ML19312B831

Application for Licenses Under Atomic Energy Act of 1954,as Amend to Acquire,Own & Use 4% Undivided Interest,As Tenant in Common,W/O Right of Partition,In Facility

ML19312B831
Person / Time
Site:	Oconee
Issue date:	09/11/1967
From:	Harris J, Reeder S, Tally J PIEDMONT CITIES POWER SUPPLY, INC.
To:
References
NUDOCS 7911210804
Download: ML19312B831 (29)

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BEFORE UNITED STATES ATOMIC ENERGY COMMISSION DOCKET NO.

In the Matter of PIEDMONT CITIESePOWER SUPPLY, INC.

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APPLICATION FOR LICENSES UNDER THE ATOMIC' ENERGY ACT OF 1954 AS AMENDED.

TO ACQUIRE, OWN, AND USE A 4% UNDIVIDED INTEREST, AS TENANT IN COMMON, WITHOUT RIGHT OF PARTITION IN THREE NUCLEAR' PRESSURIZED WATER TYPE REACT TO BE LOCATED AT THE OCONEE NUCLEAR' STATION, UNITS s

1, 2, AND 3, OCONEE COUNTY, SO TH CAROLINA, AND TO BE DESIGNED, CONSTRUCTED AND OPERATED BY

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DUKE POWER COMPAN't, CONTINGENT UPON THE ISSUANCE OF LAWFUL LICENSES THEREFOR BY THE ATOMIC ENERG'.'

COMMISSION UPON THE FILING OF A LAWFUL APPLICATION THEREFOR BY DUKE k.

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791 DATE:

September 11, 1967 1

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g-BEFORE THE j

UNITED. STATES ATOMIC ENERGY COMMISSION In the Matter of Piedmont Cities-

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Power Supply, Inc., A Corporation

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Docket No.

Not For Profit

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APPLICATION FOR LICENSES i

UNDER THE ATOMIC ENERGY ACT OF 1954, AS AMENDED TO ACQUIRE, OWN, AND USE A 4% UNDIVIDED INTEREST, AS TENANT I$ COMMON, WITHOUT RIGHT.0F PARTITION p

IN THREE NUCLEAR PRESSURIZED WATER TYPE REACTORS, TO BE LOCATED AT THE OCONEE NUCLEAR STATION, UNITS 1, 2 AND 3, OCONEE COUNTY, SOUTH CAROLINA, AND.TO BE DESIGNED, CONSTRUCTED AND OPERATED BY i

DUKE POWER COMPANY, CONTINGENT UPON THE ISSUANCE OF LAWFUL LICENSES THEREFOR BY THE ATOMIC ENERGY COMMISSION UPON'THE FILING OF A LAWFUL APPLICATION ~

THEREFOR BY DUKE t t Pursuant to the Atomic Energy Act.of 1954, as amended,

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Piedmont Cities Power Supply, Inc., a corporation not for profit, duly incorporated, organized and existing, under and by L

virtue of the lava of the State of North Carolina,

(" Applicant"),*

hereby applies to the United States Atomic Energy Commission licenses to acquire, own, and use a 4% undivided interest, as tenant in common without right of' partition, in three nuclear pressurized water type reactors. (PWR's) each o'f which is part of one of the three central station power generators known as

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Oconee Nuclear Station, Un ts 1, 2 and 3, to be located' in Oconee County, South Carolina..

For each of said PWR's, Duke Power Company has applied for

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" licenses (including a construction permit) to construct, own, use and operate," in AEC Docket Nos. 269,270, and 287.

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i 2-In support of this its application, Piedmont Cities Power Supply,'Inc., respectfully alleges, avers and shows that:

1.

Neither the Applicant herein nor Duke Power Company has any lawful right "to transfer, acquire, possess, use, import g

or export" the said three PWR's proposed to be incorporate'd in said Oconee Nuclear Station, except un, der and in accordance wida a lawful license duly issued by the Commission pursuant to either Section 103 of the Act (" Commercial Licenses") or Section 104 of the Act ("Research and Development Licenses"), whichever is ap-plicable.

2.

Applicant authorizes Duke Power Company to act as its l

representative to design, construct and operate under a lawful

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license said three Oconee Pressurized Water Type Reactors, in their entirety, but seeks herein solely on Applicant's own be-half a license to acquire, own and u'se an undivided 4% interest l

as tenant in common without right of partition in each or said

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1 three PWR's.

In the absence of any other competing application or the filing of any supplement to or amendment hereof,. Applicant i

therefor prays that the three pressurized water type reactors 1

aforesaid be lawfully licensed as to acquisition, ownership and j

use to Piedmont Cities Power Supply, Inc. and Duke Power Company, as tenants in common without right of partition and with the respective undivided interests of the owners as tenahts in common and their respective capacity entitlements in said three PWR's to be as follows:

Applicant - 4%, Duke Power Company - 96%, with e

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Duke Power Company to act under a lawful license from AEC as Applicant's representative, as well as on Duke's own behalf, i

as the sole designer, constructor and operator of said three PWR's.

3.

Pursuant to the Atomic Energy Act, Sections 1, 101, 102, 103 and 104, Applicant has a righ,t to file this Application, and the Commission has a statutory duty to accept the same for filing, if the Commission has made a finding in writing that the pressurized water type of reactor utilization f acility has been sufficiently developed to be of practical value for industrial or commercial purposes, within the meaning of Section 102 of the Act.

