ML19263A680

Submits City of Cleveland Position Re Notice of Violation Issued to Util Concerning Antitrust Issue.Util Transmission Svcs Schedule Submitted 780915 Inadequate & Violates License Conditions.Nrc Notice of Violation Should Not Be Withdrawn

ML19263A680
Person / Time
Site:	Davis Besse, Perry
Issue date:	10/20/1978
From:	Goldberg R GOLDBERG, FIELDMAN & LETHAM, P.C.
To:	Case E Office of Nuclear Reactor Regulation
References
NUDOCS 7810240004
Download: ML19263A680 (14)

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!!AND DELIVERY t

Mr. Edson G. Case

, Acting Director i Office of Nuclear Reactor Pegulation l United States Nuclear Regulatory l Cormission i Washington, D.C. 20555 I

Re: Notice of Violation, Davis Besse Unit 1, License No. NPF-3, Perry I

Units 1 and 2, CPPR-148, CPP2-149 (Docket Nos. 50-346A, 50-440A, 50-441A, 50-500A, 50-501A)

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Dear Mr. Case:

! By .etter dated September 15, 1978, addressed to

! Mr. Jerome Saltzman, Chief, Antitrust & Indemnity Group, Nuclear Regulatory Conmission, The Cleveland Electric Illuminating Company (CEI), to whom the above-referenced Notice of Violation was issued, through its counsel, sub-mitted a " suggested transmission services schedule" for

" review by the NRC Staff" for transmission services solely to the City of Cleveland, Ohio, as "a satisfactory response to the Notice of Violation" and recuested "the NRC Staff to withdraw said Notice of Violation."

CEI's counsel advised that "(s)ubject to approval ,.

by the NRC Staff and to execution by City officials, CEI would propose to file the enclosed service schedule with FERC as a supplement to the preexisting Agreement of April 17, 1975, between CEI and City; an identical service schedule would be filed as a supplement to the Agreement between CEI and the City of Painesville, if so desired by the munici-pality."

By this letter the City of Cleveland, Ohio states its position and submits its comments with respect to the

. transmission services schedule of September 15, 1978.

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Mr. Edson G. Case Page 2 POSITION OF CITY OF CLEVELAND For the reasons hereinafter set forth, it is the City of Cleveland's positon that the transmission services schedule submitted on September 15, 1978 is not a satisfactory response to the Notice of Violation, that the schedule does not satisfy the Notice of Violation, that the schedule violates the license conditions as does the transmission services schedule to which the Notice of Violation was addressed, that the Notice of Vio-lation should not be withdrawn, and that an additional Notice of Violation should be issued with respect to the September 15, 1978 transmission services schedule.

BACKGROUND OF THE SUBMISSION OF THE SEPTEMBER 15, 1978 TRIsNSMISSION SERVICES SCHEDULE A. Before the NRC In its Initial Decision of January 6, 1977, the Atomic Safety and Licensing Board found that the issuance of licenses for the Davis Besse and Perry nuclear units to CEI and its joint applicants "without appropriate license conditions will lead to the creation and maintenance of the proscribed situation incon-sistent with the antitrust laws." "Accordingly", the Board found, "it is our task to design license conditions which will prevent activities under the license from achieving and aiding in this result." The Initial Decision comprehensively sets forth the flagrant violations of the anti-trust laws by CEI in its conduct towards the City of Cleveland's municipal electric operations.

"As is evident from our findings", the Board stated,

" denial of bulk power service options, particularly opportunities for coordinated operation, reserve sharing, wheeling, and economy energy exchanges is a substantial element in the situation pre-V.iling in the CCCT."* "The anticompetitive situation", the Board continued, "is further exacerbated by restraint on utili-zation of power generated by the nuclear facilities in issue."

"Our relief, therefore, must focus upon providing access to power from the nuclear units in a manner in which it allows it to be used without restraint and with the availability of neces-sary bulk power service alternatives."

