ML19318B274
| ML19318B274 | |
| Person / Time | |
|---|---|
| Site: | South Texas, Comanche Peak  |
| Issue date: | 05/09/1980 |
| From: | Burchette W, Ritts F NORTHCUTT ELY, LAW OFFICES OF, TEX-LA ELECTRIC COOPERATIVE OF TEXAS, INC. (FORMERLY |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 8006250193 | |
| Download: ML19318B274 (29) | |
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<a N O RTH C UTT ELY W 121980 9-wartacars six HUNDRED BUILDINc g,
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CABLE: QUADRANcLE NORTHCUTT ELY FREDERICK ti. RITTS o) nOBE RT F. PsETROWSKI.JR.
WILLIAM H. BURCHETTE nAtm s. citus May 9, 1980 l
Marshall E. Miller, Esquire Sheldon L. Wolfe, Esquire Chairman, Atomic Safety and Atomic Safety and Licensing Licensing B)ard Panel Board Panel U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, D.C.
20555 Washington, D.C.
20555 Michael L.
Glaser, Esquire 1150 17th Street, N.W.
Washington, D.C.
20036 Re:
Status Report of Settlement Negotiations in Houston Lighting & Power Company, et al. (South Texas Project,
)
Units 1 and 2), Docket Nos. 50-498A and 50-499A; and
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Texas Utilities Generating Company (Comanche Peak Steam Electric Station, Units 1 and 2), Docket Nos. 50-445A and 50-446A.
(Consolidated for discovery.)
Gentlemen:
In accordance with the Atomic Safety and Licensing Board's Order of April 10, 1980, Tex-La Electric Cooperative of Texas, Inc.
(" Tex-La"), herebyrespectfullysupmitsastatusreportonsettle-ment negotiations which have taken place since the prehearing con-ference held on April 9, 1980.
On May 6, 1980, following many meetings during the past months, representatives of Tex-La and Texas Power & Light Company ("TP&L")
signed a Letter of Intent signifying the understandings which have been reached to resolve the differences between Te -La and TP&L.
A copy of the Letter of Intent and proposed licensing conditions are attached hereto as Exhibit A.
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i NO RT H C UTT E LY
,x Status Report May 9, 1980 a
Page two In summary, Tex-La and TP&L have agreed to execute a Joint ownership Agreement and Power Supply Agreement to include, inter alia, the following terms and conditions:
TP&L will sell and Tex-La will'purc'hase, as a tenant in com-mon, an undivided 4.35 percent interest in the Comanche Peak Steam Electric Generating Station, including boths Units 1 and 2, nuclear fuel, and associated 345 Kv transmission facilities.
TP&L will make available from its syster resources reserve
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capacity and back-up energy to provide Tex-La's reserves for its share of the project.
During the early years of the operation of the project, TP&L has agreed to purchase, in accordance with Exhibit A to the Letter of Intent, amounts of Tex-La's generation entitlement not retained by Tex-La.
TP&L agreed to provide supplemental power and energy in excess l
of Tex-La's retained capacity..
In the event Tex-La desires to establish, maintain, or modify a connection with facilities used for the transmission of electric energy in interstate commerce, Tex-La agreed that it will first obtain a non-jurisdictional order, applicable to TP&L and other members of the Texas Utilities Company system, under section 204 of the Public Utility Regulatory Policies Act of 1978, 16 U.S.C.
S824 (b) (2).
Tex-La and TP&L shall be free to plan, construct, and own generation and transmission facilities as they may elect.
Where Tex-La makes a timely request for participation in any project to be constructed by TP&L, such a request shall be honored where joint l
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,e Status Report May 9, 1980 Page three ownership in such a project is determined to be mutually advantageous to Tex-La and TP&L and where such participation would fully compen-sate TP&L for its costs.
Tex-La and TP&L agreed that the terms and conditions set forth in the Letter of Intent have been reached with the intention of settling the controversies between TP&L and Tex-La before the Nuclear Regulatory Commission (Docket Nos. 50-445A and 50-446A) and the Federal Energy Regulatory Commission proceedings (Docket No. E -
9578).
Tex-La further agreed that it will amend its Petition to Intervene in this proceeding and in doing so will appear in full support of Texas Power & Light seeking to secure an operating license for the Comanche Peak project as soon as possible.
With respect to the proceeding in FERC Docket No. E-9578, Tex-La agrees that it will cooperate with and use its best efforts to assist TP&L in secaring a dismissal of the case.
With respect to the direct current (DC) interconnections pro-posed by the four operating subsidiaries of the Central and South West Corporation, Tex-La agrees that it will support the issuance of an order by FERC regarding these interconnections, provided Tex-La is afforded a reasonable opportunity to purchase a three-year option to participate in the ownership of such DC facilities from the owners upon reasonable terms and conditions.
TP&L and Tex-La agreed that they will fully support conditions in the operating license of Comanche Peak in the form and substance attached to the' Letter of Intent'as Exhibit C.
Copies of the Letter of Intent and proposed licensing condi-tions have been provided to counsel for the Department of Justice and the NRC staff.
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LAW OirtCJ OF NO RT H C UTT E LY Status Report May 9, 1980 Page four Although there remains considerable work to be accomplished in drafting the Joint Ownership Agreement and the Power Supply Agreement to reflect the intention of the parties as evidenced by the Letter of Intent, Tex-La and TP&L have agreed to complete these documents as soon as practicable with the overriding view of completing the documents not later than November 1, 1980.
Respectfully submitted,
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tc Laf Offices of Northcutt Ely Frederick H.
Ritts William H.
Burchette Attorneys for Tex-La Electric Cooperative of Texas, Inc.
