ML19318A016

Forwards 780927 Operating Agreement & 701102 Memorandum of Agreement Re Sharing of Facility Const Costs,Between Met Ed,Jcpl & Penelec

ML19318A016
Person / Time
Site:	Crane
Issue date:	06/11/1980
From:	Gentieu L GENERAL PUBLIC UTILITIES CORP.
To:	Peterson J Office of Nuclear Reactor Regulation
References
NUDOCS 8006170711
Download: ML19318A016 (17)

Text

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THIS DOCUI,fENT CONTAINS P003 QUj\\UTY P.'tGE3 1

GPU Service Corporation Nme

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Pars:ppany, New Jersey 07054 201 263-6500 TELEX 136-482 wnter s Direct Dial Nurnber:

(201) 263-6018 June 11, 1980 Mr. J. Petersen U. S. Nuclear Regulatory Commission Room 266 - PHIL 7920 Norfolk Avenue Bethesda, Maryland 20014

Dear Mr. Petersen:

As you requested, enclosed is a copy of the Operating Agreement, dated September 27, 1978, between Met-Ed, Jersey Central and Penelec covering the operation of the Three Mile Island Generating Station. Also enclosed is a copy of the Memorandum of Agreement, dated November 2, 1970, covering the sharing of construction costs of the TMI Units.

If you should need additional information, please let me know.

Sincerely ycurs, L. P. Gentieu LPG:jb

_.aclosures cc:

M. Karlowicz (W/ Enc.)

THIS DOCUMENT CONTAINS POOR QUAUTY PAGES Boos-s

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GPU Servce Corporation :s a sues:cary of General Puche Utit;es Corporat.on

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J. ?. Previte I cm enclosing confor:cd copy of Mecorende of Agreement concernin; Three Mile Is"cnd nuciccr sencrctin; ste. tion.

Ua ucro chic to occure signe.tures of proper officers frce ecch ec.:.7cny who ucre cttendin; cn oporcting ccotin3 cc G?U.

Signed cc7 cs he.vc been 'forue.rded. to those listed below.

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between Metropolitan 2dison Ccmpany (" Met-Ed"), c Pennsylvcnic cor, oration, Jersov.Contral Pcwor & Lis~ht Com.ocnv. -( "Jo rcev i

Central"), ' c Now Jerscy. corporatirn, and Pennsylvcnic Electric Company ("Pencloc"), a Pennsylvcnia corporation.

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The Three Milo Island nuc.1 car generating 's'tation consisting of onc unit ("TMI #1") with an,cxpected ccpcbility of approximctcly S40 :c7, scheduled for service in 1972, and a second unit (."T:1; #2") wiuh cn expected capcbility of approxi-mately 930 107, scheduled for servico in 1974 is in the proccss of construction.

Met-Zd has boca fincncing all the on-site and off-site costs 'of.TM

1. 1 cnd the on-site costs of TMI #2 cnd Jerscy Contral has bcon fincncing the other costs of OMI O2.

L On June 20, 1970, Met-Ed had invested c.o.uroximctois.i $D3,616,000 in TMI.#1 and $9,701,000 in TMI #2, cnd Jeracy Centrcl hcd in-vested approxiuctoly $16,83t.,000 in TMI #2.

2.

Mot-Ed, Jersey Contrcl and Penclec he.vc cgreed th a t, subject to the obtc:.ning of cli neccccary cuthorizc-l tions, approvcis cnd consancs, Mot-26, Jersey Centrci cnd Poncice will owa the Thr.ac Mils Icicnd station as tenants in comr.cn (wcthoub i

4 right 'of partition), wich Met-Zd owning c 50';s undividad ntarcst 6

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thcroin and Jcracy Contr:1 cnd Ponc1ce caci} owning 25% undivided interests therein, and with each of them sharing in the obliga-tions relating to the station in those proportions.

