ML18009A573

Notifies That Arbitrator Issued Award in Proceeding & Advises of Eastern Municipal Power Agency Withdrawal of Request for Initiation of Informal Complaint Procedures Re Antitrust License Conditions Contained in License NPF-63

ML18009A573
Person / Time
Site:	Harris
Issue date:	06/12/1990
From:	Newell G NORTH CAROLINA EASTERN MUNICIPAL POWER AGENCY, SPIEGEL & MCDIARMID
To:	Virgilio M Office of Nuclear Reactor Regulation
References
A, NUDOCS 9006210477
Download: ML18009A573 (14)

Text

ACCELERATED D TRIBUTION DEMONSTIMTION SYSTEM r~'EGULATORY INFORMATION DISTRIBUTION SYSTEM (RIDS)

ACCESSION NBR:9006210477 DOC.DATE: 90/06/12 NOTARIZED: NO DOCKET FACIL:50-400 Shearon Harris Nuclear Power Plant, Unit 1, Carolina 05000400 AUTH. NAME AUTHOR AFFILIATION NEWELL,G.J. North Carolina Eastern Municipal Power Agency NEWELL,G.J. Spiegel 6 McDiarmid RECIP.NAME RECIPIENT AFFILIATION R VIRGILIO,M.J. Policy Development 6 Technical Support Branch (Post 870411

SUBJECT:

Notifies that arbitrator issued award in proceeding 6 advises of withdrawal of request, for complaint proceedings. D DISTRIBUTION CODE: Y002D COPIES RECEIVED LTR ENCL SIZE:

TITLE: Distribution for Atypical 50 Dkt MateriaT NOTES:Application for permit renewal filed. 05000400 /

RECIPIENT COPIES RECIPIENT COPIES ID CODE/NAME LTTR ENCL ID CODE/NAME LTTR ENCL D PD2-1 LA 1 1 'PD2-1 PD 1 1 BECKER,D 1 1 "

VIRGILIO,M.J.. 1 1 Dl INTERNAL: ACRS 1 1 EOD SP/TPAB 1 1 OGC/HDS 1 1 1 REG F 01 1 1 RGN2 1 1 EXTERNAL: LPDR 1 1 NRC PDR NSIC 1 1 D

S

/

NOTE TO ALL "RIDS" RECIPIENTS:

PLEASE HELP US TO REDUCE WASTE! CONTACT THE DOCUMENT CONTROL DESK, ROOM Pl-37 (EXT. 20079) TO ELIMINATEYOUR NAME FROM DISTRIBUTION LISTS FOR DOCUMENTS YOU DON'T NEED!

TOTAL NUMBER OF COPIES REQUIRED: LTTR 12 ENCL 12

GEORGE SPIEGCI PC BCN FINKELSTEIN ROBCRT C. MCOIARMID DONALD WCIGHTMAN SANDRA J, STREBEL

)350 NLW YORK AVENUE NW MARGARET A MOGOLORICK ROBCRT A. JABLON WAS))INGTON 0 C 20005 4798 BARBARA 5. ESBIN JAMES N HORWOOO MARTIN S PUTNAM ALAN J. ROTH SUSAN M BERNARD FRANCES E. FRANCIS TELEPHONE (202) 879 4000 DIANC H, LAUTRUP DANIEI I. DAVIDSON JEFFREY R BABBIN TEI ECOPICR )202) 079-400'I DAVID KOLKCR PETER K MATT DAVID R STRAUS TCLECOPIER )202) B79-400) LISA G OOWDEN BONNIC 5 BLAIR WILLIAMS HUANG THOMAS C. TRAUGER RISC J PFTERS JOHN J CORBETT PETER J HOPKINS NANCY R PAGC CYNTHIA S BOGORAD GARY J, NEWCLL RUSSELL r SMITH. In MARC R POIRIER KOOWO GHARTEY.TAGOC r P DAVID LOPEZ RICHARD A. BROWN >> MARK F BADALAMCNTE JOSEPH VAN EATON 5 DAVID C POMPER RCNA ) STEINZOR 5 JOSHUA KATZ P, DANIEL BRUNER SCOT)' STRAUSS June 12, 1990 'ruhr>> or vv4oor 5 i errr 0>> 5v r uc<<e)>> or rv5* or ere r>>.5v oe covrrscL 5 ur<<er>> or>>)hherlv>>s.>> e<>> oui.v r SPENCER I KIMBALL r ANTHONY B MAOOONALO <<5<<er>> or u4 r hr>>or Lr