/dsf Enclosure Copy to all parties i
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TEXAS POWER & LIGHT COMPANY
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1511 Bryan Street
- P. O. Box 226331
- Dallas, Texas 75266 May 6,1980 e
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60 > h Tex-Lo Electric Cooperative of Texas, Inc.
Ir[ ugh [/gf07 P0:1 P. O. Box 398 s
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Guitman, Texcs 75783 L
Bg Gentlemen:
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This letter of intent will confirm recent discussions between your
., representatives cnd those of Texas Power & Light Compcny concerning settlement of vcrious controversies, and will serve to set forth the understcndings recched to resolve these differences, including the sale by Texas Power & Light Company (TP&L) to Tex-La Electric Cooperative of Texcs, Inc. (Tex-Lc) of an undivided ownership interest in the Comenche Peck Stecm Electric Station under construction in Hood and Somervell Counties, Texas, including both Units I cnd 2, nuclecr fuel cnd esscciated 345 kv transmission facilities (Project).
Subject to the execution of a Joint Ownership Agreement cnd Power Supply Agreement, hereincfter cciled " definitive cgreements," between the various offected porties, the undersigned intend that such agreement (s) shcIl include the following terms and conditions:
1.
TP&L will sell on,d Tex-La will purchase es a tencnt in common en undivided inte. rest not to exceed 4.35% in the Project. The purchese price will be the same undivided percentage es the ownership percentcge of the total costs of construction and fuel for the Project to the date of closing (Construction Costs), plus interest, calculated monthly, on Construction Costs incurred from the Icst day of the month in which the particular Construction Costs were paid to the dcte of closing, compounded cnnucily, at a rate equct to TP&L's weighted cost of ecpital for ecch
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cost of the Compcny's most recent long-term debt and,
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such year (including the i
preferred stock issues crid the actual rate of return on overage commonf5 coch determined for ec h calender yect, as of the prior eclender year), plus i d on g
cctuct federal income tax liobility associated specifically with the gain real ze E
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the interest and development cost component of the purchase price on the s Tex-Lo will also pay TP&L ct closing $326,250 (based upon a 4.35%
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Tex-Lc.
undivided ownership interest), representing its share of costs in developing Project which cre properly alloccble but not specifically charged to the Proj After closing, Tex-La shcIl pay its undivided ownership interest percentage t
f of costs thereafter incurred for the Project, including without limitation, cos s o construction, fuel, operation cnd maintenance.
11.
On.cnd cfter commercial operation of Unit #1 of the Project, Tex-La shcIl l
receive a percentage, equal to its undivided ownership percentcge, of the net I
cnd net energy genercted by the Project (Generation Entitlement), less transmission losses. Tex-Lo expects and is expected to have utility respo for its own system, cnd recognizes its responsibility to provide installed reserve For the ccpacity and spinning reserves to firm up its Generation Entitlement.
considerations hereinafter set forth, TP&L shcIl make available from its system i
resources reserve capacity and backup energy to provide Tex-Lc's reserve I
Generation Entitlerunt-from the Project.
Tex-La shall maintoin reserve ecpacity annually in cn omount equal c.
to Tex-Lc's Retained Capacity (cs defined in Part til herein) times the percentcge of reserve ccpacity which the Texas Utilities System com maintained on their collective Systems during the preceding year.
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b.
TP&L shcIl provide end Tex-La shall pay each month for such amounts of reserve ccpacity at c price based on the embedded weighted avercge cost per kw for all TP&L generation investment including its interest in generation facilities owned jointly with others multiplied by TP&L's cppropriate fixed chcrge rate, each determined as of the end of the prior calendar year, divided by twelve. In addition, Tex-La shall pay for operating costs cssociated with its spinning reserve requirement.
c.
When backup energy is required by Tex-La to replace loss of Retained Ccpacity from the Project, the price of such backup energy to be paid to TP&L by Tex-La shall be Tex-La's pro rata shcre of TP&L's cetual cost incurred to repiece the cggregate of TP&L's and Tex-La's simulteneous loss of generction from the Project for a given time period.
ill.
During the early yecrs of commercial operation of the Project, it is anticipated that Tex-Lc's Generation Entitlement will exceed its ennual bcse load l
power cnd energy requirements. Therefore, TP&L cnd Tex-La intend to establish a schedule of cnnuci amounts of ecpacity from the Project to be retained by Tex-La for its own use (Retained Ccpocity) cnd annual cmounts of surplus ccpccity to be purchesed from Tex-Lc's Generation Entitlement from the Project by TP&L (Surplus Ccpacity), generally in accordance with Exhibit A attached hereto cnd made o part hereof. Tex-La's Retained Ccpocity will be credited continuously against its load, in c$cordcnce with 11 cbove. TP&L shall be obligated to pay '
annually for such scheduled Surplus Ccpacity regardless of the net output of the Project. TP&L will also purchese from Tex-La cil energy actually generated with Surplus Ccpacity (Surplus Energy). The price of such Surplus Ccpacity cnd Surplus 5
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4 Energy during each year shall be computed in accordance with Exhibit B cticcNd hereto cnd made o part hereof.
IV.
During the periods of trial operation of either generating unit of the Project, TP&L will purchase the energy associated with Tex-La's Generation Entitlement at a price equal to the average of TP&L's avoided energy costs and Tex-La's costs of energy cssociated with its Generation Entitlement during ecch hour of test operations of the Project.
N V.
It is understood thct TP&L shcIl have sole discretion for the scheduling cnd dispatching of Tex-Lo's Generation Entitlement from the Project in cccordence l
with the undersigned's scheduling and dispatching procedures. In the event TP&L t
l voluntarily ceases to operate or reduces the outpuf from the Project beccuse of the availcbility of lower cost energy from other sources, TP&L will mcke avcilcble to Tex-Lo the cmount of energy which the Project would recsoncbly be anticipated to provide to Tex-La hcd its output not been reduced, at a cost equo! to the cost that would have been incurred by Tex-La if the unit had continued to operate at its L
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recsoncbly anticipated operating level.
