ML19329C688

Forwards FPC Opinion 644-A in City of Cleveland Vs Cleveland Electric Illuminating Co & Related Orders & Ltrs

ML19329C688
Person / Time
Site:	Davis Besse
Issue date:	03/14/1973
From:	Charnoff G SHAW, PITTMAN, POTTS & TROWBRIDGE
To:	Bender P US ATOMIC ENERGY COMMISSION (AEC)
References
NUDOCS 8002180188
Download: ML19329C688 (42)

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• .' , ' ' ' 'o o .'.". 'c . March 14, 1973 Mr. Paul C. Bender Secretary of the Com. mission U. S. Atomic Energy Commission Washington, D. C. 20545 I

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In the Matter of The Toledo Edison Company and The Cleveland Electric Illuminating Company, Davis-Oc33c Nuclcar Pc'.icr Station, Docket No. 50-346A

Dear Mr. Bender:

Please reference my letter of March 6, 1973, in which Applicants submitted for the record copies of orders and related documents in City of Cleveland, Ohio v. Cleve-

, land Electric Illuminating Company, Docket .Io. E-7631, l before tne Federai Power Cccm:ssion. Enclosed is a copy of FPC Opinion No. 644-A in that proceeding, issued March 9, 1973, in uhich the FPC has denied tne City of Cleveland's requests for a rehearing and stay or the execution of FPC Opinion No. 644 wnich had been issued on January 11, 19,73. ,

-l THIS DOCUMENT CONTAINS 1

I Enclosure POOR QUALITY PAGES 8002 2 so /PP #7 l

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• 7 Mr. Paul C. Bender March 14, 1973 cc/with encl. Nathaniel H. Goodrich, Esq.

Joseph J. Saunders, Esq.

Mr. Frank W. Karas Benjamin H. Vogler, Esq.

Philip P. Ardery, Esq.

Mr. Raymond Kudukis Herbert R. Whiting, Esq.

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4 Defore Ccc.iss1 x: crc: John !!. Itassi'tas, Chairmn; Albert B. Brcoke , .ir. , and Rush Moody, Jr.

City of Cleveland, Ohio ) 00chet Nos. E -76 31 and

v. ) E-7633 .

Cleveland Electric )

Illu;::i:: sting Ccrpony )

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Citv of Cluvelt.ad

. ) Docket No. E-7713 t l

l OPINION CO. 6CS-A .

I OPn: ION Id:D ORDER DE5YING riMEARI::G A::D STAY  ;

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s .- s On l'ebruary S,1973, the City of Clevolt.'nd, Ohio (Cleveland) rpplied fcr reher.rir.g ,l_/ in thecc procccdir.gs upon the tolicwing grounds: .

(1) A belief that Cleveland Elec ric Illu :inating .

Conper.y (CEI) uill not agree to the interconnec-tic:t in ccepliance with our order of January 11, ,

' i 1973.

(2) An objectica to all previcier:s of cur January 11, 1973 order which are :.nconsistent tith Cicveland's position en c:-:ceptions taken to.the Initial Decision of the Administrative Le.w Ju4c. .

1/ By telegram received on Jr.:m..zr 12, 1973, Cleveland  !,

enlarged the secyc of its application to include a .

recuest for a 90-day stay of our order of January 11, i 1973.

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I s (3) A reiterction of their claim that a ovnehroneuts -

} 09 TV tomoort.ry inscrconnectica is ncw required

by the peblic interest.

i ea j O.t rebruary 12, 1973, CSI indicated to,this Comnission

! it:: agreemnnt to cceept the terme and conditions included i in cut ordur of Jcnuarv 11, 1973. -

i No nev factual :"atters or coints of law are raised in -

Cleveland's an..nlicatica for rehearina whi<ch require modi-J fication of car order of January 11, 1973. CEI asks for no podificat. ion of that ordar.

In ordering paragrcph (A) of our crder of January 11, 15:73, we ardored the establish =cnt of a 12C IN permanent

, interconnection provided bcth parties indicated to the Com- .

mission eithin 30 days their agreecent to the tc:r.s and conditions thercia set forth, Cleveland has not agreed to such terra cnd cenditions. Under the circumstances, the

. p10in purpart of our crder wculd require that no intercon.nec-j tion should bc .made, for the ecnditions uc irposed ucrc the j minin.um sicndards under uhich the culalic interert required i the crdering of service to Cleveland. Any disruption of i service.dt.e to the icilure to construct the interconnection

, I. as ordernd wil1 he as a direct result of the failure of the I

i City of cleveland to abide by the terms and conditions of .

I cur order of January 11, 1973. We will therefore a:. tend, for j 15 days frc:. th'a Q.tc of issuance hereof, the tinc in which i Cleveland may indicate to this Cor,r:ission its agrecrent to l

all the terms and ccnditions of our order of January 11, 1973.

In the event Claveland decs not so indicato its agree-i rmnt to all the terms and ccnditions of our order of Janu-ary 11, 1573, that or icr anc our order of March 3, 1972, requiring Clevelcnd to establish a tenporary energency ncn-syncnrcneus 69 KV interconnection, will boccme incperative and CEI w:.ll be relieved of its obligaticn to provido any intercennection service to Cleveland.

I In addition, CEI's application to discontinue continued 4

Icad transfer service snall be granted.

Our order of January 11, 1973, in, in our opinien, equitable to both partics and establishes the minimum n

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• c"o ','."s",'s , March 6, 1973 I

Mr. Paul C. Bender Secretary of the Commission U. S. Atomic Energy Commission Washington, D. C. 20545 In the Matter of The Toledo Edison Company and l The Cleveland Electric Illuminating Company, Davis-Besse Nuclear Power S tation, Docket No. 50-346A

Dear Mr. Bender:

l In its July 6, 1971, petition for leave to inter-

, vene in the captioned proceeding, the City of Cleveland

! cited the proceedings in City of Cle7 eland, Ohio v. Cleve-l land Electric Illuminating Company, Dockee No. E-7631, before tne Federal Power Commission. The subject of those

! proceedings, the establishment of a permanent interconnec-tion between Cleveland and Applicant Cleveland Electric i

Illuminating Company (CEI), is also the subject of the City of Cleveland's pleadings in this proceeding.

The Federal Power Commission issued a decision in that proceeding on January 11, 1973, affirming the hearing examiner's initial decision that CEI had not engaged in anticompetitive practices or antitrust violations. For the information of the parties and the Comission, Applicants are submitting for the record copies of:

1. Presiding Examiner's Initial Decision in Consolidated Proceeding, July 12, 1972.

2. Opinion and order in Consolidated Pro-ceeding, FPC Opinion No. 644, January 11, 1973.

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! Mr. Paul C. Bender March 6, 1973 l

! 3. Application for Rehearing of the City

, of Cleveland, February 7, 1973.

4

4. Letter of CEI dated February 8, 1973, j to FPC agreeing to accept and comply with Opinion No. 644.

5. FPC Notice of Extension of Time with

respect to Opinion No. 644, February 12, 1973.

i Sincerely, su v. u Serald Charnoff I L

Enclosures j cc/with encl. Nathaniel H. Goodrich. Esq.

Joseph J. launders, Esq.

Mr. Frank W. Karas ,

Joseph Rutberg, Esq.

Philip P. Ardery, Esq.

Mr. Raymond Kudukis Herbert R. Whiting, Esq.

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' FEDERAL PCUER CCaaISS10N Doche: Men.

) E-7631 and E-7533 City of Cleveland, Ohic

v. )

Cleveland Electric Illuminating )

Company )

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) E-7713 q,. (S_# c.e s Citv cf Cleveland

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IN CONSOLIDATED PROCEEDIUG

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APPEAU.NCES Philio P. Arderv for the City of C12veland., Ohio Harry A. Poth. J r ._, Ui_llic= H. Salesman, and Donald H. Hau --

2r=

.u:nnat:.ng uc=pany ror C,. evet and ._.:.tectric p.c yr- t .

.v, 's , Miche c t J . M.'nnire , end G. Eco?las Es:-v for. . .

cua Scaff of the Feder: 1. rc e:er L.:==:.m i.:n 1

J LEVY, Presiding Examiner: _Introdurtica 1

The City of Cleveland, Chic (City) cperates a Municipal Electric Ligh: Plant (MELP) wnich serves approni=2c21y The cc=aining 20h c' tha :ot:1 rec il lead of the Ci:y of Cicvaiand.

2 l 80% is served by the Clavelar.d Elactric Illuminating Ccepant 31 l (CEI), a public c:ility : ithin the macning of the Feder:

j Po::cr Act.

MELP is an isolated, poorly desi ned and relacivel:,

unreliable system, vich a total installed capccity of 206 5 censisting of ger.eratin; units in a " sad state of repair" cnd a history cf inefficien: cperations 1/ (City Sr. p. 3) (Tr. 22-fcr 2 permanen:

'; 23). E'irly prcposcis beginning in 1M2 c tectorictit:

. intercennec:ica betw.3en CEI and MZLP failed primarily 'cecause of the City's d2 sire to rc=ain sci f-suf ficienc and independent of the CEI systc= (Tr. 373-350).

l _

s Four breakdcwas h.ive occurred since September 1971. (Tr. 16:9 i

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I During the Christcas season in December 85 MW1969, MELP unit.

generating

! suffered a forced outage of its largestfolicued resulted in cn l' Tha critical betwecnsituatica (Tr.16) the parties thatJanuary 20, 1970, under dated agreement which CEI agreed to serve apprcxinately 26,000 D.'A of NELP's The

. load feca five load transfer points on the CEI system.

i . agreement, filed with the Cc= mission as Rate Schedule FFC No. ,

.7, uas supple =ented by let:ers dated March 17, June 9, and Service under the agreement was to J; July 22, 1970 (Ex. 51-54) .

terminate uhan two gas turbines purchased by the City .to e provide ready reserve and insurec reliability were in ec=marcial i operation, or no later than Decam' er 31, 1971.

i

! Six new load transfer points were installed, of which i five are s:ill in use, and payments were made by the City ra ta 2

through March 1971, when tha City first protested enceeded thethe rate j .

filed with the Cc= mission en the ground it j

authori cd bv, the City in Ordinance No. 161-70, dated ,

Janucry 19, 1970. Negotiations over a proposed permanent i interconnectica brcke dcwn over :he clieged arrearages eved i in by the City, and in February 1971 CEI filed a cceplaint the local ecurts claiming 51,332,256.60 for such unpcid i

amounts. Cu M;y 13, 1971, the City filad c cc=picin

wi:S E-7631;

' the Cc= mission instituting this proceeding (Dockac No.

and on I:27 21, 1971, CEI tendared a "nctice of cer=inatica and i

canec11stion" of the load trcnsfer service provided to the .