(42 U.S.C. Section 2132.)

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The Commission has made a finding in writing that the pressurized water type of reactor utilization facility has been sufficiently developed to be of practical value for industrial, or commercial purposes.

Since 1960, the Commission h'as licensed t

nine nuclear generating stations which employ the pressurized e, -.

water type of reactor, as follows:

(1)

Indian Point Station, Unit 1 (Cons. Edison Co.

of New York) Indian Point, N.Y., has a capacity in net megawatts electrical (mwe) of 270; (270,000 kilowatts (kw)) is a Pressur-ized Water Tvoe of Reactor (PWR) ; received a~~ construction p,ermit in 1956; and has been in " commercial coeration" accor' ding to an official publication of AEC since September cf 1962.

Babcock and Wilcox is the contractor.

(2)

San Onofre Nuclear Generating Station (S. Calif.'

Edison and San Diego Gas and Electric), San Clemente, Calif.,

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. 2 has a capacity of 430 mwe (430,000 kilowatts); is a Pressurized i

Water Tvoe of Reactor; was licensed by the AEC in March of 1964";

I should have been operational in 1966 but for " deliberateness in following start-up program and non-nuclear operational problems; and is now classified by an official AEC publication as an

" operating reactor. "

Westinghouse is the contractor.

(3)

Yankee Nuclear Power Station (Yankee Atomic Elec-(-}

tric Co.) Rowe, Mass., has a capacity of 175 mwe (175,000); is a Pressurized Water Tvee of Reactor _ (PWR); received a construction permit in November of 1957; and has been in ' commercial cueration,"

according to an official publication of the AEC since July of I

1961.

Westinghouse is the contractor.

(4)

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B. Robinson Unit No. 2 (Carolina Power and Licht Co.), Hartsville, South Carolina; has a capacity of 663 mwe (663,000 kw); is a Pressurized Water Tyne of Reactor; was licensed s

by the AEC in April of 1967; construction is scheduled to be com-w-

pleted in early 1970, "with commercial operation to start about mid-1970," according to an official AEC publication.

Westinghouse is the contractor.

(5)

Indian Point Station, Unit 2 (Cons. Ed. Co. of New i

York), Indian Point, N.Y., has a capac,ity of 873 mwe (873,000 kw) ;

is a Pressurized Water Tyne Reactor (PWR); was licensed by the AEC on October 14, 1966; and construction completion is scheduled for the spring of 1969.

Westingh.ouse is the contractor.

(6)

Palisades Nuclear Power Station (Consumers Power Co. of Mich.), Palisades Park, Covert Townshio, Michican; has a

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i capacity of 700 mwe (700,000 kw); is a Pressurized Water Type _

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Reactora (PWR); was licensed by AEC on March 14, 1967; and is l

scheduled for operation by Ehe spring of 1970.

Combustion Engi-neering is the contractor.

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Turkey Point Station, Unit 3 (Florida Power and I

Licht Co.), Turkey Point, Dade Co., Fla.; has a capacity of 722 mwe (722,000 kw); is a Pressurized Water Tyce Reactor (PWR); wa's

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licensed by AEC on April 27, 1967; and is scheduled to go into operation during 1970.

Westinghouse is the contractor.

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Turkey Point Station, Unit 4 (Fla. Power & Licht l

Co.), Turkey Point, Dade Co., Fla.; 25 miles south of Miami; has a capacity of 722 mwe (722,000 kw); is a Pressurized Water Type-Reactor (PWR); was licensed by AEC on April 27, 1967; and is scheduled to go into operation during 1971.

Westinghouse is the contractor.

(9)

Robert Emmett Ginna Plant, Unit 1 (R'ochester Gas.

and Electric Co. ), Ontario, N.Y.

(formerly "Brookwood"); has a, capacity of 420 mwe (420,000 kw); is a Pressurized Water Tvee Reactor (PWR); was licensed by AEC on pril 25, 1966; and is scheduled to go into operation in 1969.

Westinghouse is the con-tractor.

4 In Duke Power Company's Application for the licenses ap-270, filed December 1, 1966, plied for in AEC Docket Nos. 269 1

Duke correctly states in pertinent part, as follows:

(Suoplement 1.1)

"The nuclear steam supply system is a pressurized water reactor type,similar to systems operating or under construction.

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" Construction is scheduled for completion in i

time for loading fuel into Unit 1 in Decem-ber 1970 and for its commercial operation l

by May 1971, with commercial operation of Unit 2 by May 1972.

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(Suoclement 1.3)

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" Table 1-2 is a comparative list of important-design and operating characteristics,of Duke's Oconee Nuclear Station Units 1 and 2, Turkey Point Units 3 and 4, (Florida Power and Light Company), Indian Point Station Unit 2 (Con-solidated Edison Company of New York, Inc.),

and Brookwood (Rochester Gas and Electric Com-(~>g pany) nuclear power stations..................

"The design of' each of these stations is based upon information developed from operation of commercial and prototype pressurized water type reactors over a number of years............... "

The following findings, decisions, and construction per-mits issued by the Commission in connection with the licensing of the pressurized water type reactors incorporated in Turkey Points 3 and 4, Indian Point.2, and Robert Emmett Ginna (formerly Brookwood), all of which are referred to in Duke's Application x

7 and quoted ibove, are incorporated herein by reference as fully as though rewritten herein as further support for the ab he statement that "the Commission has made a finding in writing that the pressurized water type of reactor utilization f acility has t

been sufficiently deve:oped to be of practical value for indus-trial or commercial purpose":

1.