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In order to effcctuato the foregoing, Mat-Ed, Jerscy 1

Contral and Penelec will scek such' cuthorizations, approvcis and consents as may bc necessary or appropriate and, cs scon as such 9

author,1:ntions ara obtained, will respectively execut'c such in-q*

struments and assumo such responsibilitic's as tre necessary in order to achiave the intanded sharing of cwnership of the station and obligations with respect thorcro.

It is recognized that the completion of the necessary stops may require up to a year or more.

In the interim,.but subject to the obtaining of the requi-sito authorizations of the Sec.uritics and Exchtngo Commission, Ponoloc will from time to timo make pay:5cnts to Jcrsay Contral and Mot-Ed. and/or to the supplicrs or constructors for the Thrca Mile Island station, and Jerscy Contral will frca timo to timo mako payments to Met-2d and/or to the suppliers or constructors for the Threc Mile Island station; such payments will be appli:6 to the acquisition by -Pencicc and Jersey Centrol of their respcc-tive 25?', undivided intercsts 'in the station, b. t, if such acquis10.,ons saalA not ha cc:.iplc, eo. on or.;crore septocc.er

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1971, Mot-Ed shall upon request of Jcracy Central and/or Penclec

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ropay to thcc th respcetive art. cunts paid by them on accou: t of such proposed acquisitions.

H: WITh2SS t'EEEEOF, tho' parties have en.cred into this 2."ecorandura of. Agrcement, as of the day and year first above written.

METRO?OI12 TAN EDISON COMPANY

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A OPEPAT!f C AGREEi4E IT-among a

METROPOLITAN EDIS0tl C0i;PANY JERSEY CEitTPAL POWER &'llGHT COMPA!1Y and PEfillSYLVAtlIA ELECTRIC COMPAtl7 a=1 Scr;t&her 1976 This AGREEMENT made and entered into this 27 day of

, among Metropolitan Edison Company (Met-Ed), Jersey Central Power & Light Ccmpany, (Jersey Central), and' Pennsylvania Electric Company (Penclec), supersedes an-agreement made by and between them on the 31st day of May,1974 aisc entitled THREE MILE ISLAliD MUCLEAR GEllERATitlG STAT 10tl OPERAT!iG AGREEMEriT.

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W I T ll E S S E T H:

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MIEREAS, each of the parties hereto (hereinafter referred to collectively as " Owners" and individually as an "0wner") owns, as a tenant in ccanon with the 'others, an undivided interes t in - the Three Mile Island Nuclear Generating Station (hereina f ter referred tn as the '.' Station").

The Staticn, which is located.

on the Susquehanna River near liarrisburg, Pennsylvania, consists of Unit.!!o.1 Unit tio. 2, and certain facilities that are useful in the operation of both' units.

The present undivided interests are 50' percent in the ca ;e of Met-Ed and 25 percent each in the case of Jersey Contral and Penclec.

WilEREAS, it is desirable and to.the mutual advantage of the Owners that Met-Ed be detenated, under the terms land conditions hereinaf ter set forth, to operate and maintain the Station and make any necessary ai!ditier.s thereto and retirements therefrom on behal f of itsel f, Jersey Central, and Penelec.

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-fiOW LTilEREf 0RE, iri consideration of tnese premises, the parties hereto da hereby-agree as follows:

' ARTICLE 1 Sharinn of Capaci ty and Energy _

l.1 As tenants in common, each owning an undiviced interest in the Station, the Owners-are each entitled to a share of all the services provided thereby in proportion to their respective undivided interests in the sta-tion, including GY' stalled capacity, available capacity, operating capacity, reactive power and nct hourly energy generation of the Station.

1.2 When plant conditions are such as to require a net input to supply Station power-and light, the Owners are responsible for these requirements in pro-portion to their respective undivided interests in the Station.

