ML19262A596
| ML19262A596 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 11/28/1979 |
| From: | Ross W, Watson K CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.) |
| To: | |
| References | |
| NUDOCS 7912070120 | |
| Download: ML19262A596 (22) | |
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UNITED STATES OF AMERICA BEFORE THE ATOMIC SAFETY & LICENSING BOARD NUCLEAR REGULATORY COMMISSION In the Matter of )
) Docket Nos. 50-329A CONSUMERS POWER COMPANY ) 50-330A Midland Plant, Units 1 and 2 )
ERRATA TO PROPOSED LICENSE CONDITIONS On September 25, 1979, Consumers Power Company and the Intervenors in the above captioned proceeding attached proposed antitrust license conditions to their Joint Motion of Consumers Power Company and Intervenors Supporting Imposition of License Conditions.
Recent review of that attachment revealed three minor errors which require correction. I am attaching a list of these corrections and a brief explanation of them. Also attached is a complete set of the proposed license conditions which reflect the referencud corrections.
I am authorized to state that counsel for the Intervenors, the Department of Justice and the Commission Staff concur in these corrections. We regret any inconvenience to the Board occasioned by this filing.
Respactfully submitted, Wm. Warfield Ross Keith S. Watson WALD, HARKRADER & ROSS Attorneys for Consumers Power Company ,307 1522 November 28, 1979 7 912 070 /MO gq
ERRATA TO LICENSE CONDITIONS
- 1. On page 7, last line, insert "and," after " sales)".
Explanation: This reflects correction of a typo-graphical error and would conform with previous drafts.
2 On page 8, line 7, insert "as a part of" after " provide for".
Explanation: This is clarifying language which insures that under the circumstances described in the sentence the I:4 serve responsibility is not construed to constitute only the increment in question. Such a construction would clearly not reflect the intent of the parties.
- 3. On page 13. line 18, insert after " executes" the phrase ",
within one year after execution of letter of intent," and strike the phrase from the end of the same sentence.
Explanation: Moving the phrase in question within the sentence clarifies the intent of the parties that the phrase modify " executes".
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LORRECTED ATTACHMENT TO THE JOINT MOTION MIDLAND NUCLEAR POWER STATION, UNITS 1 AND 2 PROPOSED LICENSE CONDITIONS I. DEFINITIONS
- 1. As used herein:
(a) " Licensee" means Consumers Power Company, or any successor or assignee of this licensee and includes each present or future subsidiary in which Licensee owns more than 50% interest and any successor there to.
(b) " Bulk power" means the electric power and attendant energy supplied or made available at transmission or subtransmission voltage for resale.
(c) " Neighboring entity" means a private or pub-lic corporation, a governmental agency or authority, a municipality, a cooperative, or a lawful association of any of the foregoing, which is all or pr.;tia22y in Licensee's service area-(as defined below) and which meets each of the following criteria: (1) its facilities, existing or pro-
. posed in the immediate future folicwing a . proposal for arrangements under these ccnditionti, are eccnomically and technically feasible of interconne': tion with those of the Licensee; (2) it owns and operates or proposes to own and operate electric generation, transmission or distribution facili ies or has joint ownership participation or contrac-tual rights in generation, transm!.ssion or distribution facilities operated by others; and (3) with the exception of 1522 309
generation and transmission cooperatives, municipalities, governmental agencies or authorities, and associations, it is, or upon commencement of operations, will be a public utility or cooperative and subject to regulation with respect to rates and service under the laws of the State of Michigan or under the Federal Power Act; provided, however, that as to associations, a majority of members of such. association is either a public utility or cooperative as discussed in this clause (3) or a municipality, governmental agency or authority.
(d) " Neighboring coordinating entity" means a " neigh-boring entity" which is currently planning its future bulk power supply so that its " total generation capacity" (as defined below) will be ac least equal to its projected peak load demand and reserve requirements established pursuant to Secticn 3(a) hereof. Total generation capacity shall be calculated as the sum of the system's (1) native installed capacity, (2) formally executed bulk power purchases (in-cluding purchases under a wholesale tariff) from or arrange-ments with Licensee or other parties for periods of one or more six-month peak load seasons and (3) participation in generating units of Licensee or other electric systems.