! City (Docket No. E-7633).

1, The Censolidated Proceeding The initial ecuplaint filad by the City en May 13, 1971, (Docket No. E-7531) sought a permanent intercennection with i

l CEI pursu n:

to Section 202(b) of the Act (16 U.S.C. S24a), a i

determination of the rate issue and the clieged arrearages, to rre-

! and an crder under Sacticn 202(c) and 2C5 of the Ac:

clude CEI from terminating, its existing temperary service Setticren:

through the five load trcnsfer intercennecticus. . _

.. centinuco curzac.

} negotiations sponscrea by Cc =.ss:on d:ar:

s t

che su==er of 1971, and C21 extended the effective date o-j leu voltage service terminatien nctica until December 16. l?71, at which time the Cc=missica issued an order suspenoing 1972.the notice of termination cad cancellation until May 17, i

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f On December 6, 1971, the City filed a motion to consoli-date its Section 202(b) interconnection proceeding with CEI's_

e f fort to terminate lead transfer service, requested an

?

, emergency Section 202(c) parallel interconnectied with CEI, i 2 and urged investigation of CEI's alleged anticompetitive On Decemb2: 16, 1971, the Cenmission suspended the practices.

! proposed termination of the five load transfer points until l, May 17, 1972, consolidated the proceedings, and denied the j City's request for an emergency Section 202(c) interconnection.

i .. On January 31, 1972, the Commission denied the City's renewed request for a permanent interconnection dated December 22, 1971, stating "No facts have been presented since '

i our Dece=ber Crdar which establich that tha City's system l is currently operating in an emergency situation." On i, February 7,1972, the City suffered a forced cutcge of its

, j largest generating unit (prior cutages had occurred en j j September 7, 1971, and November 13, 1971) which resulted in a

} ) blackout of saveral hours duration during the early morning

]i

heavy traffie. The follcuing day, February 8, 1972, the City renewed its request for a temporary emergency 'Seccicn 202(c)

inte rc.onnec tica, and on M2rch 8, 1972, follcwing an investi-I j gatica by Cemmission Staff cnd conferences en February 10 and 3

! i 15, 1972 the Ccmmission _1/ ordered a temo.crary emercencv.

intercennection under Section 202(c) finding char "a ccmhi-nation of circumstances, both within cud without the control i  : of the City of Cleveland, hcs rendered the municipal system i unrcliable." These circumstances included the operating diffi-I culties experienced on all equipment, the lack of plannin3 for reliability of the large 65 MN generator with regard to spinning reserve, the failure to install remote starting equip-ment on the gas turbines accuired to insure reliability cs ready reserves, and the receval of three of the five boilers

] supplying the three 25 MW generators for air pollution centrol i

". conversion. These circumstances, the Conmission found, i ) created an caergency whenever the largest 85 MN unit is cut of I. .

se rvice .

i. ..

e h 1/ Ccmmissioner Carver dissented noting in part "the ' emergency' l

nou being cceed upon is neither more nor less than tha

]  ! ' emergency' which has existed for menths or years hereto-fore." pea s  :

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1 In addition to the temporary 69 KV emergency, nonsynchroncus interconnection, the Ccamission directed continued service

through the five lead transfer points subsequent to May 17, 1972, until further order of the Ccmmission. And on May 30, j 1972, the Ccmmission set interim rates for the continuatica i of the.lcad transfer service and the 69 KV emergency service until its . final order in this consolidated proceeding.

Hearings were held on March 21st through 24th, inclusive and April 6, 1972. Briefing was concluded on June 1,1972.

6 1 - The Issue s 1

1 j The issues in this consolidated proceeding vere summarized

in the Ccemission's Order of March 3,1972 (Para. H) . They 1 include:

i (1) whether a per=anent interconnection should be ordered i under~ Section 202(b) of the Fedarcl Pcwor Act; (2) whether CEI

should er should not be alleued to discontinue the tc=porcyy,

! low voltage deliveries currently being providad the City under

five locd tr

nsfer points; (3) chachar the intercennecticn should be et 69 KY,133 KV cr both; (4) whether the inter-connectien should be synchrencus er ncasynchronous at either or both 69 K'i cnd 133 91; (5) the rate, terms pf service, pay-ment for service and conditiens for maintaining the five lead transfer points: (6) the rata, terms of service, payment for service and conditions for interconnection, and (7) the City's anticcapetitive allegations.

4 i

The Permanent Interconnection d.

All parties agree that a 138 KV permanent synchrcnous l type intercennection is required to solve the inadequacies and

. deficiencies that have plagued the MELP system. Repairs to

- correct deficiencies on boiler 6, which feeds the turbine on

'. MELP's S5 Z: unit, will not be completed before 1974 (T r . 172).

The failure of the 85 EJ unit, ever twice the sice of the City's next largest unit contrcry to general utility practice (Tr. 173), is the major cause of MELP's system breakdown in recent monens (T r. 165). The lack of re=cto centrol startup equipment en FILP's gas turbines, which would provide quicker i

', backup when the 85 El unit is inoperable, is still a problem

(Tr. 182, 629). 1 c3 cn ' D es e El j

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i A reliabic backup for MELP's 85 hW unit requires a per-J manent 138 KV line. MELP recuirec a capccity of 100 MVA to be 1 supplied by CEI in ceder to meet its additional load require-

ments and to provide r211abic service (Tr . 557-563). City 2 witness F.inchec, Cc

missioner of Light and Pcwer since

- March 15, 1971, testified that the City was in the precess of

} contracting for the instnlletien of an overhecd 138 KV line i t (Tr. 225) . No undue burden uculd be imposed on CEI by :he i 138 KV line and no new gcncrating, facilities vill be required.

i Nor vill this line impair CEI's service to its present i *: customers provided the 138 KV service is en an if, as, and when availcble basis and prcperly engineered to connect the

[

l City's Lake Rond Plant cnd CEI's Lake Shore Plant. (Tr. 32,

! 225, 690).

1 Staff recermends, and the City is agreeable to maintain-ing, a minimum daily cperating reserve of 15"., the same l reserve requirement spacified by the Ccmmissien in its order l of March 8, 1972, in respect of the temporary 69 KV inter-1 ConnGCtion.

i 1

i The rates and char;cs for service under tha 133 KV permanent in:creennection are a T.at cr of scme disagraement.

For e..eracnc/ scrvice nc: to encend 43 hcurs duration, chare j is ;aucral cgreement th:c CEI shculd supply such service tu i MELP if, cs, cad uhen availcble at an energy ra:e cf 110'/. of l out-of-pcchec costs er 17.5 mills per kilewart hour whichaver j is grector, if CEI is subjec: to the Chic state excise tax with respect to sales to the City. If no tar: is payable by

' CEI en such sclas, the rate would be 16.8 mills per kilcwat:

hour.

f i

If the emergency entends beyond 45 hours5.208333e-4 days <br />0.0125 hours <br />7.440476e-5 weeks <br />1.71225e-5 months <br />, short term j (less than one month) or limitad term service (more than a i, O months duratien) would b provided as available. Short term

n. er ,42.icua r t o.er ueer cemano se rvice uoutc ne ol,tle c. at av,e i

i charga uith energy billed ct 110'4 of out-of-pocket costs. If i -

the pcuer furnished is purchased frem cr.orher system, tha 1

t demand charge .ould be the cmount actuclly paid clus 12.5: per

( kilcwatt per veck, and the enerTy charge 115; of out-of-pechet l costs. The demand cher;e fcr limited term service would be i $2.15 per '01 per monta uith ener;;y at 110% of cut-cf-pocket

\ costs. If such pcuer is bought frca another system, the demand D ll'D

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l per charge would be the amount actually paid plus 55c per KU l'

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month, and the energy charge 115% of out-of-pocket costs.

(Tr. 666-64) .

1'

- CEI proposes a provision for payment by MELF for KVAR demand at a rate of $0.10 per maximum leading or lagging hourly KVAR demand per manth, regardless of direction of ficw.

Staff objects on the ground that CEI does not pay a saparate

.l i

charge for reactive K7A uhen it buys electric power and energy from another source (Tr. 510-11) (Ex. 96, p. 20), and there is, l

j consequently, no justification for its proposed charge to MELP.

Instead, Staff proposes various cperating conditions to avoid any adverse ef fects of KVAR ficws.

1 CEI witness Leshing recommends that neither party "be obligated to daliver kilovars for the benefit of the other nor should a party be obligated to recieve kilovars when to do (Trso j may create adverse operating eenditions on its system."

the situatica is entirely within the 672) Pc_nting out that j City's control, he maintains that tha City should pay at the rate of S0.10 per maximum leading or lagging KVAR dtmand per month, regardicsc cf f1cu direction. (Tr . 672) Staff witnass j to E211 dic=:racs. Ma croposas that the parties a;rce not in l

burden each other, and to reimburse tre other uccty fcr cc-t i the event the offending party is not able to control the situc-4

, tion. (l'r . 765)

(

1 Staf f proposed conditions (Reply Erief p. 2-5) are con-sistent with the general statement respecting control of kilovar exchange in CEI's cperating agreement uith the Chic Power Ccmpany (Ex. 96, p. 20) and are adopted herein as l reasonable an'd apprcpriate.

t 1-

' Pavment Provisicas i

The parties are in agreement that the City sheuld pay bilic

' If the Ci ty fails rendered by CEI within 45 days of receipt. ch,rne .ill he to pay within this time period, a 5% interest i I added, uith additional interest of 2hZ, if not paid within e>

' 1 days.

l i

i <

l They disagree in respect of CEI's proposed additional che t i 'e n -

f i charge af ter 60 days of 2 percentage points above cou r.mv , .md current annual prime race of the Cleveland Trust D' * :w l l CEI's proposal for full payment of disputed bills. '

D o D

{ a a d. dl m

\ It\

D

- ... . . . . . . . . . . . . . .. . . ' f' g% glmn um n.

-n.v - - _ _ _ _ _ _ _ .