The Board went on to fashion the license conditions.

No. 3 related to wheeling and provided as follows:

• "CCCT" refers to "CAPCO Company Territories". "CAPCO" refers to the " Central Area Pcwer Coordination Group" of which CEI and its partners in these proceedings are members.

JeovF'CEs GO LD B ERG, FIE LO M AN & LETH AM , P. C.

Mr. Edson G. Case Page 3 "3. Applicants shall engage in wheeling for and at the request of other entities in the CCCT:

1) of electric energy from delivery points of Applicants to the cntity(ies); and

2) of power generated by or available to the other entity, as a result of its owner-ship or entitlements* in generating facil-ities, to delivery points of Applicants designated by the other entity.

"Such wheeling services shall be available with re-spect to any unused capacity on the transmission lines of Applicants, the use of which will not jenpardize Applicants' system. In the event Applicants must re-duce wheeling services to other entities due to lack of capacity, such reduction shall not be affected until reductions of at least 5% have been made in transmission capacity allocations to other Applicants in these pro-ceedings and thereafter shall be made in proportion to reductions imposed upon other Applicants to this pro-ceeding.**

Applicants shall make reasonable provisions for dis-closed transmission requirements of other entities in the CCCT in planning future transmissicn either indi-vidually or within the CAPCO grouping. By " disclosed" is meant the giving of reasonable advance notification of future requirements by entities utilizing wheeling services to be made available by Applicants.

" entitlement" includes but is not limited to power made available to an entity pursuant to an exchange agreement.

"**The objective of this requ rement is to prevent the pre-emption of unused capacity on the lines of one Applicant by other Applicants or by entities the trans-mitting Applicant deems noncompetitive. Competitive entities are to be allowed opportunity to develop bulk power services options even if this results in re-allocation of CAPCO transmission channels. This relief is required in order to avoid prolongation of the effects of Applicants' illegally sustained doninance. "

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GO LD B E RG, FIE LD M AN & L ETH AM , P. C.

Mr. Edson G. Case Page 4 Referring to each of the license conditions, including the condition for wheeling, the Board provided:

"10. These conditions are intended as minimum conditions and do not preclude Applicants from offering additional bulk power services or co-ordination options to entities within or without the CCCT. However, Applicants shall not deny bulk power services required by these conditions to non-Applicant entities in the CCCT based upon prior commitments arrived in the CAPCO Memorandum of Understanding or implementing agreements. Pre-emption of options to heretofore deprived entities shall be regarded as inconsistent with the pur-pose and intent of these conditions.

"The above conditions are to be implemented in a manner consistent with the provisions of the Federal Power Act and all rates, charges or prac-tices in connection therewith are to be subject to the approval of regulatory agencies having juris-diction over them."

The Board defined " entity" to mean "any electric gener-ation and/or distribution system cr municipality or cooperative with a statutory right or privilege to engage in either of these functions." " Wheeling" was defined as the " transportation of elec-tricity by a utility over its lines for another utility, including the receipt from and delivery to another system of like amounts but not necessarily the same energy."

Following refusal of the Licensing Board and the Appeal Board to stay the license conditions pending appeal, the City of -

Cleveland attempted to secure an agreement for wheeling services from CEI that would comply with the license conditions. Failing to secure such an agreement, in a letter dated January 4, 1978, which provided a more detailed description of the efforts, addressed to you by its counsel, the City of Cleveland requested the NRC to commence proceedings to enforce its license conditions. Thereafter, on January 27, 1978, in purported compliance with the license con-ditions respecting wheeling, CEI tendered for filing with FERC a Transmission Service Tariff providing for wheeling services for any Rrral Electric Cooperative or municipal located within the CAPCO territories.

Under date of February 3, 1978, counsel for the City, cy letter addressed to you advisec that the schedule tendered to FERC did not comply with the license conditions for wheeling and

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Mr. Edson G. Case Page 5 urged the NRC to take prompt action to enforce its license con-ditions. The City's request was supported by the Antitrust Division of the Department of Justice.

