ML19254E026
| ML19254E026 | |
| Person / Time | |
|---|---|
| Site: | San Onofre  |
| Issue date: | 10/18/1979 |
| From: | Toalston A Office of Nuclear Reactor Regulation |
| To: | James Drake SOUTHERN CALIFORNIA EDISON CO. |
| References | |
| NUDOCS 7910300528 | |
| Download: ML19254E026 (5) | |
Text
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CCI 1 0 1973 Docket Nos. 50-361 50-362 Mr. James H. Drake Vice President Southern California Edison Company P. O. Box 800 2244 Walnut Grove Avenue Rosemead, CA 91770
Dear Mr. Drake:
SAN ON0FRE NUCLEAR GENERATING STATION, UNITS 2 & 3 Your counsel furnished by transmittal letter of August 10, 1979 answers to questions we had asked with respect to the operating license antitrust review for the captioned nuclear units.
We thank you for your clear and complete response.
We have now reviewed the answers you supplied and references you referred to.
Based on this review, we would appreciate it if you could now furnish us with some additional material and clarify some of our questions as follows:
1.
Please furnish copies of Edison's generation projections, for as many years as they were projected, for each year projections were made beginning in 1973 and ending with the latest projection.
2.
Please furnish a copy of the Settlement Agreement and associated coordination or power sales agreements which Edison entered into with the Anza Electric Cooperative, Inc.
3.
In the August 10, 1979 response to our questions, counsel for Edison stated that the Anaheim and Riverside Integrated Operation Agreements (I0As) had been accepted for filing by FERC.
Are the FERC proceedings with respect to these 10As concluded? If so, was there a final Order or Statement made by FERC which you could supply us with?
If not concluded, please summarize the events and schedules which are yet to take place.
Has Riverside or Anaheim taken any services under the I0As?
If so, please describe briefly what has taken place.
4.
Have any further significant actions taken place with respect to I0As between Edison and other California cities?
If so, please describe briefly and supply relevant documents.
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Mr. James 11. Drake 5.
Mr. R. L.
Mitchell in his testimony before FERC in Docket No.
E-7777 indicated that at the time the Sundesert Project was shelved, the Sundesert participants and Edison were reaching agreement on a coordinated transmission. plan.
Please describe the arrangements anticipated and furnish any substantiating documents.
6.
Under Section 12.2 of the Anaheim or Riverside 10A, reserves are calculated as a percent of annual peak combined finn loads of the parties. This percentage figure is then applied to the City's capacity (rather than load) to detennine the City's responsibility.
Is its Edison's opinion that this is a proper detennination when a City's capacity resources exceed its p.eak annual load? Is it anticipated that this section of the 10A would be amended if and when the City's capacity exceeds its peak annual load? Does Edison consider that this method cf reserve responsibility calculation may have the effect of discouraging a City from becoming self-sufficient in generation?
7.
Under Section 5.5 of the 10A a City's installed reserve obligations are subtracted from its capacity resources to obtain its capacity credit.
Then, under Section 15.1.1 of the 10A, Capacity Credit is used in establishing City's demand and energy requirements under the partial requirement rate schedule.
This method of demand and energy requirement appears to have two effects:
(1) A City's spinning reserve requirement would be equal to its full installed reserve requirement and, (2) energy associated with the reserve portion of a base load unit would not be credited to City.
This latter effect would be particularly significant for nuclear units which would normally be base loaded.
For example, if the installed reserve requirement were 20%, it appears that a City would only get credit for 80% of the energy from its portion of a nuclear unit.
Furthermore, under economic dispatch principles, it appears that Edison could utilize energy from the City's other 20% of the nuclear unit and provide spinning reserves from other less efficient units.
Please explain the rationale for the method used in the 10A for crediting a City's capacity resource.
What was the origination of the method used in this determination?
8.
Under Section 16.2 of the 10A, Edison supplies Contract Energy to replace energy from City cesources which Edison does not 12M 065
?C' Mr. James li. Drake schedule or dispatch.
City may pay for such contract energy based on either of two methods:
(1) Edison's Contract Energy Cost, or (2) City Incremental Cost Edison's Contract Energy Cost is based on the cost of Edison's conventional oil-fired, combustion turbine and combined-cycle generation, i.e., the cost of intermediate and peaking generation which would presumably have considerably higher energy costs than Edison's base load generation.
Thus, during light load conditions when Edison is operating its base load generation and through economic dispatch principles possibly be replacing City's base load generation which may have only slightly higher costs than Edison's, the City would be charged at Edison's intennediate and peaking generation cost.