--n.-...---_ -

_ . . - __ n

.c 3 - 7-1

.1 additional chargas, above 7% percent per annum after 60 days i on MELP bills, are required in CEI's view because of the i City's poor payment record cad Staff the need for conditions insuring urges that interest

's prompt payment in the future.

• charges en MELP bills after 60 days be limited to 747. and that I full payment on disputed bills be limited to the full cmount

! of the undisputed part plus one half of the disputed amount.

The past record herein justifics CEI's concern over prcmpt i ,

the City should be givan an opportunity to c2 mon-p payment, but payments in strate its goed faith and intention to make prempt CEI is free to 3

.. the future witbin the specified tima period.

l seek further relief if the payment previsions prove inadequate I to insure pecmpt pa ymen t i

i The Rate for Continued Lead Transfer Service i

\ The City's normal load is approximately 100 megawatts of i.

, which up to 30 megawatts is furnished to the City by CEI en a 1 temporary basis throu'h

• the existing133 lead :Ntransfer synchroncus service. inter-Pending ccepletica cf the permanent connection, ccntinuation cf the lecd transfer service 'dichout cc tha the

}

existing five lead trcasfer points is essentici. its 30 M' of 2ned tran far service, the City is unable to meet present locd, much less its summer pack of 125 MW (staff Jr. a.

f 54).

The Cermissien's order of March S, 1972, directed that

"the cppronimately 30 :M of lead new served by CEI to the .

City sna,tt .ce meirtainec cnrcusa t.ne existing rive ,eaa i . ,

transfer interconnection points subsecuent to May 17, 1972, I

The rate for the I

until furth2r order of the Ccemission".

load transfer service currently appliccble was fined by Ccmmission's order issued May 30,This 1972, setting reteinterim rates i

at 17. 5 mills per kilcwatt hcur. is the proposed by l CEI for continuatica of the locd transfer service and supported l

667-5. Ex. 100) i by tha testimeny of its witness Leshing (Tr.to CEI of supplyin;;

i shcuing 17.3 mills as the estimated ecst I -

the MELP Icad transfer service under 1971 conditions.

I Staff ccncedes the that the scme rate locd transfer service should not provided in FFC Rate Schadule

) be continued at i No. 7, but urges a flat rate of 14.5 mills if the Ohio excise j tax is payable to CEI, or 13.8 mills if the tax need not be i paid. Staf f's position is based on the 15.2 mills avera ;c cost

/

' D * @dI D a - D$

C.

Lrm M, l93[

cm em ed, ,lUf l E.,.

,' ,_ IL p lc1<.

u aw

. . ~ .

1 -

5 4

.t

• 1 ] for on system energy shown in CEI Exhibit 100, adjusted to l

substitute 0.5 mills for the.l.2 mills average administrative and overhead allouance, and further adjusted to eliminate the g 0.7 mills figure for the Ohio excisa tcn. Staff's position is

• . supported by the cross-examination of CEI witness Loshing to the e f fec t that 1971 was a heavier purchase year than is j expected in 1972, and 1973, when CEI's 650 h9 generato_r will

. come on the lina; and that future purchases r / be 10% or 15%, rather than 25% (Tr. 794-6, 801-2) . The 15.2 mills was characterized by,Loshing as a " bare-bones, irreducible cost factor". (Tr. 802) . Staff's alternative proposals are adopted

, as just and reasonable. The terms of. payment for the load

! transfer service uculd be the same as those recc= mended for 1 . the proposed 138 KV pern2nent interconnection - m.cnthly bills

! payable within 45 days of receipt, if not paid within 45 days add 5%, if not paid within c0 days add an additionsi 2%% for a total of 7s%.

~

> 1 The Rate for the 69 KV Emerzencv Interconn2ction

,i l The temporary 69 KV emergency nensynchroncus interconncetica

} provided for in the Cc:missica's order of Mcrch 3, 1972, was r sch2duled for ccmpletion in June 1972. The Ccamissica's order

! settin: interim rates, issued May 30. 1972. provides a rate

for tais service at the greater of 17.5 mills per kilowatt

'. hour, or the delivering party's cut-of-pocket costs for such j power and en2rgy to such delivery points, plus 10% of.such I costs. If CEI has to purchase pcwcr, 15% would be added to 1

ou t-o f-p c eke t costs.

Af ter 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br />, there would be an additional charge of le per E! per hcur.for servi-a .-andered in excess of 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br />, .

subject to a cally minimum cnarge or 90.00 per Ka. of estcb..tisnac

, t l demand.

i

! CEI prcpeses that the interim rate be adopted as the just l and reasonable approved rate for this service. The City is

. agreeable to pcying 17.5 mills pc-r Kmi, or cost plus 10%,

i whichever is greater. Sta f f believes that the terms and t

conditions of payment for the 69 KV temporary open switch tie i should be the same ith respect to cuergency service and

j short-tena service as for the proposed eermanent 13S KV i synchronous (closed-switch) interconnection. This uculd be i

e n D D g.

l d

~

a p @a}09 uw, U -

c

• .. ~*-.....n .gme .. .o. . . . . . . . . . . . - * ~ = . **A I

h

._m_. __

^ .

4 r

.[ 16.8 mills per IMh or out-of-pocket costs plus 10%, whichever

.) is greater, for thc first 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br /> of the emergency take,

's exclusive of any Ohio excise tax if required. Af ter the first 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br />, there uculd be a short-term rcte of 40c per i KR per week plus out-of-pocket costs plus 107., excluslye of

i. .

Ohio excisc tax if required.

l-1- Staff believes CEI's proposed additional capacity charge i

of Ic per KN. per hour for service rendered in excess of 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br />,

{ subj ect to a daily minimum demand, is punitive in that it

{., assenes the City's lack of interest in relieving an energency j caused by its cun lack of effective generating capacity. CEI l

states the purpose of the 1c additional ccpacity charge "is in j the nature of an econc=ic senction to discourage MELP from j leaning en the interconnectica" (3r. p. 24).

! The City's 69 KV line vill be hooked up to the CEI system l only in the event of an emergency on the City's system and j only if no c=2rgency exists en CEI's system, and when, in CEI's judcrent , it has the pcuer and energy available without

causing impaircant of service to its custtmers. The City is j obligated to tche immediata steps to relieve its emergency i and to restore CEI's 69 KV line to its normal functicn cf j support for CEI's sytte=. In th2~a circums tances , the pro-l posed pencity previcions or econcaic sanctions are inacpropriat i

Similarly, the 133 KV per anent synchronous intertie

} agreement shculd not be limited to a five year period. All of j the terns and conditicas of a Section 202(b) interconnection j are subject to the Cc: mission's approval and it is not in the

'} public interest to limit operction o~f this interconnection to an arbitrcry term of years when operation may in fact be required until allcwed to be terminated by the Cc= mission for i good ccuse shown.

! Rate for Past Locd Trcnsfer Service J

j ,: There is a basic disa3rcement betueen the parties as to 4

i the rate applicable to the ' cad tr:ns fer service rendered by

{ CEI to MELP frem February 1970 thrcugh May 17, 1972. CEI

! and the Strff maintain that the ch>rges applicable to the 1 cad

} transfer carvice initiated pursucnt to the agreement of j January 20, 1970, must be based on Race Schedule FPC No. 7.

i.

2 i In their view Rate Schedule FPC No. 7 is the leoally o filed rate.

s 4

$ CD CD

D D eu cu 4

ppf h !b! .m 4

f

. _ . .. . . _. .. .. .. . . . W2 Uu

a. L.Im WJ _ J a

.; t. .

f .

I f -

p .

10 -

1 1

The City contends that the CEI filing of Rate Schedule No.

7 was a unilateral act in violation of City ordinance,

~

t i contrary to the Sierr.:-Mot iic Doctrine , and tha t City Grdinance

{

161.-70, established :he legal rate for such service.

t, ,

t City Ordinance 161-70. passed January 19, 1970, did not establish a centrccc bets.'ecn CEI and the City. It was a.

j unilaterci action by the City Ccuncil authcrizing MELP to enter -

1 i into an cgreenent with CEI for the lead transfer service. The l agreement of Janu ry 20, 1970, between CEI and MELP defines the i.

contract betteen the parties and the terms of the lond transfer '

j service (E:: . 51-54). Rate Schedule No. 7, ea.bodving that 1

- contract, was filed with the Co==ission by CEI, as Rate Schedule FPC No. 7. Under Section 205(c) and (d) of the Act, and the

l j i regulations issued pursuant thereto, the only legal rates are

! those rates which are on file with the Cc==ission. The so-I called Ordinanca rate was never agreed to by the parties or j filed uith the Cc mission. The agreement of January 20, 1970, l

was signed by the apprcpriate City officials, the Director of

! MELP cnd the Director of L:w, and filed with the Cc==ission.

! (E:: . 51-54) Any alleged violation of the Crainance is a iccal matter between the City and its officials. The Crdin nce cannot nodify th2 provisions of the Federal Pcuer Act or the re;,ulations duly #--"'" " ~' " - d a - 4: neced by tbo N rt in Ucrth"estern Prblic Fervica ca. v. Mentan2-Dakota Util. Co.,

1S1 F. 2 d '. :/ , c i f . 3 M U.S. 24c: -

f i

,,So long as tne n;.ed rate :.s not changed :..n the manner 3

provided by the .ict it is to be created as though it were a scctuce, binding upon the seller 2nd the pur-chaser alike" (p. 22).

J

! Accordingly, Rate Schedule FPC No. 7, as supplemented, is l the legal rate for service prior to May lE, 1972, and CEI claims $723,233.43, for such load transfer service as of May 18, i

i

, cv

• • -e t

1 The Sierra-Mobile Dcetrine ,1], relied upon by the Cit"J ,

t, bars unilateral changes to a contract rate on file with the t

.e I

lj Uniecd Gas Pine Line v. Mobile Gas Service Corocra tion, 350 U.S.

i 332; F.P.C. v. Sierra Pacific Pc..:er cercany, 350 U.S. 343 (1956)

~

l

+

t i

a b

1

--. .. . -...... . . . . . . . . . . . - . . . _ . ,._........_y.... . . . . . .

6

. . _ . _ - ...,m. ,r- -. . . - _ . - - - _ - - - . _ _ . - -, ,, , , . , , . . . - _ - .,

e I

J .