VI.
in order to effect the sale of on undivided interest in the Project, it will be g
necessary to amend the-Joint Ownership Agreement between Dollos Power & Light Compcny, Texcs Electric Service Company, Te.xes Power & Lirit Compcny, Texcs Municipal Power Agency and Brczos Electric Power Cooperative, Inc. for 3
Comanche Peck Steam Electric Station, and such sole is subject thereto. It will s_
clso be necessscry for Tex-La to join in such cgreement, or a similcr agreement, to e
assume its responsibilities and obligations os an owner.
The Project Mancier engaged in the planning, construction and operation of the Project is Texcs Utilities Generating Compcny, subject to the direction of cn Owners' Committee composed of one representative from each owner of the Project. As an owner of the Project, Tex-La will pay to the Project Mcnager a management fee equal to 5% of its portion of all costs of operation and fuel related to Retained Ccpccity cs covered in the Joint Ownership Agreement.
Vll.
N In all respects not separately addressed in this Letter of Intent, it is the intent of Tex-La and TP&L to structure any subsequent egreement(s) related to the ownership, construction end/or operation of the Comanche Peck picnt consistent with the provisions of the aforesaid Joint Ownership Agreement.
Vill.
The undersigned contemplate that definitive agreement (s) shcIl contain I
provisions through which TP&L will provide Tex-La with bulk trcnsmission cnd distribution services to Tex-Lo's points of delivery (or its Participcnts' points of delivery) from TP&L for delivery of Tex-Lo's Retained Ccpecity from the Project, including backup power and energy from TP&L System resources when generating unit (s) at the Project are out of service.
Such trcnsmission and distribution senices shall be provided on terms that fully compensate TP&L for its costs, including a reasoncble-return on investment, cnd line losses; such terms will recognize Tex-Lc's partial ownership of transmission facilities common to the needs of Tex-La cnd TP&L and will further recognize Tex-Lc's use end obligation to pay for use of transmission facilities jointly owned by the other operating companies of the Texcs Utilities System cnd others.
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J IX.
TP&L cnd Tex-La anticipate that Tex-Lc's Retained Ccpacity will satisfy only a portion of Tex-Lcs total monthly power and energy requirements. For the life of the contempleted definitive agreement (s), at Tex-Lc's request, TP&L intends to provide Supplemental Power and Energy in excess of Tex-Lc's Retained Ccpacity ond other generating resources in omounts necessary to satisfy the remaining load requirements of Tex-Lc's participants, subject to reasonable provisions as to advcnce notice and payments cssociated with cdded facilities simi:cr to the provisions in the existing agreement between Tex-Lo cnd TP&L.
Such Supplemental Power and Energy will be provided under a partial requirements wholesale tariff to be promulgated by TP&L subject to cpproval by. the Public Utility Ccmmission of Texcs and/or cny other regulatory authority having jurisdiction. In. developing this toriff, TP&L's objective shcIl be to cllocate costs based on TP&L's generating resources which are to be used to provide Supplemental Power cnd Energy after crediting Tex-Lc's generating resources against TP&L's generating resources which are utilized on a compcreble bcsis. All additional cost allocations will be consistent with the methodology most recently cpproved by the Public Utility Commission of Texas and used by TP&L in developing other wholesale and retail tariffs during the scme time period.
X.
TP&L cnd Tex-La recognize that the Agreement between Tex-Lo end TP&L dated October 20, 1964, as amended, will require cmendment and/or renegotiation pursucnt to any definitive agreement (s) thct may be executed in conjunction with joint ownership by Tex-Lo in the Project as contempleted herein.
XI.
TP&L will not disconnect from, refuse to connect with, or prevent Tex-Lo or
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0 ony entity with which it molntoins a connection from establishing or mcintainin[a connection with, facilities used for the transmission of electric energy in interstate commerce, by reason of the interstate chorocter of such facilities, unless it determines that any such connection or the intended use thereof is not fecsible under sound engineering practice or that TP&L's costs in connection therewith will exceed its benefits therefrom, or such connection or the intended use thereof would impair TP&L's system reliability or emergency transmission capacity. This is not to imply that TP&L must benefit from a connection; a refusal is valid, however, N where TP&L's net costs exceed its net benefit. In the event that Tex-La or any entity with which it is connected desires to estcblish, maintain or modify a connection with facilities used for the trcnsmission of electric energy in interstate commerce, it shall first obicin a non-jurisdictional order, cppliccble to TP&L cnd other members of the Texas Utilities Company System, under Section 204 of the Public Utility Regulatory Policies Act of 1978.
X11.
Tex-La expects to meet its public utility responsibilities by the constmetion i
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of generation and transmission facilities including joint ownership of future facilities with TP&L and other electric utilities, or by the purchase of power cnd energy. In view of the agreement (s) contempleted herein, and possible cgreements between Tex-La and others, it is intended that both Tex-La and TP&L shcIl be free, subject to provisions of X1 herein, to plan, construct, and own such generation and transmission facilities as it may elect. TP&L and Tex-La will consult and advise os to proposed facilities and jointly plan such facilities as seems cppropriate to achieve economies and avoid unnecessary duplication of facilities and in keeping with each Party's plans and responsibilities.
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It is intended that Tex-Lc's requests for participation in ony project to be constructed by TP&L shcIl be made prior to any significent development of the
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project. Where such a timely request for participation is mode, cnd where joint ownership in such project is determined to be mutually advantageous, Tex-Lc's participation shall be on a mutually agreechle basis that fully compensates TP&L for its costs. In connection with such participation, TP&L will also interconnect with and offer firm transmission service cs may be required for delivery of such power to Tex-La at points on TP&L's system on a basis that will fully compensate TP&L for its costs, including a recsoncble return on its investment.