For example, assume that during an off-peak load condition, Edison Contract Energy cost is 35 mills, Edison's incremental energy cost is 20 mills and City's incremental cost is 22 mills.
Under economic dispatch principles, Edison would dispatch its 20 mill generation in place of City's 22 mill generation. On a split-the-savings basis, City would be charged 21 mills.
However, under the 10A, City would be charged at 35 mills.
Please explain the rationale for the use of Contract Energy Cost instead of a split-the-savings basis.
We understand that under the 10A a City may choose another method of paying for Contract Energy rather than the one just described, i.e., one based on the City Incremental Cost rather than Edison's Contract Energy Cost.
However, it appears that this option is not appropriate for a City with only partial generation.
For example, at a slightly higher load level than the illustration given above, City's incremental cost could jump quite rapidly because with partial generation the City would be into its very high cost peaking generation whereas Edison would still be using its base load generation.
As an illustration, when Edison's incremental cost is 21 mills City's incremental cost could be 45 mills and Edison would be making a 24 mill profit under the I0A. Without the I0A arrangement, City would buy partial requirement power instead of dispatching its high cost peaking units.
The only time City would dispatch such peaking units if under City's control would be during extreme peak load periods in order to reduce the demand charges under the partial requirement rate schedule.
12M 066
1 4-Mr.. James H. Drake In sumary, it would.:ppear that while City's peaking units would not actually be dispatched under the 10A during off-peak load periods, City would nevertheless have to pay Edison as if they had been dispatched.
Plec;e explain the rationale and
. appropriateness of this type of pricing for a partial requirement purchaser.
From what books or operating principles did the two pricing methods, i.e., Edison's Contract Energy Cost or alternatively City's Incremental Cost origi,a?.e? Please furnish the separate components (FC, HR, OC ::d 100/(100-L)of Edison's Contract Energy. Cost for the latest month for which it is available.
9.
With respect to the Anaheim and Riverside requests for transmission from the Palo Verde Nuclear Plant, Edison responded that the capacity of the Palo Verde to Devers 500 kv transmission line would be utilized by Edison over a period of time for Palo Verde Units 1, 2, and 3, for additional units in Arizona, for acquiring a portion of the Salt River Projects interest in Palo Verde and for participation in the second D.C. tie to the Northwest.
If Edison declines to furnish firm transmission services outside of its retail service area on the basis that sometime in the future its transmission facilities may become loaded, under what conditions, if any, would it offer firm transmission services outside its service area?
We note that Mr. R. L. Mitchell in his testimony in the FERC Docket E-7777 states:
"The basic reason for Edison's inability +9 offer long-term firm transmission service or co-ownership in this line was its need to transmit 1370 MW of power from its share of Palo Verde Units 1, 2 and 3, and its planned shares for participation in Palo Verde Ur.its 4.nd 5.
In fact, Edison's planned participation in Palo Verde Units 4 and 5 of 790 MW, plus its 580 MW participation in Palo Verde Units 1, 2 and 3 will exceed the transfer capability of the Palo Verde-Devers line, and will require construction of additiorial transmission facilities from Palo Verde to Southern California."
Did Edison recognize at the time of its initial response to the cities that it woi.ld require more than one 500 kv line to carry out the functions which it itemized?
Is it Edison's b :$ b'l Ub?
2
~
3 Mr. James H. Drake view that the transmission system from Palo Verde could not have been designed to accomodate the Cities' requests for 150 to 220 MW of participation? Please explain.
Under the 10As with Anaheim and Riverside, would the transmission requirements from Palo Verde be any different if Riverside and Anaheim had acquired a portion of Salt River Project's interest in Palo Verde instead of Edison? Please explain.
Is it Edison's view that the cities could have and should have built their own transmission facilities, separate from those of Edison to obtain Palo Verde Participation?
10.
M.. R. L. Mitchell in his testimony before FERC in Docket No.
E-7777 indicated that Edison had not as of then received right-of-way rights from the Bureau of Land Management for tmnsmission lines from Palo Verde.
Has Edison received such rights yet? If so, were there any conditions attached regarding transmission rights of others?
Please respond to the above questions and requests at your earliest opportunity so that we can continue our review in an expedited manner.
Sincerely, ry") A.L nwdste Argil Toalston, Chief Power Supply Analysis Section Antitrust & Indemnity Group Office of Nuclear Reactor Regulation 123 068