• { _ 11 -

1 Ccemission withcut notice to and cpptcval by the Commission.

Here the contract rate is the , agreement of January 20, 1970, a filed as Rate Schedula FPC No. 7, not City Ordinance 161'-70.

' i e

4 i

. Staff agrees that CEI made the correct calculatiens for

! computing the amount due for past se vice rendered to the City -

using 30 minute readings for catermining KVA demcnd. Staff, l however, suggese a 60 minute demand reading as more appro-

j priate (Er. p. 19). CEI's method is in accord with its filed j Rate Schedule No. 7, and its custemary practica (Tr. 514).

I 3

S ta f f' s . me thod , the re fore , which wculd reduce the balance

) claimed to $785,589.51 (733,238.48 less $2,348.97) is not l, recccmended.

i 69 KV Intercennection - Coen er closed I

The Ccmmissien's March S, 1972, order provided that the temporary 69 KV interconnection would be nonsynchrencus, wich ~

i switches normally open or cut of service, to be clcsed when emergency service is required. CEI and Staff argue that the 69 KV intertie should be continued as cn epen-switch, non-

! synchronous interconnection until the 138 KV synchroncus per-l manant intertie is c erational. T'.: t City insists th t tha

), 69 KV intercennecticn cheuld be synchronous er closed cs tha i best way of prevanting blackcuts and maintcining relicble l service. To the City "En open interconnection is a blackout

, l type inter:cnnection" (Rep. 3r. p. 8) since service will be l interrupted in the event of cn emergency until the cpen-4 l switch 69 KV service cca be made operational.

g The temporary 69 KV interconnection is designed to furnish i up to 40 MW of c'mergency service to the City during the rext

{ two years until the proposed 133 K7 permanent intertie ecn be

)

placed in operction. The 40 MW cf emergency service functicns as bcckup for the 33 S1 generator uhose ferced cutage crectes an c=ergency en the MELP system. CEI and Staff argue that cn (2

i l

open intercennection is required to maintain the reliability of CEI's service to its cun custcmers. In their viev, a

> closed line would be det'imental to CEI's system and would -

{ ' impair the reliability of service to CEI's custcmers in the i j area served by the Lcke Shore switchhouse. An open switch i intertie protects the CEI system from any CEI outage i 3 -

i i $

4 I

.-. .. . . . . . , ,..r . . . . . . . . . . , . , - . . . . . . , , , . - . . . . . . . . . . . . . . . . . . - . . . .--

r 3

I - - _ . - _ - - - -

n f

j. . Closed i occasioned by operation of the emergency incertie.

switch or synchroncus operation subjects CEI's Lake Shore 69 KV cable switchhouse to severe overleading during any CEI outage on the Lehe Shore-Mcwburgh line. This would diminish j

the reliability of service to CEI's oun customers CEI and Staff concern in the area j served by the Lake Shore suitchhouse.to Cc~~t's system frem a cTosed respecting posslole d.etriment of the switch 69 KV line to M2LP is legitimate in , - the light

~

City,s past record of inccmpetent anc ineiricient operation, t Staff uitness Fowlkes reccmmended against a closed switch j '

69 KV cmargency tie with the City since it "uould imperil the l relichility of sarvice to the Company 450 M??A Lake Shore-Newburgh load area and therefore is not a recccmended mode for

' interconnection betueen the City and the Compcny'" Similarly, (Tr. Sta 7f f57) .

He was not cross-excmined by the City.

witness Gunderson testified: "cnce limited to 40 MVA the

' concept of a synchronized tie between MELP and CEI is no longer desirable. Such a tie vould becc=e anleast econcaic as complex burden (Tr. to "ELPS0-i j

and create opercting difficulties at to a normally cpen temperary

83) as those required to adept ~

recuire that the tie" (Tr. 742). The public interest dcas not the City's custemars be procacted fren tempercry blackcuts atParticul_rl i

expanse cf CEI's custcmers.

testimonv shcws that "operaticn of the 69 KV tie in the

'I normally open .

. mode can be implementec to svolc any risx i

l of an outage to MELP extending beyond two or three minutes",

f (Tr. 742)

The Secte of Chio Encise Tcx There is a sharp dicpute between CEI and the City as n to the applicability of the Ohio Excisc Tax cn Grcss Recei.ts ~

c. c c'e ' / '/?. 'a 3 T, on alll.ings to thie City.

5

• ' C ~sI

' ~

(O'nio neviseu*

argues it must pay the tan to the state in advance and "that 1

the caly wcy it can be made whole is by collecting the p.a nount 15).

of the tax as part of its ecsc of service" (7ep . Br.

The City maintains the tax is' clearly inapplicable and sees the effort "to exact the tax as one more device to increase i

Claveland's cost and thus impair its positien as a cenpeti;ce (Br. p.

in the field of power supply in the Cleveland area."

i 29) i  !

I ,

.t

- . - . . . . . . . . . . . . . ~ . . .

r

n

> 1 1 s ,

1-8

) Staff properly emphasizes that the determination of 1

liability for the State excise can is for the Ohio courts for not'

[ Staff proposes that any rates set this Cc= mission.

/ future service in this preceeding be exclusive of the Ohio excise tax, including tha calculation of monies owed for pcst l'

I services. Houever, shculd the courts determine er future sales to that CEI is I liable for the State encise.cax on castin the sums owed or the City, an adjustment should be chda the excise l f. the future racesStaff by the Cc=

set proposal is adopted as just, reason- mission to reflect i

l I tai licbility.

- able and apprcpriate in this proceeding. ,

te i

Anti-Cenoctitive Allecations-I requesting o Beginning with its motion of December 6, 1971,and an investigation  ;

an emergency interconnectien, City has charged that f; allegad anticempetitive practices, the '

j l

CEI' engaged in varicus naticompetitive practices which have l

damaged the MELP system These and centributed charges are to the blackouts repocced in the and  !

other system prcblems.  ;

City's brie fs. The Cc mission's crder of January 10, 1972,

)

l [

l I

i statec in pertinent part:

i.

l,

" pen re"ieu of the City's antitrust allegations it appears th econtained the

[ in the above-mentienzd ettiens,is etsenticily the same as thnt requested relief south:

by the City in its original ccmplaint filed inintercennecticn this i

i.

)

1 Docket en F:ay 13,1971 - n:=cly, a permanent I,

between the facili ties of the City cnd the Ccmpany in r l

crder to sell energy to or exchange energy with each i

f; other.

The claims regsrding the Ccepany's anti-cccpetitive to I conduct touard the City are essenticily an amendment 4

i 2 -

the cceplaint and are, therefore, cognizable in the present I

j proceeding.

l 1 (. The City, of course, as ccmplainant herein has the will be l }

therefore, j l burden of proving its allegations and,its evidence in support thereof j  !

required to submit .. - .. . .

part or its case-in-enter, whicn nas ceen orderedany to be 1

Likcuise, j

y served on or befcre January 26, 1971.

evidence in cppesi tion to such contentions which the~ of the I shculd be filed as a part i

f Company desires to presentCompany's case-in-chief, which is

.i l

1 e:

i -i ,,,, _ ,,,_ ,..,., .,

t . ..

., ,, a ,, ,,, , , , , _ , ,

I *a-~------ . . . . .... .

1

_ _ . . , - _ . _ _ , . _ . . . . , , . . _ _ _ , ~- . _ _ . __ . _ _ . . - , , _ , _ -, _ __

i n i-M i  ! '  :

i i Cur determination that the antitrust issues are encom-1 l 1 passed in the amended complaint makes it unnecessary to l grant the City's request for an investigation, because the Cem:aissica's Staff may develop any evidence deemed l relevant to a ecmplain.t proceeding. .

1, . ,

The City did not present any testimony at the hearing on j

CEI's alleged anticempetitive practices nor did it cross-examine CEI's witnesses on this issue (Tr. 453) . In its 1

i

' briefs, the City relics on the so-col'.ed Bridges =ccorandum (Ex. 24) , CEI's ef fert to collect the Ohio e:<cise tax, and CEI's alleged refusal to build a parallel interconnection.

l, The Bridges memorandum is an internal budget planning i

report for the year 1971, frca the CEI Public Information

! Department to C. Hewlay, a CEI Vice-president and witness in this proceeding. The memorandum discusses planning objectives 1

I and incIudes the follcuing statement:

Five-Yecr Plan Chiective - "To reduce and ultimatelv

+ eliminste tha ten -- suosicitec C.1 2 cal.anc and Painesvill

' l Municip:1. Electric Syst:c." (Profic).

1

" Provide e f fec tivioublic cerrunica ci ens , as develcoed i

. . ; - , t ,.

-.. z. ..,... n; : m..,.e.,.~. ..-..m ..: -.. ,.. ..-n..

_n.-- n. .= .u.

! Clevalana Munici7cl Licat Plent."

l The Municical Licht Plant situation is one which has .

,- undergone consider ble and severe chan<;e during tne j past year. Outages haye been frequent and often of j

• ff

• cecause i t has received ffScd o. ress

(

maJ or croc. orticns.

of this poor centinuitsj of service, cnd is frequ2ntly cited by tne newspcpers cecause it :.s a maj or centrib-j Legislatton nas been introduced utor to air po,,iuticn. t in Council to study the feasibility of selling the j plant. Cnc result of the decline of the MELP plant is . .

that only .,+n. , or its custcmers ce:.leve e.ney sacu:.d ,ce i

', served b,v the municip:1 system, as opposed to c2f', in

1969, according to the 1970 Custcmer Opinion Survey.

,I t

J These changes in attitudes indicate that the 7.ELP situs-l tion is very fluid, subject to further change virtually l

l over night. Therefore, any cc=munications activity must l

be able to adjust to immediate change.

l l4

1 T

l

--.....-.. ..-.....-......=..-.-..-.,........-....-.-...........-.. .

i J

f i

. _ . _ - , . ,_ . , . - . , _ , _ _ . - . , , . , _ ,. ..m.. ..m.. . . . . . . . , _ , , ,,_. _,.-,,., ., , ,

1.  : .

i .

f- - 15 -

2,.

