ML19338E506
| ML19338E506 | |
| Person / Time | |
|---|---|
| Site: | South Texas, Comanche Peak  |
| Issue date: | 10/01/1980 |
| From: | Oneil R MILLER, BALIS & O'NEIL, SOUTHWEST TEXAS ELECTRIC COOPERATIVE |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| ISSUANCES-A, NUDOCS 8010030125 | |
| Download: ML19338E506 (22) | |
Text
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION 2
) /p BEFORE THE ATOMIC SAFETY AND LICENSING BOARD g
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In the Matter Of:
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HOUSTON LIGHTING & POWER COMPANY (South Texas Project, Docket Nos.
Units 1,and 2) 50-498A, 50-499A TEXAS UTILITIES GENERATING COMPANY, Docket Nos.
et al. (Comanche Peak Steam 50-445A, 50-446A Electric Station, Units 1 and 2)
STATUS REPORT OF TEXAS BORDER COOPERATIVES By their September 24, 1980 " Comments on Proposed Settlements" the Texas Border Cooperatives advised the Licensing Board that the proposed settlement entered into between the Staff of the Nuclear Regulatory Commission and certain other parties to these consolidated proceedings failed to alleviate their concerns over the competitive implications of d.c. versus a.c.
interconnections.
They represented further, however, that they were negotiating actively with Central and South West Corporation ("C&SW")
and hoped that an agreement would be reached which would allow them to withdraw their. opposition to the d.c. pro-l po, sal.
The Texas Border Cooperatives advised that they l
would report 't$o the Board by October 1, 1980 in the status of those negotiations.
80200301LT
9 The Texas Border Cooperatives have actively negotiated with C&SW during the past week to clarify and confirm the details of the generating and transmission opportunities
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which C&SW previously had indicated it would make available -
to'the Texas Border Cooperatives, and which the Texas Border Cooperatives believed would allev.iate the detrimental aspects of a d.c.
interconnection.
C&SW's attorneys tele-copied a formal settlement document to counsel for the Texas Border Cooperatives on Tuesday, October 30, 1980, but review of the document revealed several critical limitations which made it unacceptable.
Counsel for the Texas Border Cooperatives has conferred with' counsel for C&SW in an effort to resolve the remaining differences.
The Texas Border Cooperatives do not view the differences as insurmountable, but must report to the Board at this time that an accord has not been reached with C&SW that would permit the Texas Border Cooperatives to accept the limitations that would be created by a settlement predi-l cated upon the construction of d.c.
interconnections.
l Accordingly, the Texas Border Cooperatives must at this time
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continue to pursue their intervention before the Nuclear 1
l Regulatory Commission in these consolidated proceedings, and oppose the proposed settlement.
In regar'd to their intervention petition, the Texas Border Cooperatives would invite the Board's attention to two recent developments at the FERC in Docket No. EL79-8.
As anticipated in their September 24 " Comments of the Texas Border Cooperatives on Proposed Settlements" (pp. 4-5) the Justice Department ("De' par tment") is being met with opposi-tion in its efforts to contest d.c.
interconnections at the FERC.
Attached as Appendix A is a copy of the " Answer of the Central and South West Companies to the Petition of the United States Department of Justice for Leave to Intervene" in Docket No. EL79-8, which cites the Department's con-currence with the NRC settlement for the proposition that it cannot pursue antitrust issues before the FERC.
Attached as Appendix B are the substantive comments filed by the Department in opposition to the d.c.
interconnections.
Respectfully submitted, THE TEXAS BORDER COOPERATIVES Robert'A. O'Neil Miller, Balls & O'Neil, P.C.
776 Executive Building 1030 Fifteenth Street, N.W.
Washington, D.C.
20005' l
(202) 333-4500 l
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APPENDIX A
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UNITED STATES OF AMERICA BEFORE THE I
FEDERAL ENERGY REGULATORY COMMISSION Ce'ntral Power and Light Company
)
Public Service Company'of Oklahoma
)
Docket No. EL79-8 Southwestern Electric Power Company
)
West Texas Utilities Company
)
ANSWER. 0F THE CENTRAL ' & SOUTH NEST COMPANIES TO THE PETITION OF THE UNITED STATES DEPARTMENT OF JUSTICE FOR LEAVE TO INTERVENE On September 17, 1980, tIhe United States Department of Justice ("the Department") filed a Petition for Leave to Intervene in these proceedings, alleging generally that the construction of direct current asynchronous interconnections between the Electric Reliability Council of Texas ! ~(ERCOT) and the Southwest Power
- Pool (SWPP ) pursuant to the Amended Application filed June 27, 1980, instead of alternating current synchronous interconnections, "could have effects on utilities both in ERCOT and SWPP and throughout the south-western United States that would be anticompetitive, incon-sistent with the public interest and contrary to the Public Utility Regulatory Policies Act of 1978. "
The Central &
South West Companies
("CSW"),* applicant.s herein, hereby file their Answer to the Department's Petition for Leave to
- Intervene.