Xill.
The understcndings herein set forth were recched with the intention of settling the controversies between the undersigned cnd Tex-La before the Nuclear Regulatory Commission (Docket Nos. 50-445A cnd 50-446A) and the Federal Energy Regulatory Commission (Docket No. E-9578). In this connection Tex-Lo desires to and will coopercte with cnd use its best efforts to assist TP&L in securing on operating license for the Comanche Peck nuclect units at the earliest possible date and the avoidance of an antitrust hecring before the Nuclear Regulatory Commission in Docket Nes. 50-445A and 50-446A, such efforts to include, without limitation, prompt cmendment of its petition to intervene before the Nuclecr Regulatory Commission and appecrcnces in full support of TP&L cnd other members of the Texas Utilities Company System cnd such other cssistance as TP&L may recsoncbly request. Further, Tex-La will cooperate with cnd use its best efforts to assist TP&L in securing dismissci, on terms satisfcctory to TP&L, of the proceeding in FERC Docket No. E-9578. In addition, Tex-La will fully support the issucnce of cn order by FERC, in form and substcnce sctisfcctory to T~~xL, under Sections 210 or 211 of the Federal Power Act requiring construction of two di, rect i
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current interconnections cs proposed by the four operating.;ubsidicries of Centr.cl and South West Corporation, provided Tex-Lo is afforded a recsonable opportunity to purchese o three-year option to pcrticipate in the ownership of such facility from the owner (s) upon reasoncbi-e terms cnd conditions. TP&L will agree to end Tex-Lo will fully support conditions in the operating license of Comanche Peck in
- form cnd substance attached hereto as Exhibit C.
XIV.
Notwithstanding any provision of this Letter of Intent or otherwise, the Confidentiality Agreement dated October 5,1979, shall govern the disclosure of any
' discussions between the porties of the subject matter.
XV.
It is further understood that the provisions of this cgreement and of the
' definitive cgreement(s) cnd the obligations of the pcrties thereto mcy be subject to continuing or further regulation by regulatory bodies having jurisdiction.
If the foregoing correctly sets forth our understandings, piecse sign and return a copy of this letter. Upon receipt thereof, the undersigned will be prepared to enter negotiations so es to complete the definitive cgreement(s) cnd close cs soon cs prccticcble with the view of completing the some not later then November 1.,1980. By the execution of this cgreement, you cgree to use your best efforts to secure (i) cpproval of this agreement by your member systems on or before Mcy 8, 1980, (ii) interim financing on or before October 30,1980, (iii) permcnent fincncing by the Rural Electrification Agency, (iv) certifi' cation cnd/or recertification by the Public Utility Commission of Texas and (v) such other metters as may be necessary to ccrry out the intent of the parties as expressed herein.
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TEXAS POWER & LIGHT COMPANY T
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TEX-LA LECTRIC COOPERATIVE OF TEXAS, INC.
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For and on Behalf of:
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Deep Ecst Texas Electric Cooperative, Inc.
Jcsper-Newton Electric Cooperative, Inc.
Rusk County Electric Cooperative, Inc.
Scm Houston Electric Cooperative, Inc.
Cherokee County Electric Cooperative Association Wood County F.lectric Cooperative, Inc.
l Houston County Electric Cooperative, Inc.
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TEI-LA RET.C3ED CAPACITY AND SURPLUS CAPACI Y
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AS PERCE1TAGE OF TEI-LA GENERATION ENTITLDfENT InTI* 1 CNIT 2 Tax-La Su=plus capacity Tex-ia Surplus CapacitI Re % ed Capacity to TP C Retained Cacaci y t e
"'? C
.981
'O 100.0%
.982 0
100.0
- .983 0
100.0 0
100.0%
. 984 12.5 87.5 12.5 87.5 1585 12.5 87.5 12.5 87.5 1986 25.0 75.0 25.0 75.0 1987 37.5 62.5 37.5 62.5 1988 37.5 62.5 37.5 62.5 1929 50.0 50.0 50.0 50.0 1990 62.5 37.5 62.5 37.5 1991 75.0
'25.0 75.0 25.0 75.0 25.0 1992 75.0 25.0 1993 and.afts:
100.0 0
100.0 0
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3ased upcn ec=:sercial cperatien dates of August 1981 ic: Unit I and Nous:
Janua:f 1983 for Unit 2.
Commercici cperction dctes cre projectiens cnly cnd cre subject to chcnge fcr a vcriety of recsons, including, but not limited to, ccticns icken by the Nuclect Regulctery Commissien in cennection with TUGCO's cppliccticn for en cpercting license, delcys cssociated with constructien, etc. Tne dctes en the foregcing icble cre subject to chcnge ccccrdingly.
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EXEI3IT 3 TP&L'S ENTITL EENT TO TE'C-LA CA?ACITY AND ENERGY T?SL shall purchase Tex-La's Surplus Capacity in the
.0.1 Project in accordance with the schedule in Exhibit A with the following basis of charges :
T?&L shall pay Tex-La for the capacity 1.1 Cauacity Charze.
enticlenent so purchased a monthly capacity charge ca' culated as pr'avided in Section 1.5 below.
Monthly Charges will be calculated and billed usi 5 a=nual fixed charges determined as of the end of the prior year.
The sonthly capacity charge shall be a fixed charge payable regardless of the availability of capacity.
1.2 Ocers tinz ' charzes_.
T?&L will pay into the Operating for the account of Tex-La that por-den of Tex-La's share Account of the Operating Costs of Cca.anche Peak Units 1 and 2,other than associated fuel a=ortization, allocable to the energy entitlenent with the Su:plus Capacity being bought back by T?&L f cm Tex-La.
