconnected with either FMPA or Florida Power.
Texas Utilities Motion to Intervene at 2.
In support, Texas Uti1ities cites Texas Uti1ities is correct that the Commission has not yet ordered transmission under section 2 11, as amended by,the Bnergy Policy Act.
- However, as Texas Utilities is fully
- aware, the Coami ssion did order transmission under the pre-Energy Po 1icy Act version of Neet ion 2 11. ~ Central Power and Light Company, gf; ~,
17 PERC 61, 078 (198 1),
7g~g 18 FBRC
$ 61, 100 (1982).
Docket No. TX93-4-000 30 On August 23,
- 1993, Duke Power Company (Duke) filed a motion to intervene. ~/
Duke requests that the Commission allow Duke to intervene because of the possible precedential effect of this case. ~/
On August 23,
- 1993, LG&E Power Systems, Inc.
(LG&E) filed a motion to intervene. ~/
LG&E argues that the Commission should allow it to intervene because this case "will affect power development and access to power purchase markets across the country." ~/
On August 23,
- 1993, Seminole Electric Cooperative, Inc.
(Seminole) filed a motion to intervene. ~/
Seminole states that it has a direct interest in this proceeding because it purchases full and partial requirements power from Florida Power, and because Seminole is dependent upon Florida Power for the transmission to serve Seminole's loads located in the Florida Power control area.
On August 24,
- 1993, FMPA filed an answer in opposition to Texas Utilities'otion to intervene.
FMPA argues that Texas Utilities'equest for intervention should be denied, because:
(1) the Commission can decide this case on the basis of section 206, rather than sections 211 and 212, and that the only justification for Texas Utilities'ntervention would be the precedential effect of a section 211 case; and (2) Texas Utilities acknowledges that it has no direct interest in the case.~ Duke is a public utility which provides retail and wholesale electric services in portions of North Carolina and South Carolina.
~/ In support of this request, Duke cites and Tex-La Electric Cooperative of Texas, Inc.,
64 FERC 61,162 (1993)
(Talma)
~
~
LG&E is a power developer engaged in developing, owning and operating power pro)ects.
~
LG&E Motion to Intervene at 3.
~ Seminole supplies wholesale electric power and energy on behalf of its eleven members which serve retail customers in 45 counties in Florida.
Seminole states that, on August 20, 1993, it sent a
formal written request 'to Florida Power for limited transmission service to commence in 1999, pursuant to sections 211 and 212 of the FPA and the license conditions.
Seminole Motion to Intervene at 4.
Docket No. TX93-4-000 31 On August 24, 1993, Florida Power filed an answer in opposition to APPA's motion to intervene.
Florida Power argues that APPA has no direct interest which warrants APPA's intervention.
Florida Power also argues that the cases APPA cites in support of its request to intervene present unique circumstances that are not present here. ~
On August 27,
- 1993, FMPA filed an answer in opposition to Duke's motion to intervene.
FMPA states that it opposes Duke' motion because, among other reasons, Duke is an investor-owned public utility (IOU) whose views are adequately represented by Florida Power and other intervening IOUs.
On September 21, 1993, Florida Power filed a letter arguing that FMPA's response to Florida Power's answer should be rejected.
Florida Power argues that, although in the past the Commission has occasionally permitted responsive pleadings in unusual circumstances, no such circumstances are present here since PMPA merely reiterates arguments made in its earlier pleading.
Under Rule 214 of the Commission's Rules of Practice and Procedure, ~ the timely, unopposed motions to intervene filed by Tampa, LG&B and Seminole serve to make them parties to this proceeding.
The timely motions to intervene by Duke and Texas Utilities are opposed by FMPA, and the timely motion to intervene by APPA is opposed by Florida Power.
Normally, under our Rules of Practice and Procedure, a would-be intervenor must demonstrate that it has or represents an interest that may be affected by the outcome of the proceeding or that its participation otherwise is
~ Qgg gggZg note 116.
More specifically, Florida Power" argues, ~~ aljgL, thatin, that.
proceeding was the only forum in which other utilities could express their views on the primary issue in that case (~, compensation for "loop flows'; here,
- however, generic proceedings exist in which entities such as APPA can express their concerns regarding the Commission's transmission policy.
Florida Power Answer to APPA Motion to Intervene at 2-3.
~ 18 C.F.R.
5 385.214(c) (1)
(1993).
Docket No. TX93-4-000 32 in the public interest.