~

<<5<<>>5>> or <<555>>o <<Snve er>> 5h.5v Mr. Martin J. Virgilio Chief, Policy Development and Technical Support Branch Program Management, Policy Development and Analysis Staff Office of Nuclear Reactor Regulation Nuclear Regulatory Commission Washington, D.C. 20555 RE: Shearon Harris Nuclear Power Plant, Unit 1 Request for Initiation of Informal Complaint Procedures

Dear Mr. Virgilio:

By letter dated May 5, 1989, addressed to Dr. Thomas Murley, North Carolina Eastern Municipal Power Agency ("Power Agency" ) requested the initiation of informal complaint procedures pursuant to Section 5.3.2 of NUREG-0970. The purpose of that request was to seek enforcement of antitrust license conditions contained in the Facility Operating License for the Shearon Harris Nuclear Power Plant, Unit No. 1, operated by Carolina Power & Light Company ("CP&L") on behalf of itself and Power Agency as co-licensees.

As indicated in Power Agency's May 5, 1989 request, matters set forth in Power Agency's complaint were also the subject of an arbitration proceeding commenced by Power Agency.

Pursuant, to your request, Power Agency and CP&L have kept you apprised of the status of that arbitration proceeding. The purpose of this letter is to notify you that the Arbitrator has issued his award in that proceeding, and to advise you of Power Agency's withdrawal of its request for the initiation of informal complaint procedures.

A copy of the Arbitrator's award, which was issued on June 9, 1990, is enclosed. The award resolves certain issues of contract interpretation under the 1981 Power Coordination Agreement between CP&L and Power Agency that had arisen in 9006210477 900612 PDR ADOCK 05000400 PDC c

I ll

Mr. Martin J. Virgilio June 12, 1990 Page Two connection with Power Agency's efforts to utilize alternative bulk power supplies (i.e., power supplies other than those provided by CP&L). Without delving znto the details of the award, we note for your information that the Arbitrator ruled in CP&L's favor on certain of these contract interpretation disputes, and in Power Agency's favor on others.

Power Agency's request for informal complaint procedures was based on the view that CP&L had asserted unjustified interpretations of the 1981 PCA that obstructed Power Agency's access to alternative power supplies. The Arbitrator's ruling sustains certain of the contract interpretations advanced by each of the parties, including certain of CP&L's interpretations that had formed the basis (in part) for Power Agency's complaint.

Further, since the Arbitrator's ruling resolves contract interpretation disputes that had previously separated the parties, it may now be possible for CP&L and Power Agency to negotiate arrangements for the use by Power Agency of certain alternative power supplies. Power Agency expects to seek the commencement of such .negotiations in the very near future. Under these circumstances, Power Agency deems it appropriate to withdraw its request for informal complaint procedures, without prejudice to its rights to renew that request (or to submit a new request) in the future if, in Power Agency's view, circumstances so dictate.

Power Agency appreciates the Commission Staf f 's attention to the matters raised in its request for informal complaint procedures.

V trul ours, Gary J. Newell Counsel for North Carolina Eastern Municipal Power Agency GJN/cjc Enclosure cc: George A. Avery Mark S. Calvert William G. Wemhoff Michael S. Colo

~

'ROCEEDING IN ARHITRATION mw ~~~ ~

WO ~

NORTH CAROLINA EASTERN MUNICIPAL PONER AGENCY, Initiating Party V~ The Honorable Sidney 0. Smith, Jr.,

CAROLINA PONER 0 LIGHT Arbitrator COMPANY, Other Party.