Robert Emmett Ginna Unit 1 (formerly "Brodkwood")

Docket Nos. 50-244 Rochester Gas & Electric Corporation Amendment to Provisional Construction Permit No. CPPR19 Issued April 10, 1967 (2 pages)

Provisional Construction Permit No. CPPR19 (1 page)

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Indian Point 2 l

Docket Nos. 50-247 consolidated Edison of New York Indian Point Station Unit 2 Construction Formit No. CPPR21 (4 pages)

Issued October 14, 1966 In the Matter of Consolidated Edison Company i'

Indian Point Station Unit No. 2 of New York

. Initial Decision (Samule W. Jensch, Chairman)

Issued October 3, 1966 (19 pages)

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Turkey Point 3 and 4 i

i Docket Nos. 50-250 Florida Power and Light Construc ion Permit No. CPPR27 (2 pages)

Issued April 27, 1967 j

Docket Nos. 50-251 Florida Power and Light construction Permit No. CPPR28 (2 pages)

Issued April 27, 1967 In the Matter of Florida Power and Light Company (Turkey Point Nuclear Generating Units Nos. 3 and 4)

Docket Nos. 50-250 (Unit 3) 50-251 (Unit 4)

Initial Decision (Samuel W. Jensch, Chairman) (27 pages.)

i By reason of said Commission finding in writing of the m.

practical value of the pressurized water type reactor for com-j mercial or industrial use, Applicant has a statutory right to file this Application and the Commission has a statutory duty to accept it for filing.

l 5.

Pursuant to the Atomic Energy Act, Sections 1, 102, 103, and 104, the jurisdiction of the Commission to grant"this Appli-cation depends upon the question whether the three reactors to be employed in the Oconee Nuclear Station, Units 1, 2, and 3, are in

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f act the same type of pressurized water reactor which the Com-I mission has previously found in writing as aforesaid to be suf-ficiently developed to be of' practical value for commercial or industrial use.

That question is now before the At'omic Sa,fety and Licensing Board, Samuel W. Jensch, Chairman, subject to review by the Commission, whose decision is in turn subject to review by the United States Court of Appeals, whose decision is

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in turn subject to review on cortiorari_by the Supreme Court of t

the United States.

Once the Application herein has been ac,

cepted for filing, as the Commission has a statutory duty to do as aforesaid, the hearing upon this application should be stayed pending the final decision of the underlying question of juris-dictional f act which is being tried in Docket Nos. 50-269, 50-270, and 50-287, and which is the controlling jurisdictional fact issue in both of these proceedings. 'Any delay either in this Application proceeding or in Du k e 's Application proceeding -

which may attend the decision.of the jurisdiction question which lies at the threshold of both proceedings, will be due solely to the perisistence of Duke in seeking a Research and Development license for a pressurized water type of reactor which the Com-mission plainly has no jurisdiction to grant, and in Duke's further failure to amend its Application in Docket Nos. 269, 270.and 287, to Apply for a Commercial License for said pressurized water type of reactor which the Commission does have jurisdiction to grant.

By reason of its competing Application:herein, Applicant has a substantial interest which may be affected by the decision of i

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the common question of jurisdictional fact in Docket Nos. 269, I

270 and 287, as aforesaid In short, the Application of Piedmont i

Cities Power Supply, Inc. herein for lawful commercial licenses under Section 103 of the Act to acquire, own, possess and use, a 4% undivided interest as tenant in common, without right'of partition, in said three nuclear pressurized water type reactors, must be and is necessarily provisicaal and contingent upon Dukes filing an Application for a lawful commercial license (including 7 )

a construction permit) under Section 103 of the Act "to construct, own, use, and operate" said three reactors of the pressurized water type, whose practical value for commercial use Duke can hardly be heard to question, in light of the statement in Duke's pending Research and Development License Application, in Dockets 50-269, 50-270, 50-287, Amendment 3, p. 3, that:

" Applicant's projected load requirements will necessitate full power operation of Oconee Nuclear Station, Unit 1, by May 1971; Unit 2, by Mary 1972; and Unit 3 by June 1973."

The commission should take official notice, as the Courts. :will take judicial notice, that public_ utilities of the established financial and commercial standing of the Duke Power Company and its. controlling interests, do not inve'st hundreds of millions of l

dollars in the pressurized water type of reactor, or any other type, unicis it is sufficiently developed to have practical value i

f for commercial use, and'particularly to meet their projected load a

requirements over the vast and highly profitable territory 'in which they enjoy a monopoly of the generation for and transmission of electric energy in interstate commerce in the Piedmont Carolinas. '

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i Manifestly the only course open to the. Commission is to dis-miss Duke's Application in Dockets 269, 270, and 287, forthwith, with lecte to Duke to amend the same, and apply for valid com-mercial licenses as aforesaid.,

c 6.

Applicant, Piedmont Cities Power Supply, Inc., is a corporation not for profit, organized by public spirited citizens and residents of the State of North Carolina.

A true and cor-

,. ) rect copy of Applicant's Charter is hereto attached, made a part hereof and marked Exhibit A hereto.

7.

The address of Applicant is Suite 207, Stimpson-Wagner Building, Statesville, North Carolina.

8.

Applicant is not owned, controlled, or dominated by-an alien, a foreign corporation, or a foreign government.

9.