~27/
Generally, an interest that is based solely on the possible precedential effect of the Commission's decision in a particular proceeding does not constitute a sufficiently direct interest to warrant intervenor status in that proceeding. ~/
However, given that we have not yet addressed a request for transmission service under sections 211 and 212 (as amended by the Energy Policy Act) on the merits, much less a request for network transmission
- service, we are sensitive to the concern, articulated in several motions to intervene, that our order in this proceeding could have the effect of establishing binding precedent on broad issues affecting the entire industry. ~/
Accordingly, in these circumstances, we find that it is in the public interest to grant all of the contested interventions.
Notwithstanding that Rule 213 of the Commission's Rules of Practice and Procedure generally prohibits the filing of an answer to an answer, we will accept FMPA's September 9,
1993 response to Florida Power's answer since we find, given the complexity of the issues presented, this pleading has aided us in understanding the parties'ositions.
B.
This is the first case in which the Commission proposes to order transmission services under section 211 of the FPA, and the first proposed order we have issued under section 212(c)(1),
since sections 211 and 212 were amended by the Energy Policy Act.
We note that section 212(c)(1) does not provide a standard upon which the Commission should base a decision to issue a proposed
,order, nor does it dictate the contents of a proposed order.
Consequently, the Congress left it to the Commission's discretion to define the threshold for the issuance of a proposed order, and the contents of a proposed order.
1RZ/ 18 C.F.R.
5 385.214(b) (2)
(1993).
~/ ~, ~, Northeast Utilities Service
- Company, 53 FERC
$ 61,135 at 61,456 (1990);
Panhandle Eastern Pipe Line
- Company, Opinion No. 313-A, 46 FERC
$ 61,189 at 61,630-31 (1989);
New England Power Company, 37 FERC
$ 61,078 at 61,196-97 (1986); Virginia Electric and Power
- Company, 27 FERC 5 61,093 at 61,181-82 (1984);
Kansas-Nebraska Natural Gas
- Company, 21 FERC
$ 61,285 at 61,781-82 (1982).
~ ~, ~,
APPA Motion to Zntervene at 2-4; Duke Motion to Zntervene at 4-6; LG&E Motion to Zntervene at 3; Texas Utilitiea Motion to Zntervene at 4.
Docket No. TX93-4-000 33 The Commission believes it has considerable discretion with respect to both the timing and specificity of a proposed order issued under section 212(c)(1).
Clearly,'ny final order for transmission services must meet all the prerequisites of sections 211 and 212, including a finding that the order meets the requirements of section 212, and would otherwise be in the public interest.
In addition, the Commission may not issue an order if it finds the order would unreasonably impair the continued reliability of electric systems affected by the order.
- However, the statute does not state that preliminary findings or determinations must be made in the proposed order regarding each of the prerequisites to a final order.
We believe it is in our discretion, in issuing a proposed order, to reserve judgment on some or all of the prerequisites of a final order, depending upon the facts before us.
We conclude that there is a sufficient record before us to exercise our authority to issue a proposed order.
At this early stage of our implementation of the amended sections 211 and 212, and based on the facts of this particular case, we have chosen in this proposed order to make preliminary determinations regarding the public interest and reliability, and to provide general pricing guidance, but to give the parties the opportunity to negotiate specific rates, terms and conditions of service consistent with section 212(a) ~/ and our transmission pricing policies.
In taking this approach, we hope to provide
~ Before issuing a final order, section 212(a) requires that we, find that the rates,
- charges, terms and conditions of the sezvice to be provided:
permit the recovery
. of all the costs incurred in connection with the transmission services and necessary associated
- services, including, but not limited to, an appropriate share, if any, of legitimate, verifiable and economic costs, including taking into account any benefits to the transmission system of providing the transmission service, and the costs'of enlargement of transmission facilities.
Such rates,
- charges, terms and conditions shall promote the economically efficient transmission and generation of electricity and shall be just and reasonable, and not unduly discriminatory or preferential.
- Rates, charges, terms and conditions for transmission services provided pursuant to an order under section 211 shall ensure that, to the extent practicable, costs incurred in providing the wholesale transmission
- services, and properly allocable to the provision of such services, are recovered from the applicant for such order and not from a transmitting utility's existing wholesale, retail, and transmission customers.
Docket No. TX93-4-000 34 sufficient guidance to advance the negotiations between the parties to the proposed order (Florida Power and FMPA). ~/',
FMPA has requested network transmission service under which Florida Power would transmit power without assessing multiple charges for each receipt/delivery point combination.
Power has indicated its willingness to negotiate network service,;
For the reasons discussed
- below, we propose to issue an order requiring Florida Power to provide network transmission service to support FMPA's ZDO project, without multiple point-to-point pricing and consistent with section 212(a).
Zn doing so, on a preliminary basis, we reject multiple point-to-point charges for network service in 'this case.
The Commission recognizes that the cost of providing network service may exceed the cost of point-to-point service because the transmitting utility may incur additional transmission capacity costs to accommodate the increased flexibilityof',network usage of the system.