The CSW companies a.re Central Power and Light Company, Public Service Company of Oklahoma, Southwestern Electric Power Company and West Texas Utilities Company.
4 CSW doac not object per na to tha Department's proposed intervention in these proceedings, CSW'would, however, po' int out that the Depart' ment has been a partici-pdnt' in proceedings (I.n The Matter of Houston Lighting & Power Company, et al. (South Texas Proj ec.t, Units Nos. 1 and 2) and Texas Utilities Generating. Company, et al.
(Comanche Peak Steam Electric Generating Station, Units 1 and 2)
(Nuclear. Regulatory Commission Docket Nos. 50-498A, 499A, 455A and 446A)) which were initiated to determine whether the absence of interconnections' between ERCOT and the SWPP would " create or maintain a situation inconsistent with the antitrust laws" pursuant to Section 105(c) of the Atomic Energy Act of 1954.
In both of those cases, the Department, on September 12, 1980, signed a Stipulation to the effect that the licensing of the South Texas Project and Comanche Peak nuclear units under certain license conditions agreed to by the applicants for operating licenses for those units, the Department and the NRC Staff, will not create or main-tain a situation inconsistent with the antitrust laws or the policies thereunder and agreed to withdraw its request that the NRC conduct a hearing pursuant to Section 105(c) of the Atomic En,ergy Act.
(Copies of these Stipulations, uith the agreed-upon license conditions, are attached he,reto as Exhibits 1 and 2.)
One of the provisions in the license conditions which form the basis for the Department's stipu-
'lation that. licensing will nbt create or maintain a situa-tion inconsistent with the antitrust laws is that th'e CSW
9 Companies, Texas Utilities Companies
- and Hou.ston $ighting &
Power Company "shall use their best efforts to modify the of.fer of settlement filed in [this docket] to include each of the undertakings set forth in the letter agreement" dated September 11, 1980 among those parties and the FERC Staff Counsel participa~ ting in this' case..The offer of settlement as modified by the September 11, 1980 letter of agreement expressly.provides for the construction of' direct current asynchronous electrical interconnections between ERCOT and SWPP.
The Department thus finds itself in the somewhat anomalous position of having entered into Scipulations in the NRC proceedings (wherein antitrust issues are of central importance) which effectively state that the construction of direct current interconnections pursuant to certain commit-me'nts contained in the letter agreement will not create or maintain a situation inconsistent with the antitrust laws or policies, while at the same time seeking to intervene in this docket (in which antitrust issues are at most of only peripheral relevance) in order to advocate the position that the construction of the same direct current asynchronous intercohnections may have anticompetitive effects on utili" ties throughout the southwestern United State's. ' As noted at.
the outset, CSW does not' object to the proposed intervention -
Dallas Power & Light Company, Texas Electric Ser-vice Company and Texas Power & Light Company.
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v by tha D3partment in these proceedinge, but would only stata that the broad antitrust issues which the Departr5ent seeks to interjec't in these proceedings 'have already been resolved
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to tihe satisfaction of. the Department in the NRC proceed-ings, in which the Department has in effect already giv,en its approval under the antitrust laws to direct current
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asynchronous interconnections.
Respectfully submitted, ISHAM, LINCOLN & BEALE 7
(
f Attorneys for THE CENTRAL AND SOUTH WEST COMPANIES Suite 325 1120 Connecticut Avenue, N.W.
Washington, D.C.
20036 202/833-9730 One First National Plaza Chicago, Illinois 60603 312/558-7500 Dated:
September 24, 1980 O
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APPENDIX B UNITED STATES OF AMERICA BEFORE THE FED.ERAL ENERGY ' REGULATORY COMMISSION CENTRAL POWER AND LIGHf COMPANY,)
PUBLIC SERVICE COMPANY OF
)
0KLAHOMA, SOUTHWESTERN ELECTRIC )
Docket' No. EL-79 POWER COMPANY, AND WEST TEXAS
)
~-
UTILITIES COMPANY
. )
COMMENTS-0F THE DEPARTMENT OF JUSTICE CONTESTING THE OFFER OF SETTLEMENT Pursuant to Section 1.18(e)(2) of the Rules of Practice and Procedures of the Federal Energy Regulatory Commission, as amended by Order No. 32, 1/the Department of Justice ("De-partment") hereby respectIully files with the Presiding Adminis-trative Law Judge Comments contesting the " Offer of Settlement" in the atove-captioned proceeding filed on July 28, 1980, by Central Poser and Light Company ("CP6L"), Public Service Company.
of Oklahoma ("PS0"), Southwestern Electric Power Com any
("SWEPC0") and West Texas Utilities Company ("WTU") p(collec-tively referred to as "CSW"), and D'allas Power 6 Light Company
("DPGL"), Texas Electric Service Company ("TESC0"), Texas Power 6 Light Company ("TP6L") (collectively referred to as "TUCS")
1 and Houston Lighting 6 Power Company ("HL6P").
