ML19345A820
| ML19345A820 | |
| Person / Time | |
|---|---|
| Site: | Wolf Creek  |
| Issue date: | 11/14/1980 |
| From: | Koester G KANSAS GAS & ELECTRIC CO. |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| References | |
| ISSUANCES-A, KMLNRC-038, KMLNRC-38, NUDOCS 8011250287 | |
| Download: ML19345A820 (102) | |
Text
KANSAS GAS AND ELECTRIC COMPANY w ea. cmc cowaw GLENN L MOESTER
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November 14, 1980 Mr Harold R Denton, Director Office of Nuclear Reacter Regulation U. S. Nuclear Regulatory Commission Washington, DC 20555 K 1NRC-038 Re:
Docket No. 50-482-A Re f:
- 1) Letter of 7/8/80 from Darrel Nash, NRC, to KG&E
- 2) Letter of 8/6/80 from KG&E to Harold Denton, NRC
Dear Mr Denton:
Reference 2 provided additional antitrust information requested of the Wolf Creek Generating Station, Unit No.1 Operating License Applicants by Reference 1.
Because of the short time allowed to respond to the request and the significant document search required, Reference 2 committed to a continued search and submittal of any additional relevant documents found. Enclosed herewith, for your information, are five copies of the additd anal documentation found that was deemed relevant.
Sincerely, l
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80lI250) Q 201 N. Market - Wictuta, Kansas - Matt Address: PO. Box 2C8 ' Wicttta, Kansas 67201 - Terephone: Area Code (3161 261-6451
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OATH OF AFFIRMATICN-STATE OF KANSAS
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COUNTY OF SEDGWICK )
I, Glenn L. Koester, of lawful age, being duly sworn unon oath, do depose, state and affinn that I am Vice President - Nuclear of Kansas Gas and Electric Ccmpany, Wichita, Kansas, thai I have signed the foregoing letter of transmittal, know the contents thereof, and that all statements contained therein are true.
KANSAS GAS AND ELECTRIC COMPANY By
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Glenn L. Koester
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COUNTY OF SEDGWICK )
BE IT REMEMBERED that on this 3 4th day of November, 1980 be fore me, Evelyn L. Fry, a Notary, personally appeared Glenn L. Koester, Vice President - Nuclear of Kansas Gas and Electric Company, Wichita, Kansas, who is personally known to me and who executed the foregoing instrument, and he duly acknowledged the execution of the same for and on behalf of and as the act and deed of said corporation.
IN WITNESS WHEREOF, I have hereunto. set my hand and affixed my seal the
.......date and year above written.
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gnimission expires on August 15, 1981.
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d Additional Documentation in Response to the NRC Letter Dated July 8, 1980 from Darrel Nash to KG&E The time allowed to respond to Mr Nash's request for additional infor-mation was very short. Kansas City Power & Light (KCPL) felt additional searching of their files could reveal other relevant documentation.
KCPL committed in the Applicants' August 6,1980 response to the NRC to continue the document search and provide any other documents found that were considered responsive to the NRC's inquiries.
Additional relevant informatis n was discoverec concerning KCPL Items 2 and 5.
The exhibit numbering scheme used in our August 6, 1980 submittal has been continued. New exhibits provided herewith are numbered beginning where the previous submittal left off.
Item 2 An additional docu.'ent concerning KCPL's service to the City of Osawatomie, Kansas is provided'as Exhibit C.2-16.
Item 5 Additional documentation concerning KCPL's transmission services for:
a) Garnett, Kansas is provided as Exhibits C.5-33 through C.5-44.
b) Osawatomie, Kansas is provided as Exhibits C.5-45 through C.5-76.
c) Kansas City, Kansas is provided as Exhibits C.5-77 through C.5-80.
- c.2-16
?&.e,, 4" December 19, 1977 TO:
R. H. Graham FROM:
I. G-Chronister RE:
SERVICE TO THE CITY OF OSAWATOMIE In accordance with' Article 1, Section 4, of the Municipal Parti-cipation Agreement, the Engineering Department has completed studies to ascertain the various types of service that the Company can furnish to the City during the next Contract Year. We are required to deliver this information to the City prior to December 31:
Short Term Transfer Service 16,000 KW @ 100% p.f.
Long Term Transfer Service 5,700 KW @ 100% p.f.
Firm Power _
5,700 KW @ 100% p.f.
As required by all MOKAN Pool newhers and Associate members, the City is to complete the attached form showing projected load and capability data for the next ten contract years..I would appreciate receiving this information early in 1978.
No later than April 1, 1978, the City is required to inform the
, Company pf their intentions regarding usage of the services offered above.
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Mr. D. T. McPhee Mr. J. A. Mayberry Mr. R. B.'Sullivan e
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CITY OF GARNETT 131 WEST FIFTl! STREET - PilONE 913 448 5496 Post Offim Box H GARNETT, KANSAS 66032
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August 9, 1974 Mr. Dick Overton Linsas City Power and Light Company 1330 Baltimore Avenue Kansas City, Missouri 64141
Dear Sir:
We have discussed at some length the contract proposal made by KCPSL to the City of Garnett on May 7, 1974. We have concluded that execution of this contract is not in the best interest of the City of Garnett.
'Ihe City specifically objects to the definition of insured reserve capacity. This definition has the practical effect of tieing the City's insured reserve capacity to the single largest generating liability. The City of Garnett requests that insured reserve capacity be based on 15% of peak for the last preceding 12 months. We see no reason why the reserve definition in this contract should not be the same as is currently required of KCP5L in its participation in existing' power pools.