4 1 Mr. howley was not cross-enamined with respect to the' k Bridges =cmarandum. He did testify (Tr. 403-406) that the two systems actively ccmpeted for customers. The custeners who switched from MELP to CCI, hcuever, did so because of

, 3 poor services and outages on the MELP system occasioned, as 4

this record discloses, by SELP's inccmpetent management and

! ' ine f f.icient operaticns rather than any action by CEI. The t

-, Bridges me=crandum 'does disclose a public relations cc=paign

'! to.cncourage the sale of MELP to CEI by. pointing cut the ~

' alleged tan benefits of investor cunership. It also discloses f~"

l that."during this period, the Ccapany has taken a positica I, not to join or attempt to strengthen the attacks on the 117E I system" (En. 24 p. 4). The Bridges memorandum dees not .

support a 11nding or anticcmpetitive practices or antitrust s

i 1

, violations.

t 4

4 i The charge of CEI refusal to build a parallel line as an j j anticempetitive practice is ircnic in the light of this j t record wnica snows crearly ther the City repeatedly turned --. .

dcwn uch. proposals a.n an effort to remain seit- surticient and i

j j

; independent of the CEI system, i t o

I Since 1942, when the City rejected FPC's'" urging very I

(i strenucurly that an interconnection . . . be set up" (Ex. 42),

j tha City Fas rejected all proposals for interconnecticn (Ex.

! 41-49) en the ground it ucul,d result in a loss of " independence"

) and put th2 City "at the mercy" of CEI (2x. 44). Conversely, i CCI has expressed its willingness to interconnect since 1942

j (Tr. 378).

2 CEI's effort to ecliect the Ohio excise tax does not i

3 constitute an anticcmpetitive practice. Presumably, this

issue vill be resolved by the Ohio courts

here the question

is being litigated. Finally, the City's vague proposals for I ). wheeling pcwcr through CEI' a facilities , contained in Exhibit

! D to its Initial Brief, are not approved as unsupoorted by

]

j this record and outside the secpc of this proceeding. (See l .

,i

~

City of Paris v. Kentuchv Utilities Co., 38 FPC 259 (1967)

, 399 F. 2d 963 (1967).

I E

. .I e

t 1

i .5 i

s j

1

. ,.g 8 - 49 6. 9 *

,G** 4S g De O 9 *ee, y g go ,mo,egqg g,, gg k

4 1

-, _ _ - _ _ . ._ -_,.-- . , _ _ . , _ . . _ _ _ _ . _ ,- _ ..._., _ .. . ._ __..-e.. ,- _ . _ _ _ _

,;............. .- . ... : - .. - .. :.. .. . - .... .-.: = ... = . -.. -..

a. . -

.n .

l, .,.

~ '

! Conclusion 1

, .s 1

j The public interest recuires the construction, at the

. City's sole expense, of a 138 KV permanent synchronous inter-connection with 100 MVA of capacity connectinee the Citv's .

Lake Road plant with the Cc=pany's Lake .Short . .

plant.

This intertie saoulc, be bu2_t 3 as soon as possiote ano operated in accord uith ECAR cnd UAPSIC 1/ rules. Until the 13S KV permanent intertie beccmes c3erational, the existing load transfer service should be continued alcag with emergency l service over a 69 KV temporary ncn-synchronous cpen-switch l interconnection. Houever, the City is obligated to proceed

{ as scen as possible with the repair and restoration of its 1 206 megavatts of installed capacity to full productive gene-l ration in order to reduce the use and need for the load trcnsfer i

I and c=ergency 69 KV service herein provided.

l

' 1 Rate Schedule FFC No. 7, as supplemented,is the legally

!I filed rate acplicable to the load trcnsfer service until May 17,

{ 1972, and the balance claimed by the City as of May 18, 1972, is l l $788;238.43. Thereafter, the basic rate for both the 69 KV

,I on.en-switch c=crgencv interconnectica cnd the 133 K7 j synchronces perennent interconnection will be 16.8 mills per ...

R1,cuatt-acur or out-or-pocaet costs p.3us .tun. watcuever is i greater, for the first 45 hcurs of the emergency, exclusive j of the Ol'io State excise tax. The rate for the centinuation of lead transfar service after May 17, 1972, will be a flat

., charge of 13.8 mills per hilcuatt, exclusive of any excisc.

j tax.

t i Finally, the City's allegations that its difficulties in 1

maintcining service to its custccars are due in hole or in

{

part to CEI's anticc=petitive prcctices are not supported i by the record in this consolidated proceeding. This record i i indicctes that the City's past incbility to furnish relichle, l dependable service on the MELP system to its own custc=2rs has been due primarily to inccr,etent tenagement cnd inefficient i j operations. The relief provided in this proceeding shculd eliminate any continuing threct to MELP's ability to previde

}

1

!. (,

e i 1/ East Centrcl Area Reliability Agreement (ECAR) and North I American Power Systems Interconnection Cc mittee (NAPSIC)

!; Ex. 29-31. l l

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-.... ~ . . . - , . . .

I

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! dependable service, if the City moves effectively to restore

, j its 206 megawatts of installed capacity to full production on a dependable operating basis.

a .

.  ! ADDITIO:'AL FINDINGS AND CONCLUSIONS I

1 l

. Upon consideration of the entire record in this proceeding l

- including the pleadings, the evidence adduced, and the briefs

~

filed, it has been found and concluded, in addition to the l . ', findings and conclusions heretofore . stated, that: .

i

+

i

l. CEI is a "public utility" within the meaning of Section 201(a) of the Federal Praer Act.

l 2. The City of Cleveland is a " person" within the meaning i

I of Section 202(b) of the Act.

l j 3. An emergency exists in the City system (MELP) by i reason of a shortage of reliable facilities for the generatica l

and maintenance of dicctric energy and service.

i l 4. A permanent 138 KV synchronous interconnection with l a capacity of 100 MV.\ connecting the City's Lake Rcad l Plant tc CEI' c L2he Shore ?1sn r i s rec.ui red to sucolv emergency service and serve the public interest.

j

5. Until such permanent 138 KV intertie is in conmercial 1

i operation, the existing low voltage deliveries currently beins i

provided to the City bv CEI should be continued along with the i

! temporary emergency oy

.u open-switch nonsynchronous inter-

! connection provided for in the Ccmaission's order issued j March S, 1972.

{

) ,

j 6. The permanent 138 KV intertie will not place any l **

undue burden upon CEI, nor require CEI to enlarge its generating facilities for such purposes, nor impair its ability to render l  :

i '. s adequate service to its custcmers.

', 7. Rate Schedule FPC No. 7, as supplemented,is the

! legally filed rate and is the ef fective rate for the calculation j of load trcnsfer service charges through May 17, 1972, ex-clusive of any Ohio excise tax.

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18 -

i ORDER 4

Wherefore, IT IS ORDERED, subject to review by the Commission en appeal or upon its cun motion, as provided by its Rules of Practice and Procedure, that:

f (A) A permanent 133 KV synchronous interconnection, with_

i a capacity of 100 MVA, connecting the City's Lake Road Plant and CEI's Lake Shore Plant shall be established to supply emergency service to the City upon the following terms and conditions:

I (1) The City shall be responsible for the i

l installation of all facilities necessary to effect the inter- '

I connection and shall pay all costs associacad thereuith, in-cluding any costs which may be -incurred by CEI.

i I

j (2) The City is to. maintain a minimum operating 8

i reserve of 157.. Both the City and CEI are to keep their i systems in good operating condition in accordance with l accepted utility practices and ECAR standards so as to avoid j imposing a burden on the othar party, i

! (3) Energy is to be transmitted through such inter-l connectitns provided th

t no ccergency exists at that tima on l CEI's systcm and that in CEI's sole j~udgment it has the pcuar i and energy available without causing in.pairment of service to 1 its custccers. Such service may be interrupted by automatic j protectica devices for construction and maintenance purposes j or in order to preserve the integrity of, or avoid imposing a burden on the systen of one of the parties.

}

(4) ' The City vill as promptly as possible af ter

' the termination of the emergency pick up the load on its own system. The intercennectica facilities may be withdrawn at any time for the sole use of CEI for service to its othar

- custe=crs in the even t of an cmergency arising on its system.

i I (5) The City shall make the manicum use of its own generatin; facilities, at all times before reques tin.;

l t

emernencvU =

sarvice, or the delivery of newer and encrav [ ~% under i the existing load transfer service, from CEI.

t i

i j (6) The City shall take immediate steps to relieve 4

the conditions that made the emergency connection necesscry l

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, j and shall make reports with respect thereto, as prescribed i, in Section 32.21(a) of the Commission's Rules and Regulations i under the Federal Power Act.

t

.i (B) The 69 KV open-switch nonsynchronous emergency I interconnection ordered by the Ccmaission on March 8, 1972, I, shall be maintained in place until a 133 KV interconn2ction i becomes operabic and further, the 69 KV connection must be i

operated in the open-switch mode at all times except when used for emergancy or short-term service to the City.

4 I

g' ,

The i . ,, 69 KV cmergency nonsynchrcacus interconnection should trans-1 $ mit energy frca CE1 to the City on an if, as, and when available basis only.

i  ! (C) The rate for both the 69 KV cpen-switch emergency

{ interconnection and the 135 KV synchroncus permanent inter-

. connection shall be 16.3 mills per xiloua tt-hour or out-of-j pocket costs plus 10%, ihichever is the greater, for the first s 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br /> of the emergency take, enclusive of the State of

Ohio Encise Tcx. For the 69 KV service, a short-te rm ra te

I after the first' 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br /> will be 60c per kilowatt per week e

plus out-of-pocket cot ts plus 10%, exclusive of cny excise 1

I tax. For the 138 XV service, the short-term rate vill be the

' scme cfter 4S hcurs, but in addition a limited-term rcte of

$2.15 per Kilcuart per conth plus cut-of-pocket coscs plus l 10%, enclusive of any excice tax. When electric service is provided for t'a2 benefit of che City frca other electric j systems, there will be cn additional charge of 12h, cents te j the actual demand chcrga paid per hilcuart per uaek plus an i energy charge of 115% of out-of-pceket costs. Where limited-

' term service is cbtainad fer the City by CEI frca othar electric systems, then the demand charge actually paid will be 1 increased .oy 32 cents per ,nitcwatt per cont,a uith an energy

} charge ecual to lla,,., or. cut-or-pocket costs. 1/

1

- f (D) The City shall pay its bills fcr the continua tion of i, the load transfer service, the 69 KV emergency interconnectica,

, J cnd the 133 KV permanent intercennection within 45 dcys frem

receipt of the bill. If not pcid within 45 days, 5% is to ea ac,ded to tne ..l3, oi . cnc it not paid witnin a total at 60 c.ays

] ', . from receipt of the bill, than 26% additional will be addad 4

{tothebill, totallin; a 74% additicn to the bill.

t t

i 1/ For definitions of " Emergency", "Short Term", and " Limited Term Service" see discussion beginnin'g p. 5, et sea. -

I i, .. . . ~ . _ , . . . , . . . . . . - . . . . ._ . _ , . . . . , .. . . ...__,,... . . . . . . . .

