ML17228A979

Responds to 941205 Ltr Re an Update on Status of Certain Proceedings Involving Util Before FERC & Courts

ML17228A979
Person / Time
Site:	Saint Lucie
Issue date:	01/03/1995
From:	Bouknight J STEPTOE & JOHNSON
To:	Gody A Office of Nuclear Reactor Regulation
References
NUDOCS 9501230119
Download: ML17228A979 (12)

Text

R.ICON.I RIDS PROCI'.SSIiG)

EY'CELERATED REGULATORY INFORMATION DISTRIBUTION SYSTEM (RIDS) l ACCESSION NBR: 9501230119 DOC. DATE: 95/01/03 NOTARIZED: NO DOCKET N FACIL:50~%-Mendocino, Unit 1, Pacific Gas & Electric Co. 0500988$

AUTHOR AFFILIATION AUTH. NAME BOUKNIGHT,J.A. Steptoe & Johnson g 8'9 RECIP.NAME RECIPIENT AFFILIATION GODY,A.T. Office of Nuclear Reactor Regulation, Director (Post 870411

SUBJECT:

Responds to 941205 ltr re an update on status of certain proceedings involving util before FERC & courts.

R DISTRIBUTION CODE: Z998D TITLE: Antitrust Info COPIES RECEIVED:LTR Re Reg Guide 9.3 J ENCL Q SIZE:

0 NOTES:Application withdrawn 1/19/73. 05000398 R

RECIPIENT COPIES RECIPIENT COPIES ID CODE/NAME LTTR ENCL ID CODE/NAME LTTR ENCL AD 1 1 LA 1 1 PD 1 1 PM 1 1 1 1 NRR/PMAS/PTS B 1 1 OGC/AD 15-B-18 1 1 EXTERNAL: NOAC 1 1 NRC PDR 1 1 D

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NOTE TO ALL"RIDS" RECIPIENTS:

PLEASE HELP US TO REDUCE 4VASTE! CONTACT'I'HE DOCUWfENT CONTROL DESK. ROOKI PI-37 I EXT, 504-2083 ) TO ELI,"lflNATEYOUR NAifE I'ROTI DISTRIBUTION LIS'I'S I:OR DOCUh,fEN'I'S YOU DON"I'I.:I'.D!

TOTAL NUMBER OF COPIES REQUIRED: LTTR 9 ENCL 9

O'EPTOE &I: JOHNSON ATTORNEYS AT LAW 1330CONNECTICUTAVENUE, N.W.

WASHINGTON, D.C. 20038-1795 PHOENIX, ARIZONA STEPIE & JOHNSON IMTERNIUUNAL TWO RENAISSANCE SQUARE AFFILIATE IN MOSCOW~ RUSSIA (202) 429-3000 TELEPHONE: (502) 267-6200 FACSIMILE: (202) 429%902 TELEPHONE: (CII-7-60I) 129-9700 FACSIMILE:(502) 267-6299 TELEX: 89-2503 FACSIMILE: (OII-7-601) 121-970I January 3, 1995 Mr. Anthony T. Gody Chief, Inspection Program Branch Directorate for Inspection and Support Programs Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission One White Flint North 11555 Rockville Pike Rockville, MD 20852 Re: Florida Power R Li ht Com an (St. Lucie Plant, Unit No. 2),

Docket No. 50-389A, Operating License No. NPF-16

Dear Mr. Gody:

This responds to a letter to you dated December 5, 1994, from Robert A. Jablon and Bonnie S. Blair, attorneys for the Florida Municipal Power Agency ("FMPA"). The letter states that your it staff was written in response to the request of a member of for an update on the status of certain proceedings involving Florida Power 8 Light Company ("FPL") before the Federal Energy Regulatory Commission ("FERC") and the courts.