I.
Background
A significant portion of the electricity consumed in the State of Texas is produced, transmitted and sold by electric utilities which do not operate in interstate commerce., These exclusively intrastate utilities include TUCS and HLGP.
- TUCS, HL6P and other utilities operating solely within Texas are mem-bers of the Electric Reliability Council of Texas ("ERCOT").
Applicants CP6L, PSO, SWEPC0 and WTU are all operating subsidi-aries of Central and Southwest Company, a public utility holding company.
CPSL operates entirely within Texas and i.s a member of ERCOT.
h*TU is a bifurcated system:
its Northern Division ha.s historically operated in interstate commerce, whereas its South-ern Division has operated solely in Texas and is a member of ERCOT.
PS0 and SWEPC0 operate in interstate commerce.
Both are members of the Southwest Power Pool ("SWPP"), an interstate c,o-ordi:mted and interconnected group of utilities in Oklahoma, Louisiana and a small portion of Texas,. bordering ERCOT's terri-tory.
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Procedure for Submission of Settlement Agreemehts, Docket Ko. RM78-16 (Issued June 13,.'1979).
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Beginning in 1974 CSW sought the cooperation of TUCS and HLGP in establishing interconnections that would electrically integrate CSW's SWPP subsidiaries and its ERCOT subsidiaries.
A~fter TUCS and HLSP declined to accede'to CSW's proposal, WTU, on May 4, 1976, energized certain radial ties and began trans-mitting power from Texas to PS0 for resale to customers in Okla-homa.
Immediately upon being informed of the interstate inter-connection, TUCS and HLGP, in order to avoid FEP.C jurisdiction, 1
disconnected from CPGL, WTU, each other and other utilities in Texas.
While TUCS and HLGP reconnected to one another within a matter of days, these utilities did not reconnect with other utilities in ERCOT unt.il issuance of an order by the Texas Pub-lic Utility Commission ("TPUC") nearly a year after the original disconnection. 2/
In addition, the TPUC Order of May 1977 precluded CPSL and WTU from operating in interstate commerce and required any utility. operating solely in Texas to obtain prior TPUC or Federal Power Commission approval for future operation in interstate commerce. 3/
In 1978 the Public Utility Regulatory Policies Act ("PURPA")
was enacted.
Under PURPA, the FERC is authorized, inter alia, to establish interconnections between SWPP utilities an3 ERCOT utilities without the latter coming under FERC jurisdiction for 2/
Public Utilit 14, Final Urder (May,1977)y Commission of Texas, Docket No.
and Amended Final Order (July 11, 1977).
TUCS and HLGP could have reconnected prior to the TPUC orders without subjecting themselves to the jurisdiction of the Federal Energy Regulatory Commission ("FERC").
See Order Rejecting In Part and Accepting In Part Application For Action Pursuant to Section 202, FERC Docket No. E-9558 (Issued July 21, 1976).
As a result of Commission action in Docket No. E-9558, CPSL and WTU's South-ern Division are now interstate utilities regulated by the FERC under Section 201 of the Federal Power Act.
Even though both TU and HLGP are interconnected, directly or indirectly, with CPSL and WTU, the Commission in Docket No. E-9558 held that TU and HLGP were not interstate utilities.
The Commission's order in Docket No. E-9558 was remanded by the Court of Appeals in Cen-tral Power 6 Light Co. v. FERC, 575 F.2d 937 (D.C. Cir. 1978) i and currently is under reconsideration by.the Commission.
3/ The FERC has participated in a challenge to the TPUC Order in the United States District Court for the Western District of Texas, Civil Action No. A-77-CA-86.
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ratemaking purposes.
On February 9, 1979, CSW filed an applica-tion 4/ in the instant proceeding for approval of four al-ternating current (synchronous) interconnections ("AC Intercon-nection" or "AC grid") between ERCOT and SWPP under Sections 202-204 of PURPA.
16 U.S.C. 55 824i, 824j, 824k (1978).
TUCS and HLGP opposed CSW's' Application.
On June 27, 1980, in an attempt to settle, inter alia, the instant FERC proceeding and a related proceeding before the Nuclear Regulatory Commission ("NRC"), 5/ CPGL filed an amended application 6/ seeking approval under PURPA of two direct current (asynchronous) interconnections ("DC Interconnec-tions") between ERCOT and SWPP.
The Offer cf Settlement, which was signed by CSW, HLGP and TUCS, effectuating the proposal set forth in the Amended Application, was filed on July 28, 1980
(" Offer of Settlement").