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- 20 -

j service at.te (E) (The 17, u.,y i ,

rate to72>

- forshall thebecontinuation a flat charge of t3.of the load t,.c. -

mills per kilouate exclusive et any excise Reactive ficas and inadvertent cnergy fleus shall be ,

4 (v) to et., follcuineo conditions:

i centrolled su..ect oj .

j When tu,, 138 "V permanent interconnection is - -,i-

, , . .- .7 , ebe flew or .w e

! (1) e enceulec. ..,

s. pcwc,-

. operot.nao 4 4 at ~a-o -

. ,, 0,, aco,. g- . o, , ch 11 not exceec )

7 I

i in c'~uh.e-unleo, MVn,R . c -ac*'on s a3bye d~13bIca-Wthe . .

. -;.Operating ,, ,,,. '1cws Ccc.ittee

' or or

-a- 1 ^- -"5--

sc e '1a e- " "onitCCS- the City dispatccers a will request 4 .

j Cc pt-e

-. n 4-c:.n one 4

ML. R c .- . . ,

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c <. - c 4 G'i- ,le"s - "," to ~"u:-enc "

w pres-i t.. l C- n -aximtra a - -

1h.,,I~- " - --

"'* V O d to recuce w

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sue..if4*uoya* -

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a .nu,. ue ~ - L'ofn 00.0033 C 'To 1 hou ma*~n' .tuce o

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u, -c v per maximum ten Ing or i exccos at -

hourly DIAR demand per day.

l

! (2), If either CEI or the City schedulcs a roccipt in order to secure accc.'"t- .

i . c a c. 4 n' o - , c- ,e .,4 ., ~u-"=."

- 2 -

o r a. l l .,. ~.a - s , r ,. . , ~., ,. o- en1 use or ac.43.4 u-

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e o schac.u.,ca .s 4cs ,n enc inter-.-rh,..

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service ,.,.c, -

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I. ~ ~ ,a-t ,.cn 13 cp uuu. -

• . . 3. 1 ., 4

-** C.7$

I d. (~ d &---

- 1.". ?!Q-hcuriv :Gl'."

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y vor sucn s u= ~~,-c4- .

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" *0*0033 c c cor max 1 um 1C"ae.,.,e.~ is naived n by cutual a'SrceC0"'-

per day, c.. . - - p. ::

i. .- -c-l

!, knen cl..we,. -

uu-- *ha Cie7 or CEI receives

- - fre,the 5." i,> -i ,-

du2ation, a, wu h,, ,

'i (3) " to 4T,-h eurs .

~ n C V. se-v4 Ca ,..-p o e ',, C ts: o, * . men a i o ti,.3, e.s.n r~e- &

o b ,. . .

4 be no separctc 00 -

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-'"-o* 'j ~ L oVu, , a,,

e,CC.-4,, - - - - sYs te.r.s in .

i 1 1,3-nc~ e is = ace trcn othe , .

rcC M01 e"ut ShlL1 4  ;

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,4 purCh,sn connection . m 4u such c..3.."'e'^9. Cy sc rViCc .

cost p us 10 m.,.,-

L 1 p^~~'nt-t  ! pay ,r such purchased kilovars at Ub~an either the City or CEI - atpurchases an heuriv. and pc ..e r (4) c "ee-h4- a -..r- n' .- s no t.. ce.m e I', c- ,.,,

" o t" 01,33- /

receives - - . - '-

factor of icss than 90 parcent durinr, ..cck- t'~')-cu r - ng v"'; ' - - " "-

t n .ao- -"; S; percentw Sunday, suca e';c- '

thecugn 10 p.m. o ieu.1,...,

,, , , d 2. ,

ueck- cay hcur s ,nc

. e ,- ,K 1 t=1 i g ,g . , . , ;

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' shall be paid for at aC~,ratc , ci . , $L,,.m

- '. c c c. ,),

v .u. - ) t -

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~I n'6hCUU,-7 "y"",

,rg o . *' I . o- r-

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1 a"6' n.- en t ,

6 ment c,-y b',

c- ived uo. en cutual ., t., -.,- and econc=ical use m. -

t in the interest or adequ:,tc servica 4 l

t facilitics.

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.:4 I (5) When either the City or CEI purchases and i receives from other limited-teen pcuer at an hourly power . ._

j factor of less than 90 percent during week-day hours of

./

7 a.m. through 10 p.m. cr less than 85 percent during the

'}'

remaining week-day hours and during Saturday and Senday, such I

excess RVAR shall be paid for at a rate of $0.10 per m ximum leading or lagging hourly : IAA dcmsad par month except that such K'!AR payment may be waived upon mutual agreement of CEI in th interest of adequate service and economical j - and M'LP i j'.

i use of facilities. -

(6) Metering methods will be used, either' recording

.j type, which will supply the needed data in the most

. or chart i

t Convenient form.

i j (G) The City shall pav any tax imposed by the State of Ohio on the revenues derivea trem service e.nrcugn tnc inter-connection. t.ither party may at any time unilaterally sack . . . . -

changes in the toregoing rates and terms anc concit:.cns or t service by apprcpriate filing with the Ccmmission and any

)

i other agency having jurisdiction.

i I

(H) The City shall begin censtruction of the 133 Tl permanent interconnection facilities in the shortest reascnable time and shall have the facilitics in operating ccaditic:

within a period of tuo years of the issuance or the finsi orcer in this proceeding. CEI shall notify the Cc=nissien i

when the interconnection is established and cpeiative.

l j i .

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L. Muf.",

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' Willic C. Levv -

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- Presiding Daminer l4e

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UNITED STATES OF AMERI '!'..~#' " '.".5 y

' ~-

- FEDERAL F0WER COS211SSIOd OPINION NO. 644 City of Cleveland, Ohio ) Docket Nos. E-7631 and

v. ) E-7633 Cleveland Electric )

. i Illuminating Corapany )

and )

City of Cleveland ) Docket No. E-7713 OPINION AND ORDER IN INTERCON'JECTION PROCEEDING

• e Issued:23nU2"" 11, 1973 DC-47

i

, , UNITED STATES OF AMERICA

. FEDERAL POWER COMMISSION 1

City of Cleveland, Ohio ) Docket Nos. E-7631 and i v. ) E-7633 Cleveland Electric )

Illuminating Company )

and )

City of Cleveland ) Docket No. E-7713 s .

OPINION NO. 644 l APPEARANCES 1

i j Philio P. Arderv for the City of Cleveland, Ohio Harry A. Po th . Jr. , William H. Saltsran, and Donald H. Hauser for Cleveland Electric Illuminating Cempany j Robert L. '.'c

.. od s , Mic hae l J . Manninn, and C. Douzlas Essv for l the Staff of t'ae Federal Power Commission 1

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. UNITED STATES OF AMERICT

i. ' ,l - .

- FEDERAL POWER COMMISSION t

Before Commissioners: John N. Nassikas, Chairman; Albert B. Brooke, Jr., Pinkney Walker,*

and Rush Moody, Jr.

1 City of Cleveland, Ohio ) Docket Nos. E-7631 and

v. ) E-7633 l

Cleveland Electric )

Illuminating Company )

) , and )

City of Cleveland ) Docket No. E-7713

!, I OPIMION NO. 644 i

OPINION AND ORDER IN t INTERCONNECTION PROCEEDING e

(Issued January 11, lo73)

I MOODY, Commissioner:

I This caso ecces to us on exceptions to the Administra-tive Law Judge's decision issued July 12, 1972.

i I

i 8 The introduction, procedural history and statement of i

j issues as set forth in the Administrative Law Judge's de-l cision are ccmprehensive and correct, and require no further j amplification by us.

1 The Initial Decision I

~The Initial Decision ccncluded, inter alia, that the public interest requires the construction, at the sole i expense of the City of Cleveland, Chio (City) , of a 138 KV permanent synchronous interconnection with 100 MVA of capa-city connecting the City's Lake Road Plant with Cleveland El.ctric Illuminating Ccmpany's (CEI) Lake Shore Plant; that the intertie should be built as scen as possible and operated in accord with East Ccntral Area Reliability Agreement (ECAR) and North American ?c.ter Syster/s Interconneccion Committee (NAPSIC) rules; and that until the 13S KV permanent inter-tie beccmes operational, the existing load transfer service should be continued along with emergency service over a 69

! KV temporary non-synchrchous open-switch interconnection.

i-

• / This opinion was adopted on December 29, 1972, before Commissioner Walker lef t the Commission.

k

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i f

,. Docket Nos. E-7631, et al. <

The Administrative Law Judge found that (1) all parties agree that a 138 KV permanent synchronous type interconnection is required to solve the inadequacies and deficiencies that have plagued the Municipal Electric Light Plant (MELP) system; (2) there is general agreement that for emergency service not to exceed 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br /> duration CEI should supply such service to '

MELP if, as, and when available at an energy rate of 110 per-cent of out-of pocket costs or 17.5 mills per kilowatt hour whichever is greater, if CEI is subject to the Ohio State ,

excise tnx with respect to sales to the City; and if no tax is payable by CE: cn scch sales, the rate would be 16.8 mills per kilowatt hour; and (3) the parties are in agreement that the City should pay bills rendered by CEI within 45 days of receipt and if the City fails to pay within this time period, a 5 percent charge will be added, with an additional charge of 2-1/2 percent, if not paid within 60 days.

The Initial Decision adopted as reasonable and appro-priate, (1) Staff's proposed conditions as consistent with the general statement respecting control of Kilovar Exchange in CEI's ~ operating agreement with the Ohia Pouer Company; (2) Staff's alternative proposals for continued Icad trans-for service of a flat rate of 14.5 mills if the Ohio excise tax is payabic to CCI, or 12.3 millc if the tan nocd nc: ha

paid; and (3) Staff's proposal trat any rates set for future i service in this prcceeding be exclusive of the Ohio excise tax, including the calculation of mcnies cued for past ser-vices; provided, h cueve r , should the courts deternine that i CEI is liable for the State excise tax on past or future sales to tne City, an adjustment should be made in the sums owed or the future rates set by the Commission to reflect

! the excise tax liability.