Applicant's Directors, all of whom are citizens of the United States, together with their addresses, are correctly listed in the document, hereto attached, ma'de part hereof, and marked Exhibit B hereto.

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Applicant's Principal Officers, all of whom are citi-zens of the United States, together with' thele addresses, are correctly listed ir. the document hereto attached, made part hereof, and marked Exhibit C hereto, 11.

The class of license applied for is a Commercial License, pursuant to Section 103 of the Atomic Energy Act of 19'54, as amended, (42 U.S.C. Section 2133), authorizing the acquisition and use of the Utilization Facilitier, 4% cf three pressurized water type reactors, which will be used "or the generation of i

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The license period requested is forty years.

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The corporate public purpose of Applicant is to ac-

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quire an undivided interest in the Oconee Nuclear Station, Units i

1, 2 and 3, together with a corresponding right in the capacity s'

of said station, and to contract to sell said nuclear power at b

cost to the following Piedmont Electric Cities'for a long term t

i period:

City of Statesville, North Carolina 7)

City of High Point, North Carolina City of Lexington, North Carolina City of Monroe, North' Carolina City of Shelby, North Carolina

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City of Albemarle, North Carolina p

Town of Cornelius, North Carolina e

Town of Drexel, North Carolina il Town of Granite Falls, North Carolina Town of Newton, North Carolina d

Town of Lincolnton, North Carolina Said cities have all been permitted.to, intervene in AEC Docket Nos. 50-269, 50-270, and SD-287, and Applicant also is a Joint.

Petitioner for Leave to Intervene in said proceeding.

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Although the licenses sought herein relate only to the pressurized water type reactors, three in number, the prac-tical value of Which for commercial use has been established as

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aforesaid, the ultimate goal of Applicant is to obtain a 4% in-

,1 terest as tenant in common in the entire,0conee Nuclear Station, Units 1, 2 and 3.

With the necessary. licenses from this Commis-sion, Which we believe will be forthcoming as an outccme of the litigation which has just begun, Applicant proposes to ent'er into contracts for the purchase and sale of bulk power with the eleven Piedmont. Electric Cities aforesaid, which will secure a tax exempt i

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f bond issue of Applicant, which will finance Applicant's pur-i chase of a 4% interest in the Oconee Nuclear Station, Units

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1, 2,

and 3, and save the purchasers an average of 3 mills per

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kilowatt hour on every kilowatt hour purchased from. Applicant t'f j

instead of Duke Power Company at Duke's present rates.

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i size of the required bond issue by Applicant to finance even i

a buy of a 4% undivided interest in the entire Oconee Nuclear f[

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Station would not exceed the sum of $12,700,000.

h much larger interest has been recently and successfully financed by an l-issue of revenue bonds, secured only by power purchase con-f j

tracts, with a non-profit corporation as the issuer, as shown f

by the summary pages of the prospdctus of Columbia Storage t

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Power Exchange, a Washington-Non-Profit, Nonstock Corporation, a true and correct copy of the outside and summary pages of

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r which is hereto attached, made part hereof, and marked Exhibit l

D hereto.

Applicant's ultimate objective is to save the eleven Piedmont Electric Cities, who will become its spons' ors by enter-ing into the contracts aforesaid,approximately $1,500,000 on an annual basis, or a total of approximately $60,000,000 over.he j

forty year license period, which is the maximum period' allowed by law for commercial licenses.

The overwhelmingly greater part of said projected saving is due to sharing the benefits of the peaceful atom, which is the property of the whole American people, and only a minor fraction of said:saving is due to tax exemption.

14.

Applicant agrees that.it will not permit any individua]

i to have access to restricted data until the Civil Service

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Commission shall have made an investigation and report to j

the Commission on the character, associations, and loyalty of i

such individual, and the Commission shall have determined that permitting such person to have acosss to restricted data 3

will not endanger the common defen~se and security.

15.

The filing of. this Application has been authorized by Applicant's Board as shown 'by the Resolution, copy of which is hereto attached, made part hereof, and marked Exhibit E i

hereto.

16.

Communications concerning this Application-should be sent to:

Jack R. Harris Collier, Harris & Collier Suite 207 Stimpson-Wagner Bldg.

Statesville, North Carolina WHEREFORE, Applicant, Piedmont Cities Power Supply, Inc.,

respectfully applies as above set forth for licenses, under the Atomic Energy Act of 1954, as amended, to acquire, own, and use a 4% undivided interest, as tenant in common,.without righ of partition in three nuclear pressurized water type reactors, to be located a't the Oconee Nuclear Station, Units 1, 2,

and 3, Oconee County, South Carolina, and to be designed, constructed and operated by Duke Power Company, contingent upon uhe issuance of lawful licenses therefor by the Atomic ' Energy Commission upon 0

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the filing of a lawful Application therefor by Duke.

Respectfully submitted, PIEDMONT CITIES POWER SUPPLY, INC.

. CGy k/N Wack R. Harris Suite 207 Stimpson-Wagner Building Statesvipe, rth Carolina

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J'IO. Tally,Jr/.["

1. .O. Drawer 166'O Fa etteville, North Carol'na n/ d/d j

Spe cer W. Reeder Spe cer Building St. Michaels, Maryland Its Attorneys D

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VERIFICATION i

DISTRICT OF COLUMBIA, SS:

SPENCER W. REEDER, being first duly sworn, states l

that he is an attorney duly admitted to the practice of law in Maryland, the Uni.ted States, Ohio, New York, and the s

2I District of Columbia; that he has been employed as Special Counsel by Applicant herein; that he has read the foregoing document and knows the contents thereof; that he has sub-scribed and executed said document as a duly authorized attor-I ney for PC.P.S.,

Inc. ; that he has been duly authorized by P.C.P.S., Inc. to file the aforesaid ' document; and that the contents thereof are true and correct.