In addition to the Offer of Settlement, CSW, TUCC, HL6P, the FERC Staff and the NRC Staff recently have entered into a sup-plemental letter of understanding (" Letter Agreement") with re-gard to conditions to be attached to the proposal contained in the Offer of Settlement.
The conditions include rate methodolo-gies for wheeling to, from and over the DC interconnections, reservation of capacity for firm power wheeling, and the oppor-tunity for participation by other utilities in the ownership of incremental capacity increases in the DC interconnections.
4/
Application of Central Power and Light Company and Others Tor Exemption from State Commission Orders Preventing Voluntary Coordination Pursuant to Section 205 of the Public Utility Regu-latory Policies Act of 1978, and Interconnection of Facilities, Provision of Transmission Services and Related Relief Pursuant to Sections 202, 210, 211 and 212 of the Federal Power Act ("Ap-plication").
5/
Houston Lighting and Power Co.,
(South Texas Project, Units 1 and 2), Docket Nos. 50-498A, 50-499A; Texas Utilities Generating Company (Comanche Peak Steam Electric Station, Units 1 and 2), Docket Nos. 50-445A, 50-446A.
The NRC proceeding in-volved the issue of whether the intrastate-only operations of certain ERCOT utilities would create or maintain a situation in-consistent with the antitrust laws or the policies underlying those laws under section 105c of the Atomic Energy Act of 1954.,
Applicants for the nuclear licenses in that proceeding, includ-ing TUCS and HLGP, have reached a settlement agreement with the governmental parties therein which was tendered to the NRC Licensing Board on September 15, 1980.
6/
Amendment to Application of Central Power and Light Com-pany and Others for Interconnection of Facilities, Provision of Transmission and Related Relief Pursuant to Section,s 210, 211 and 212 of the Federal Power'Act (" Amended Application").
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II.
Description of the Offer of Settlement
- -The proposal contained in the Offer of Settlement would re-quire CSW to construct a direct current asynchronous intercon-nection of 200 mw capacity between PS0 near Lawton, Oklahoma and WTU near Oklaunion, Texas (" North In.terconnection").
CSW and
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HLGP would be required to construct a 500 mw direct current i
asynchronous interconnection between SWEPC0 near Walker County, Texas and the South Texas Nuclear Project (" South Interconnec-tion").
The Offer of Settlement includes terms and conditions for ownership participation by other entities and rates for wheeling. power over the DC interconnections.
The Letter Agreement of September 11, 1980, supplements and, in some instances, supplants terms in the Offer of Settlement.
It requires each owner of the DC lines to file a single wheeling tariff with the Commission, to, from, and over the DC intercon-nections which, inter alia, incorporates each relevant system's DC transmission costs in the overall transmission costs of that system; provides for a reservation of capacity in the lines for certain firm power wheeling for a minimum of five years after each DC facility goes into commercial operation; and provides for planning and participation by other entities in the owner-ship of incremental capacity in the DC lines. 7/
III. CONTESTED ISSUES The Department contests the DC interconnection proposal as set forth in the Offer of Settlement as proposed to be modified by the Letter Agreement, on the grounds that, it is not clear that the proposal will meet the requirements of PURPA.
It is undisputed by the Offer of Settlement that interconnections be-tween ERCOT and SWPP are necessary and are in the public inter-est.
The Department believes that AC interconnections between ERCOT and SWPP may have procompetitive features which DC inter-connections would not possess.
Moreover, the Department be-lieves that DC interconnections exhibit anticompetitive charac-teristics not associated witn AC interconnections, and that con-ditions cannot be imposed upon the DC interconnections that would render those interconnections the competitive equivalent of AC interconnections.
Further, there are no apparent cost or system reliability reasons which would warrant the construction of the proposed DC interconnections *rather thah AC.interconnec-tions as the initial mode of interconnection between ERCOT and SWPP.
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In addit' ion, the Letter greement obligates TUCS to file a single tariff for wheeling power to and from the DC intercon-nections.
A.
The Legal Standard To grant an application for an interconnection under PURPA, the~ Commission must find that the interconnection (1) is in the public interest, (2) would (a) encourage overall conserv'ation of energy or ca'pi-
- tal, (b) optimize the efficiency of use of facilities and resources, or (c) improve the reliability of any electric utility system or Federal power marketing agency to which the order applies, and (3) meets the requirements of Section 824k of this title.
16 U.S.C. S 824i(c). 8/
In determining whether an interconnection application under PURPA meets the first criteria, that it be in the "public inter-est," the FERC must consider the impact of the interconnection on competition..
The Supreme Court has held that in implementing the public interest standard under the Federal Power Act, FERC must give due consideration to competition. 9/
FERC's obli-gati.on to consider competition under the PURPA amendments to the Federal Power Act ("FPA") is no less compelling than it is under the unamended FPA.