An electric distribution system that satisfies its entire peak load demand with firm power purchases from another electric system (including an association of which it is a member) does not qualify as a neighboring coordinating entity.
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(e) " Costs" means all appropriate costs, including a reasonable return on investment, which are reasonably allo-cable to an arrangement between two or more electric systems under coordination principles or generally accepted industry practices. In w:t;caining costs, no value shall be included for loss of revenues from a sale of power by one party to a customer which another party might otherwise serve.
(f) " Net benefits" means that, for each party thereto, the benefits derived from an arrangement exceed its costs. Receipt of compensation which covers Licensee's costs, in accordance with the applicable tariff or rate filed by Li-censee with a regulatory 7
authority, or established by such au-thority pursuant to a final, non-appealable order, shall be deemed to provide Licensee with net benefits as to such arrange-ment; provided that Licensee shall not decline to enter into an arrangement during the pendency of administrative or judicial proceedings involving filings applicable to such arrangement.
Compensation under a tariff or rate applicable to a particular arrangement or a particular party shall not necessarily be deemed to provide net benefits as applied to different arrangements or different parties. In calculating net benefits from a particular arrangement, Licensee shall also take account of value (positive or negative) other than compensation under a rate or tariff, including impact on system reliability and risks of forced outage.
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(g) " Integrated bulk power system" means the inter-connected generation, transmission and sub-transmission f a-cilities used to serve a system's principal load centers.
(h) " Licensee's service area" means all counties in Michigan's Lower Peninsula with the following exceptions:
(1) the entirety of the counties of Berrien, Cass, Huron, Lapeer, Macomb, Sanilac, St. Clair and Wayne, and (2) the townships in which Licensee is not franchised to provide electric service in the counties of van Buren, St. Joseph, Monroe, Washtenaw, Oakland, Tuscola and Livingston.
II. GENERAL PRINCIPLES 2(a) The arrangements described in the following sections shall be o'f the types, and pursuant to terms and conditions, which are consistent with good industry prac-tice. The terms and conditions of any individual arrange-ment'shall be on a basis that will compensate Licensee for its costs incurred thereby. No party skall be obligated to enter into an arrangement if on balance there does not ap-pear to be any demonstrable net benefit to such party arising from that arrangment. It is recognized that, in any particular arrangement the net benefits may not be equal or identical for each party and that the net bene-fits of an arrangement for a small system or for a system not theretofore engaging in such arrangements may be greater 1522 312
than that realized by a larger electric system or one already engaging in such arrangements. The relative net benefits to be derived by the parties from a proposed arrangement shall not therefore affect a decision with respect to parti-cipating in any such arrangement, subject uo the other terms and conditions of this license.
(b) Any neighboring coordinating entity entering into any arrangements provided fer in these license conditions will be expected insof ar as practicable and in accordance with good industry practice - taking into account laws, rules and other restrictions affecting taxation and financing - to grant recip-rocal rights and benefits to Licensee, and to underttke recip-rocal obligations with respect to Licensee. Nothing herein shall require a neighboring coordinating entity to construct generation facilities except where to do so is necessary to maintain its reserve obligations under Section 3(a) below.
(c) Interconnection, interchange of pcwer, coordi-nation or other arrangements under this license shall be re-quirea only if such arrangements would not adversely affect Licensee's system operations or the reliability of power sup-ply to Licensee's customers or other electric systems with whom it has prior contractual commitments, and if such ar-rangements would not jeopardize Licensee's ability to finance or construct on reasonable terms facilities needed to meet its 1522 313
own anticipated system requirements, including the sale of firm bulk power pursuant to Section ll(a) hereof.
(d) The following conditions shall be implemented in a manner consistent with the provisions of the Federal Power Act and other applicable regulatory statutes, regula-tions and orders. All rates, charges or practices in connee-tion with any action taken by Licensee pursuant to this li-cense, which are subject to the jurisdiction of a regulatory agency, are subject to the approval of that agency. Nothing in the foregoing shall be construed to waive any of the Li-censee's rights or protection afforded by law with respect to the retail distribution of electricity in those areas of Michi-gan in which it transacts local business. Licensee shall not be required to enter into any final arrangement prior to reso-lution of any substantial questions as to the lawful authority of another party to engage in the arrangement.