Upon consideration of pleadings and other filings and, the testimony and other evidence Presented at the hearings of this Arbitration between North Carolina Eastern Municipal Power Agency (" POWer AgenCy" ) and CarOlina POWer S Light COmpany

("CPa'), it is hereby ordered and adjudged as follows:

1. Each New Resource must be a firm power supply through provision of backstand for such New Resource which meets the standard set forth in Section 6.1(C)(l) of the 1981 Power Coordination Agreement (the "1981 PCA"). Therefore, Power Agency does not have the right to use energy from a resource other than the energy associated with the capacity of a New k

Resource to meet any portion of its Hourly Resource Demand unless (i) such supply of energy is no more than the capacity of the New Resource; and (ii) the energy associated with the capacity of the New Resource can be provided in place of ruch

JUN '1 '98 18'43 P.3 other energy without any interruption. "Without any interruption," as used herein, shall moan tho degree of assurance as to firm power supply as CPS'nd Power Agency may agree upon in negotiations with respect to a power coordination agreement for a particular Now Resource for which an onergy source other than energy associated with tho capacity of such New Resouzco is boing supplied.

Tho dogroo of assurance applicable to the Santee Cooper New Resource as identif ied herein, including any 'ubstitute source of energy as described in the foregoing paragraph, must be that Santoe Cooper will supply energy with the same degree Of assurance that it supplies its own f irm retail or other .

wholesale customers.

2. The amount of noticed firm capacity that Power Agency has contracted to purchase from Santee Cooper in the years 1994-1995 pursuant to Service Schedule D of the draft Inter-Utility Exchange Contract ("Exchange Contract" ) dated March 2, l990, and the Commitment for Iong Term Firm Power between Santee Cooper and Power Agency (the "Commitment" )

(included in power Agency Exhibit 2) and deliveries of Firm Power scheduled pursuant to Section D.3.3. of such service Schedule D qualify as a New Resource under Section 6.1(E) of the 19Sl PCA. The services provided for under Service Schedules 8 and C as reflected in the March 2, 1990 draft of the Exchange Contract (Power Agency Exhibit 2) do not qualify

JLJN '3. '98 18:44 p,4 as Now Rosourcos undor tho 1981 PCA; provided. however, that this ruling shall not procludo the uso of energy by Power Agency under such Service Schedules B and C, or revisions thereto. ox the use of other sorvicos that may be, provided under the Exchange Contract, when such uso takes placo undor terms and conditions which meet the etandards of paragraph 1 hereof, 3 ~ (a) Subject to the notice provisions of Section

6. 1(D) and 6.1(E) as interpreted in paragraphs 6 and 7 herein, Power Agency has the right, under the 1981 pCA, to use New Resource capacity to reduce power Agency's purchases of Supplemental Capacity; - (b) Subject to the notice provisions of Sections 6.1(D) and 6.1(E) as interpreted in paragraphs 6 and 7 herein, Power Agency has the right, under the 1981 PCA, to use the energy associated, with the noticed firm capacity of the New Resource to reduce power Agency's purchases of Supplemental Energy.

4. Kith respect to energy from a New Resource dispatched by Power Agency, power Agency shall have the right to schedule dolivorios Crom such New Resources when, in power Agency's

$ udgmont, such dolivorios aro oconomically advantageous to Power Agency and CP&K shall credit such delivorios pursuant to Section 8,3 to reduce Power Agency's purchasos of Supplemental Energy. Other aspects of after tho fact accounting shall bo negotiated as part of the power coordination 'agroomont

III JUN 1'98 18:44 P.5 applicable to such New Resource. Nhen Power Agency has more than one Naw Resource, the foregoing principles shall be applied in a manner which recognizes, for Power Agency's benefit, the differences in energy cost between such New Reaourcea.

5. Power Agency doeo not have the right, under the 1981 PCA> to use the energy associated with the capacity of a New Resource to displace Hourly Resource Demand up to the level of total Retained Capaoity, 1.e., its Actual,Entitlementa ae such Actual Entitlements are determined in accordance with Section E

7.1 of the 1981 PCA, or to displace Replacement Energy supplied by CP&L pursuant to Section 7.z of the 1981 Pcs, or to displace its use of energy from Unused Supplemental Capacity in accordance with Sections 7.5 and 8.2 of the 1981 FCA, or to displace its purchases of Reserve Bnergy or Deficiency Energy in accordance with Sections 7.4, 7.6 and 8.2 of the 1981 PCA.

