ML19322C235
| ML19322C235 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 01/12/1979 |
| From: | Plumb K FEDERAL ENERGY REGULATORY COMMISSION |
| To: | FEDERAL ENERGY REGULATORY COMMISSION |
| References | |
| TASK-TF, TASK-TMR NUDOCS 8001160662 | |
| Download: ML19322C235 (5) | |
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UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Before. Commissioners: Charles B. Curtis, Chairman; Don S.
Smith, Matthew Holden, Jr.,
and George R.
Hall.
Metr opolitan Ed ison Company
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Docket No. ER79-58 I*
ORDER ACCEPTING FOR FILING AND SUSPENDING PROPOSED RATE INCREASE, DENYING MOTION, GRANTING INTERVENTION, pol PROVIDING FOR HEARING, AND ESTABLISHING PRICE SOUEEZE PROCEDURES (Issued January 12, 1979) 1'N On November 13, 1978, 'Aetropolitan Edison Company (Met Ed) tendered for filing a proposed rate increase for I'
five f ull r equirements and one par tial requirements customer. 1/
The proposed rate would result in increased r evenues of appr oxima tely S3,637,944 (39.59%).for the f ull requirements customer s and
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$1,134,552 (37.0%).for the par tial requirements customer.
This L
total S4,772,496 increase (38.9%) is based on the twelve month
.5 test per iod ending December 31, 1979.
Met Ed requests an effective date of January 12, 1979, 60 days after f il ing.
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Notice of the instant filing was issued on November 24,
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1978, with pr otests or petitions to intervene due on or before December 18, 1978.
Four such petitions have been submitted.
Allegheny Electr ic Cooper ative, Inc. (Allegheny) and the Borough of Goldsboro (Goldsboro) protest the proposed rate as excessive. 2/
In addition, the ir petition sets 3
forth a number of specific objections to Met Ed's cost of service and cost allocations, including the use of the superseded 48% federal income tax rate and the inclusion of a tax adjustment clause in the proposed rate schedule for Allegheny, which the petition states should be rejected.
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In suppor t of their petition, filed December 18, 1978, the parties state that they are customers of Met Ed whose interests will be directly affected by Commission action and are not adequately represented by any other i
par ties.
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I Docket No. ER79-58 The petition requests that the Commission suspend the proposed rates for the full five month statutory per iod, set the matter for hearing and grant the par ties in ter ven t ion in the pr oceeding.
' The Borough of Kutztown (Kutztown) filed a protest and petition to inter vene 3/, claiming that the proposed retur n on common equity is excessive and that the cost of ser vice is substan tially over stated.
Fur ther mor e,
the petition alleges that the proposed increase will create an illegal pr ice squeeze.
Kutztown also asserts that the proposed increase exceeds the President's r ecently announced wage /pr ice guidelines.
The petition urges the Commission to suspend Met Ed's proposed rate schedules for five months and grant Kutztown leave to intervene in the proceeding.
On December 19, 1978, Her shey Electr ic Company (Her shey Electr ic) filed an untimely petition to intervene.
The petition states that Her shey Electr ic is a customer of Met Ed whose interests would not be adequately represented by any other party.
Hershey Electric also petitions the Commission to exercise its discretion to suspend the proposed rates f,or five months.
On December 18, 1978, Her shey Foods Corpor ation (Her shey) filed a protest and petition to intervene.
In support of its petition, Hershey asser ts that it is a retail customer of Her shey Electr ic and tha t any increase in the rates Met Ed char ges Her shey Electr ic will be passed through to Her shey.
Our r ev iew indicates that the proposed rates have not been shown to be just and reasonable and may be unjust, unreasonable, unduly discr iminatory, pr efer ential, or other wise unlawf ul.
In light of this review and our determination that the allegations presented in the submitted petitions present questions of law and f act more appr opr iately considered at hear ing, the Commission shall accept the submittal for filing and suspend the rates for five months, to become effective June 13, 1979, subject to refund.
With r espect to the tax adjustment clause included in the proposed rate schedule for Allegheny, we note that any adjustment the Company may wish to make in its rate schedule
. FIIEE DecemEe7 IB7197BI Kutztown states that, as a customer of Met Ed, it has a substantial interest in Commission action in this Docket.
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to implement this clause shall be treated as a proposed rate change under Section 35.13 of our Rules; it must be tender ed for filing with appropr iate cost support and is subject to Commission approval.
However, the recuest for r ejection of this clause shall be denied.
We als, note the Company's use of a 48% federal income tax r ate ratner than the current 46% rate.
The 46% f igur e is the appr opr iate one and Met Ed shall be required to file within 60 days r evised rates and accompanying cost suppor t incor por a t ing the 46% tax rate.
Although we are mindf ul 5
that this refiling will place some burden on the Company, this burden is outweighed by the f act that the cost of r e f il ing is far less than that amount of excess revenue f
which would be gener ated through the use of the 481 tax y
rate.