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' Spence'r W.

Reeder u.

Subscribed and sworn to before me, a Notary Public of the District of Col'mbia, this lith day of September, 1967.

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Notary Pyhiic' My Commission expires:

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ARTICI.ES OF INCORPORATION OF PIEDMONT CITIES POWER SUPPLY, INC.

A NON-PROFIT CORPORATION We, the undersigned natural persons of the age of twenty-one years i

l or more, do hereby associate ourselves into a non-profit corporation under l

the laws of the State of North Carolina, as contained in Chapter 55A of the i

General Statutes of North Carolina, entitled "Non-Profit Corporation Act",

and the several amendments trereto, and to that end do hereby set forth:

I 1.

The name of the corporation is Piedmont Cities Power Supply, Inc.

2. The period of duration of the corporation shall be perpetual.

3. TMs corporation is organized wholly and solely for the following l

public purpose:

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Certain municipalities situated in the Piedmont section of North Carolina own and operate electric distribution systems to serve their citizens and customers by providing them elec.tricity at retail. To do this it is necessary that such municipalities have adequate, dependable, and economical source f

or sources of bulk or wholesale electric power.

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Such municipalities are or may be entitled to pcrtions of culk power I

l generated by atomic energy or ot?erwise. Such portions are, hereinafter, I

called "entitlements".

This corporation can:

A) Contract to secure and haw made available to suc'n i

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municipalities such entitlements, 1

l B) Contract with such municipalities for them to receive i

l and pay for such entitlements; l

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• li C) Issue the bonds of this corporation to fund the con-ATTO ANCTS AT LAW I

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D) Retire the principal and interest of such bonds with the payments under the contracts in B)iabove, which would enable such municipalities to obtain and use these entitlements,-

thereby better assuring them and their citizens and customers of adequate and dependable bulk or wholesale power and at less cost to such municipali'tiehanc to their citizens and customers, none of which benefits can now be at all or so well attained.

This non-profit corporation is formed for this public purpose, only.

4.

The corporation shall have no members.

i 5.

Tra Directors of the corporation shall elect their successors, and the number of Directors (not less than three) shall be such as fixed from time 1

to time by the Directors, all in the manner and as provided in the bylaws.

6. Within the limits of the pur;ose above stated, the corporation ~ shall have all powers now or hereinafter provided by law, and particularly, without further limiting the generality of the foregoing, shall have power, within the meaning of the Internal Revenue Code to issue bonds or other obligations I

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"on behalf of" political subdivisions of North Carolina, in respect of the entitlements above described, and to acquire and own an undivided interest as, tenant in common without right of partition in t' e Oconee Nuclear Station, h

Units 1, 2 and 3, together with.a corresponding right in the capacity and,

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energy ceveloped by said Oconee Nuclear Station, Units 1, 2 and 3, snd to contract to sell said nuclear power at cost to said certain municipalities-I situated in the Piedmont section of North Carolina for a long term period.,

I 7.

The address of the initial registered office of the corporation in the State of North Carolina is Suite 207 Stimpson-Wagner Building, South

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Center Street, Statesville, Iredell County, North Carolina; and the name of its; COLUEA l

6 "j"" [ 1 initial registered agent at such address is Jack R. Harris.

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8. The number of Directors constituting the initial Board of Directors ;

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shall be twelve (12); and the names and addresses of the J

.i perso,ns who are to serve as the initial Directors are:

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i NAME ADDRESS 4

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'4rman ? powe!!

South Main St., Drexel, N. C.

C. L. Smith

17. Grandview Street.,, Granite Falls, 'N. C.

Hentv C. Gantt 619 Caldwell Avanue. New+ cn. N. n.

Hubert Plaster 525EWashincton St Shelbv. N. C.

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Wm. M. Lentz 215 N. Laurel St., Lincolnton, N. C.

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P. W. Shell 636 Glendale. Drive, Statesville, N. C.

i H. E. Dickerson 335 Holland Drive, Statesville, N. C.

Ice D. Little Proctor Road, Cornelius, N. C.

4 I. E. Henkel 305 Bay Street, Monroe, N. C.

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f Jack F. Neel 505 PeeDee Avenue, Albemarle, N. C.

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I! Eugene T. Morris 207 Woodhaven Drive, Lexington, N. C.

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, Knox Walker 1103 Brookwood Drive, High Point, N. C.

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The names and addresses of the incorporators are-

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I Herman T. Powell South Main St., Drexel, N. C.

C. L. Smith 17 Grandview St., Granite Falls, N. C.

Henry C. Gantt 618 Caldwell Avenue, Newton, N. C. '

Hubert Plaster 5255 Washington St., Shelby, N. C.

i Wm. M. Lent:

215 N. Laurel St., Lincolnton, N. C.

P. W. Shell 636 Glendale Drive, Statesville, N. C.

H. E. Dickerson 335 Holland Drive, Statesville, N. C.

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0 LUER. HARRIS & I Joe D. Little Proctor Road, Cornelius, N. C.