The extent of any additional costs associated with network service is at the core of the negotiations we are initiating under this order.
Zn developing rates for the
- service, Florida Power must. substantiate its costs of providing network service.
If Florida Power seeks to charge a rate for network service that exceeds what it charges for point-to-point service, it must provide the information necessary for's to determine that such a charge is )ustified.
Florida Power's
- rates, charges, terms and conditions for this network service must not be unduly discriminatory when compared to rates,
- charges, terms and conditions of transmission used to serve Florida Power's other customers, and must meet the other requirements of section 212 (a).
Consistent with section 212(c) (1) of the
- FPA, we will give FMPA and Florida Power 60 days to agree to the specific rates, terms and conditions under which this order is to be carried out, including the apportionment of costs between them and the compensation or reimbursement due to either of them.
Pursuant to section 212(c)(1), this proposed order shall not be reviewable or enforceable in any court.
Zn addition, we clarify that, consistent with 18 CFR 5 385.713, this is an interlocutory order not sub]ect to requests for rehearing.
The proper time for parties to seek rehearing is after the Commission issues a final order under section 211.
~ Accordingly, as discussed
- below, we have made a preliminary
)udgment regarding general pricing under section 212(a)
(~, no multiple point pricing), but we reserve
)udgment on specific rates, terms and conditions.
Docket No. TX93-4-000 1.
h r
35 n.
Th Im a f Pr xi in As an initial matter, we address the issue of whether the Commission is barred, in whole or in part, by section 211(c) (2) of the FPA from requiring Florida Power to provide the transmission service requested by FMPA.
Section 211(c)(2) prohibits the Commission from ordering transmission service:
which requires the transmitting utility subject to the order to transmit, during any
- period, an amount of electric energy which replaces any amount of electric energy--
(A) required to be provided to such applicant pursuant to a contract during such period, or currently provided to the applicant by the utility sub)ect to the order pursuant to a rate schedule on file during such period with the Commission Thus, section 211(c)(2) requires us to examine whether any of Florida Power's existing contracts with FNPA or its members require Florida Power to provide electric energy to them, and therefore bar, the section 211 relief which FMPA requests.
The only existing contracts with FMPA or its members are the TSAs and certain partial requirements contracts, discussed below.
Upon review of the existing TSAs, we find those contracts pose no section 211(c) (2) bar to our ordering of wheeling.
The TSAs require Florida Power to provide transmission to FMPA.
They do not require Florida Power to provide electric energy to FMPA.
Section 211(c)(2),
on its face, refers to contracts to provide electric energy (~, contracts for generation),
not contracts to provide for transmission of electric energy.
- Moreover, Congress, in establishing the Commission's basic Jurisdiction in section 201 of the FPA, clearly distinguished between transmission of electric energy and sale of electric energy.
Zt did not in section 201, or in any other sections of the FPA, use the term 'electric energy" interchangeably with the term 'transmission of electric energy."
Of particular relevance here are sections 211 and 212 of the
- FPA, as amended by the Bnergy Policy Act, in which Congress specifically referred to the provision of transmission, rather than the provision of electric
- energy, when it so intended.'or
- example, section 211(a) provides:
Docket Na; TX93-4-000 36 Any electric utility, Federal power marketing
- agency, or any other person generating electric energy for sale for resale, may apply to the Commission for an order requiring a transmitting utility to provide services (including any enlargement of transmission capacity necessary to provide such services) to the applicant.
(Emphasis added).
In addition, section 212(a) provides that an order under section 211 requiring wheeling must contain such rates,
- charges, terms, and conditions that will "promote the economically efficient d g l.
1 1 l. y.'
h Y.ll "ensure that, to the extent practicable, costs incurred-in p
1 1 g h
1 from the applicant for such order and not from a transmitting lily' lg hl 1.
11, d~
customers."
(Emphasis added)
Accordingly, we believe that had Congress intended existing transmission contracts to bar relief under section 211, Congress would have drafted section 211(c) (2)(A) to say 'which replaces Y
1 1
gy ~
pl.
d h
provided...."
Similarly, section 211(c) (2) (B) would have d
1 d y'yp ddd~
h applicant.
Having determined that the TSAs do not bar the Commission from ordering transmission service, we now turn to whether other Florida Power contracts to provide electric energy to FMPA's members fall within the 211(c) (2) bar.
We note that Florida Power provides partial requirements service to four IDO Pro)ect participants, the Cities of Clewiston, Fort Pierce, Green Cove Springs and Jacksonville
- Beach, Florida (PR customers).
The partial requirements tariff and service agreements that apply to service for the PR customers provide for an initial term of five years and, thereafter, until terminated in accordance with the PR tariff or service agreement.