On June 28, 1978, the NRC Staff issued a Notice of Violation to CEI. The letter accompanying the Notice of Vio-lation stated in part:

"As a result of our consideration of the City's request, it appears that CEI is in noncompliance with antitrust license condition No. 3 concern-ing wheeling. We are therefore issuing the en-closed Notice of Violation. While this item of noncompliance probably could properly be dated as far back as the date of the drafting of the June 27, 1977, transmission schedule, we believe that at least as of CEI's submittal of the January 27, 1978, transmission schedule to the Federal Energy Regulatory Commission (FERC) a continuing refusal to wheel in accordance with the license conditions began to occur."

Utilizing CEI's January 27, 1978, transmission tariff, the NRC Staff derived a partial tariff which the Staff considered to be in compliance with the license conditions. This partial tariff accompanied the Notice of Violation. CEI was requested to respond to the Notice of Violation within a specified time. CEI was advised that its response "will be considered in determining whether further enforcement action, including civil penalties, or orders modifying your license will be required to assure compliance."

CEI's response of July 14, 1978 denied any violation of the license conditions relating to wheeling, asserted that the ,

Notice of Violation had been improvidently issued, requested with-drawal of the Notice, advised that a hearing might be requested if the Notice were not withdrawn, and offered to meet with the Staff to discuss the Staff's recommended changes in the transmission schedule.

A meeting was subsequently arranged for August 10, 1978 between representatives of the NRC Staff, of CEI, and of the City of Cleveland. At the meeting, CEI argued that provisions of the transmission tariff filed with FERC which had been singled vut by the Notice of Violation as violations of the license conditions could be omitted and Staff's recommended changes accepted if CEI were to prepare a transmission schedule limited to wheeling services solely for the City of Cleveland. On September 15, 1978, CEI sub-mitted a transmission schedule limited to wheeling services solely for the City of Cleveland.

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GO LD B ERG, FIE LD M AN & LETH AM, P. C.

Mr. Edson G. Case Page 6 B. Before FERC The transmission tariff tendered by CEI to FERC on January 27, 1978 was not accepted for filing by FERC becuase of CEI's failure to comply with FERC's Regulations governing the filing of rate schedules. A deficiency letter was issued on February 27, 1978 by FERC's Secretary advising CEI of the spe-cific deficiencies that CEI was required to cure before the transmission tariff would be accepted and given a filing date.

The City of Cleveland filed a Protest, Petition to Intervene, and Motion requesting a one day suspension and hearing alleging that the terms and conditions of CEI's proposed wheeling schedule were "anticompetitive and not just and reasonable."

Months passed without CEI curing the deficiencies of its tendered filing or showing any intention of doing so. Since the absence of an effective transmission schedule was standing in the way of the City receiving low cost Public Authority of the State of New York (PASNY) power, the City filed a motion with FERC requesting waiver of the filing deficiencies and acceptance for filing of CEI's Transmission Service Tariff after a one day suspension.

Because FERC found that "the public interest would be well served if electric consumers served by City could benefit from having low cost power from PASNY available to them", FERC on June 14, 1978 granted City's request for waiver of the filing deficiencies and acceptance of the transmission tariff for filing as of February 27, 1978. The tariff was suspended for one day until February 28, 1978 after which it became effective subject to refund. CEI was also ordered to cure the filing deficiencies.

At a prehearing conference, the Administrative Law ,

Judge established a schedule for the submission of testimony by each party and fixed a date for hearing. CEI has submitted its case-in-chief evidence. Staff and City are scheduled to file evidence on November 22, 1978; CEI's rebuttal is due December 13, 1978; and the hearing will commence on December 19, 1978 with re-spect to the transmission service schedule that is the subject of the Notice of Violation.