ARTICLE 2

. Services to Ic Provided 2.1 Met-Ed shall provide and be responsible for the operation and maintenance c' the Station in a safa and reliable manner in accordance with all permits and requirements of State and federal regulatory agencies and generation of power and energy at the Station as economically as is practicable, cchsistent with'such guidelines as may be jointly cevelcped by the Owners.

Met-Ed shall make additions to and retirements from the Stat.icn consistent with

such operation and maintenance.

Such'scrvices may be provided by Met-Ed i

- through its own personnel or in part by others under contractual or other arrangements; In furtherance of_the foreguing Met-Ed shall:

(a)

Select, hire, contrni and discharge personnel, who will be empicyces solely: of Met-Ed.

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(b) Schedule de1iverles nf and Iandle nuclear fueI to the St.ation under cuntracts entered int.o by the Owners, for the operat. ion of the Station.

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(c)-' Purchase ordinary operating and maintenance materials ar.d supplies including fuci oil, but excluding nuclear fuel whicn is to be porchased under centracts (which contracts shall be subject to the approval of Met-Ed for quality assurance purposes) entered into by the Owners.

fc) Keep Jersey Central and Penelec informed in a manner to be mutually agreed a.

upon concerning operation and maintenance of the Statitn.

(c) Prepare in accordance with its usual procedures annual budgets and

' forecasts for the Station's operating and maintenance expenses, capital expenditure >, and retirements to be submitted to t.nc Owners for approval.

Such budgets and forecasts shall be revised from time to time to reflect material changes in circumstances.

( f)- Perform any services and taka any action related to the operation, maintenance, renewals, replacements, additions and retirements per-taining to the Station as may be necessary or acpropriate to comply

'with the provie. inns of the Atomic Energy Act, as amenced or as it may be amended, or any other applicable s tat.ute, rules, regulations, guidelines or sin.ilar criteria, and any provisions or' conditions of i

construction permits and operating licenses or similar authori-zations grinted or that may be granted in connect. ion with Station

- t acili tles, as' such permi ts. licenses or other authorizatiens may i

herea f Lee he amenderJ.

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renrit il*. and i cp lacw:nt.s rcen:i e tid to I;t ep the ' t. i. it.n in. ale and ef ficient operatinej i:ondition and to protect thr' preperty.

Such work.

shall he subject to the sarne fict-Cd revicu and a;. proval procccures

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-tha.L. apply te similar vork on-wholly-ct:ned generating facilitics.

Approval of the 0.nces will te required for vork chich will cause the operations and maintenance,- or capital budget or lat :st approved fore.

. cast _t'o be ci.cceded by $500,000. Such approval :. hall be in advance

- of undertakinf the v:ork unicss the work is required to prevent h::ard-cus conditions or substantial reduction in riencrction, in which evcut 14ct-Ed shall inform the Oveners of the undertaking of such work as 1

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-promptly as feasible.

(h) Perform any additional scryices related to the operation, mainten:nce, I

rencuals, rcplccc:.:ents, additions and retirc;'. cat'. Pertaining to the

~ Station to which the Ov;ncrs shall have inutually cgreed.

(i) 1:eep in accordence with its usual prcccdurcs all hecessary bcoks of

, record, books of occcunt and n:emeranda of all tran!. actions and Turnish i-reports with respect thereto to the Cuners.to enable cach Cuner to Imcat its accounting and statistical requiren:ent.:, and to conferm to the

-rules, regulations 'and requirements of all regulatory bodies havi,ng jurisdiction over the Cuners. The costs for the Station shall be ac-

'cuirulated in a separate set of dccounts.

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liatters and questic.is arising in cnnnection with the operation and.naintenance

. of.'the Station which are not within the scope of f.he. nutharity delegated to J

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!*et-Ed under this t.irec*.cnt and are not specifically provided for _ in this Atycerren*

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. sh111_ t c jnintly deter mined frren time to tin.c by the Ge.ners.