COLUER ATT0antTS AT LAW tattomus-Meestanut 4

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Page Four NAME ADDRESS J. E. Henkel 305 Bay Street, Monroe, N. C.

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Jack F. Neel 505 PeeDee Avenue, Albemarle, N. C.

I hgene T.. Morris 207 Woodhaven Drive, Lexincton,

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Knox Walker 1103 Brookwood Drive, High Point, N. C.

10. This corporation is not organized and shall not be operated for

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profi: (except to the extent of retiring indebtedness).

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No part of the co'rporate income of the corporation shall inure to the benefit of any director, officer of the corporation, or any private person, i

and no director, officer of the corporat, ion, or any private person shall be i

entitled to share in the distribution of any of the. corporate assets on disso-lution of the corporation.

At any and all times while this corporation shall have outstanding any I

indebtedness all political subdivisions which then have contracts,with.this i;

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corporation under which such political subdivisions receive and pay for entitle-w.

i ments shall have the following beheficialinterests in this ccrporation:

Such political subdivisions may pay off such indebted-s y.

ness and terminate their obligations under such contracts.

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Upon the dissolution of the corporation or the winding up of its affairs, the fulllegal title and beneficial ownership of all the assets of the corporation shall be distributed exclusively to the political subdivisions whch then have contracts with this corporation under which :entracts such political sub-i divisions had been receiving and paying for entitlements.

, LUER. H ARRIS &

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,IN TESTIMONY WHEREOF, we have hereunto set our hands this the i

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28th day of July,1967.

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This is to certify that on the 28th day of July,1967, before me, a Notary Public, personally appeared Herman T. Powel1 and OOCCCCCCE:SEf C. L. Smlth

, who, I am satisfied, are.cersons named in and who executed the foregoing Articles of Incorporation, and I, havin; made known to them the contents thereof, they did acknowledge that : hey signed and delivered the same as their voluntary act and deed for the uses and purposes therein expressed.

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IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my seal, this the 28th, day of July,1967.

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l Notarv.ublic h My commission expires:

Nov. 17 th, 1968 I

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NORTH CAROLINA l

CATAWBA COUNTY I

28th ay of July,1967, before me, a This is to certify that on the d

Notary Public, personally appeared Henrv C. Gantt l who, I am satisfied, is the person named in and who executed the foregoing l

A.11cles of Incorporation, and I, having first made known to him the centents thereof, he did acknowledge that he signed and delivered :he same.as his voluntary act and deed for the uses and purposes therein expressed.'

l IN TESTIMONY WFEREOF, I have hereunto set my hand and affixed my seal, this the 28th _ day of July,1967.

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person $ named in and who executed.the foregoing Articles of Incorporation, and I, having first made known to tEsili the contents.thereof, d'd7'did acknow-l ledge that tfnE9' signed and delivered the same as tiidir voluntary act and deed I

for the uses and purposes therein expressed, i

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l IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my i

seal, this the.~d'71' day of July,1967.

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- VM 7. l.entz, P. W. Shell and H. E.

Notary Public, personally appeared Dickerson

, who, I am satisfied, are the l

persons named in and who executed t,he foregoing Articles of Inccrpora

1on, and I, having first made known to them the contents thereof, they did acknow-ledge that they signed and delivered the same as their voluntary act and deed j for the uses and purposes therein expressed.

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IN TESTIMO'NY WHEREOF, I have hereunto se: my hand an'd affixed my 28th l seal, this the day of July,1967.

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MECKLENBURG COUhTl TL This is to certify that on theM ca, y of July,1967,.

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who, I am satisfied, is the person named in and who executed the foregoing Articles of Incorporation, and I, having first made known to him the contents I

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voluntary act and deed for the uses and purposes therein expressed.

and affixed my seal, this the -229,1T1 WHEREOF, I have hereunto set my h l

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I This is to certify that on ther27 ay of July,1967,

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F. Tc-d.'d' who, I am satisfied, is the person named in and who executed the feregoing l

Articles of Incorporation, and I, having first made known to him the contents I thereof, he did acknowledge that he signed and delivered the same as his

! voluntary act and deed for the uses and purposes therein expressed.

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and affixed my seal, this thec8N'ydEREOF, I have hereunto set my hand

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and I, having first made known to them the contents thereof, they did acknow-1 edge that they signed and delivered the same as their voluntary act and deed l

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for the uses and purpose's therein expressed.

IN TESTIMON_.Y WHEREOF, I have hereunto set my hand and affixed my seal, this the.JFA ay of July,1967.

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i IN TESTIM,0NY,, WHEREOF, I have hereunto set my hand and affixed my seal, this the.J'.f" day of July,1967.

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,. l, ELECTION OF OFFICERS _

l The Temporary Secretary of this meeting of the Board of Directors be instructed and he is hereby instructed to

, cast a unanimous ballot of and for all Directers for the election of the following persons as officers of the corpo-ration:

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NAMES OF PERSONS OFFICES TO

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ELECTED

_WHICH ELECTED i

Hubert Plaster President Vice President P. VV. Shell i

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Knox Walker Secretary Eugene Morris Assistant Secretary Wm. S. Lentz Treasurer Paulette H. Blackwelder Assistant Treasurer j

t Upon motion of H. E. Dickerson,i seconded by Knox Walker, and i

unanimously passed, it was resolved hat:

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ENGAGEMENT OF LEGAL COUNSEL g

Jack R. Harris of Statesville, North Carolina, and J. O. Tally, Jr., of Fayetteville, North Carolina, and Spencer i

W. Reeder of St. Michaels, Maryland, are hereby retained, i

designated and authorized as legal counsel for this corporation.