I i The Administrative law Judge further found that under Sections 205 (c) and (d) of the Act, and the regulations issued oursuant thereto, the only legal rates are these rates which are en file with the Commission. Kate Schedule FPC No. 7, as supplemented, is the legally filed rate applicable to the lead transfer service until '-:ay 17, 1972, and the i balance claimed by CEI as of May 18, 1972, is S'/38,238.43.

Thereafter, the basic rate for bcth the 69 .;V cpen-switch

! cmcrgency interccnnection and the 130 KV synchrencus per-i manent intercot.ncetion should be 16.8 mills per kilowatt I  ! hour or cut-of-pocket costs plus 10 percent, 'chichever is 5

i

.t -

- Docket Nos. E-7631, et al. -

3-

)

greater, for the first 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br /> of the emergency, exclusive of the Ohlo State excise tax. CEI's proposed addit.i.onal g

capacity charge of one cent per KV per hour for service rendered in excess of 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br /> subject to a daily minimum ,

demand is inappropriate. The rate for the continuation of

. load transfer service af ter May 17, 1972, should be a flat 2 charge of 13.8 mills per kilowatt hour, exclusive of any excise tax.

) .

The so-called ordinance 161-70 rate, according to the i

Initial Decision, was never agreeu -a by the carties or filed with the Ccamission. Any allcged violation of the ordinance is a local matter between the City and its offi-j ) cials. The ordinance cannot modify the provisions of the Federal Pcwer Act or the regulations duly issued thereunder.

Northwestern Public Service Co. v. Montana-Dakota Util. Co.,

181 F.2d 19, aff. 341 U.S. 246.

' The Administrative Law Judge would not limit operation of the 138 KV permanent synchronous intertie to a five-year I, period, reasening that the best interests of the public may

, I in fact demand the operation be required to continue until I

l allcoaC to be terminatcd by Lhe Ccmmisaicn for gccd ex.eu I

shown.

3 According to the Initial Decision, the internal memoran-

dum of CEI does not support a finding of anti-ccmpetitive i practices or anti-trust violations. Nor does CEI's effort to collect the excise tax constitute an anti-ccmpetitive practice. The Administrative Law Judge found that the City's 3

$ past inability to furnish reliable, dependable service on the MELP System has bee,n due primarily to incorpotent managcment and inefficient operation.

, Exceptions City excepts to the decision of the Administrative Law i

Judge in four respects.

i First, prior charges to the City should be computed

under the rates contained in e City ordinance rather than the tarif f on file with the FPC. City argues that when City

! I of ficials signed the letter agreement with CEI, which I

subsequently was filed with this Commission, it was with the k

+

" ** emanume m eye = ess **pm . e -eime== =se =emmeog ,

-- - - - . . ~ . . - - , , . - .---,_ m--,- , - ,. .-

i. n Docket Nos. E-7631, et al. '

b J'

understanding that the rate provisions of the letter agree-ment were identical to those contained in the ordinance.

Second, the increased rates for service at various load trans fer points cannot be supported. City urges that the increane, cmcunting to at least 50 percent, is in violation ,

of price guidelines and it permits CEI to retain an anti-competitive advantage over City.

Third, City states that the provision permitting the temperary 69 RV emergency interconnection to be operated non-synchronc :s , open-switch, is deleterious to the main-tenance of re liable service to City.

Finally, City urges that it has shown anti-competitive e

practices on the part of CEI and that such practices shculd l be considered in regulating the relationship between City and CEI.

CEI exccpts to the decision with respect to some aspects of the proposed rates for, and to certain terms and condi-tions o f , service through the interconnections. CEI further

excepts to tne cisallowance .in its rates or a ccmuonent to cover an unio excise tax on gross receipts: the failure of I

I the Administrative Law Judge to order prompt payment of amounts due f r past services rendered; and the failure to j provide a time limitation on the duration of the permancnt i

i interecnnection.

i l Our Staff took no exception to thc decision.

Discussicn The Administrative Law Judge's decision should be modified in the fcllowing respects: ,

(1) The rates should be adjusted to include the i ef fects of the Ohio grcss receipts tax, upon condi- .

j tien, h e' re ve r , that in the event such tax shall be i fcund to be unlawful, CEI shall promptly modify its rates to eliminate the effect of such tax and shall refund to City its preporticnate share of any re-funds of ta:. monics theretofore paid by CEI including any interest therecu received by CEI; l l

1 l

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~

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I Docket Nos. E-7631, et al. i i f i

1 (2) The rate for continued load transfer service should be modified to reinstate the 0.7 mills for i administrative and overhead costs and the 0.7 mills for the Chic excise tax; i

l I (3) The tariff should provide an incentive for l

prompt payment of bills and continuing additional 4

) charges in the event prompt payment is not made; I ,

(4) The service rendered'by CEI to City should i

be for a limited term with provision for continuation I thereafter from year to year until terminated by one

! of the parties; and i

j (5) Certain of the ordering paragraphs in the i Initial Decision should be recast as conditions rather l than orders, recognizing that we have limited juris-1 diction over City.

i The Ohio Excise Tax City argues that the imposition of an excise tax by

' the State of Chio en re tenues of CEI derived frcr helcrale business is unconstitutional, even tnough CEI is, in fact, l currently paying the tax and believes it to be legal. All parties recognize that the legality of such a tax is not an

! issue over which this Ccmmission has jurisdiction. Our l Staff urged, hcwever, and the Administrative Law Judge de-i cided, that this cost should be excluded frca CEI's rates, i to be reinstated only upon a final determinat ion that such tax is legal. ,

I It has been argued that if this tax is climinated from

the presently prcposed rates, and if it is found that such i tax may be legally collected, CEI may file to adjust its rates prospectively. We must reject this proposal as being 3 ,

wholly inconsistent with the teachings of Ec;c, wherein it

. was stated that a regulated public utility is entitled to

~

recover its reasonably and prudently incurred costs as well

,i 2 as a reasonable return en its investment. -1/ The effect of i

1 l .

1/ P.P.C. v. Ucce Natural Gas Co. , 320 O.S. 591, 603 (1944) i s

- - . . . e..-....-..-. . - . . . . - -

, . - - . _ . _ _ . - _ _ . , - ,-,-. .m - . , .

_ -- m .__.. ..

+

1

) .

' Docket Nos. E-7631, et al. - -

4 i this proposal would necessarily deprive CEI of the opportunity .

I to recover this cost for the pericd until new rates may be put into effect in the event the tax is upheld.

The Administrative Law Judge would seemingly avoid this result by ordering reparations upon a final determination .

th at the tax may be legally imposed. Such a solution might i i

appear to be equitable to both parties if we were empowered to order such reparations. We doubt, however, that the a Federal Power Act grants us that authority. Ne are, however, fully authorized to condition this order to require CEI to j reduce its rates and refund any excessive revenues collected i under rates herein ordered in the event that it is subse- l quently determined that CEI is not legally required to pay i this tax. .

i Rate for Continued Load Transfer Service 4

) , CEI proposed a 17.5 mill rate for continued service at existing load transfer points. On cross enamination, CEI i

! indicated a bare bones cost of 15.2 mills for this service.

(Tr . 802) Staff, on brief, recommended the fl:t rate of

13.8 mills adop:cd by the Administrative Law Judgc. The

! Staff figure was derived by subtracting 0.7 mills for the j i Ohio excise tun and 0.7 mills of administrativa and overhead j  ! costs fren the 13.2 mills. As indicated, supra., we believe j the inclusion of the Ohio excise tax in rates is appropriate.

l  ! CEI's rate contained in Exhibit 10C included an admin-

! istrative and overhead cost component which utilized a ratio 1

of 10 percert of energy related costs. The record demon-1 strates that this is the usual allowance in interconnection rates. The parties do not question that this is a commonly l

used rule-of-thumb estimate in the industry, but our Staff l would, neverthclass, reduce the allowance frca 1.2 mills to .

l 0.5 mills on the theory that meter reading and billing under

~

! the proposed flat rate schedule would be simple and inexpen-

[ sive. The record indic.=tes that administrative and overhead .

expenses include a number of items other than meter reading and billing. We cannot find any evidence that the industry figure of 10 percent chosen by CEI is unreasonable. We will, l therefore, modify the rate determined by the Administrative l Law Judge to include the full impact of CEI's estimated i administrative and overhcad cost.

1 t

i

, a S

-r, v-, ---,,,, , - ,- ---., .-a.,o. - , - - , . , , - - . -,,rm -,-------e -

P-

. Docket Nos. E-7631, et al. ,

Payment Provisions l City has for some time refused to pay, or han been quite late in paying, certain bills rendered by CEI. We are here exercising our authority under 202 (b) of the Federal Pouer Act and ordering that CEI interecnnect its system with that of City. In so doing, we may not, lawfully, impose an undue t burden upon CEI. Accordingly, we shall provide that bills rendered by CEI to City shall be increased by 5 percent if not paid within 45 days, and an additional 1 percent per 1

month after 60 days until paid. None of these charges shall be assessed against City if it pays its bills promptly. The

imposition of an additional 5 percent af ter 4 5 days should act as an inducement for prompt payment by City and City has agreed that this is a reasonable tariff condition.

However, this provision will not adequately protect CEI i in the event payment is not made over a prolonged period of time. The irposition of an additional 1 percent per month appears proper for the follcwing reason. An allowance for the cost of working capital as a part of rate base is prop-erly included in a cost of service. The total impact of I rate of return plus related state and Federal income taxes i . . ..

wl ave ayu asuu. iz percent annua 11y.

T n.e 2 percent per i month addition to bills rendered by CEI to City but not paid within 60 days is not intended to be in the nature of a fi penalty, but rather, in effect, tracks the increased cost to I CEI of providing additional zorking capital i:' recognition of the added time lag between the incurrence of costs by CEI 3

and the rcccipt of revenues frca City.