- 2.' 3 The cos ts - f er e, vir.cs ;ienv irk d by. or for l'e'.-Ed for the bencii t. of. the S tation h

1sh 11 ti.~ aid.to itet-td as providJd in Article 1 p

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m ARlit.LL 1 Scheduling of Operation, Disnatch anti Maintenance i

3.1I It.is anticipated that the Station will be operated so that the Owners

use their respective ' shares of its output and capacity at a same time

. since such operation will normally be corrpatible with each Owners' desired sys tem operation. flormal scheduling shall contemplate the division of entitlements to the Station output as _ provided in Article 1.

3.2 0uring operating conditions which Met-Ed in its sole judgment deems

..x-abnormal, Met-Ed shall take such action as it deems appropiiate for the safety of personnel and equipment.

'3.3 Reactive power output and input to the Station shall be determined with due regard to each 0wner's interes t and to Met-Ed's sys tem operating practice regarding voltage schedules in a manner mutually acreed to by the Craners.

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ARTICLE 4 Unrkinfi und F

4.1 The Owners shdll establish a fund from which Met-Ed shall make payments for all costs pu" tant to its services and responsibilitics hereunder.

The-Owners 'shall determine, ini tially and from time to time, during the tenn of this Agreement,. the amount or amounts required to maintain a satisfactory' balance in _the fund..and sha'll bc liable in proportion to

'their respective undivided -interests in the Statico for any such additional amounts required to maintain the agreed-upon balance.

The Gu::ces shall

.rcinburse the fund promptly' on receipt of notice of their respective liability; for reinhursement, hy account, as provided for in 2.1(i) above.

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4.2 On termination of this 6 reement, as hereinaf ter provided, any residual 9

unexpended balance in the advance fund shall be credited to the Owners in

-proportion to their-respective undivided interests in the Station.

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ARTICLE 5 Charnes, Financial Statements and Billincs 5.1 !!ct-Ed shall promptly report to Jersey Central and Penelec for each month, tollowing the enf-of sucli month, and subsequently by written statements the folicwing:

(a) The expenses of operation and maintenance, the cost of any plant additions and retirements including applicabic cost of removal and salvage, on an accrual basis, classified in the manner as set -

. forth and defined in Section 2.l(i) above.

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(b) A suninary statement of the operation during that montn of the horking s

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fund, showing beginning balance, receipts, disbursements and cicsing i

balance.

5.2 The costs incurred from all sources, including Met-Ed,during or accrued for each calendar month in operating, maintaining and makinc additions to and retirements from the Station shall beccme liabilities of the Owners,when incurred and shall be borne by the Owners in proportion to their undivided interes ts in the Station. All such costs shall be cetermined in accardance wi th sound accounting practir.es, and shall include reasonable and appro-priate indirect cos ts and overheads.

5.3 It. is the intent of the Owners that so far as pussible cach Owner shall separately report, file returns with respect to, be responsibic for and pay all real property, franchise, business or other taxes, except payroll and sales

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< sod that such taxes shall be separalcly levied and assessed against eacn Owner. llowever, to the extent that such taxes raay l,e levied on or assi:ssed against the Station, or its operation, or the Owners in such a manner as, in the opinion of the Owners, to make impossibic or inequitable the carrying out of said intent, then such taxes shall be deemed a part of the expenses of operating and maintaining the Station and shall be apportioned among the Owners under thg Agreement in accordance with their respective percentages of ownership.

Payroll and sales or use taxes paid by each Ov.I1er as a part of the operation of the Station shall be reimbursed from the Working Fund.

5.4 Jersey Central and Penelec shall have the right, during the term of this Agreement and thereafter as long as the books, records and memoranda referred to in Section 2.1 shall be preserved, to inspect all such items and to make audi thercof at their own cost as they may deem necessary to prctect their inter-

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5.5 In the event an Owner shall question any statement rendered according to the provisions of Section 5.1 hereef, it shall nevertheless promptly pay the amount indicated in such statem.ent but. such payment shall not be deemed to pre-vent.such Owner from claiming an adjus tment of any statement rendered.