FMPA's letter encourages an inaccurate impression about the status of matters before the FERC. As described below, "network transmission service" is now indisputably available to FMPA under a rate schedule on file with the FERC. FMPA, however, has declined to commence service under that schedule, because disagrees with the rates ordered by the FERC. There is no good it reason for the Nuclear Regulatory, Commission to inject itself into a rate issue that 'is properly and fully before the FERC.

Accordingly, FMPA's gratuitous request for enforcement action should be denied.

I ll FMPA is unhappy about the rates and related terms and conditions of transmission service that have been determined by PDaR ADOCK

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the FERC for its transmission service. FMPA was unhappy under the FERC's prior pricing policies. e Wiscon in Elec. Power Co., 46 FERC $ 61,019, reh'eni ~S d, 48 FERC $ 61,247 (l989).

And, it appears to be equally unhappy about the network transmission service pricing standard adopted by the FERC in a case initiated by FMPA itself against FPL in 1993 (FERC Docket No. TX93-4 and EL93-51). By any other name, a rate dispute is a rate dispute.

FMPA's letter misleads the NRC with its statement that FPL "is not selling network transmission service to FMPA." The service, with "network" pricing as determined by the FERC, is available under a rate schedule submitted by FPL in accordance with the FERC's order. Thus, it is more accurate to say that FMPA is not buying network transmission service. FMPA does not like the price and is awaiting the FERC's action on its request for rehearing. It is free to do so. It'is not at liberty to convert its reluctance to purchase into a refusal to sell. FMPA suggests that both it and FPL are equally dissatisfied with the FERC's orders. As anyone who follows the FERC's decisions knows, FPL's basic pricing methodology was approved by the FERC; FMPA's was soundly rejected (see both the FERC order in Docket No, TX93-4-000 at 67 FERC $ 61,167 (1994), and the attached news story on the FERC meeting where the order was voted upon).

The simple fact, as the FERC has recognized, is that FMPA wants a free ride. It first proposed to FPL and then to the FERC that it receive network transmission service for all of its loads and resources, but pay only about sixty percent of its allocable share of FPL's transmission costs. The FERC found this to be "flawed", holding, instead, that if "FMPA wants to be able to use the transmission system exactly as freely as does Florida Power, it must pay a rate that reflects that equality." 67 FERC at 61,482. Then, under the guise of protesting the compliance filing made by FPL at the FERC, FMPA suggested, based on a strained interpretation of a footnote in the FERC's order, that A United States, District Court in Florida had no difficulty determining, based largely on FMPA's own statements, that FMPA's complaint was with FPL's FERC-filed rates, and that rate issues were within the exclusive province of the FERC. That ruling, granting FPL's motion for summary judgment, as well as the question whether FMPA should be sanctioned for abusive discovery behavior, is pending in the United States Court of Appeals for the Eleventh Circuit. FMPA now seeks proceedings in yet another forum to pursue the same fanciful argument.

The FERC has issued a final order granting FMPA the right to network transmission service on terms and conditions that FERC found to be just and reasonable. That should put to rest this whimsical request for enforcement of the St. Lucie Unit No. 2 license conditions. Assuming, without conceding, that the NRC license conditions contemplate that FPL provide "network"

'o transmission service to FMPA, this service is now available to FMPA any day that it chooses to start receiving it. There is no reason for this Commission to expend its resources second-guessing the FERC's rate determination, a subject which this Commission has repeatedly recognized to by within the exclusive jurisdiction and expertise of the FERC.

The incessant forum-shopping that has become FMPA's trademark imposes gratuitous, expensive and wasteful burdens on every agency within the sweep of FMPA's imagination. It should not be countenanced, let alone encouraged. FMPA's petition for enforcement should be rejected forthwith without the expenditure of any more of this Commission's or FPL's resources.

Sincerely

.A. Bouknight, Jr.