I Term of the Acreement "

1 CEI asks that the per=anent interconnecticn agreement

, run for a pcried of five years from the time the intercon-

[

nection is first placed into service, cancellable thereaf ter j at any time on one-year's notice by any party. Such a pro-

) vision appears to be reasonable. In setting a term of five I

years on this agreement, it is not cur intent that the parties

, enter into a centract with a fi::ed rate for that term. He have previcusly indicated cur displeasure with the Mobile -

i l

Docket Nos. E-7631, et al. sierra 2/ rule, and our intent to require a showing that a fixed-rate contract is in t'.e public interest. 3/ In our view, the objectives of regulaticn are best achieved when rates may be adjusted to reflect changing cost conditions.

Recent experience indicates that such cost conditions may not be accurately foreseen -- particularly for periods as long as five years, i

! Initial Decision -- Orderinc Paragraphs l

In his decision, the Administrative Law Judge directed City to perform certain acts. We agree with the objectives of the Administrative Law Judge, however, these provisions i should be recast as conditions precedent to the making of i

this order ef fective rather than orders .

l The Commission Orders (A) The Initial Decision of the Presiding Administra-tive Law Judge is mcdified as follows:

(i) Delete the first sentence of ordering para-graph (A) e.nd si_bstituta therator, "A per.ancn lJs KV synchronous interconnecticn, uith a capacity of 100 M'/A, connecting the City's Lrke Ecad Plant and CEI's Lake Shore Plant chall be established to supply

, emergency service to the City provided the City and i CEI within 30 days frcn the date of issuance of this order indicate to this Commission their agreement to the folicwing terms and conditions :"

(ii) Add to ordering paragraph (A) the following i trao provisicas:

2/ Uni ted Gas Pipe I.ine Co . v. Mobile Gas Service Corp.,

350 U.S. 332 (1956); F.P.C. v. Sierra Pacific Pc<: r Co.,

350 U.S. 348 (1956). fee c.a., Carolina Power & Lic .:

Co., Opinion No. 608, issued January 3, 1972.

3/ Philadclchia Electri~c Co., Decket No. E-7726, Order issued August 31, 1972.

T t.

l l* *.

s Docket Nos. E-7631, et al. }

i f (7) The City shall begin construction of the 138 KV permanent interconnection facilities  !

i in the shortest reasonable time and shall have the facilities in operating condition within a period of two years of the issuance of this order. CEI l

shall notify the Commission when the interconnec-

' tion is established and operative.

(8) The City and CEI shall enter into an j agreement with respect to the 138 KV interconnec-tion consistent with the provisions of this order, 1

such agreemen: to be for an initial term of five i years from the commencement of service through 4 the 138 KV interconnection and to continue there-i after frca year to year until cancelled upon one year's notice by either party.

(iii) In ordering paragraph (C) delete the term l "16.8 nills per kilowatt hour" and substitute therefor "17.5 mills per kilowatt hour", and delete the words

" exclusive of the State of Ohio Excise Tax."

nu) Delete ordering parauraph D and su'estituta

)

' therefor.

(D) Bills to the City for the continuation cf the load transfer service, the 69 KV Emergency Interconnection and the 133 KV permanent inter-connection shall be paid within 45 diys from

' 1 receipt of the bill. If not paid within 45 dayc, l

5 percent is to be added to the bill, and if not paid within a total of 60 days frca the receipt

} of the bill then 1 percent per month, or portion I

thereof, will be added to the bill thereafter i until paid.

(v) In ordering paragraph (E), delete the words "13.8 mills per kilowatt hour" and substitute therefor "15.2 mills per kilevatt hour."

(vi) In ordering paragraph (G), delete the first s e r.tence .

{

l i

S

+- - - ~n - ,. n- -

Docket Nos. E-7631, et al. (vii) Delete ordering paragraph (H), and substi-tute therefor:

(II) In the event it is deterr. tined that CEI is not legally required to pay the Ohio Excise Tax on revenues derived from sales to City, CEI '

i i shall within 30 days from the date of such de-i termination file rates to eliminate such tax and flow-through to City its proportionate share , ,

I of any refunds, including interest thereon, l

received by CEI as a result of such determination.

i (B) The Administrative Law Judge's decision issued in ,

this proceeding on July 12, 1972, is modified as herein set i forth and as so modified is adcpted by the Commission as of the date of issuance of this opinion, to constitute with l this cpinion the Commission's decision in this case. Excep-I tions to the Administrative Law Judge's decision not granted herein are denied.

l l By the Commission.

4 i

4

t s.A.u a

1 Mary B. Kidd ,

Acting Secretary.

I i

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- . . . - - - , , , . . . . . - . . .. ,. ~ - ..- - , -- . - . . - . , , _. , , .

> a RECEIVED

• - FEB 8 1973 m

3 :.e

.I $

ep (Il9. %}h orner or D. H. N AUSEn_.

RALPH J. PERK. MAYOR O C P A R T k:C 'e T O F L A W ROOM 213 o CITY HALL CLCVCL AND. CHIO 44114 a 14CRDCRT R. WHITING (294) 494+2000 DeRCCTOR February 7,1973 Kenneth F. Plumb, E squire Se c re ta ry Federal Power Commission Washington, D. C. 20426

~

Re: Cleveland v. CEI E 7713 Dea e Mr. Plumb:

Enclosed for filing are an original and fou teen (14) copies of Cleveland's Application for Rehearing i- the above mat c r.

Very truly fc urs, Brown, Todd & Heyburn

}  !

n, By ,"df s d'I! %

6 Philip P. A rde r\-

1600 Citi .cns Plara Louisville, Kentuchf 40202 l

- i 1

UNITED STATES OF AMERICA

. ' FEDERAL POWER COMMISSION City of Cleveland, Ohio )

) Docket Nos. E-7631

v. . ) and E-7633

)

Cleveland Electric Illuminating )

Company )

)

and )

)

City of Cleveland ) Docket No. E-7713

)

APPLICATION FOR REHEARING OF OF THE CITY OF CLEVELAND The City of Cleveland, Ohio (Cleveland) hereby applies for a rehearing herein pursuant to Commission Rules of Practice and Procedure, Section 1. 34 and state s as its grounds relied upon:

(1) The Order of the Commission of January 11, 1973 does not provide for a permanent 138 KV synchronous interconnection between Cleveland and Cleveland Electric Illuminating Company (CEI) c:< cept upon agreement by CEI. To the best information of Cleveland, CEI has not so agreed and Cleveland believes CEI will not so agree.

(2) Cleveland he reby indicates its agreement to said interconnection, but objects to those provisions of the Comminsion's Order of January 11, 1973 insofar as that order is inconsistent with the initial decision of the

I i

. . - i I

i Presiding Administrative Law Judge. C,leveland specifies as error the

/ failure of the Commission to adopt the initial decision of the Presiding Administrative Judge as modified by the exceptions filed by Cleveland, August 9,1972.

(3) Since the Order of the Commission, matters have arisen indicating

. that owing to the fault of CEI, it has been impossible to use a non-synchronous 69 KV inte rconnection in the manne r contemplated. On all occasions to date during eme rgencies when Cleveland has sought to energize the 69 KV interconnection, inordinate delay on the part of CEI has resulted in serica and unnecessary conditions in the Cleveland system and failure of the inte rconnection to operate as contemplated.

(4) Since the 69 KV interconnection was made, it has been established that n 69 KV synchronous inte rconnection is practicabl.e and workable, and impose s no burden upon CEI. It has been established also that a non-synchron:

inte recnnection such as the Commis sion ordered is not suitable to provide emergency service to Cleveland.

WHERE FORE, ' Cleveland re spectfully requests that rehearing be granted he rein.

Respectfully submitted, BROWN, TODD E< HEYBURN By:  ; ill,*p l , I 0. W Philip 11. A rde ry 1600 Citir.cns Plaza Louisville, Kentucky 40202 Februa ry 7,1973.

4 -

. . n

. a STATE OF OHIO l i SS:

COUNTY OF CUYAHOGA i VERIFICATION PHILIP P. ARDERY, beint: duly sworn, states that he is Counsel for the City of Cleveland herein that he has read the foregoing Application for Rchcaring and the matters of fact sta+.ed therein are true as he verily believes. ,

ik

-/

\i..\.A 1 . .O("f%

PHI L1 ? P. A R D E R 'i s i

\.

SWORN TO BEFORE ME by Philip P. Arderf, this 7th day of Feb rua ry , 1973. /

/

! x l l d A& ~ s ./ .

G'llL'. '

Sc:ary Public -

l'i, tc.;i'i hs k 4 <t & i: O: d y W~:'.

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o

( -

I CERTIFICATE OF SERVICE

I hereby certify that I have this day served a copy of the foregoing document upon all parties of record in this proceeding in accordance with the requirements of Section 1.17 of the Rules of Practice and Procedure.

Dated at Cleveland, Ohio, this 7th day of February, 1973.

d 4 d.?O Pd.)'. M Philip \P. A rde r,, dgunsel fo r the City of Clevelt.nd, Ohio e

n i .

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. s 1 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY CLEVELAND f

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I F02 YG'JR !!;F0E!.' Il0 I UNITED STATES OF N ERICA B.Ry 1 !,':MMPJS FEDLR/1 PO11K CC:OlISSION RE D & fittest W,$H.. D. C. 0m0E -

/

City of Cleveland', Ohio ) Docket Nos. E-7631 and ,

v. ) E-7633 Cleveland Electric Illuminating )

Company )

and ) -

City of Cleveland ) Docket No. E-7713 ItECEIVED MAR M973 N0 RICE or c.ucSION OF TDIE ,@

(February 12, 1973) j

' On February 12, 1973, the City of C1cveland, Ohio, (City) i filed a telegran rec.uesting that the execution of j Opinica No. 644 and order in the above-desigr,ated natter be stayed until 90 days subsequent to s final deterninstion by the Corriission of City's applicaticn i.

for rehearir.g.

Upon consideration, notice is hereby given that the time within whic'.i City and Cleveland Electric 111.:nir.cring Company shall indicate Oc the Comr.ission their I; rec-cent to the terns and conditions of Opinion No. 644 i t. er. tended pending action by the Cenni.ssion en the

( application for rehearin; filed by the City of Cleveland v

on February S, 1973.

I i .

! ~

l ns ~> C /*A f

? /k3o?. WiiA.'%)~

Kenneth F. Plunh t Sccretary i

tc.:s l

I .. .-

i