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GOLD B ERG, FIELD M AN & L E T H A M , P. C .

Mr. Edson G. Case Page 7 THE SUBMISSION BY CEI OF A PROPOSED TRANSMISSION SERVICES SCHEDULE FOR SERVICE SOLELY FOR THE CITY OF CLEVELAND DOES NOT EXPUNGE OR ALTER CEI'S VIOLATION OF THE LICENSE CONDITIONS BY REASON OF THE TRANSMISSION SERVICES SCHEDULE SUBMITTED IN JANUARY, 1978 The January, 1978 transmission services schedule was tendered to FERC in purported compliance with the license condi-tions imposed by the Board. It purported to provide wheeling services for rural electric cooperatives and municipalities located in the CCCT. The terms and conditions imposed by CEI in that transmission services schedule did not comply with the license conditions. As a result, the NRC Staff issued a Notice of Violation in which the failures of CEI to comply with the license conditions were detailed. The NRC Staff concluded that commencing at least with the submittal of the January 27, 1978 trar.smission schedule to FERC "a continuing refusal to wheel in accordance with the license conditions began to occur."

CEI's refusal to wheel for entities in the CCCT in accordance with the license conditions under that January, 1978 transmission schedule continues to this day despite the proposed September 15, 1978 transmission schedule. The latter schedule is limited to wheeling services for the City of Cleveland. As far as other entities are concerned they are relegated to a trans-mission schedule that violates the license conditions. Thus, neither the license conditions nor the Notice of Violation is satisfied by the proposed September 15, 1978 transmission schedule for wheeling services only for the City.

The City of Cleveland's interest in compliance with the license conditions relating to wheeling is not limited to the existence of a transmission services schedule that provides wheeling services solely for the City of Cleveland. The City of Cleveland's interest runs to effectuation of the license condi-tions as ordered by the Board because it is only through full

.-compliance with the license conditions pertaining to wheeling for all entities in the CCCT that the City of Cleveland and all other entities in the CCCT can realize the benefits the Board intended to bestow upon them in each and every one of the condi-tions appended to the license. The license. conditions are in-tended to provide bulk power service options, particularly

~ opportunities for coordinated operations, reserve sharing and, amoung other things, economy energy exchanges. Wheeling is an integral and essential element to accomplishment of these object-ives, not just wheeling for the City of Cleveland, but wheeling for all entities in the CCCT. Transmission service schedules

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Mr. Edson G. Case Page 8 that are not in compliance with the license conditions perpetuate the antitrust restraints and violations that the Board worked to prohibit and prevent through the license conditions it fashioned.

THE PROPOSED TRANSMISSION RATE SCHEDULE LIMITED TO THE CITY OF CLEVELAND ALSO VIOLATES THE LICENSE CONDITIONS A. The proposed transmission schedule of September 15, 1978 is also in non-compliance with the license conditions by reason of the fact that it proposes to provide wheeling services solely for the City of Cleveland. Wheeling services under the license condi-tions are to be provided to all entities in the CCCT. This require-ment was recognized by CEI when it submitted to FERC in January, 1978 a transmission services schedule for all rural electric co-operatives and municipalities in the CCCT. Indeed, the wheeling license conditions require CEI and its joint Applicants to make reasonable provisions for transmission requirements "of other entities" -- observe the plural form -- "in the CCCT in planning future transmission either individually or within the CAPCO group-ing" where " reasonable advance notification of future requirements" for transmission is provided.

B. The proposed transmission schedule of September 15, 1978 violates the license conditions and additionally imposes unlawful competitive restraints in that the schedule (Section 2.1) limits wheeling services to "the native peak demand of City's system based on an annual estimate thereof mutually acceptable to CEI and City." While the transmission schedule is deficient in fail-ing to define " native peak demand", it is quite clear that the transmission services are intended to be limited to the peak de-mand of the retail customers of the City's electric distribution ,

system. No such restriction was proposed by CEI in the January, 1978 transmission schedule and no such restriction is authorized or contemplated by the license conditions. The Initial Decision of the Board details the offers to the City of interconnection which it badly needed. These offers were always coupled with acceptance of restrictions designed to throttle competition and cripple the City's system, conditions the City could not accept.

