ML19308B659
| ML19308B659 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 02/16/1979 |
| From: | Plumb K FEDERAL ENERGY REGULATORY COMMISSION |
| To: | FEDERAL ENERGY REGULATORY COMMISSION |
| References | |
| TASK-TF, TASK-TMR NUDOCS 8001160612 | |
| Download: ML19308B659 (5) | |
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d UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION ELECTRIC RATES:
Suspension, Hearing, Intervention, Summary Disposition Before Commissioners:
Charles B. Curtis, Chairman; Matthew Holden, Jr., and George R. Hall.
Jersey Central Power and
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Docket No. ER79-112 Light Company
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A ORDER ACCEPTING RATES FOR FILING, SUSPENDING PROPOSED
,I RATE INCREASE, ALLOWING INTERVENTIONS, MAKING
SUMMARY
DISPOSITION AND ESTABLISHING PROCEDURES 4
(Issued February 16, 1979) 1 On December 18, 1978, Jersey Central Power and Light Company (Jersey Cbntral) submitted for filing increased tariff rates for*all-requirements service to Allegheny Electric Cooperative, Inc. (Allegheny), and to the Boroughs of Butler, Lavellette, Madison, Pemberton and Seaside Heights, New Jersey (Boroughs).
The rates proposed by Jersey Centralk-__-
would result in increased revenues of $2,136,351 (or 26.6%)
based on the 12-month period beginning January 31, 1979 (Period II).
t Notice of the filings was issued on January 3,1979, with protects or petitions to intervene due on or before c
January 19, 1979.
On January 19, 1979, protests and petitions to inter-vene were tendered for filing by Allegheny and the Boroughs, respectively, pursuant to Sections 1.8 and 1.10 of the Commission's Rules of Practice and Procedure.
Both peti-tioners allege various deficiencies in Jersey Central's cost of service filings.
Petitioners also allege that the filings are in contravention of the wage and price guidelines issued December 13, 1978 by the Council on Wage and Price Stability.
Thg_Borsyghs further allege that the proposed increase will create an illegal price squeeze.
Both petitioners request suspension of the proposed rate increase for five months.
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g Docket No. ER79-ll2 2-On January 31, 1979, Jersey Central tendered for filing a response to the protests and petitions to inter-vene.. Jersey Central does not oppose the petitions to intervene but objects to petitioners' motions for summary judgment and a five-month suspension.
s Among other items, Jersey Central's filing includes the following in its cost of service treatement:
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1)
Jersey Central has used plant ratios t
for its functionalization of general plant.
'I 2)
Jersey Central's Period II data incor-y porates a Federal Income Tax rate of 48%
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3)
Jersey Central has included contributions s}
to EPRI and LMFBR in its cost of service.
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In its response, Jersey Central asserts that this Com-mission requir,es general plant to be functionalized on the
$1 basis of labor ratios only with regard to the production, transmission, and distribution functions.
Jersey Central (i$
has thus used labor ratios for only three of the five functions.
We shall require Jersey Central to meet the h,l burden of showing that the use of labor ratior, for all general plant functions is unreasonable as applied to the Company, h
not merely that its alternative method of functionalization may be reasonable.
This Commission has consistently re-h quired this burden of proof for all plant functions, I
including customer service and information, sales, and cus-N tomer accounting, and not just as to the three major h
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functions. 1/
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With regard to the Federal Income Tax rate, we shall grant summary disposition and require that Jersey Central refile its Period II tax expense on the basis of the 46%
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See, Pennsylvania Electric Company, Docket No. ER78-494
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(order issued September 29, 1978); see also, Opinion Non. 20 and 20-A, issued August 3, 1978 and October 30, 1978, respectively, Minnesota Power & Light Company, l
Docket Nos. E-9499 and E-9502, and Superior Water,
Light and Power Company, Docket No. ER76-20.
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Docket No. ER79-112 tax rate.
In accordance with this Commission's policy, the costs of such refiling shall be borne by the Company and not charged to the ratepayers, since Jersey Central's filing was tendered after December 1, 1978. 2/
With regard to EPRI and LMFBR contributions, we shall also grant summary disposition.
EPRI and LMFBR contributions are voluntary in nature.