If any' charges inc.luded in Operating Costs,other than fuel a=ortization, are also included as fixed charges under Secticns 1.3 5
and 1.4 below, to avoid duplication such charges shall be taken into account only as Operating Costs.
Fuel anortima icn will be considered a fixed charge.
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1.3 T?&L's.Anm'al Fixed Charge Rate for pu poses of this y
Exhibic shall be:
A = DG + FG + IG + AVTG + COFG GIG 1.4 Tex-La's A
,al Fixed Charge Rate for purposes of this Exh'ibit shall be:
3 = DC + FC + IC + AVTC + ITC GIC 1.5 For=ula for Calculr.cion of Monthly Charge:
Monthly Charge = A a 3 (C) (GIC) + ST g
1.6 For purposes of the calculations under Sections 1.3, 1.4, and 1.5 of this exhibit:
A = T?&L's Annual Fixed Charge Rate, for the Project, calculated as orovided in Section 1.3 of this exhibi:.
3 = Tex-La's.ir-ual Fixed Cha ga Race, for the Project, i
calculated as provided in Section 1.4 of this exhibit, i
C = Percent of Surplus Capacity being bought back by T?&L per Exhibit A during the non:h for which the calculation is nade.
EG = T?&L Book Depreciation for the ?:oject facilities during such a=nual pe'iM.
FG = T?&L nuclear fuel c,,y
.pacien du-ing su.:h annual period.
IG = T?SL Insurance for the ?:oj stt facilities during such annual period.
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.o AVTG = T?&L Ad Valorem and Franchise Taxes and othe~r property-related taxes allocable to the Proj ect facilities during such annual period.
COFG = T?&L's Total Cost of Funds in percent, calculated as provided in Section 1.7 below [namely (13)],
Wes T?&L's weighted average net depreciated investment in the ? oject facilities during such anm'al period.
GIG = T?&L's average Gross ?lant Invest =ent in the Project eacil:. t:.es.
DC = Tex-La's Book Depreciation for the Proj ect facilities during such annual period.
FC = Tex-La's Nuclear Fuel Anortication during such annual period.
IC = Tex-La's Insurance for the ? oj ect facilities du-ing such ser"al period.
AVTC = Tex-La's Ad Valoren Taxes and any other croperty-related taxes paid by Tex-La and reasonably allocable to the Proj ect facilities for such annual period.
ITC = Tex-La's total cost of long-tern debe during such annual period.
GIC = Tex-La's weighted average Gross Plant Invest =ent in the Project facilities.
ST = Monthly Sales Taxes paid by Tex-La as a result of the sale of capacity and energy to TP5L, if any.
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For purposes of this section " Gross ?lant Invest =ent" of T?E and Tex-La in the ? oj ect facilities shall =ean its total
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invescent in such facilities at the ti=e of cernercial operaticn (includingtrans:kssionfacilities,nuclearfuelstock,natarials, supplies, and other working capital) plus its investment there-after in the cost of completions, renewals, additions, replacements and codifications to the ?:oject facilities.
" Net Depreciated Invest =ent" of T?E or Tex-La. in the. ?:oj ec: facilities shall cean its Gross Plant Investment in such facilities less ace =21ated book depreciation.o: a=ortization, as app cpriate.
1.7 T?&L's Cost of Funds with respect to g css investment in the ?:oj ect facilities as of the date of cec =ercial operation shall be calculated pursuant to the follcwing fo-mela based on T?E's actual weighted average cost of the capital specifically incurred in financing the ? cject facilities.
The Cest of Funds with respect to gross invest =ents in the ?:cject facilitie.s after such date of ecc=ercial operation shall be calculated pursuant to such fo__.cla based on T?E's actual weighted capital costs incured in =aking such invest =ents.
Rate Percent Weighted. Cost Total Cost. of Funds (%1 Long-Tet:1 Debt (1)
(4.)
(7) = (1) x (4)
(10) = (7)
?:aferrad Stock
~(2)
(5)
(8) = (2) x (5)
(11) = (8) + (1 - CTR)
(1 - CTR)
' Equity (3)
(6)
(9) = (3) x (6)
(12) = (9) +
100%
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4 where:
(1) and (2) = weighted annual average percent rates (3) = nest recent rate of retnrn on T?&L coc:en equity allowed in the nest recent rate case prior to the date of Coc=ercial Operation or, as appropriate, the date of the se~osequent invest =ent.
i (4), (5) and (6) = components of capital struerre 1
using I?&L capital st=cere on Decenber 31 l
of the prior year.
(10) + (11) + (12) = (13) total cost of Funds in Percent h
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where:
CTR = Corporate Federal and S ace Inccme Tax Race, as t
in effect from eine to ti=e.
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EXHIBIT C
.., DRAFT OF 4/28/80 -
License Conditions For Comenche Peck Steam Electric Station Nuclecr Units Nos. I cnd 2 D'efinitions "Compcny" means severally cnd jointly Texas Utilities Genercting Compcny, DcIlcs Power & Light Company, Texas Electric Service Company, Texcs Power & Light Company, Texcs Utilities Compcny cnd ecch other subsidicry,
~cffiliate er successer compcny engcged in the generction, trcnsmission cnd/or the distribution of electric power in the State of Texcs.
2.