(e) If Licensee participates in any of the following arrangements with an association of electric systems, Licensee shall not be obligated to take account of requests or require-ments of members of that association which do not qualify as a " neighboring entity", as defined in section 1(c) hereof.
(f) Agreements implementing the following sections shall not impose limitations upon the use or resale of capacity and energy after delivery to a neighboring entity, except as may be necessary to protect the reliability of Licensee's system. ,
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(g) Licensee shall also negotiate in good f aith interconnection and other appropriate agreements with a neighboring entity which has bona fide plans to become a neighboring coordinating entity in the immediate future so as to permit such entity the opportunity to participate in arrangements described in the following sections as soon as it becomes a neighboring coordinating entity.
(h) The obligations set forth in the following sections shall be governed by conditions and limitations set forth in this section.
III. COORDINATED OPERATIONS
- 3. Obligation to interconnect and share reserves (a) Licensee shall interconnect and enter into appropriate coordination agreements with a neighboring coordi-nating entity which so requests and operate normally in parallel in accordance with good operating practice, provided that a reciprocal plan of reserve sharing is agreed to by a neighboring coordinating entity as provided herein. Licensee and such entity shall jointly establish and separately maintain the minimum reserves to be installed or otherwise provided under such a plan in accordance with good industry practice.
Further, under such a plan, Licensee shall not be obligated to agree that a party may maintain a minimum reserve percentage less than Licensee's own reserve percentage. The reserve re-quirement thus established shall be calculatet as a percentage of peak load demand (adjusted for firm pcwer purchases and sales)
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and, except as provided herein, no party to the interconnection shall be required to maintain as its reserve requirement more than such percentage of peak load demand. If the reserve re-quirements of any party to a reserve sharing plan under this paragraph are increased over and above the amount such party would be required to maintain without such interconnection, then the other party shall be required to carry or provide for as a part of its reserve responsibility the full amount of kilowatts of such increase. If over a reasonable period one system demands en.ergency support from the other to a dispropo:-tionately greater extent than the system delivers such support, by reason of the unfavorable reliability experience of the receiving system's generation or transmission facilities, the receiving system shall take all reasonable steps to avoid such demands (e.g.,
by purchasing capacity and energy other than emergerny energy, or other reasonable steps). Each party to any such recipro-cal plan shall maintain such amounts of operating reserves as may be consistent with good industry practice and adequate to avoid the imposition of unreasonable demands on either party in meeting the reasonable contingencies of operating its own system. However, in no circumstances shall a party's opera-ting reserve requirement exceed its installed reserve require-ment.
(b) Interconnections with neighboring coordinating entities shall not be limitcd to lower voltages when higher voltages are requested and available from installed facilities 1522 316
of the party to whom the request is made in the area where the interconnection is desired. Each party shall maintain control and metering facil11 ties as required for safe and pru-dent operation of the interconnected system in accordance with good industry practice.
(c) The cost of interconnection facilities between Licensee and another system shall be allocated in a manner which takes account of the various transactions for which the interconnection facility is to be utilized.
(d) Except as provided in Section 10(a) infra, interconnections shall be made to the integrated bulk power systems of each entity. Any party may require that the trans-mission f acilities between the interconnected parties meet reasonable protective standards to avoid credible contingen-cies cascading to areas outside of each party's system.
(e) Interconnection agreements shall not prohibit neighboring coordinating entities from entering into other interconnection agreements, but may include appropriate pro-visions to protect the reliability of Licensee's system, and to insure that Licensee is compensated for additional costs resulting from such other interconnections.
- 4. Obligation for reciprocal sales of emergency p ove r.
Licensee shall exchange emergency power with neigh-boring coordinating entities which so request. Licensee shall be required to engage in such transactions if and when 1522 317
it has power and energy available for such transactions from its own generating resources or from interconnected systems but only to the extent that it can do so without impairing service to its customers or other electric systems with whom it bas contrac'tual commitme ts, 'provided, however, emergency service shall take precedccc over any sales of economy energy.