Wholesale custo-I mers should thus be free to make independent contribu-tions to these research programs.
This is in accord g
g with our policy objectives as enumerated in Connecticut Light and Power, Docket No. ER78-518. 3/
We will there-fore order Jersey Central to refile it's rates to reflect the elimination of this item froe its cost of service.
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,b We also find that participation by the petitioners
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in this proceeding may be in the public interest.
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Our review indicates that the proposed rates have 041 not been shown to be just and reasonable and may be un-
'8 just, unreasonable, unduly discriminatory or otherwise unlawful.
Therefore, the Commission will accept Jersey f1:
Central's submJttal for filing and suspend the rates for i
five months, tp become effective July 17, 1979, subject to refund.
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See, for example, Order dated January 31, 1979 in Central Kansas Power Company, Docket No. ER79-90, 1
and Order of October 30, 1978, Georgia Power Company, f,f Docket No. ER79-88.
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The Initial Decision in Carolina Power & Light Com-Eany, Docket No. ER74-495 (Phase 1), September 7,
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1978, as af firmed in Opinion No.19, disposed of the LMPBR contribution allocation on three grounds:
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(1) avoidance of " double contribution" by wholesale g?,l customers; (2) preservation of the voluntary nature v ~.
of the contributions; and (3) elimination of the
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deterrence to independent contributions by wholesale k,l customers.
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.h Docket No. ER79-112,
I'1 The Commission orders:
j (A)
Jersey Central's proposed rates are hereby ac-cepted for filing and suspended for five months, to be-come effective July 17, 1979, subject to refund.
(B)
Pursuant to Section 2.17 of the Commission's Regulations, we hereby order initiation of price squeeze procedures.
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r (C)
The petitioners, Allegheny Electric Cooperative, Inc., and the Boroughs of Madison, Butler, Lavellette, Seaside Heights and Pemberton, New Jersey, are hereby j
permitted to intervene in this proceeding subject to the Rules and Regulations of the Commission:
Provided, however, r
that participation by such intervenors shall be limited to the matters set forth in their petitions to intervene; and Provided, further, that the admission of such inter-4 venors shall not be construed as recognition by the Com-mission that they might be aggrieved because of any order or orders of the Commission entered in this proceeding.
't (D)
Jersey Central must meet the burden of showing that the use of labor ratios is an unreasonable method of f unctionalization for all of its general plant expenses.
(E)
Jersey Central shall refile its Period II on the basis of the 46% tax rate.
All costs of such refiling should be included in Account No. 426.5 (18 CFR, Part 101).
I (F)
Jersey Central shall refile its rates to reflect the elimination of EPRI and LMBFR contributions from its cost of secvice.
All costs of this refiling shall also be included in Account No. 426.5.
(G)
Pursuant to the authority contained in and subject to the jurisdiction conferred upon the Federal Energy Regu-latory Commission by Section 402(a) of the Commission's I
Rules of Practice and Procedure and the Regulations under the Federal Power Act (18 CFR, Chapter I), a public hearing
,I shall be held concerning the justness and reasonableness of the rates proposed by Jersey Central Power and Light Company.
(H)
The Staff shall serve top sheets in this proceed-ing on or before May 9, 1979.
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4 Docket No. ER79-ll2 (I)
A Presiding Administrative Law Judge to be desig-nated'by the Chief Administrative Law Judge for that purpose shall convene a conference in this proceeding to be held within ten (10) days of the serving of top sheets in a hear-ing room of the Federal Energy Regulatory Commission, 825 North Capitol Street, N.E.,
Washington, D.C.
20426. The designated Law Judge is authorized to establish procedural g
dates and to rule on all motions (except motions to consol-l idate or sever and motions to dismiss), as provided for in the Commission's Rules of Practice and Procedure.
The r
Presiding Administrative Law Judge shall convene a prehear-I ing conference within fifteen (15) days of the issuance of g
this order for the purpose of hearing intervenors' requests 2!
for data required to present their case, including prima
.:t facie showing, on price squeeze issues.
(J)
The Secretary shall cause prompt publication of this order to be made in the Federal Register.
By the Commission.
(SEAL) t Kenneth F. Plumb.
Secretary.
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