Attorney for Florida Power & Light Company cc: Joseph Rutberg, Esquire Robert A. Jablon, Esquire See Kansas Gas and Elec. Co. and Kansas Cit Power and Light Co., 1 N.R.C. 415 (Atomic Safety and Licensing Board 1975) (" It is unreasonable to require this Commission to frame detailed rate and interconnection provisions, dealing with relatively minute specifics, for the 40-year period to be covered by the proposed license." . . . Clearly the Federal Power Commission has the requisite jurisdiction and expertise to resolve the issues of fairness of the instant transmission rates and rate schedule.

Comity between sister commissions, as well as considerations of avoiding duplication of effort, would indicate that the pending FPC proceedings provide an adequate forum . . . .") See also Louisiana Power and Li ht Co., 8 A.E.C. 718 (Atomic Safety and Licensing Bd. 1974) ("supervision over rates is the particular province of the Federal Power Commission and the [Licensing]

Board is neither qualified nor authorized to pass on the appropriateness of transmission rates").

4 t SOUTHEAST POWER REPORT MAY20, 4994

'fRSY FERC SECTlON K1 VNEEUNQ ORDER sttxy ishecatcntkwhayoaaskfar.yoamxybmcsap@r ierit>>

eBHMO POSNVELY SV FPhL, MUNfGROUP An FPAL spckccwotaaa said thte adfity%as IpQc, pfeascxf whh the dean and felt tbatFERC bad dcctded thepticixsg is-Bah Hooda Poach. Ughtand the HotMa MitnicipafPower sue hidy.

"~szidfastmck tber atepleascdwiA dsehl dcciYicn FMPh also said itfdtthe decision isa&in cee."Vfo ere sctchcdbydx:~ Encqp Regufatcxy Commission ia akey very pkascd the tbfs matter has been decided so crybaby, a casehvolviag aexwmk txansmfsske access ax! hear macha tttffiQ'an chafed, for ptanium ttansmissioa scxvico

., %ecae is tbe6cainahch FGu: bas cr6md anality so (DS~ ~ ~5'.~

spokcsmaa said.

service, sste canmoveoa to &npkasent thatact-allow as to adneve gtcatcr gezatiag d5acacy and, dsas,save moaey forcfcsmi:custtglcxs, oomptebetx&e and Qexihfe ncteek KARc. httd 15cr The FMPhspckesxnaa noted ltvrilfreceive cxedit forits

-. FPAL Med to ayeeoa lhe p6ce for theFHKccderscxvice.it stndits metnbccsexlsang tratlsxtlissLoa hcGitfes. Beadded i Section 2II ofthe

.:6a thatprovides

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. alto hecamethe Qtst case h uhicb 5ecemtnassxa otdcxed wheeling and sct tbe ttxms and coadldons kr the axvkc ender it~

Power Act KRC gtaatcdFMPA'sscquesxdsatit esumtiatfy the gX-~ and RLG-SI).

get ttaastxtissioa sex samtsme of the gtid FM'Abad scceivcd tbeaxas it sough!.ahBe FPkL sxcaived lhe price it chanted.W a berj~

Tbeoatcr caid tbepsice of h~"

the~ ~ be dctetxaiacd oa akxdecio shatebasis,~ the maafs payinghtted on tbcirshate ofaxal lead,whehapalsabout5%, cxxxtpatcd ala'M:c97%.

. tbstFPkL itself enjoys,oa the other band, FERCaidedvrlth FE'kL oa tbe issue ofhng so picesuch sexvRe.

FpkL waned dse munis lo pay based aa tbcstr total load of

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Efavevcr.a FERC sxatfcr noted, dse kot4atioshgc is "Ssotdto and ca~I -adhr toanahs mayafso boacccfxabL, Statfcxs aha noted that sheoxtfer estabhsbes hoar PHtC ~

the ~:

" geat4$ 0M%'.arguing that because the mssais to itstegrate their load. dsey should

<<'ased on the ataount of that ~hesame way FP8tL clku-

~ted pay for to use sexvioe mesh Sccticas2I I and 205 of the rahaf Power Act.

wm otdcxcd to pmvide the service andcr Seaim 2l I; it+BlCc the sales to provide dse service, hovsevcr, nader Scc6ce20$ .