5.6 If. it shall be determined that an Owner has paid more or less than its proper share of the operating and capital costs and expenses of. the Station

.for the month covered by any such s tatement, an appropriate correction shall be made by I'.ct-Ed by proper credit or charge, as the case may be.

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t ARIICl.E 6 fletering, Relaying and Control 6.1 The ' net power generated by Unit flo. I shall be determined by :netering tne a

power output, at the high side of the 19-230kV step-up transfonner minus the pcwer metered on each of the two Unit service transfonners (i*os. l A,18) at the 230kV bus.

6.2 The net power generated by Unit :c. 2 shall be detennined by metering the

. pdwer output at' tNe high side of the 22-500kV step-up transf,onners minus the power nctered on each of the two Unit service transforcers (flos. 2A, 2B) at the 230kV bus.

6. 3 The SC0kV power delivery shall be the power generated by Unit t'o. 2 deter-mined by metering the power output at the high side of the 22-500kV step-up trans f onner.

This value is prm. W d to PJM for detennination of 500kV

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losses and system security analysis.

6.4 The accuracy of the metering eqcipment installed to provide infonnaticn under Sections o.1, 6.2 and 6.3 above shall be in accordance with GPU Meter Standards.

The n.eters so provided _ shall be tested and calibrated according to schedules. arranged by Met-Ed at intervals not to exceed twelve months.

-Adequate notice of such tests shall be given, if requested, to Jersey Central and Penelec so that they may have representation present to witness them.

Correction of inaccuracies found to exist in any meter shall promptly

.be made and, if appropriate, such correction shall be retroactively applied to the extent necessary to carry out the intent of this Agreement.

~6.5 Settings, calculations and test procedures for relays, telemetering and associated control equipment in the plant and suMlaticn, whicn are of direct interest to any of the Owners si'all be deterr :.ed by -:autual agreemer.t

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a hetween appropriate representativr', of the (Nocr..

Test schedules shall

~be' jointly agreed upon by the Owners and adequate notice of such tests shall be given, if requested, to Jersey Central and Penele 50 they may have representation present to witness them.

ARTICLE 7 i

Compliance with Provisions of Pernits and Requirements of Governmental Agencies _

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l 7.1 The Owners shall cooperate in taking whatever action may be necessary l

to comply with the tenns and provisions of permits for the Station and 1

with all lawful requirements of any federal or State agency or regula-tory body having jurisdiction in the premises.

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ARTICLE 8 Penal ties and Damaac to Persons or Proper.t'y 8.1 The following provisions shall be applicable to penalties assessed, or damage to the property of any or all the parties hereto (including i

Station property) or third parties, or injuries to or loss of life by any person, including employces of the parties hereto:

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(a) Each Owner will procure and maintain such physical damage, public i

liability, workers' ccmpensation and other insurance as it may l

deem appropriate with respect to all losses, damages, liability and claims arising out of its ownership interest and the operation of the Station and the premium costs thereof shall be Station costs under Section_5.2, or, in the alternative upon concurrence of eacn i

I party hereto, the Owners-uill jointly procure anJ r:aintain such

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s physical damage public li.ileility, workers' compensation and other 3'

insurance as they may deem appropriate with respect to all losses, damages, liability and claims arising out of their rr.s' cctive c<.ner-

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ship interests and the operation of the Station and the premium costs thereof shall be Station costs unoer Section 5.2.

All insur -

ante shall contain a waiver of subrogation clause against the other Owners.

.(b) Claims coggjzable under workers' compensation acts or temporary di.

ability benefits laws or any other benefits under workers' compensa-tien or analagous statutes and the expenses of defending or disposing of the same, attributable' to the ownership or operation of the Station, which are not covered in full by insurance procured in accordance with the preceding paragraph shall (Lo the ex tent not covered by such

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insurance) be treated as Station costs under Secticn 5.2.