In the proposed transmission schedule CEI has reverted to its old practice of offering service it would rather not make available to its competitor coupled with restrictions designed to reduce or entirely obviate the usefulness of the service in violation of the antitrust laws and in direct conflict with the license conditions. If the City were to purchase power on behalf of a group of municipal-ities to secure the benefits of economies of scale and coordination such as CEI and the other CAPCO members enjoy, the restraint on wheeling CEI would impose would preclude the arrangement. The

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GO LD B ERG, FI E LD M AN & LETH AM , P. C.

Mr. Edson G. Case Page 9 .

City has not overlooked the phrase "unless otherwise agreed."

This phrase is window dressing, designed to make it appear that the unlawful restraint may not be operative.

C. Not content with the violation of the license conditions by reason of the restriction on the quantity of energy to be wheeled, CEI violates the license conditions by another restraint. Not only are wheeling services limited to the " native peak demand" of the City's electric system but this " native peak demand" is to be

" based on an annual estimate thereof mutually acceptable to CEI and City" (Section 2.1; emphasis supplied). By this anticompetive provision, which finds no warrant in the license conditions and, in fact, violates them and the Initial Decision, CEI controls the load growth of the City's electric system.

D. Section 2.1 conteins yet another restriction. It pro-vides that the wheeling set / ice shall be at "128 kv or above."

This provision would prevent the City from receiving wheeling services at a lower voltage. There is no justification or reason for this restraint and no support therefor in the license condi-tions. No such restriction is in the transmission schedule filed with FERC in January, 1978. This proposed transmission schedule of September 15, 1978 is, according to CEI's representations, to be a supplement to the preexisting Agreement of April 17, 1975, between CEI and the City. The requirement for wheeling services at 138 kv or above is inconsistent with the Agreement which con-templates that the City's electric system can receive electric energy at 138 kv or any other voltage mutually agreed upon.

E. Another provision of Section 2.1 that violates the license conditions and does not appear in the January, 1978 trans-mission schedule is the provision that subordinates the City's right to wheeling services to "all of the needs of its retail customers." This restriction, imposed by CEI, is at odds with the' provision that CEI and its partners may reduce wheeling services to "other entities due to lack of capacity" only after " reductions of at least 5% have been made in transmission capacity allocations to other Applicants in these proceedings and thereafter shall be

- made in proportion to reductions imposed upon other Applicants to this proceeding."

F. The proposed transmission services schedule provides that it shall terminate and be of no force and effect on and after the date of the final decision of the NRC in the antitrust pro-ceedings associated with the licenses and permits for the Davis-Besse and Perry nuclear units "if the final decision alters or eliminates antitrust license condition 3 concerning wheeling" (Section 1.2).

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GO LD B ERG, FIE LO M AN & LETH AM , P. C.

Mr. Edson G. Case Page 10 In the January, 1978 transmission schedule CEI provided that the schedule shall terminate and be of no force and effect on and after the date of the final decision of the NRC in the above-referred to antitrust proceedings. The NRC Staff in its Notice of Violation regarded this provision as unreasonable and tanta-mount to a refusal to wheel in violation of the license conditions respecting wheeling. The NRC Staff proposed the addition of the following language:

"if the final decision significantly alters or eliminates antitrust license condition 3 concerning wheeling."

In the proposed transmission schedule of September 15, 1978, CEI has added the recommended language of the NRC Staff with an im-portant change that changes the intent of the NRC Staff proposal.