" North Texas Area" mecns the following Texcs counties: Andersen, Andrews, Angeline, Archer, Bestrep, Scylor, Bell, Borden, Bcsque, Brown, Burnet, Cherckee, Clcy, Coke, Collin, Cemenche, Cocke, Ccryell, Crcne, Culberson, Dolics, Dawson, Delte, Denten, Ecstiend, Ector, Ellis, Erath, Falls, Fcnnin, Fisher, Freestone, Gaines, Glcsscock, Grcysen, Hendersen, Hill, Hood, Hcpkins, Houston, Howcrd, Hunt, Jack, Johnsen, Kcufmen, Kent, Lcmcr, Lcmpcscs, Leon, Limestene,
- Loving, Lynn, Mcrtin,'
- McLennon, Mid!cnd,
- Milcm, Mitchell,
- Montague, Ncccgdeches, Ncycrro, Nolcn, Pelo Pinto, Pcrker, Peces, Rcins, Recgen, Red River, Reeves, Rockwall, Rusk, Scurry, Schockelford, Smith, Somervell, Stephens, Sterling, Tctrcnt, Terry, Tom Green, Trevis, Upten, Vcn Zcndt, Word, Wichite, Wilberger, Willicrnson, Winkler, Wise, Wcod and Young.
3.
" Entity" mecns a person, c. private or public corporation, c
-governmental cgency or cuthority, a municipality, a cooperative, or cn cssociation owning er opercting or prcpesing in good fcith to own or cperate fccilities for generation of electric power in the North Texcs Area for rescle.
4.
" Bulk Power" mecns the electric power cnd ettendent energy supplied or
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made ovcilcble et trcnsmission or subtrensmission voltcge.
5.
" Costs" mecn oil cppropriate opercting cnd mcintenance expenses cnd all ownership costs where cppliccble.
Policy Commitments 1.
The Compcny shall, subject to existing rights of first refusal of entities not offiliated with the Compcny, afford cn opportunity to participate in the Comenche Peck nuclear units, through ownership in such unit (s) on recsoncble I/
l terms cnd conditions, for the term of the instant license, or cny extension or renewcl thereof, to cny Entity (ies) now without generatien, who mcde c request th'erefer prior to December I,1979, to the extent of cn cggregate total of 100 Mw, on a bcsis that will fully compenscte the Ccmpcny for its costs cnd reflect the vclue of units in cn advcnced state of construction. Any joint ownership cgreement implementing the foregoing must be concluded by. November I,1980. In cennection with such participation, the Compcny clso will (1) cennect with cnd offer trcnsmission service es mcy be required for delivery of such power to such Entity (ies) et a point or points en the Compcny's system cnd (2) in the ecse of I
Ccmpcny wholesale customers ccquiring ownership under these conditions, provide (c) pcrtici requirements wholesale service for the difference between the cepccity ccquired in Comenche Peck cnd the locd of that Entity which the Ccmpcny would otherwise have served at wholesale end (b) emergency cnd scheduled maintencnce power cnd energy to fi'm up the ccpccity ccquired in Cemenche Peck, pending r
develcpment by the ccquiring Entity of instclied reserves or citemate purchesed reserves, all en a bcsis that will fully compenscte the Compcny fcr its costs, including a recsoncble return en investment.
2.
The Compcny will support requests by Entities for member' ship in the J
Provisions substenticily the some cs these in. the existing joint ownership cgreement cmong the Compcny, Texas Municipcl Power Agency, cnd Srcz'es Electric Power Cocperative shcIl be deemed to be recsoncble.
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Texcs Interconnected Systems (TIS), including requests by cny such Entity hcving'c smaller peck load then cny of the present TIS members, so long cs such Entity hcs sufficient generation ccpacity to mcke o recsoncble centribution to the relicbility of bulk power supply. The Compcny will propose, cnd cctively support, the crection of one er more cdditienci cicssifications of TIS membership (which mcy include non-voting membership) bcsed on retienci criteric to cfford cccess to dctc, studies end recommendcticns to cil Entities who desire it, including these hcving no genercticn er insufficient generatien to mcke such a recsoncble centributien to The Compcny will clso support requests by quclified Entities for relicbility.
membership in cny other electric utility picnning crgcnization er power pcci of wnich the Compcny is a member (other then one involving enly the Ccmpcny). The Ccmpcny shcIl shcre information with other Entities with respect to, cnd shcl!
pcrticipcte with other such Entities through TlS, ERCOT cr other electric utility plcnning orgcnizations in, joint studies and picnning of future generaiten, trcnsmission end relcted facilities; provided, however, this condition shall not obligate the Compcny to pcrticipcte in such joint studies or joint picnning (1) unless requested cnd conducted in good faith cnd bcsed en recsoncbly reclistic cnd recscncbly complete dato cnd projections, (2) unless involving all other electric utility systems whose pcrticipation in such joint studies cnd joint plcnning is
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recscncbly required for valid cenclusiens thereof, (3) unless recsencbly justified on j
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[;j the bcsis of scend enigineering principles, (4) unless cppropriate protection is i
cccorded proprietcry er other ccnfidentic! business cnd fincncial informatien, cnd
=G (5) unless the costs for such studies are c!!occted en c fcir cnd equitcble bcsis.
!=i 3.
(c).
The Compcny will connect with cnd coordincte reserves thrcush
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the scle cnd purchese of emergency cnd/or scheduled mcintencnce bulk power with f
a
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a cny Entity (ies) if and when power is availcble on terms that will fully compens8te the Company for its costs, including a recsoncble return en investment to the extent it een do so without impairing the service relicbility of the Ccmpcny cnd other electric systems to which it hcs firm commitments.
(b).
The Company and cny other Entity (ies) who are pcrties to cn crrcngement described in (c) cbove shall from time to time jointly estchlish the minimum reserves to be instc!!ed cnd/or provided by ecch party under contrcctuci
' crrcngements to mcintcin a reserve margin sufficient to provide cdequate relicbility of power supply in cccordcnce with good industry prcctice cs develcped in the crec. Unless otherwise cgreed upon, minimum reserve requirements shcIl be cciculated cs a percentcge of ecch such Entity's(ies') estimated net peck locd demcnd (teking into cccount firm sales cnd firm purcheses). In no event shcIl the Ccmpcny be required to maintain greater reserves thcn the percentcge which results frem the aforescid cciculation.