- 5. Obligation to coordinate maintenance scheduling and for purchases and sales of maintenance power and energy.
Licensee shall exchange joint maintenance schedules and shall engage in purchases and sales of maintenance power and energy with any neighboring coordinating entity which so requerts when it can reasonably do so. After agreement to each such transaction, power shall be supplied to the fullest extent practicable for the time scheduled and in accordance with generally accepted industry practice for maintanance power and energy sales.
- 6. Obligation to engage in sales of economy energy.
Licensee shall exchange data on costs of energy from-generating resources available to it and, consistent with sys-tem security sell to, purchase from, or exchange economy energy when appropriate to do so under principles of economic dispatch with a requesting neighboring coordinating entity on a basis that will apportion the. savings from such transactions equally between Licensee and such entity.
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- 7. Obligntion to sell, purchase or exchange other ron-firm surplus capacity and energy associated therewith.
Licensee shall sell to, purchase from or exchange with any neighboring coordinating entity other non-firm bulk power whien the supplying system deems to be surplus, when such transactions would serve to reduce the overall costs of bulk power supply without a loss to either party. Such bulk power transactions shall be on terms and conditions consistent with generally accepted industry practice.
- 8. Reciprocal Performance With regard to transactions in emergency and main-tenance power, economy energy and other non-firm surplus capacity-energy, as set forth in Sections 4, 5, 6 and 7 above, other parties to such transactions shall maintain (and ade-quately plan to provide) bulk power supply f acilities and capabilities sufficient to reasonably assure Licensee that reciprocal performance will be f arthcoming. Reciprocal per-formance requires plans and cona fide efforts necessary to maintain the established reserve levels under the coordina-tion arrangement. Temporary short-falls in meeting this requirement due to circumstances beyond a party's control would not provide a basis for the other party's failure to perform in this regard. Reciprocal performance does not necessarily require that neighboring coordinating entities supply Licensee with the same amounts of power or energy which they receive from Licensee.
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IV. ACCESS TO NUCLEAR GENERATION 9(a) Licensee shall, upon timely request, afford any neighboring entity an opportunity to participate in Midland Units 1 and 2., Licensee shall, prior to the time major equip-ment items for nuclear generating units are ordered, upon re-quest by any neighboring entity, afford such entity an oppor-tunity to participate in all future nuclear generating units for which Licensee applies for a construction permit on or be-fore December 31, 1999. Participation shall be through rea-sonable joint ownership or other joint financing arrangements in which the participating neighboring entities pay their share of costs of construction approximately (but no later than) as they are incurred by Licensee. The form of such participation in such generation units shall be at the option of the parti-cipating entity to the extent that such an entity is legally able to participate in the unit under such a form of partici-pation. Such participation shall be on reasonable terms and conditions and on a basis that will compensate Licensee for its costs incurred and to be incurred for such generating units; provided, the aggregate participation of others in any nuclear unit shall not be required to exceed the lower of 49% of the capacity of such unit or an amount based upon a ratio of (i) most recent aggregato peak load demand of requesting participants to (ii) the sum of such demands and Licensee's most recent peak load demand (less the most recent peak load demands on Licensee by the requesting participants.)
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A request from a neighboring entity for participation in Midland Units 1 and 2 shall be deemed timely only if a letter of intent to participate (subject only to financing contingencies) is executed by the governing body of the participating entity and received by Licensee within a mutually agreeable time period following the effective date of these license conditions. As to future nuclear units it plans to construct, other than Midland Units 1 and 2, Licensee shall provide to requesting neighboring entities all available financial and technical data required to assess the feasibility of participation therein. A request for such participation shall be deemed timely only if a letter of intent to participate (subject only to financing ,
contingencies) is exe need by the governing board of the participating oncity and received by Licensee within six months following Licensee's provision of such data. A neigh-boring entity's participation request in a nuclear unit shall also be deemed timely only if it executes, within one year after execution of such letter of intent, a legally binding and enforceable agreement with Licensee to assume financial responsibility for its share of the costs associated with a unit.