The partial requirements tariff
~ The fact that the section 211(c)(2) prohibition applies only to contracts to provide electric energy, and not to contracts to provide transmission, does not mean that issues associated with existing transmission contracts do not have to be taken into account or resolved in detezmining whether and under what conditions to order section 211 transmission service.
In this particular case, as stated
- agafya, issues associated with existing transmission contracts (raised in Docket No. EL93-51-000) ultimately may be mooted by our action in Docket No. TX93-4-000.
Accordingly, we will hold Docket No. EL93-51-000 in abeyance.
Docket No. TX93-4-000 37 also provides that the contract demand for partial requirements service will be set forth in Exhibit A of the tariff and will be in effect for the twelve-month period beginning on June 1 of each year.
The contract demand can be changed upon written request of the customer made on or before March 1 of any year; however, it may not be increased or decreased by more than 25 percent in any one year. ~/
With respect to the PR customers, FMPA argues that Congress'hoice of the term "electric energy" in section 211(c) (2) means that the section 211(c)(2) bar does not apply unless the applicable power supply contract requires the customer under that contract to purchase specific amounts of energy from the transmitting utility.
Therefore, FMPA argues, because the PR customers are required to purchase only the energy they schedule, section 211(c) (2) does not preclude the Commission from directing Florida Power to wheel on behalf of the PR customers. ~/
We disagree.
We do not believe the term "electric energy" in section 211(c)(2), which is used in section 201 and throughout the statute, is intended to create a distinction between the purchase of energy and the purchase of capacity, and that it applies only when the requesting utility explicitly prescribes
~
We note that, in Docket No. ER93-465-000, in connection with Florida Power's
'open access" transmission tariff, Florida Power proposed to revise the initial term to 10 years and to revise the notice conditions regarding changes in contract demands.
The Commission has suspended those proposals until February 26, 1994 and set them for hearing. ~ 64 FERC
$ 61,361, slip op.
at 12-14.
We also note that our review of the partial requirements tariff, Exhibit A, indicates that some of Florida Power's PR customers have reduced their contract demands under the partial requirements agreements.
Zn fact, Florida Power has informed the Commission in its application, dated March 19, 1993, in Docket, No. ER93-465-000, that Fort Pierce has already given notice of its intent to terminate service as of May 1, 1994.
~ ~ gggyg, notes 51 and accompanying text.
As discussed above, ~ gggxg, text accompanying note 86, Florida Power states that 'it does not agree that Section 211 can be used to override existing contracts for'ransmission service,'
Florida Power Answer at 62; nevertheless, Florida Power states that it "will respond to a specific good faith request for new
'network'ransmission service from FMPA.
at 2.
Docket No. TX93-4-000 38 the amount of energy to be purchased.
- Rather, we believe that the choice of the term "electric energy" describes a broader concept -- that of electric service, reflecting the fact that electric energy is the term generally used to describe the "commodity" that is physically delivered over the transmission system.
- Thus, we find that section 211(c)(2) does constitute a bar to any request by FMPA for transmission of power that would replace service that Florida Power provides under the PR tariff and service agreements.
The bar would continue until the contractual obligation is terminated pursuant to the PR agreements.
- However, FMPA is not barred from requesting transmission service for power that would not replace purchases under the PR agreements. ~
2.
a 0 Section 211(a) of the Federal Power Act, as amended by the Energy Policy Act, provides, ~ZZ~, that the Commission may issue an order requiring the transmitting utility to provide transmission services if it finds that the order meets the requirements of section 212 and would otherwise be in the 'public interest.
The Commission finds that ordering network transmission service will be in the public interest in this case and fully consistent with the purposes of the FPA.
As the Supreme Court stated:
'[t]he principal purpose of [the FPA] was to encourage the orderly development of plentiful supplies of electricity at reasonable prices.'
As a general matter, the availability of transmission service (or increased flexibilityto use transmission) will enhance competition in the market for power supplies over the long run because it will increase both the power supply options available to transmission customers (thereby benefitting their customers) and the sales options available to sellers.
This should result in ?ower costs to consumers.
Xn addition, if a transmission customer determines that flexible service, such as network service, will allow it to serve its customers more efficiently, we believe the public
~ Our review of the service agreements indicates that the customers'ezvice under the PR agreements meets only a small portion of their needs.
~ NAACP v.
- PPC, 425 U.S.
- 662, 669-70 (1975).
~ at 670 n.5 (purpose of FPA is to assure abundant supply of electric energy throughout United States with greatest possible economy).
~ 0
Docket No. TX93-4-000 39 interest will be served by requiring that service to be provided so long as the transmitting utility is fully and fairly compensated and there is no unreasonable impairment of reliability.