(c) All losses, damages, expenses, penalties and claims (including those in respect of property damage and personal injury) asserted by third.

parties and the expenses of defending or disposing of the same, attri-butable to'the ownership or operation of the Station, which are not covered in full by insurance procured in accordance witn the second preceding paragraph shall'(to the extent not covered by such insurance) be treated as Station costs under Section 5.2.

(d) Each Owner 2xpressly waives any right it may have to reccver from the.other Owners for any loss, damage, penalties, claim nr expense (including damage to property of the Station) for any cause including the negligence of the other Owners, its employees and agents in connection with the operation of the Sta tinn.

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11 ARTICLE 9 i

!!iscellaneuus 9.1 flothing in this Agreement shall be deemed to create or constitute a part-nership, joint venture or association among the Owners, the sole purpose of this Agreement being limited to provisicn for "- cederly as.d efficient operation and maintenance of their respective separate undivided interests in the Station.

9.2 Jersey Central ciId Penelec, by written notice to Met-Ed, shpli each' designate a Representative, who shall receive notices and ccnmunications frcm Met-Ed under the provisions of this Agreement and who shall send to Mat-Ed all notices and communications under the provisicns of this Acree-ment.

9.3 Met-Ed, by written notice to the Jersey Central and Penele: Representatives,

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shall designate a Met-Ed Representative, who shall receive notices and

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ccmmunications from the Jersey Central and Penelec Hepresentatives under the provisions o'f this Agreen.ent and who, shall send to the Jersey Central and Penelec Representatives all notices and ccmmunications concerning the

- provisions of this Agreement.

9.4 Any designation by Jersey Central or Penelec pursuant to Section 9.2 or by tiet-Ed pursuant to Section 9.3 may be revoked by Jersey Central, Penelet

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or Met-Ed, as the case. may be, by ' designating a substitute representative by written notice to the Met-Ed Representative, or the Jersey Central 1

Representative and the Penelec Representative, as the case taay be.

9.5 The Owners may agree upon - the establishnent of one er more conn:ittees l

to coordinate matters relating to performance of the various aspects of this Agreement.

The Owners shall notify each other in writing of the (1.

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. V names and addresses of the persen or persons appointed to any such committee, and such designations shall continue in effect unless and

=until an Owner designating such person or persons shall revoke the same by giving written notice of the designation of a successor appointed to any such ccmmittee.

9.6 Each Owner shall determine the basis and method it will use for purposes of depreciation,and other matters where investment in Statien property is relevant.

9.7 In performing services under this Agreement on behalf of Jersey Central and Penelec, Met-Ed shall act as an independent contractor responsible for the result to be attained, consistent with such guidelir.es as may be jointly developed by the Owners.

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ARTICLE 10 Ef fective Date and Termination 10.1 Subject to any applicable rules and regulations of any regulatory authority, this Agreement shall becomo effective as of the date first above written and shall remain in full force and ef fect unless and until any one of the Owners shall cease to own an undivided interest in the Station.

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11.'l This Agreement and all of' the '.erms and conditiens ' hereof shall be binding upon and inure,to the benefit of the Owners and. heir re-spective successors and assigns.

Any mortgage indenture trustee _which shall foreclose on substantially all of the electric utility properties of any Owner, including the Iundivided interest of said Ovener in the Station, may, at its own election, be deemed to'be a successor and

' assig'n of said.0wner under this Agreement.

Ill.WITriE55 UHEREOF, the parties. hereto have caused these present to be signed and attested as of the day and year first above written.

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. ATTEST:

METROPOLITArt ED:50:1 CCMPA :Y s

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By Secretary i,C.'

Vice 1*resiucat ATTEST:

~JER5EY CEllTRAL P0' DER & LIGHT COP.PA:(Y

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Vice i'resiuent.

' ATTEST:

PEr:r45YLVAt:! A ELECTRIC COMPA!iY Y

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