(b) As a part of any arrangement that Inay be reached with respect to any participation under subsection 9(a) above, Licensee shall interconnect with and deliver to the integrated bulk power system of a participating neighboring entity any powertowhichitmaybeentitledundersu4 ib22aura32$gementata
delivery point or points on Licensee's system on a basis that will compensate Licensee as provided in Section 10(b) infra.
(c) Licensee, as long as it maintains majority own-ership, may exercise final authority in all decisions neces-sary in accordance with good industry practice in the engineer-ing, design, construction, operation, maintenance and schedul-ing of a nuclear generating unit where a joint ownership or joint financing arrangement is entered under subsection 9(a).
An advisory committee shall be organized properly to consider the needs and desires of each party thereto.
(d) In the event that one or more neighboring en-tities choose to obtain majority ownership in any nuclear unit, Licensee shall be afforded the opportunity to participate in s
such unit under comparable terms and conditions ac those de-scribed in subsection.9(a). Nothing in these License Condi-tions shall require any party to enter into a nuclear unit joint venture where to do so would cause loss of tax-exempt status or otherwise significantly increasa the tax liabilities of such party.
V. TRANSMISSION SERVICE 10(a) Licensee shall facilitate bulk power trans-actions b~etween two or more neighboring entities by providing transmission service between or among the integrated bulk power systems of such entities or to such integrated bulk power systems from the generation facilities of such entities.
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Licensee shall also provide transmission service for bulk power transactions over its transmission facilities between the integrated bulk power system of any neighboring entity and any electric system engaged in bulk power transactions which is outside Licensee's service area. Licensee shall pro-vide transmission service under this paragraph only if (1)
Licensee's and other connected transmission lines form a con-tinuous electric path between the supplying and the recipient systems; ( 2) permission to utilize other systems' transmission lines has been obtained by the proponent of the arrangement; (3) the services can reasonably be accommodated f rom a func-tional technical standpoint without significantly impairing Licensee's reliability or its use of transmission facilities; and (4) reasonable advance request is received from the neighboring entity seeking such services to the extent that such notice is required for operating or planning purposes.
(b) Licensee's provision of transmission serrices under this section 10 shall be on a basis which compensates it for its costs of transmission reasonably allocable to the service or on another mutually agreeable basis and in accor-dance with a reasonable transaission agreemant. Licensee shall file tariffs providing for transmission services required to implement these license conditions with the Federal Energy Regulatory Commission or its successor agency. Nothing in this license shall be construed to require Licensee to wheel 1522 323
power and energy to or from a retail customer. Each neighbor-ing entity to whom Licensee provides transmission services here- .
under shall be expected to provide transmission services to Licensee under comparable terms and conditions, to the extent it has transmission facilities available to do so. Licensee shall keep requesting neighboring entities informed of its transmission planning and construction programs and shall in-clude therein sufficient transmission capacity as required by such entities, provided that such entities provide the Licensee sufficient advance notice of their requirements. However, Li-censee shall not be required to construct any transmission facility (1) which will be of no demonstrable present or future electrical benefit to Licensee, (2) which would jeopardize Li-censee's ability to finance or construct, on reasonable terms, f acilities to meet its own anticipated system requirements or to satisfy existing contractual obligations to other e).ectric systems, or (3) which could reasonably be constructed by the requesting entity without duplicating any portion of Licensee's transmission system. In such cases where Licensee elects not to construct transmission facilities, the requesting system shall have the option of constructing and owning such f acili-ties and interconnecting them with Licensee's f acilities.
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VI. OBLIGATION TO SELL FIRM BULK PGiER ll(a) Upon timely request, T(censee shall intercon-nect with, execute appropriate agreements with, and sell firm bulk power under tariff provisions filed with the Federal Energy Regulatory Commission or its successor agency to any neighboring entity (i) which was a wholesale customer of Licensee on the effective date of these license conditions and (ii) which is not a party to a coordination agreement with Licensee, up to the amount required to supply electric service to the retail customers or the retail load of distributing cooperatives (located in Licensee's service area) which are supplied by such neighboring entity.