CEI has eliminated the important word "significantly." Under CEI's proposed language the schedule would terminate and be of no force and effect on and after the date of the NRC's final de-cision even if the most minor alteration were made by the final decision in the wheeling condition whereas the NRC Staff proposal required that the alteration be significant.

In any case, even with the NRC Staff's language, the provision for termination and non-effectiveness and force of the schedule with a final decision altering significantly or elimi-nating the wheeling license condition is neither appropriate nor proper. The transmission schedule proferred in response to the wheeling license conditions must comply with the requirements of the Federal Power Act and the regulations of FERC thereunder.

FERC precedents and regulations proscribe automatic termination of service. 18 CFR 35.15; 18 CFR 35.13; 18 CFR l'1.53. CEI if it were to terminate or change the service as the result of a final NRC decision could not do so without filing a Notice of Cancellation or Change with FERC. The Notice of Cancellation or Change would be subject to FERC suspension powers and hearing for compliance with the standards of the Federal Power Act. 18 CFR 2.4. FERC would have the power to determine whether the service could ter-minate or be changed.

Under these circumstances, a provision for automatic termination and non-effectiveness is not in compliance with the wheeling condition.

G. Section 2.1 of the proposed September 15, 1978 trans-mission services schedule provides --

"Nothing herein shall be construed as requir-ing CEI to enlarge its facilities to transmit such power."

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Mr. Edson G. Case Page 11 This provision, which CEI also included in its January, 1978 transmission services schedule, appears to violate the license condition that require CEI and its partners to "make reasonable provisions for disclosed transmission requirements of other entities in the CCCT in planning future transmission either in-dividually or within the CAPCO grouping." (emphasis in the original) " Disclosed" is defined to mean "the giving of reason-able advance notification of future requirements by entities utilizing wheeling services to be made available by Applicants."

In fact, it is a violation of this condition to fail to include a provision explicitly setting forth this obligation of CEI and its partners and spelling out the procedure to be followed by the entities seeking wheeling services, including definition of the " reasonable advance notification" period.

H. Section 2.1 of the September 15, 1978 transmission schedule provides, in part, that --

"Each request for a transmission service reservation shall be in writing and shall specify the maximum amount, the source and the destination of capacity and energy to be transferred and the period of time in-volved."

Section 2.3 provides, in part, that --

" Transmission Service shall be provided by CEI from time to time, upon (i) written re-quest by City, or by a duly authorized agent of City acting on its behalf, for the reser-vation of transmission capacity (Transmission ,

Reservation) for a period of not less than 1 week, (ii) concurrence in such request by CEI in writing."

The provision in Section 2.1, quoted above, was one of the NRC Staff's recommended changes in the January, 1978 toans-mission services schedule in an effort to bring the provisi'.ms of that schedule in compliance with the license conditions and providing a more simplified procedure for securing wheeling services.

But even the Staff's suggested procedure, particularly when coupled with CEI's procedure in Section 2.3, introduce un-warranted delay when time may be of the essence.

The Initial Decision details the " severe operating problems, unnecessary restrictions and administrative delays"

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GO LD B ERG, FIE LD M AN & LETH AM, P. C.

Mr. Edson G. Case Page 12 that CEI imposed on the City's electric system before it could utilize the load transfer service (Initial Decision, p. 71).

"Whenever MELP realized the need for emer-gency power and the necessary activation of a load transfer point, MELP was required to contact CEI and obtain the necessary clear-ance. CEI personnel in turn would have to obtain clearances from higher ups within the organization before entering the field. After all clearances were secured, a single crew would be dispatched (instead of two crews to coordinate the dual switching operation) to the designated substation to switch over the system manually. Tr. 2561; Tr. 2566; Tr. 2760-2761. As a result of this procedure delays of various lengths were frequent.* The resultant loss of power proved damaging to MELP's rela-tionship with its customers, Tr. 2526; Tr. 2566.