Upon motion of H. E. Dickerson, seconded by Knox Walker, and unanimously passed, it was resolved that:

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the f(dNnal Revenue Service with respect to the Rds,

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SS14,100,000 i

Columbia Storage Power Exchange (A Washington Nonprofit, Nonstock Corporation)

Columbia Storage Power Exchange Revenue Bonds S106,520,000 Serial Bonds due annually April 1,1970 to 1986, inclusive.

S207,580,000 3V3% Term Bonds due April 1,2003.

The Bonds will be dated September 1,1964; principal and interest (semi-annually April 1 and October I; first coupon April 1, 1965 for seven months) on coupon Bonds and principal on fully registered Donds will be payable at the option of the holder at The Chase Manhattan Bank, New York, New York, Continental Illinois National Bank and Trust Company of Chicago, Chicago, Illinois, Seatt!c.First National Bank, Seattle, Washington or Bank of America National Trust and Savings Association, San Francisco, California. Payment of interest on fully registered Bonds will be made by the Trustec. Morgan Guaranty Trust Company of New York is Trustcc.

l The Bonds will be issued in coupon form in the denomination of $5,000, registreble as to principal only, and in fully registered form in the denomination of $5,000, or any multip!c thereof. Coupon and fully registered Bonds will be interchangeabic as set i

forth herein.

The Bonds will be subicct to redemption prior to maturity (i) out of any sinking fund insta!!ments for the Term Bonds, on i

October 1,1974 and on cach April 1 and October 1 thereafter to and including April 1,2003, and (ii) at the c!cetion of Columbia

( ) ora;c Power Exchange, at any time on or after October 1,1972, as a whole or in part (in inverse order of matu any redemption in part of Serial Bonds),in cach casc at the respective redemption prices (expressed as percentages of the principal

' amount) set forth below, together with accrued interest to the redemption date:

Redemption Prices At E!ccrion For the Period During Wh!ch Redeemed of CSPE Sinking Fund October 1,1972 to and including September 30, 1974.-

104 %

Thereaf:er to and including September 30, 1978.

104 100 % %

Thereafter to and including September 30, 1984.-

103 100 %

Thereafter to and including September 30, 1989.

102 100 Thereafter to and including September 30, 1994--

101 100 4

Thercafter 100 100 AMOUNTS, COUPON RATES, MATURITIES, YIELDS OR. PRICES j

(Due Aprill)

$ 3,200.000 3%%

1970 3.00 %

$ 6,000,000 3%%

1979 3.55 %

5,780,000 3%

1971 3.10 6,000,000 3.60 1980 100 6,465,000 3%

1972 3.20 6,000,000 3.60 1981 100 6.310,000 3%

1973 100 6,000,000 3.60 19S2 3.65 %

12.265,000 3%

1974 3.30 %

6,000.000 3.60 19S3 3.65 6

3%

1975 3.35 6,000,000 3.70 198 (

100 N,000,000

,000,000 3%

1976 3.40 6,000,000 3.70 1985 100 l

. 6,000,000 3%

1977 3 t5 6,000,000 3.70 19S6 100 6,000,000 3h 1978 100 S207,580,000 3 % % Term Bonds dt:e April 1, 2003 Price 100% (Approximate Yie'd 3.85% to Maturity)

(Plus Accrued Interest)

Blyth & Co., Inc.

Merrill Lynch, Pierce, Fenner & Smith John Nuveen & Co.

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Eidder, Peabody & Co.

l Francis I. duPont & Co.

B. J. Van Ingen & Co. Inc.

Smith, Barney & Co. Incorporated t

White, Weld & Co.

Carl M. Loeb, ~1hoades & Co.

Blair & Co., Granbery, Marache Incorporated These Bonds are oCered for delivery when, as and if issued and received by the Underwriters, subject to prior sale, to the right to reject any order and to withdrawal or modifcation of the ofer without notice. Lega! matters relative to authori:.ation and issue of these Bonds are subject to appraval by Messrs. Wood, King, Dawson & Logan, and by Messrs. Culp, Dwyer, Guterson & Edwards, Bond Counsel and Counsel,*respectively, to Columbia Storage Power Exchange. Certain legal matters will be passed upon by Messrs. Sullivan & Cronr.ve!!, Counsel to the Under-writers. It is expected that the _ Bonds in defnitive form will be ready for delivery on or about September 16,1964.

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i This does not constitute an ofer to sell the Bonds in any State to any person to whom*lt is unlawful I

to make such an ofer in such State. No dealer, salesman *or any other person has been authorized to give any information or to make any representations, other 'than those contained herein in connection with the ofering of the Bonds, and il given or made, such information or representations must not be relied upon.

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SUMMARY

STATEMENT On January 17,1961, the " Treaty between the United States of America and Canada,RcIsing to the Cooperative Development of the Water Resources of the Columbia River Basin" was signed by.

the United States and Canada. Formal ratification of the Treaty and delivery of the 1964 Bonds are expected to occur simultancously on or about Septen;ber 16,1964. The Treaty and the notes exchanged pursuant to the Treaty provide for the construction', maintenance and operation by Canada of storagc i

l dams and reservoirs in British Columbia on the Columbia River at Mica Crcck and at Arrow Lakes, and on one or more tributaries of the Kootenay River near Duncan Lake (Sec Map on page 4) to provide an aggregate of 15.5 million acrc-fect of usab!c storage. The controlled release of water so stored is

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expected to provide flood control benefits and will result in increased dependable capacity and average annual usable energy at hydroc!cetric power projects in the Columbia River Basin in the United States.