(b) Upon timely request, subject to the terms of subsection 11(c) hereof, Licensee shall sell firm bulk power to neighboring coordinating entities to which Licensee is not selling bulk power under subsection 11(a) hereof; provided, howev ur, that the purchasing entity agrees to sell such firm bulk power as it has available to Licensee under comparable terms and conditions. Nothing shall require Licensee to sell firm bulk power under the preceding sentence in amounts which exceed the purchasing entity's an-nual peak load demand and reserve requirements minus i ts total generating capacity (other than firm bulk power purchases from Licensee), as defined in paragraph 1(d) hereof, at the time of the sale. As used in this subsection (b), " peak load" shall mean the greatest previously experienced load i522 325
plus estimated load growth attributable to the retail customers or the retail load of distribution cooperatives (located in Licensee's service area) to the extent that such load and load growth are supplied by the purchasing entity in question for periods of requested purchases.
(c) Licensee shall keep requesting neighboring enti-ties informed of its generation planning and eonstruction pro-grams. Licensee shall include in such planning and programs sufficient generation capacity to satisfy requests for firm bulk power from a system which was a wholesale customer of Licensee on the effective date of these license conditions. Licensee shall not be required hereunder to construct generation facilities or advance generation schedules to satisfy bulk power requests of a system which was not a wholesale customer of Licensee on the effective date of these license conditions.
(d) As used in this paragraph, " wholesale customer of Licensee on tne effective date of these license conditions" shall include a neighboring entity which is formed in the future whose load includes load served at retail by Licensee immediately prior to its formation (hereinafter a "New Neighboring Entitf"); provided, however, that when the total load of a New Neighboring Entity also includes load served at retail by an entity other than Licensee immediately prior to its formation, Licensee shall only be required to sell firm 1522 326
bulk power under this paragraph in an amount equal to the load in kW served at retail by Licensee during the year im-mediately prior to the New Neighboring Entity's formation, plus the growth of retail load experienced in the geographic area previously served by Licensee.
(e) Firm bulk power sales under this paragraph shall not be limited to lower voltages when higher voltages are re-quested and available from Licensee in the area where the inter-connection is desired.
VII. ACCESS TO POOLING ARRANGEMENTS
- 12. Licensee shall not oppose the membership of a neighboring coordinating entity in any pooling or coordination arrangement to which Licensee is presently a party, or within the term of this license becomes a party; provided, however, that the entity satisfies membership qualifications which are reasonable and do not constitute undue discrimination. To the extent that Licen ee enters into pooling, coordination or similar joint bulk power arrangements during the term of the license, it shall use its best efforts to include provtsions therein which permit requesting neighboring coordinating en-tities the opportunity to participate in the arrangement on a basis that is reasonable and which do not constitute undue discrimination.
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UNITED STATES OF AMERICA BEFORE THE ATOMIC SAFETY & LICENSING BOARD NUCLEAR REGULATORY COMMISSION In the Matter of )
') Docket Nos. 50-329A CONSUMERS POWER COMPANY ) 50-330A Midland Plant, Units 1 and 2 )
CERTIFICATE OF SERVICE I HEREBY CERTIFY that copies of Errata to Proposed License Conditions were served upon the following persons by depesi: in the United States mail, first class mail postage prepaid, this 28th day of November, 1979.
Hugh K. Clark, Esquire Marshall E. Miller, Esquire Chairman, Atomic Safety Atomic Safety & Licensing and Licensing Board Board P.O. Box 127A Nuclear Regulatory Commission Kennedyville, Maryland 21645 Washington, D.C. 20555 Frederic D. Chanania, Esquire Dr. J.V. Leeds, Jr.
Nuclear Regulatory Commission 10807 Atwell MNBB-9604 Houston, Texas 77096 Washington, D.C. 20555 John Whitler, Esquire Chase R. Stephens, Chief Antitrust Division Docketing & Service Branch Department of Justice Office of the Secretary Washington, D.C. 20444 Nuclear Regulatory Commission Washington, D.C. 20555 Robert A. Jablon, Esquire Spiegel & McDiarmid 2600 Virginia Avenue, N.W.
Suite 312 Washington, D.C. 20037 1522 328 Wm. Warfield Ross Keith S. Watson WALD, HARKRADER & ROSS 1300 Nineteenth Street, N.W.
Washington, D.C. 20036