Noz does it have the right to use the capacity of a New Resouxce to displace Reserve Capacity supplied by CP&L pursuant to Section 7.4 of the 1981 PCA.

6. Power Agency's statement of the amOunt oK capacity of New Resouxco it intends to deClare for the purpose of reducing Supplemental Capacity in a notice provided pursuant to Section 6.1(D) or 6,1(E), as applicable, is binding upon Power Agency and such Statement may not bo changed; provided, howeyex' tha t this determination shall not diminish Power

~ ~

r

JHH 11 '93 "8:45 P.G

~ ~

Agency's rights to schedule a Nevi Resource to serve Hourly Resource Demand in less than eight years, upon eighteen months written notice.

7. In any notice provided by Power Agency pursuant to Sections 6. 1{D) and 6, l{E) of the l981 PCA, Power Agency's F

statement of the expected dependable capacity> source, means proposed for backstand, period of "expected availability of the New Resource and the further information required by Section 13 '{C) of the 1981 PCA need not be stated precisely; providedg ho~ever, that Power Agency is obligated to state, at the time t

such notice is given, a substantially correct expectation with r

respect to each ot these items. The aforesaid information concerning a New Resource (other than the declared amount of Supplemental capacity reduction) may be modified by power Agency following the provision of the original notice'provided, however, that if CP&L believes that such modification has a materially adverse impact upon the power supply planning activities of Cp&L, considering, the nature, timing and magnitude of the modifications, the relative size of the CP&L and Power Agency systems, the risks properly to be horne by utilities because they undertake to provide new generation. and the parties'espective planning period for significant generation and transmission resource additions, the effect af such modification shall be a subject of the negotiations of the terms and conditions of the power coordination agreement for 5

0 'I

~ ~

JliN 11 '98 18:45 P.7

~ ~

such. New Resource. At any time that it appears to either party that negotiations will not produce an agreement on such modification, such party may make appropriate application to FERC for a determination of (1) whether tho modification results in an impact on cPEL's planning activities that is materially adverso in light of tho forogoing considerations and, (2) if so, tho appropriato torms and conditions of the power coordination agroomont for such New Resource to address such advorso impact.

8. When Power Agency provides advice to CPSL pursuant to Section 6.l(C)(5) of the 1981 PCA, such advice Shall inClude, to the extent known to.'Power Agency at the time such advice is provided, the typo and approxiraate size of the resource being considered and the approximate time frame when the resource is expected to be available; provided, however, that Power Agency shall not be required to include in any such advice information that Power Agency reasonably deems to be proprietary or commercially sensitive. Power Agency shall provide such advice in good faith at the times indicated in Section 6.1(C)(5), but such advice shall not be binding on power Agency.

9 This arbitration has resolved the issues of contract interpretation arising under the 1981 pCA which are set forth in the Stipulation of Parties dated March 12, 1990. Any further disputes which related solely to the torms and conditions of a power coordination agroomont for Powor Agoncy's 6

JlN X1 '98 18:46 P.S

~

~

I use of thP Maw Resource obtained from Santeo Cooper under the draft Exchange Contract, as such How Resource ie identified in paragraphs 1 and 2 above, or which (a) relate solely to the terms and conditions of a power coordination agreement for any other New Resource obtained by Power Agency and (b) do not require interpretation of provisions of the 1981 PCA, are to be decided by the Federal Energy Regulatory Commission in the f'st instance.

10. Each party shall bear its own attorneys'ees and other expenses incurred in preparing and presenting its case.

CPSL and Power Agency shall pay equally the costs of conducting this arbitration proceeding, including the Arbitrator's fee and expenses, the costs associated with providing the hearing room and related equipment, court reporting costs, and the costs of deposition transcripts.

Dated this day of June> 1990.

Sidney 0, Smith, Jr.

Arbitrator