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Pur suant to the policy set forth in Order No. 563,
I and in Section 2.17 of our Regulations, we find it is appropr iate that pr ice squeeze procedures be initiated in this case.
W' The Commission finds that participation in thi:'
y'i proceeding by Allegheny, Goldsboro, Kutztown, Her shey
' l Electr ic and Her shey may be in the public interest. 4/
The Commission orders:
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(A)
The rates proposed by Metropolitan Edison Ccmpany t
ar e her eby accepted for filing and suspended for five months, to become effective as of June 13, 1979, subject to refund.
f (B)
Pur suant to Section 2.17 of the Commission's t
Regulations, we hereby order initiation of pr ice squeeze h,. '
pr oced ar t s.
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(C)
The petitoners, Allegheny Electr ic Cooperative, Inc., the Borough of Goldsboro, the Borough of Kutztown, Her shey Electr ic Company and Her shey Foods Corpor ation, are hereby permitted to intervene in this proceeding 3,
subject to the Rules and Regulations of the Commission; q.
Provided, however, that par ticipation by such intervenors h(~. !'
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Despite Her shey 515ctr ic's untimely filing, the Commission finds that, since par ticipa tion by Hershey Electr ic may
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be in the public in ter est, it is appr opt iate to grant it leave to in t er vene.
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3 Docket No. ER79-58 shall be limited to the natters set forth in their petitions to intervene; and Provided, further, that the admission of such intervenor s shall not Be construed as recognition by the Commission that they might be aggrieved because of any order or orders of the Com.t.ission en ter ed in this proceeding.
(D)
The motion to reject the proposed tax adjustment clause is hereby denied.
i (E)
Me tropolitan Edison is hereby ordered to refile within 60 days of the issuance of this order new rates and cost support incorporating the 46% federal income
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tax rate.
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(F)
Pursuant to the authority contained in and 4
subject to the jur isdiction conferred upon the Feder al 3.r, Energy Regulatory Commission by Section.402(a) of the d
DOE Act and by the Federal Power Act and pursuant to the Commission's Rules of Practice and Procedure and the 54 Regulations under the Federal Power Act (18 CFR, Chapter is t I), a public hear ing shall be held concerning the 4
justness and reasonableness of the rates proposed by the fi Metroptlitan Ed,ison Company.
(G)
The Staff shall serve top sheets in this i
pr oceeding on or before June 17, 1979.
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(H)
A Presiding Administrative Law Judge to be i
designated by the Chief Administrative Law Judge shall convene a conference in this proceeding to be held within ten (10) days of the serving of top sheets in a hear ing room of the Federal Energy Regulatory Commission, 825 North Capitol Street, N.E.,
Wa sh ing ton,
D.
C.
20426.
i, l The designated Law Judge is authorized to establish
[' g procedural dates and to rule upon all motions (except motions to consolidate or sever and motions to dismiss),
as provided for in the Commission's Rules of Practice and Procedure.
The Presiding Administrative Law Judge shall convene a prehearing conference with fifteen (15) days of r
the issuance of this order for the purpose of hearing
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intervenors' requests for data required to present their case, includ ing pr ima f ac_ie showing, on pr ics squeeze issues.
k (I)
The Secretary shall cause prompc publication of this l J' order to be made in the Federal Register.
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By the Commission.
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- hi (SEAL) i"
Ysenneth F.
- Plumb, l
Secretary.
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Attachment _A METROPOLITAN EDISON COMPANY TARIFF AND RATE SCHEDULE DESIGNATIONS ER79-58
. DOCKET NO_.___
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Designation Descr iption Met Ed Electr ic Tar if f,
Or iginal Volume No.1 o
Four th Revised Sheet No.13 Rate RP (Super sedes Third Revised Sheet No. 13) g Third Revised Sheet No. 14 (Super sedes Second Revised
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Sheet No. 14)
Four th Revised Sheet No.15 Rate RT (Super sedes Third Revised
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Sheet No. 15) 4 Four th Revised Sheet No. 16 (Supersedes Third Revised Sheet No. 16)
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Fifth Revised. Sheet No. 17 Fuel Clause (Supersedes F<ourth Revised Shee t No.17 )
l Supplements for Service to Allegheny Electr ic Cooperative Supplement No. 16 to' Supplemental Power and Rate Schedule FPC No. 43 Energy Supplement No. 17 to Fuel Clause Rate Schedule FPC No. 43 Supplement No. 18 to Wheeling of Authority Rate Schedule FPC No. 43 Power
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Full Requit ements Partial Requirements t
e Borughs o f Goldsboro, Allegheny Electr ic Le w isbet r y, Roy ton, and Cooper a t ive, Inc.
Kutstown and th Her shey Electric Company si 9
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