Accordingly, the FERC cannot determine that a contested interconnection is in the "public interest" within the meaning of PURPA if there is evidence in the record that an alternate mode of interconnection would not provide substan-tially similar benefits while posing fewer c'ompetitive risks.
In this proceeding, FERC must consider whether an AC grid would achieve substantially the same benefits as the proposed DC interconnections without creating the same anticompetitive ef-l fects.
FERC can make this determination by comparing the pro-posed DC interconnection in the Offer of Settlement as proposed I
to be modified by the Letter Agreement, with the AC interconne'c-tion CSW initially proposed.
Should the record demonstrate 8/
Section 824k adds Section 212 to the Federal Power Act.
l Section 212 requires the Commission to make additional findings before ordering wheeling or interconnections.
9/
Gulf States Utilities v. FPC, 411 U.S. 747 (1973); FPC v.
Conway Corp., 426 U.S. 271 (1976).
that, for example, the original CSW AC proposal exhibits fewer anticompetitive characteristics than the DC proposal and pro-vides comparable overall conservation of energy or capital, ef-ficiency in the use of facilities or resources, or improvement in the reliability of the' electric systems to be interconnected, then FERC cannot at the same time find that the instant DC in-terconnection proposal meets the "public interest" standard of PURPA.
The Commission has already. ruled in Order No. 32 that the proponents of an Offer of Settlement continue to bear the burden of proof that their proposal satisfies the statutory cri-teria.
B.
Benefits of AC Interconnections AC inte'rconnections are the normal mode of interconnection in the electric power industry throughout the United States.
DC interconnections have-been utilized, to date, primarily for providing stability in special circumstances or for high voltage long distance transmission of large blocks of power from distant generation sources to an AC grid. 10/
Such is not the case with the DC interconnections contained In the proposed Offer of Settlement. 11/
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Since the enactment of the FPA in 1935, the major electric utilities in Texas have refused to engage in interstate electrical transactions with the remainder of the nation.
As a result, ERCOT is today electrically isolated from the SWPP and any other neigh-boring utilities.
The effect of the isolation has been to pre-clude opportunities for competitive power transactions in the southwestern United States.
Utilities and other generators and customers outside this isolated area are foreclosed from buying or t
selling power, and other entities inside ERCOT are foreclosed from buying or selling electricity outside ERCOT.
The construction of AC interconnections between ERCOT and SWPP would create opportuni-ties for such transactions to a significantly greater degree than would the construction of the proposed DC lines.
AC lines could be constructed at a lower cost per unit of megawatt capacity than DC lines, and would furnish substantially greater capacity for in-terstate transactions than would DC lines.
Thus, AC lines would enable utilities throughout the southwest United States to opti-mize the potential benefits of interstate interconnections.
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The longest such DC line was built after AC synchronous Tines were already operating interstate on parallel paths.
11/
The proposed Northern Interconnection would consist of two.
Fack-to-back terminals, one on each side of the ERCOT-SWPP border at Oklaunion, Texas. 'The proposed Southern Interconnec-tion would consist of a DC line approximately 153 miles long.
See Testimony of Jack C. Wells, pp. 4-5, Offer of Settlement.
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The construction of the proposed AC grid, although of lower capital cost than the DC proposal, would provide substantially more transfer capacity.
An AC interconnected grid between.ERCOT and SWPP, such as that proposed in the Application, provides not only such greater capacity, but also much more flexibility for future power flows and future economic interconnections than does the DC proposal contained in the Offer of Settlement..
Once an AC grid is in plate, additional small capacity AC lines can be easily constructed in the future to meet new needs at rela-tively low cost; smaller utilities in Texas could own and con-struct such smaller capacity AC li~nes as their individual needs dictate.
Thus, if an AC grid is constructed, the market for power flows between ERCOT and SWPP would develop in a manner uncon-strained by artificial historical or technical barriers.
C.
Detriments of the DC Proposal In contrast to AC interconnections between SWPP and ERCOT, the DC proposal poses a number of significant risks to competi-tion and efficiency in power transactions in the southwest United States.
These risks fall into three categories: 1) per-mitting DC interconnections now may prejudice future intercon-nection decisions; 2) DC interconnections could result in greater capital and operating costs to owners and users than AC interconnections; 3) DC interconnections also exhibit other an-ticompetitive, bottleneck characteristics.
1.
The approval of DC lines as the initial means of inter-connections will likely irrevocably dictate the future character of interconnections in a manner that would not occur if AC lines were chosen as the first type of interconnections between ERCOT and SWPP.
Thus, FERC is being called upon to render an opinion that will have an importance which transcends the instant pro-ceeding.
Construction of DC interconnections between ERCOT and SWPP will forestall, or possibly preclude for the foreseeable future, the type of AC grid with the procompetitive benefits mentioned above.