The Treaty specifics that the United States and Canada are cach catitled to one-half of this increase in I

capacity and energy.

Canada has agreed to the sale of its entitlement to such capacity and energy to a single purchasce in the United States for a term of years for $254,400,000 (as adjusted) which is expected to be paid on or about September 16,1964. To make this purchase Columbia Storage Power Exchange ("CSPE"),

a nonprofit, nonstock corporation, has been organized for the benefit of the three Public Utility Districts in the State of Washington owning hydroelectric projects on the main stem of the Columbia River. In turn, CSPE has entered into Canadian Entitlement Exchange Agreements (the " Exchange Agreements")

with the Bonneville Power Administrator (the " Administrator"), acting in his capacity as the Adminis-trator and acting for and on, behalf of the United States Entity to be designated pursuant to the Treaty, and with certain Pacific Northwest electric utilitics (the " Participants") whereby CSPE has transferred 100% of the Canadian Entit!cment to the Participants on a percentage share basis and the Participants have transferred the Canadian Entitlement to the Administrator in exchange for specified amounts of capacity and energy. The Exchange Agreements provide that the obligation of the Administrator to make.

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available such capacity and energy to the Participants in accordance therewith is unconditional and such obligation is not affected by any failure by Canada to construct, maintain or operate the storage dams.

Tbc Participants cornprise 14 utility districts,11 municipalities and 12 cooperatives, which have purchased and exchanged with the Administrator 50% of the Canacian Entitlement, and four utility companics, which have purchased and exchanged with the Administrator the remaining 50% of the Canadian Entitlement. The following seven Participants have so purchased and exchanged S0.5% of the Canadian Entitlement: City of Eugene, Oregon (5.5%); Pacific Power & Light Company (10%);

Portland General Electric Company (17.5%); Puget Sound Power & Light Co:npany (17.5%); City of Seattle, Washington (12.5%); City of Tacoma, Washington (12.5%); and The W nhington Water Power Company (5%).

The proceeds from the sale of the 1964 Bonds will be used to finance the purchase of the Canadian Entitlement by CSPE and to pay the corporate expenses of CSPE and interest o;t the 1964 Bcnds to and including April 1,1969. Commencing April,1969 the aggregate annual payments to CSPE under the Exchange Agreements are required to be suilicient to pay the principal of and interest on the 1964 Bonds and the expenses of CSPE.

The Attorney General of the United States has concurred in the opinion of the Solicitor of the Department of the Interior the.t, when delivered in the manner referred to in this Official Statement, the Exchange Agreements will be valid and binding agreements of the United States enforceable in accordance with their terms.

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e-AUTHORIZATION OF PROCEEDINGS BEFORE THE UNITED STATES ATOMIC ENERGY COMMISSION, AND OTHER COMMISSIONS, AGENCIES AND COURTS

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The above designated legal' counsel for this corporation shall iu have and they do now have full authority and consent to initiate, present, process and prosecute beforo,The Nnited States Atomic I

Energy Commission, The Federal Power Commission, any and all

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State and Federal Courts, and any and all other State, Federal and other Boards, Courts, Commissions, Agencies and other authorities, as such counsel shall deem appropriate, any and all petitions, protests, proceedings, cases and caus,es which such counsel" 1

l shall deem appropriate, and to cause any and all studies, investi-i I

gations and reports to be undertaken and made, as such counsel

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shall deem appropriate, and to do any and all other things such counsel shall deem appropriate toward the end of achieving adequate,

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dependable and more economical electric energy supply to be owned, controlled by, and contracted for by this corporation for ultimata sale and disposition at cost to municipalities in the piedmont section of Nor:h Carolina consistent with the Articles of Incorporation 4-and By-Laws of the corporation; and without limiting the generality of any of the foregoing, said legal counsel for this corporation are, specificallyf authorized t'o file before :he United States Atomic Energy Commission a joint petition of this corporation and eleven cities for leave to intervene, together with a formal motion to dismiss, Page Six r

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i i-i.j and supporting memorandum in the matter of the Application of 4

Duke Power Company for Research and Development Licenses i-l under the Atomic Energy Act of 1954 as amended for Oconee g

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Nuclear S:a: ion Units 1, 2 and 3 (such Application being in Commission Docket Nos. 50-269, 50-270, and 50-287), copies of such petition, motion and memorandum being attached to these minutes as Exhibit A, and made a part hereof; and there-t i

after such counsel are authorized to amend, plead further, supplemen:, support, process, and prosecute all such before said Commission and all other appropriate agencies and courts to a conclus' ion.

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I Upon motion of Know Walker, seconded by Hubert Plaster, and unanimously passed, it was resolved thit:

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DESIGNATION OF BANK l

AS DEPOSITORY j

w First Union National Sank, Statesville, North Carolina, be, and it hereby is, designated as a depository of the corporation, and that funds deposited therewith may be.

s' wi:hdrawn upon a check, draf, note, or order of the corpo-ration, signed by any of the following:

NAME TITLE Huber: Plaster or Presiden 1

P. W. Shell Vice Presiden and Wm. M. Lentz or Treasurer Paulette H. Blackwelder Assistant Treasurer-t Page Seven m

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