(c).
Each Entity who is a party to cn crrc gement described in (c) cbove shcIl provide such cmcunts of spinning reserves es mcy be equitcble end cdequate to avoid the imposition of unrecscncble demcnds on the other pcrty(ies) in meeting the normcl contingencies of operating its (their) system (s). However, in no circumstcnces shcIl such reserve requirement exceed the installed reserve requirement.
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4.
(c).
The Cornpcny shcl! work with other Entities to fccilitate the B
exchcnge of bulk power by trcnsmission over its trcnsmissicn fccilities between or i
cmong two or more Entities with which it is connected; cnd between cny such Entity (les) cnd cny entity (ies) engcging in bu& power supply outside the North Texcs Area between whose fccilities, the Compcny's trcnsmission lines cnd other 3
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trcnsmission lines form a centinuous electricci path, provided that (c) permission to utilize such other trcnsmission lines hcs been obtained by the preponent of the crrengement cnd (b) the crrcngements recsoncbly ccn be cecommedcted frem a functienc! cnd technicci stcndpoint. Such trcnsmission shcil be on terms that fully compensate the Compcny for its costs, including a recscncble return en investment.
Any Entity (ies) requesting such trcnsmission crrcngements shall give recsoncble cdvance notice of its (their) schedule cnd requirements. The Company shall not be required to enter into any crrcngement which wculd impair system relicbility cr emergency trcnsmission ccpacity, it being reccgnized that while scme trcnsmission mcy be cperated fully locded, other trcnsmissict, mcy be fer emergency use end cperated either unlocded or pcrticily leaded.
(The foregoing cpplies to cny Entity (ies) to which the Ccmpcny mcy be connected in the future cs well cs those to~which it is now connected.)
(b).
The Ccmpcny sha!! include in its picnning cnd constructicn progrcms sufficient trcnsmission ecpccity cs required for the trcnscetions referred to in (c) cbeve, provided cny Entity (ies) gives the Compcny sufficient cdvcnce notice cs may be necesscry to cccommodate its (their) requirements from a functionci cnd technicci stcndpoint end that such Entity (ies) fully ccmpensctes the Ccmpcny for its costs, including a recsencble return en investment. The Compcny shcIl not be required to construct trcnsmission fccilities if it finds ccnstruction of such fccilities infecsiblerer if its costs in connection therewith would exceed its benefits therefrom, or if it finds such would impair system relicbility or emergency trcnsmission ecpccity.
(c).
In cennection with the performcnce of its cbligations in (b) cbove, the Ccmpcny shall not be foreclosed frem requiring a centribution in aid of
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construction or from mcking crrcngements for coordincted construction of future trcnsmission lines such that ecch of the pcrties to the trcnscetion wculd own en interest in or a segment of the transmission cddition in prcportion to its shcre of the cost of the cddition. If the Company in the future engcges in joint ownership of trcnsmission lines with cny other Entity, it shc!! not refuse to engcge in similcr trcnscetiens in comparcble circumstcnces with other Entities, subject to the provisions limiting the Compcny's obligctions in peregrcph 4(b).
5.
In connection with the performance of its obligctions in paragrcphs 3 l
cnd 4, the Compcny wi!! not discennect frem, refuse to connect with, er prevent i
eny entity with which it maintcins connections frem estchlishing or maintcining a L
connecticn with, fccilities for the trcnsmissien of electric energy in interstate commerce, by recson of the interstate chcrecter of such facilities unless cny such connection er the intended use thereof is not fecsible er its ecsts in connection l
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therewith will exceed its benefits therefrem cr such connection or the intended
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use thereof would impair system relicbility cr emergency trcnsmissicn ccpccity. It is provided, however, thct cny Entity seeking to estcblish, mcintain er modify a cennection with fccilities for the trcnsmission of electric energy in interstate commerce shcIl Scve first obtained a ncn-jurisdictional order, cppliccble to the Ccmpcny, under Section 204 of the Public Utility Regulatcry Policies Act of 1978, er such other exemption cs may be contcined in the Federal Power Act.
b 6.
The foregeing conditions shcIl be implemented in a menner censistent with the cppliccble federci, state end locci statutes, rules, regulctions cnd i
judgments cnd crders promulscted thereunder. Nothing herein shcIl preclude the Compcny frem seeking en exemptien er other relief to which it mcy be entitled u
under cppliccble Icw.
_2/ This is not to imply thct the Ccmpcny must benefit from a connection; a s
refusci is vclid, however, where the Ccmpany's net ecsts exceed its. net benefits.
_f.
E UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION 6
DOCggg)
\\
r Ustmo M4Yj g gN O k In the Matter of
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\\g O!!ic HOUSTON LIGHTING & POWER
)
Docket Nos. 50-498A\\
Dods gd 50-499A L COMPANY, et al.
(South Texas Project, Units
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C /
g No. 1& 2)
)
)
In the Matter of
)
)
TEXAS UTILITIES GENERATING
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Docket Nos. 50-445A COMPANY, et al.
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50-446A
)
(Comanche Peak Steam Electric
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Station, Units No. 1& 2)
)
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(Consolidated for Discovery)
CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing document has been served on each of the following persons by deposit in the United States Mail, first class postage prepaid, this 9th day of May 1980.
l Samuel J. Chilk, Secretary Jerome Saltzman i
U.S. Nuclear Regulatory Commission Chief, Antitrust and Indemnity Washington, D.C.
20555 Group U.S.
Nuclear Regulatory Commission Marshall E.