The instant proceeding has its genesis in CSW's need to interconnect its four operating subsidiaries in order to comply with the Public Utilities Holding Company Act, 15 U.S.C..S 79 et seq.
Once FERC permits CSW to interconnect its four operating subsidiaries, it is unlikely that other enti-ties in the ERCOT or SWPP will be willing or able to invest as much capital as will CSW and HL6P in constructing interconnec- -
tions between ERCOT and SWPP.
Instead, the construction of future interconnections between ERCOT and SWPP will be largely predetermined by the interconnections which will have been decided in this proceeding.
If an AC grid were constructed at this time, future intercon-nections between ERCOT and SWPP could be either AC or DC in char-acter.
In particular, once an AC grid is in place, relatively low cost and low capacity AC lines can be constructed with only a min-imal amount of coordinati~on.
The cost ~ of constructing additional DC lines would be unaffected by whether the initial interconnec-tions were AC or DC.
If, however, CSW and HLGP are permitted now to construct DC lines, it will not.be possible to construct the type of low cost AC lines that could have been constructed had an AC grid, rather than DC lines, been constructed at the out-set. 12/
Moreover, once DC interconnections are in place, the cost oT installing the type of AC grid that would have been con-structed if the DC lines had not been built would be substantially greater than the cost of adding incremental capacity to existing DC intercon'nections.
2.
Foreclosure of an AC interconnected grid and the result-ing inability to construct additional AC smaller capacity ties will cause, both in the short and the long-term, a misallocation of resources and will impose artificial constraints on the elec-tric utility industry in the southwest United States.
Once the DC interconnections are in place, all power exchanged between ERCOT and SWPP will be required to pass over these line's, such that some of the power will have to be wheeled great distances even though the geographic distance between the point of origin and the ulti-mate point of destination of that power is relatively short.
Such unnecessary and inefficient wheeling would be obviated by the con-struction of an AC grid, since such a grid would enable utilities to construct AC lines at a greater number of strategic delivery points than that contemplated by the DC proposal.
These AC lines would not pose the locational problems created by a smaller number of DC lines.
It is clear from the testimony of CSW's Senior Vice President for Engineering, Mr. Jack C. Wells, that substantial economic ad-vantages will result from constructing connections between SWPP and ERCOT.
Mr. Wells states (at page 9) that over the period 1984-2000, CSW's total revenue requirements with the DC intercon-nections will be approximately $1.6 billion less than if the in-terconnections are not installed.
Mr. Wells' testimony does not demonstrate, however, whether CSW's total revenue requirements would be even lower, if an AC grid were constructed.
- Moreover, the DC proposal contained in the Offer of Settlement minimizes the extent to which the benefits of CSW's interconnections will be shared with small electric utility systems, and does not compare the. benefits which small systems would obtain from the 12/ It is possible that DC interconnections may permit the construction.of smaller capacity AC interconnections than would be possible' absent any interconnections whatsoever, but only if the AC ties are operated in close coordination with the DC ties.
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construction of an AC grid.
The propcsal, in this regard, does not encourage overall conservation pf energy or capital or opti-mize the efficiency of use of facilities and resources as required by Section 210 of the FPA.
Finally, che DC interconnection may place an undue burden on such small electric utilities, qualifying
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cogenerators and qualifying small power producers, and electric utilities affected by the proposed Offer of Settlement may be un-reasonably impaired in rendering adequate service at a co'mpetitive j
cost to their customers in contravention of Section 212 of the Federal Power Act.
3.
DC lines contain exceedingly restrictive characteristics in addition to those mentioned above which may render such lines
" bottleneck" facilities that would impair, not facilitate, power flows between ERCOT and SWPP.
For example, HLGP and CSW will have daily scheduling control over all transactions over the DC lines.
If AC interconnections with their greater capacity and flexibility were constructed in lieu of DC, much less coordination of long-term planning and daily scheduling would be required.
In conclusion, for all the foregoing reasons, the Department formally contests the Offer of Settlement tendered by CSW, TUCS and HLGP and asserts that such Offer of Settlemnt does not contain substantial evidence for the Presiding Administrative Lew Judge and the Commission to find that the Offer of Settlement is in the public interest and meets the other requirements of PURPA.
PURPA requires a reasoned consideration by the Commission of the effects on competition of approving the proposed Offer of Settlement.
IV.
PROPOSED PROCEDURES The Department, in an effort to expedite hearings on a set-tlement in accordance with 18 C.F.R. 5 1.18(b), recommends the following procedure to compile an adequate record on the contested issues:
1.
That the Presiding Officer issue an order defining the issues and setting down a procedural schedule within 30 days; 2.
That the order provide for a phased proceeding, Phase I
.to require the proponents to show that the Offer of Set-tlement, as compared to AC interconnections, fulfills the requirements of PURPA.