In this case, network transmission service will allow FMPA and its members greater flexibilityto economically dispatch their generation resources.
This flexibilityshould give them the opportunity to benefit ratepayers by using their generation resources more efficiently.
Thus, it is in the public interest for FMPA and its members to have the opportunity to achieve greater efficiency and ratepayer savings. ~
b.
Section 211(b) provides that an order cannot be issued under section 211 if "after giving consideration to consistently applied regional or national reliability standards, guidelines, or criteria, the Commission finds that such order would unreasonably impair the continued reliability of electric systems affected by the order."
No party has raised any reliability considerations, ~ and the Commission does not find that the provision of network service would necessarily impair the reliability of any electric systems that would be affected by a final order.
In developing appropriate terms and conditions of network service, we expect FMPA and Florida Power to propose conditions to ensure that there is no unreasonable impairment to the continued reliability of electric systems affected by a final order.
c ~
On July 14, 1993, the Commission issued a policy statement setting forth what it generally considers to constitute the
~ Florida Power argues that FMPA can achieve savings from the ZDO prospect only if the price for transmission does not include reservation charges.
Qgp ggpya note 76. As discussed below, the specific price
($/kW, etc.) for the network transmission service we are proposing to order has not been determined and FMPA may ultimately determine not to take the service it requests in this proceeding.
However, whether a transmission requestor can actually achieve savings from the requested service is not a prerequisite to our determination of whether to order the service.
~ Indeed, Florida Power asserts that this dispute is about price, not about whether Florida Power can or will provide the service. ~ gggyg notes 74-78 and accompanying text.
Q
~ ~
\\
Docket No. TX93-4-000 40 minimum components of a good faith request for transmission service and a good faith response under section 213 of the FPA. ~1/
The Commission's policy statement sets forth 12 components of a good faith request:
(1) the identity of the purchaser; (2) a statement of eligibility to request the services; (3) a statement that the request is to satisfy section 211(a) and 213(a),
and is not a request for mandatory retail wheeling; (4) the type of service requested; (5) the names of other parties expected to deliver to or receive power from the transmitting utility; (6) the proposed commencement and termination dates of service; (7) the amount of service; (8) the expected transaction profile; (9) the firmness of service requested; (10) whether the request is made in response to a solicitation; (11) the terms and conditions requested; and (12) additional information that would help the transmitting utility evaluate the request. ~/
FMPA argues that it should not be strictly held to the policy statement because FMPA filed its complaint prior to the issuance of the policy statement.
FMPA argues that, since its request for transmission was made prior to the Commission's issuance of the policy statement:
while it may be administratively sensible to apply "good faith" request to both Section[s]
211 and 213 in the future, it would defeat the purposes of the Energy Policy Act retroactively to require rigid adherence to the Good Faith Request Policy Statement where the basic substantive requirements for requests have been fully satisfied.
(~/]
FMPA also argues that its request substantially satisfies the requirements of a, good faith request, given FMPA's repeated requests for network transmission service and given all of the information FMPA has provided to Florida Power since FMPA's 1989
~ ~ gag~ note 3.
~ ~ III FBRC Statutes and Regulations at 30,863-65.
We note that comments concerning the policy statement are pending before the Commission.
~
FMPA Response at 17-18.,
In support, of this argument, FMPA notes that the statute distinguishes between the requirements of a request under section 211 and the requirements of a good faith request under section 213.
~ at 17-18
& n.25.
Docket No. TX93-4-000 41 request for such transmission. ~4/
In support of this
- argument, FMPA states that it has "either provided or offered to provide information sufficient to meet
[the policy statement]
requirements." ~/
Florida Power argues that FMPA's request was not a good faith request because FMPA has continually changed its proposal.
~/
Flomida Power argues that FMPA has not provided "much of th[e] critical information" Florida Power needs to evaluate and respond to FMPA's request, and requests that FMPA provide further information. ~
Florida Power requests that the Commission dismiss FMPA's section 211 request and allow FMPA to come forward with the information Florida Power needs to evaluate the transmission service FMPA requests.
Florida Power states that, if FMPA is dissatisfied with Florida Power's response, it may file a section 211 application for an order directing Florida Power to provide transmission service. ~
FMPA responds that it has provided sufficient 'information with which to analyze FMPA's request for transmission service, and urges the Commission to summarily order Florida Power to file a service commitment for network service for FMPA's IDO Project, and thus put an end to Florida Power's "strategy of delay and avoidance." ~
We do not believe that we can fairly apply retroactively to FMPA the components contained in the good faith policy statement, given that FMPA's formal written request for network transmission service in 1989 pre-dated the Commission's good faith policy statement (which issued on July 21, 1993).