CEI was aware that MELP outages resulted in the conversion of customers from Cleveland to CEI, DJ 344-350; DJ 352; DJ 559, p. 60; DJ 560, pp. 132-133; DJ 563, pp. 36-37; DJ 566, p. 62; DJ 569, pp. 24, 94-95; C 11-12; C 14-15; C 19; C 159, p. 59, and solicited the affected MELP's customers after these outages, DJ 352; Tr. 2691-2695.

"CEI's load transfer procedures were arbitrary, cumbersome and not in keeping with modern pru-dent engineering practices, Tr. 2565. The administrative delays were not necessitated by the actual operation of the system and a more ,

efficient way to operate the load tranfer system was available, Tr. 2565. The switching operation could have been accomplished with only a three to fi're second service interruption without jeopardy to either system, Tr. 2565." (Initial Decision, pp. 71-72).

"* CEI required the approval of each load trans-fer by its legal officer, Mr. Hauser. This requirement obviously caused delays, at times as much as two hours, DJ 564, pp. 52-62. It was CEI's policy to provide load tranfer ser-vice to Cleveland only when required by the terms of the FPC order, DJ 558, p. 118."

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G O L D B C R G , F"l E L D M A N & L ET H A M , P. C.

i.r . Edson G. Case Page 13 Because of this experience, to say nothing of other experiences with CEI's " cooperation", the City shudders at the open-ended pro-vision providing for " concurrence in such request by CEI in writ-ing."

The City, therefore, proposes the elimination of the above-quoted language from Section 2.1 and 2.3 and the inclusion in Section 2.3 as the opening sentences the following provision:

" City may arrange to take Transmission Service by reserving transmission capacity (Transmis-sion Reservation), for one or more weeks, when-ever such transmission capacity is available.

The maximum amount of capacity to be reserved, the period of the reservation, and the source of the power to be transmitted shall be stated.

Such reservation shall be made through oral communication and shall be confirmed in writing."

This suggested provision is patterned after the provision included in Modification No. 6 Operating Agreement dated June 14, 1962 be-tween CEI and Ohio Power Company as modified on June 24, 1974, Schedule E - Short Term Power.

I. The language of the provision of Section 1.3 relating to unilateral changes in the schedule is unnecessarily prolix, complex and stilted. The City believes the following achieves the object-ive sought by CEI:

"This Service Schedule, the services to be re >

dered, compensation, and the terms, conditions and rates included herein are subject to the jurisdiction of FERC. CEI and the City shall '

each have the right to seek unilateral changes in the schedule, the service, compensation, and its terms, conditions, and rates by making an appropriate filing with FERC or any super-seding regulatory authority having jurisdiction for approval of, or authorization to, make the change or changes."

CONCLUSION _

~

The City has not discussed herein the rates proposed nor other aspects of the schedule that should be addressed to FERC or may not bear on the matter of compliance with the wheel-ing li -se conditions. What has been discussed discloses, as City stated, at the outset of this letter, that the Notice of Violation issued with respect to the January, 1978 transmission schedule has not been satisfied, that CEI is in violation of the

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Mr. Edson G. Case Page 14 license conditions with respect to the January, 1978 transmission schedule and the September 15, 1978 transmission schedule, that a Notice of Violation should be issued to CEI respecting the vio-lations of the license conditions related to the September 15, 1978 transmission schedule, and that the NRC should take enforce-ment action against CEI.

A copy of this letter has been served on all parties.

Respectfully submitted, City of Cleveland, Ohio By Y ?rf A./g!/({.g/ ,

Reuben Goldberg Goldberg, Fieldman Le tham , P.C.

1700 Pennsylvania Avenue, N.W.

Washington, D.C. 20006 Jack M. Schulman Law Director Robert D. Hart First Assistant Director of Law City of Cleveland 213 City Hall Cleveland, Ohio 44114 Counsel for the City of Cleveland cc: Mr. Jerome Saltzman Mr. Roy Lessy (Hand Delivery)

All Parties

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