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~ htcs is aansmissice costs for naave hfdf custoxncxs. Any hnae seviYiass m tbe satcs for sbescxvteeaaat beKcck ButFMPA said itdoes not need 450 NV'ofttaasmissiccl under 205. with oneexoqstiocu ifFILLE apart eocampso-sxrvice and wants so pay based oa its ase of lbesyssexa, whch it vtding aller any patt of tbe service.

~ cxpects

'se titan ymM amount lo ao mote din about 240 MWat !ay Saut cotnttusssuaer Doaahf Santa: "Tbe &st mocal of dus ~ ~

Sccxion Zl1 that ptehbits FKRC Som ocdering +heeling it mean dse cststotacr abmadveagy5ctsa

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StaEcxs also ncacd that the exdcr dari6es a ptovisioa under ttse the wtseefing sa xcpfaoe power it isttndcrcossnaet to buy. FERCsafd parties aader ooa-stact for their power tcqairetncats are &e to ceqacc an cehr, cnd FKRC can issue an order, as loag as cxxfcr is asccC'ective anat the end of the cxhdng ccxxtxact.

That chnficatftat meansthtdpatdesam5zetoRecp-the nc~ &seetfng outer whhsaRtsodcr ccatlscx t) buy their power &An tbeircutxeatsalspiicr.

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Page 9 LEVEL 1 - 5 OF 14 STORIES Copyright 1994 by Public Utilities Reports Inc.

FORTNIGHTLY June 15, 1994 SECTION: Vol. 132 No. 12 ZNSIDE WASHINGTON; Pg. 16 LENGTH: 384 words HEADLINE: Florida Network Service Order Is Final BYLZNE: Inside Washington articles were written by Lori A. Burkhart, an associate legal editor of the FORTNIGHTLY.

BODY:

The Federal Energy Regulatory Commission (FERC) has issued its first final order requiring "network" transmission service under section 211 of the Federal Power Act. The order sets the price for transmission service provided by Florida Power & Light Co. (FPL) for Florida Municipal Power Agency (FMPA)

(Docket Nos. TX93-4-000, EL93-51-000), based on FMPA's share of FPL's peak transmission load.

The FERC had issued a proposed order last October 17. That order required FPL to provide network transmission service, but offered only general pricing guidance, leaving the parties to negotiate specific rates, terms, and conditions of service. The parties failed to agree. The final order, issued May 11, notes that the parties agree on the basic principle of equal access to FPL's transmission system, but disagree on how to share the costs.

FMPA said it needed only 240 MW of firm transmission service, and that the its costs should reflect peaking demand on own system. The municipal proposed a monthly rate per kilowatt of network service that would equal the average embedded annual costs of FPL's transmission system, divided by FMPA's annual peak load on the system.

FPL proposed pricing based on a "load-share" basis, which called for FMPA to pay a share of total transmission costs, proportionate to FMPA's customer load on the network. Specifically, FPL proposed recovering its fixed costs through a monthly charge that reflects the ratio of FMPA's peak network service load coincident with FPL's system peak load. The primary component of the monthly charge for network service would be a fixed investment charge equal to the costs of the FPL transmission system, multiplied by the ratio of FMPA's network load to FPL's total load.

m The FERC adopted FPL's proposal, with some modification, finding it logical for each to pay based on its contribution to the system loads to be served by the transmission network.

The FERC also ruled that if FMPA wants to export power to other utilities if from network resources located in FMPA's control area (where FPL were making the sale it would charge itself and credit the revenue back to its transmission LEXIS'NEXIS'====:==:=-" LEXIS'NEXIS'===::.:=-" LEXIS'NEXIS*=.=::==="

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Page 10 994 Public Utilities Fortnightly, June 15, 1 system), then revenues should be shared by FPL and FMPA for the benefit of their native loads on the same basis as the costs.

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