If in the Phase I proceeding it is determined that the Offer of Settlement, as compared to AC interconnections, does not fulfill the requirements of PURPA, a Phase II proceeding shall be held to deter-mine whether the AC proposal as contained in CSW's origi-nal Application complies with PURPA; 3.
That such an order provide a limited period for necessary discovery; i.
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4.
That the parties be required to file simultaneous direct testimony within 45 days of the close of discovery; re-buttal testimony to be filed 30 days from the filing of dir'ect testimony; 5.
That evidentiary hearings for the purpose of cross-examining all persons filing direct and/or rebuttal testimony commence within 30 days of the filing of rebut-tal testimony.
The Department believes that such procedures will allow the compilation of an adequate record, while still expediting the final decision in the case.
V.
CONCLUSION On the basis of the foregoing, the Department of Justice re-spectfully urges the Presiding Officer to issue an order:
1.
Finding that there are contested issues of material fact, and that the record does not currently contain substan-tial evidence upon which the Commission may reach a rea-soned decision on the merits of the contested issues; 2.
Defining the issues to be resolved in the proceeding; 3.
Setting down a procedural schedule to expeditiously con-clude this proce'eding on an adequate record.
Res ectfully submitted, I
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Richard J. F(vfetto Dep 7 AssisFant Attorne General
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6&6nald A. Kap 1an /'
Chief Energy Section 9
Tobert Fabrikant Assistant Chief Energy Section
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t Ndncy H. h/dMi11en'
Fr(5berick rT.
armehte'r
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David A.
Dopsofice
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%Md t. &aen' Mildred L. Calhoun Dated:
September 29, 1980 Attorneys, Energy Section Washington, D.C.
Antitrust Division Department of Justice Telephone No. (202) 724-6624 e
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CERTIFICATE OF SERVICE I hereby certify that on this 29th day of September, 1980, I caused to be served by United States mail, postage prepaid, copies of the foregoing Comments of Department of Justice Con-testing tne Offer of Settlement upon the counsel listed below:
W Nancy H. d Millen Attorney l
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter Of:
HOUSTON LIGHTING & POWER COMPANY (South Texas Project, Docket Nos.
Units 1 and 2) 50-498A, 50-499A TEXAS UTILITIES GENERATING COMPANY, Docket Nos.
et al. (Comanche Peak Steam 50-445A, 50-446A Electric Station, Units 1 and 2)
CERTIFICATE OF SERVICE I hereby certify that I have caused copies of the foregoing STATUS REPORT OF TEXAS BORDER COOPERATIVES to be served on the following by deposit in the United States Mail, first class, postage prcpaid, this 1st day of October, 1980.
Marshall E. Miller, Chairman Joseph Rutberg, Esq.
Atomic Safety & Licensing Board Antitrust Counsel Panel Nuclear Regulatory Commission Nuclear Regulatory Commission Washington, D. C.
20555 Washingtor,,
D. C.
20555 R. Gordon Gooch, Esq.
Michael L. Glaser, Esq.
John P. Mathis, Esq.
1150 Seventeenth Street, N.W.
Baker & Botts Washington, D. C.
20036 1701 Pennsylvania Avenue, N.W.
Washington, D. C.
20006 Fredric D. Chanania, Esq.
Michael B. Blume, Esq.
Jerome Saltzman, Chief Ann Hodgdon, Esq.
Antitrust & Indemnity Group Nuclear Regualtory Commission Nuclear Regulatory Commission Washington, D. C.
20555 Washington, D. C.
- 20555, Sheldon J. Wolfe, Esq.
Chase R.
Stephens, Chief Atomic Safety & Licensing Board Dccketing & Servicing Section Panel Office of the Secretary Nuclear Regulatory Commissign Nuclear Regulatory Commission Washington, D.
C.
20555 Washington, D. C.
20555 David M.
Stahl, Esq.
Frederick H. Ritts, Esq.
Sarah F.
Holzsweig, Esq.
Law Offices of Northcutt Ely Isham, Lincoln & Beale Watergate 600 Building 1120 Connecticut Avenue, N.W.
Washington, D. C.
20037' Robert M.
Rader, Esq.
W. N. Woolsey, Esq.
Conner, Moore & Corber Dyer and Redford 1747 Pennsylvania Avenue, N.W.
1030 Petroleum Tower Washington, D. C.
20006 Corpus Christi, Texas 78474
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- David M.
Stahl, Esq.
Frederick H. Ritts, Esq.
Farah F.
Holzsweig, Esq.
Law Offices of Northcutt Ely Isham, Lincoln & Beale Watergate 600 Building 1120 Connecticut Avenue N.W.
Washington, D. C.
20037 r
Suite 325 Washington, D. C.
20036 Wheatley & Wollesen 2600 Virginia Avenue, N.W.
Robert Fabrikant, Esq.