- Miller, Esquire Washington, D.C.
20555 Michael L. Glaser, Esquire Sheldon J. Wolfe, Esquire Alan S.
Rosenthal, Esquire Atomic Safety and Licens ing Michael C. Farrar, Esquire Board Panel Thomas S. Moore, Esquire U.S. Nuclear Regulatory Commission Atomic Safety and Licensing Washington, D.C.
20555 Appeal Board Panel U.S. Nuclear Regulatory Commission Richard S.
Salzman,. Esquire Washington, D.C.
20555 U.S.
Nuclear Regulatory Commission Washington, D.C.
20555 Mr.
William C. Price Central Power & Light Company Jerome E. Sharfmah, Esquire P.O.
Box 2121 U.S. Nuclear Regulatory Commission Corpus Christi, Texas 78403 Washington, D.C.
20555 Mr.
G.K.
Spruce Chase R. Stephens, Secretary General Manager Docketing and Service Section City Public Service Board U.S. Nuclear Regulatory Commission P.O. Box 1771 Washington, D.C.
20555 San Antonio, Texas 78203 4
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.n Fredric D. Chanania, Esquire Roy P.
Lessey, Esquire Office of the Executive Legal Michael Blume, Esquire Director U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Washington, D.C.
20555-Jerry L. Harris, Esquire Mr. Perry G. Brittain City Attorney President Richard C. Balough, Esquire Texas Utilities Generating Co.
Assistant City Attorney 2001 Bryan Tower City of Austin Dallas, Texas 75201 P.O.
Box 1088 Austin, Texas 78767 Mr.
R.L.
Hancock, Director City of Austin Electric Mr. Dan H.
Davidson Utility Department City Manager P.O.
Box 1088 City of Austin Austin, Texas 78767 P.O.
Box 1088 Austin, Texas 78767 Mr.
G.W. Oprea, Jr.
Executive Vice President Don R. Butler, Esquire Houston Lighting & Power Co.
1225 Southwest Tower P.O.
Box 1700 Austin, Texas 78701 Houston, Texas 77001 Joseph Irion Worsham, Esquire Jon'C. Wood, Esquire Merlyn D.
Sampels, Esquire
- W.. Roger Wilson, Esquire Spencer C. Relyea, Esquire Matthews, Nowlin, MacFarlane Worsham, Forsythe & Sampels
& Barrett 2001 Bryan Tower, Suite 2500 1500 Alamo National Building Dallas, Texas 75201 San Antonio, Texas 78205 Joseph Knotts, Esquire David M.
Stahl, Esquire Nicholas S.
Reynolds, Esquire Isham, Lincoln and Bealc Debevoise & Liberman 1120 Connecticut Avenue, N.W.
1200 Seventeenth Street, N.W.
Washington, D.C.
20036 Washington, D.C.
20036 Michael I. Miller, Esquire Douglas F. John, Esquire James A.
Carney, Esquire McDermott, Will and Emery Sarah N. Welling, Esquire 1101 Connecticut Avenue, N.W.
Isham, Lincoln and Beale Suite 1201 One First National Plaza Washington, D.C.
20036 Chicago, Illinois 60603
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Morgan Hunter, Esquire David A.
Dopsovic, Esquire McGinnis, Lochridge & Kilgore Antitrust Division 900 Congress Avenue Department of Justice Austin, Texas 78701 Post Office Box 14141 i
Washington, D.C.
20044 i
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Jay M. Galt, Esquire W.N. Woolsey, Esquire Looney, Nichols, Johnson Dyer and Redford
& Hayes 1030 Petroleum Tower 219 Couch Drive Corpus Christi, Texas 78474 Oklahoma City, Oklahoma 73101 Robert M. Rader, Esquire Mr. Knoland J. Plucknett Conner, Moore & Corber Executive Director, Committee 1747 Pennsylvania Ave., N.W.
on Power for the Southwest Washington, D.C.
20006 5541 East Skelly Drive Tulsa, Oklahors 74135 Donald M. Clements, Esquire Gulf States Utilities. Company Mr.
W.S.
Robson Post Office Box 2951 South Texas Electric Coopera-Beaumont, Texas 77704 tive, Inc.
Post Office Box 151 John W.
Davidson, Esquire Nursery, Texas 77976 Sawtelle, Goode, Davidson
& Tioilo R.
Gordon Gooch, Esquire 1100 San Antonio Savings John P. Mathis, Esquire Building Baker and Botts San Antonio, Texas 78205 1701 Pennsylvania Avenue, N.W.
Washington, D.C.
20006 Mr. G. Holman King West Texas Utilities Co.
Robert Lowenstein, Esquire P.O.
Box 841 J.A.
Bouknight, Jr., Esquire Abilene, Texas 79604 William J. Franklin, Esquire Douglas G. Green, Esquire Susan B. Cyphert, Esquire Lowenstein, Newman, Reis Department of Justice Axelrad & Toll Room 8308--Star Building 1025 Connecticut Avenue, N.W.
Washington, D.C.
20530 Washington, D.C.
20036 E.W.
Barnett, Esquire Charles G. Thrash, Jr., Esquire J. Gregory Copeland, Esquire
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Theodore F. Weiss, Jr., Esquire Baker and Botts 14 '*
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3000 One Shell Plaza William H.
Burchette Houston, Texas 77002 Attorney for Tex-La Electric Kevin B. Pratt, Esquire Cooperative of Texas, Inc.
i Assistant Attorney General P.O.
Box 12548 Capital Station Austin, Texas 78711 1
Robert C. McDiarmid, Esquire Robert A. Jablon, Esquire Spiegel &-McDiarmid 2600 Virginia Avenue, N.W.
Washington, D.C.
20037 e
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