- However, we find that, in these circumstances, FMPA has complied with the requirements of the statute.
~ ~ at 15-18.
~ ~ at 16.
For a description of the specific information FMPA'as provided, age ZgZg, text acccepanying note 113.
~
QRQ, Jag~'text accompanying notes 89-90.
~ Florida Power Answer at 5; ~ ~g text accompanying notes 88-92.
~ ~ gggZg, text accompanying note 96.
~
FMPA Response at 5.
Docket NO'X93-4-000 42 Here, it is uncontroverted that, after FMPA made its request on September 8,
1989:
(1)
FMPA met with Florida Power on many occasions to exchange information about the request; (2)
FMPA promptly provided Florida Power with additional data that Florida Power requested; and (3) Florida Power had sufficient data to prepare at least two reports and to advise FMPA that it intended to conduct additional studies which Florida Power would commence after the February 1990 meeting. ~/
Xt is also undisputed that Florida Power has yet to file a service agreement providing for the transmission service FMPA requests, and has requested for several years.
The information that Florida Power claims it has not
- received, and that it still needs to evaluate FMPA's request, involves very specific, technical information. ~/
We do not find FMPA's alleged failure to provide such information is critical to a finding that it has complied with the requirements of the statute. ~/
Although FMPA's initial request may not have contained all of the information that Florida Power now claims is needed to evaluate the request for transmission
- service, the record evidence shows that FMPA has made a good faith effort to provide Florida Power with all the data Florida Power has requested.
Thus, in view of the extensive information FMPA has provided to Florida Power over the two years of negotiation following the 1989 request (which Florida Power does not dispute),
we find that FMPA has complied with the recpxirements of the statute.
d.
Florida Power states that FMPA should be required to state whether its request for transmission service is a "bona fide"
- request, whether it. intends to abide by the Commission's section 211 decision, and whether it feels free to change its proposal during or at the end of a section 211 proceeding. ~/
Zn support of this request, Florida Power claims that FMPA's consistent practice is to agree to and enter into a contract concerning a particular kind of transmission service and then to change its mind and 'use pressure tactics to force [Florida
~ Qgp aggro'ext accompanying note 113.
~ Florida Power Answer at 4-5.
~ However, as noted above, we will require FMPA to update the data it has provided within 15 days of the date of this order.
~ Florida Power Answer at 6 and 67.
Docket No. TX93-4-000 43 Power] to abandon its existing contracts." ~/
FMPA responds that any changes in position it has made in the past have simply reflected its attempts to respond to issues raised by Florida Power in order to further negotiations. ~/
Although we agree with Florida Power that the Commission's resources should not be dedicated to proceedings which are, in effect, fishing expeditions, we have no reason to doubt FMPA's commitment to obtain network transmission service from Florida Power.
Zt is clear that FMPA has requested network service for years and has pursued numerous strategies (nuclear licensing proceedings, negotiations, court proceedings and, in this proceeding, a section 211 application) in pursuit of its goal of obtaining network service.
Presumably, FMPA has undertaken this proceeding because it believes that the rates, terms and conditions the Commission will set for network transmission service will provide an economic basis for FMPA to. implement the ZDO Project.
We note that the possibility exists that the rates, terms and conditions established in this proceeding may be different than FMPA hopes
- and, as a result, the ZDO Pro)ect may not be economic.
We do not believe a section 211 applicant for transmission services should be forced to agree to take the service before the rates, terms and conditions have been determined.
Accordingly, we take this opportunity to clarify that if FMPA decides -- once the rates, terms and conditions have been set in this proceeding -- that the cost of the sezvice under a section 211 order would be so high as to render the IDO Pro)ect uneconomic, FMPA has the option to continue to take service from Florida Power under the existing TSAs, until they are terminated. ~/
3 ~
Section 212(c)(1) provides that, before issuing a final order under section 211, the Commission shall issue a proposed order setting a reasonable time for the parties to the proposed transmission order to agree to terms and conditions for carrying out the order, including the compensation and'apportionment of costs.
If the parties to the proposed transmission order are able to agree, the Commission will issue an order reflecting the agreed upon terms and conditions if the Commission approves of them. If the parties to the proposed transmission order are
~ Zd. at 6; ~ gllgya notes 93-95.
~ ~ gggZg note 112.
~ Zf FMPA elects to continue to take sezvice under the existing TSAs, the issues raised in Docket No. EL93 000 would obviously not be mooted.
4 J(
+s
Docket No. TX93-4-000 44 unable to agree within the allotted time, the Commission will prescribe the rates, terms and conditions of service.
Accordingly, we will give FMPA and Florida Power 60 days, commencing on the date FMPA provides updated data to support its
- request, to negotiate the rates, terms and conditions of the network transmission service ordered herein, consistent with section 212.