Suite 1112
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Antitrust Division Washington, D. C.
20037 Department of Justice
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Post Office Box 14141 William Sayles, Chairman and Washigton, D. C.
20444 Chief Executive Officer Central Power & Light Company Joseph Knotts, Esq.
Post Office Box 2121 Nicholas S.
Reynolds, Esq.
Corpus Christi, Texas 78403 Debevoise & Liberman 1200 - 17th Street, N.W.
G.
K.
Spruce, General Mcaager Washington, D.
C.
20036 City Public Service Board Post Office Box 1771 Douglas F.
John, Esq.
San Antonio, Texas 76201 McDermott, Will & Emery 1101 Connecticut Avenue, N.W.
Jon C. Wood, Esq.
Suite 1201 W.
Roger Wilson, Esq.
Washington, D.C.
20036 Matthews, Nowlin, Macfarlane
& Barrett Marc Poirier, Esq.
1500 Alamo National Building Spiegel & McDiarmid San Antonio, Texas 78205 2600 Virginia Avenue, N.W.
Suite 312 Perry G. Brittain, President Washington, D. C.
20037 Texas Utilities Generating Co.
2001 Bryan Tower Ms. Evelyn H. Smith Dallas, Texas 75201 Route 6, Box 298 Gaffney, South Carolina 29340 J.
Irion Worsham, Esq.
Merlyn D.
Sampels, Esq.
Dick T. Brcwn, Esq.
Spencer C. Relyea, Esq.
800 Milam Building Worsham, Forsythe & Sampels San Antonio, Texas 78205 2001 Bryan Tower, Suite 2500 Dallas, Texas 75201 Robert Lowenstein, Esq.
J.
A. Bouk. night, Jr., Esq.
Robert E. Cohn, Esq.
William J. Franklin, Esq.
Richard J.
Leidl, Esq.
Lowenstein, Newman, Reis, Butler, Binion, Rice, Cook & Knapp Axelrod & Toll 1747 Pennsylvania Avenue, N.W..
1025 Connecticut Avenue, N.W.
9th Floor Washington, D. C.
20036 Washington, D. C.
20006 Mr. G. Holman King Maurice V.
Brooks, Esq.
West Texas Utilities Company Brooks, Gordon, Long &
Post Office Box 841 Shahan Post Office Box 118 Abilene, Texas 79604 Abilene, Texas 79604
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R.
L. Hancock, Director W.
S. Robson, General Manager City of Austin Electric Utility South Texas Electric Coop., Inc.
Department Post Office Box 151 Post Office Box 1088 Nursey, Texas 77976 Austin, Texas 78767 Michael I. Miller, Esq.
Jerry L. Harris, Esq.
Isham, Lincoln & Beale Richard C.
Balough, Esq.
O'ne First National Plaza City of Austin Chicago, Illinois 60603 Post office Box 1088 Austin, Texas 28767 Donald Clements, Esq.
Gulf States Utilities Co.
Don R.
Butler, Esq.
Post Office. Box 2951 Sneed, Vine, Wilkerson, Selman Beaumont, Texas 77074
& Perry Post Office Box 1409 Knoland J. Plucknett Austin, Texas 78767 Executive Director Committee on Power for the Morgan Hunter, Esq.
Southwest, Inc.
McGinnis, Lochridge & Kilgore 5541 Skelly Drive 900 Congress Avenue Tulsa, Oklahoma 74135 Austin, Texas 76701 Jay M. Galt, Esq.
Kevin B.
Pratt, Esq.
Looney, Nichols, Johnson & Hayes Linda Aaker, Esq.
219 Couch Drive Post Office Box 125' Oklahoma City, Oklahoma 73101 Capital Station Austin, Texas 787b.
Leland F.
Leatherman, Esq.
McMath, Leatherman and Woods, P.C.
E. W. Barnett, Esq.
711 West Third Street Charles G. Thrash, Jr., Esq.
Little Rock, Arkansas 72201 J. Gregory Copeland, Esq.
Theodore F. Weiss, Jr., Esq.
Somervell County Public Library Baker & Botts Post Office Box 417 3000 One Shell Plaza Glen Rose, Texas 76403 Houston, Texas 77002 Maynard Human, General Manager Paul W.
Eaton, Jr., Esq.
Western Farmers Electric Coop.
Hinkle, Cox, Eaton, Coffield Post Office Box 429 and Hensely Anadarko, Oklahoma 73005 Post Office Box 10 Roswell, New Mexico 88201 James E. Monahan Executive Vice President and G. W. Oprea, Jr.
' General Manager Executive Vice President Brazoa Electric Power Coop., Inc.
Houston Lighting & Power Co;.
Post Office Box 6296 Post Off, ice Box 1700
/7 Houston, Texas 77001
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Robert A. O'Neil l
l October 1, 1980 l
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