We will also require FMPA and Florida Power to "submit to the Commission, within 15 days after the expiration of the 60-day negotiation period, all rates, terms and conditions on which they have mutually agreed, accompanied by explanations and cost support. If there are matters still in dispute, the parties should file briefs to support their final positions, accompanied by any necessary cost support.
We direct the parties to provide cost support information in sufficient detail to enable the Commission to establish final rates pursuant to section 212 or, at a minimum, to establish interim rates pending a final decision. ~/
In order to allow FMPA and Florida Power to prepare their briefs, they should exchange final positions on the sixtieth day of the negotiation period. ~
(A)
The timely, opposed motions to intervene by APPA, Texas Utilities and Duke are hereby granted.
(B)
Florida Power is hereby ordered to provide network transmission service to FMPA, pursuant to sections 211 and 212, as discussed in the body of this proposed order.
(C)
FMPA is directed to update the data it has previously provided to Florida Power with respect to its request for network transmission service within 15 days of the date of this order.
(D)
FMPA and Florida Power are hereby directed to undertake procedures to implement Ordering Paragraph (B) above, as discussed in the body of this proposed order.
By the Commission.
(SEAL)
Lois D. Cashell, Secretary.
~ The Commission, of course, also will have the option of requiring the use of the TSAs on an interim basis.
~ Briefs should be filed only by FMPA and Florida Power.
As
- noted, gggZa at 35, other parties to the proceeding may file their comments in rehearing petitions of the final order issued under section 211.
S/
January 27, 1993 DOCKET NO(S).
50-389 SEE ATTACHED LIST DISTRIBUTION:
'Docket File w/o encl.,/
PD II-2 Rdg ETana sUBJEGT:
St. Lucie, Unit 2 The following documents concerning our review of the subject facility are transmitted for your information.
DESCRIPTION OF DOCUMENT Notice of Receipt of Application Draft/Final Environmental Statement Notice of Availabilityof Draft/Final Environmental Statement Safety Evaluation Report, or Supplement No.
Environmental Assessment and Finding of No Significant Impact Notice of Issuance of Environmental Assessment Notice of Consideration of Issuance of Facility Operating License or Amendment to Facility Operating License Biweekly Notice; Applications and Amendments to Operating Licenses Involvin No Si nif<cant Hazards Conditions See Page(s)
DATED Exemption Construction Permit No. CPPR-Facility Operating License No.
Order Monthly Operating Report for Annual/Semi-Annual Report:
Other
, Amendment No.
,Amendment No.
transmitted by Letter transmitted by Letter 1/14/93 Office of Nuclear Reactor Regulation
Enclosures:
As Stated See next page OFFICE>
SUANAMEW OATEN PDII-2/NRR ETana 1/27/93..........
NBC FORM 318 (10/80) NBCM 0240 OFFICIAL RECORD COPY
II
/
P I
1 l
J
'l c
\\
St. Lucie 152 cc:
Chief Division of Ecological Services Bureau of Sport Fisheries E Wildlife U.
S.
Department of the Interior Washington, OC 20240 Or. William Cunningham FDA Research Chemist National Bureau of Standards Reactor Building 235, Room B-108 Gaithersburg, MO 20899 EIS Review Coordinator EPA Region IV 345 Courtland Street, NE
- Atlanta, GA 30365 Oi.rector, Cr iteria and Standards (ANR-460)
Office of Radiation Programs U.S. Environmental Protection Agency Washington, OC 20460
DISTRIBUTION:
May 8, 1992
~~Docket File wio enclosures PDII-2 RDG File DMiller JNorris DOCKET NO(S).
50-389 SEE ATTACHED LIST SUBJFCT:
ST. LUCIE PLANT, UNITS2: FLORIDA POHER AND LIGHT COMPANY The following documents concerning our review of the subject facility are transmitted for your information.
DESCRIPTION OF DOCUMENT Notice of Receipt of Application Draft/Final Environmental Statement Notice of Availabilityof Draft/Final Environmental Statement Safety Evaluation Report, or Supplement No.
Environmental Assessment and Finding of No Significant Impact Notice of Issuance of Environmental Assessment Notice of Consideration of Issuance of Facility Operating License or Amendment to Facility Operating License Biweekly Notice; Applications and Amendments to Operating Licenses Involvin No Si nifIcant Hazards Conditions See Page(s)
Exemption DATED Construction Permit No. CPPR-Facility Operating License No.
Order Monthly Operating Report for
, Amendment No.
Amendment No.
transmitted by Letter Annual/Semi-Annual Report: Forwards Vol I to "St. Luoie Unit 2 Annual Environ Operatin Re t 1
1" d Vol II transmitted by Letter Other Division of Reactor Prospects I II Office of Nuclear Reactor Regulation O4[23)92
Enclosures:
As Stated See next page OFFICE>,.Q R
R ~
suRNAMEt D
0ATE>
Og )
) 9g NRC FORM 318 Itoleo) NRCM 0240 OFFICIAL RECORD COPY
~ I I
'I I
~
I I
- I I
/
II
\\
~
I
~
I I
Ilarch 16, 1989 DOCKET NO(S).
6O 33 389 SEE ATTACHED LIST DISl RIBUTION Docket File w/o encl.p PDII Reading file w/o encl.
D. Hiller J. Norris
SUBJECT:
ST-LUCIE PLANT, UNITS ) BND 2 The following documents concerning our review of the subject facility are transmitted for your information.
Notice of Receipt of Application, dated Draft/Final Environmental Statement, dated Notice of Availability of Draft/Final Environmental Statement, dated Safety Evaluation Report, or Supplement No.
dated Environmental Assessment and Finding of No Significant Impact, dated Q Notice of Consideration of Issuance of Facility Operating License or Amendment to Faci1 ity Operating
- License, dated Bi-Weekly Notice; Applications and Amendments to Operating Licenses Involving No Significant Hazards Considerations, dated
[see page(s) ]
Exemption, dated Construction Permit No.
CPPR-
, Amendment No.
dated Facility Operating License No.,
Amendment No.
dated Order Extending Construction Completion Date, dated Monthly Operating Report for transmitted by letter dated
+ Annual/Semi-Annual Report-Combined Radioactive Effluent Release Re t for Jul-Dec 1988 d
1 d
d~d22
Enclosures:
As stated Divison of Reactor Projects - I/II.
Office of Nuclear Reactor Regulati'on CC:
OFFICE/
SURNAME/
0*m/
f>s 2
Dil e
~
~ ~ ~
~ ~ f ~ 2 ~ ~
~ ~ ~ ~
0 /Nj'89
~ ~ ~ ~ ~ ~ ~ ~
~ ~ ~ ~ ~ ~
~ ~
NRC FORM 3I8 IIOIBOINRCM 0240 OFFICIAL RECORD COPY
February,29, 9988 DISTRIBUTION Docket File w/o encl.
DMiller w/encl.
ETourigny w/encl.
PD22 Rdg w/o encl.
DOCKET NO(S).
5O 38g OLA SEE ATTACHED LIST
SUBJECT:
ST. LUCIE UNIT 2 - ASLBP NO. 87-544-Ol-LA The following documents concerning our review of the subject facility are transmitted for your information.
, ~
'otice of Receipt of Application, dated Draft/Final Environmental Statement, dated Notice of Availability of Draft/Final Environmental Statement, dated Safety Evaluation Report, or Supplement No.
dated Qg Environmental Assessment, and Finding of No Significant Impact, dated 2/22/88 Q Notice of Consideration of Issuance of Facility Operating License or Amendment to Facility Operating
- License, dated Hi-Weekly Notice; Applications and Amendments to Operating Licenses Involving No Significant Hazards Considerations, dated Lsee page(s) j Exemption, dated Construction Permit No.. CPPR-
, Amendment No.
dated Facility Operating License No.
, Amendment No.
dated Or der Extending Construction Completion Date, dated Monthly Operating Report for transmitted by letter dated Annual/Semi-Annual Report-transmitted by letter dated
Enclosures:
As stated Division of Reactor Projects-I/II Office of Nuclear Reactor Regulation cc:
See next page OFFICEtI SURNAME) 0ATa P L
22
~ ~ ~ ~
P
~
~ ~ ~
r
~
~
~ ~ ~ i ~
0 ~
~ i 2/gf/08 NRC FORM 3I8 IIOIBOINRCM 0240 OFFICIAL RECORD COPY
cc:
Administrative Judge Charles Bechhoefer, Chairman Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Administrative Judge Richard F. Cole Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Wasington, D'.C.
20555 Administrative Judge Gustave A. Linenberger Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commissi'on
'ashington, D.C.
20555 Stuart A. Treby, Esq.
Office of the General Counsel U.S. Nuclear Regulatory Commission Wasfhngton, D.C.
20555 Harold F. Reis, Esq.
Newman 8 Holtzinger, P.C.
1615 L Street, N.W.
Suite 1000 Washington, D.C.
20036 Norman A. Coll, Esq.
- Steel, Hector
& Davis 4000 Southeast Financial Center
- Hiami, FL 33131 Robert E. Uhrig Vice President - Advanced Systems and Technology Florida Power and Light Company P.O.
Box 529100
- tliami, FL 33152 John Paskovitch, Jr.
724 Lehigh Road South Venice, FL 33595