In addition, we have further concluded that it would be in the besD interest of the City of Garnett to obtain a proposal from KCP5L to deliver power and energy made available by a third party supplier through use of KCPSL's system facilities to our receiving system.
We are interested in receiving a proposal similar to the one made i
to the City of Osawatomie on July 1, 1974, entitled KHEELING: DOUBLE SCHEDULED CAPACITY BASIS.
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We are anxious to conclude the negotiations for a new contract and stand ready to discuss these items with representatives of your company at the earliest possible time.
Sincerely yours,
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- p W"*"v CITY OF GARNETT 131 WEST FIFTH STREET - P!lO*.E 913-448-5496 Post Offiw Box H GARNETT, KANSAS 66032 October 18, 1974 Arthur J. Doyle Vice President 6 General Counsel Kansas City Power S Light Company 1330 Baltimore Avenue Kansas City, Missouri 64141
Dear Sir:
This will acknowledge receipt of your letter of August 14, 1974.
Please excuse the delay in replying to your Ictter as it was necessary to complete negotiations for the enclosed contract with the Board of Public Utilities in Kansas City, Kansas.
As you requested, we are enclosing a copy of this contract for your infomation. We hope that contractual arrangements as outlined in this letter can be completed in a short time. We are willing to make a strong effort towards that end.
Sincerely yours, 42 k
Michael L. McDowel City Manager FDf/jm Enclosure cc: Drexel Journey Steve Charno
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c, CITY OF GARNETT 131 % EST FIFTil STREET - PilONE 913-448-5496 Post Office Box H GARNETT, KANSAS 66032 January 21, 1975 Arthur J. Doyle, Vice President Kansas City Power and Light Company 1330 Baltimore Avenue Kansas City, Miss.>uri 64141
Dear Mr. Doyle:
We have not received any reply to our letter to you dated October 18, 1974 in which we answered your request for information concerning a purchase contract for power and energy from third party supply systems.
My last letter to you was written over ninety days ago and I believe the City deserves at least the courtesy of a reply of some sort.
Is the review which you spoke of complete? Has it even been started?
We are beginning to wonder if Kansas City Power and Light is serious about negotiating a fair contract with the City of Garnett.
Both Kansas City Power and Light and the City of Garnett realize that a new interconnection contract is needed. The City has sought no more than what is fair and we are beginning to become weary of apparent foot dragging in completing the contractual arrangements on the part of your company.
Is there any way this process can be speeded up and these contractual arrangements completed? Surely Kansas City Power and Light has more important things to do than string along a little town such as Garnett.
This City has been a good customer of Kansas City Power and Light for seven or eight years and purchased many thousand of dollars worth of energy from your company. Therefore we feel that we are entitled to at least an effort on the part of your company to cc.aplete the contractual arrangements which have dragged on for ne'irly a year.
Sincerely, v5 Y Michael L. McDowell buf/jm City Manager cc: Steven Charno Drexel Journey
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Y C.5-36 KANSAS CITY POWER & LIGHT COMPANY oso surmoat avcuuc KANSAS CITY, MISSOURI 64141 ArtTHUR J. DOYLY.
February 7, 1975 a-
..... " co. m File No. 0302-30 Mr. Michael L. McDowell City Manager City of Garnett 131 West Fifth Street Post Office Box H Garnett, Kansas 66032
Dear Mr. McDowell:
As promised in my January 24 letter, enclosed herewith is a draft dated February 7, 1975, of the proposed Garnett as per your request,of Municipal Participation Agreement, August 9, 1974.
You will note that Agreement provides for reserve sharing on the same basis as other participants in the MOKAN Kansas.
Pool, including Board of Public Utilities of Kansas Cit.,
This type of arrangement is rather complex and if you or the City Counci?. should desire a further explanation or discussionplease concerning _ts application to Garnett, or Mr. Overr.on who will make the necessary arrangements.
In Schedule E Please excuse my delay in this matter.
the rates for Trans fer Service have been left blank. XCPL's Rate Department is !cveloping a cost of service to reflect the to you without proper rates and we want to deliver this draft further delay.
Also, we do not have a signed or conformed copy of your By your Municipal Electric Power Service Contract with BPU. letter o with BPU and stated that you hoped it could be completed in a We would appreciate receiving a copy of your Contract Its date will be inserted on the blank short time.
with BPU, as executed.
provided in Schedule F.
Sincerely, AJD:be g
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smas csov CITY OF GARNETT 131 WEST FIFTil STREET - PilONE 913 448-s496 Post Office Box H GARNETT, KANSAS 66032 Februay 14, 1975 Arthur J. Dayle, Vice President General Counsel Kansas City Power and Light Company 1330 Baltimore Avenue Kansas City, Missouri 64141
Dear Mr. Doyle:
Enclosed is a copy of the executed contract with the Board of Public Utilities which you requested from us in your letter of February 7, 1975.
We appreciate your cooperatian in this matter and will be in touch with Mr. Mayberry and Mr. Overton as questions arise in our consideration of the drait agre:..ient. We will complete our review as rapidly as possible and r.ake further replys to you.
Sincerely yours,
..:0.h q ' (,I$l O Michael L. McDowell City Manager FDI/jm cc: Drexel Journey Steve Charno Mr. J. A. Mayberg Mr. R. D. Overton i
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C.5-38 KANSAS CITY POWER & LIGHT COMPANY s33o sALTmoRE AVENut ARTHUR J. DOYLC August 25, 1975
..........eav. m File No. 0302-30 Mr. Michael L. McDowell City tbnager.
City of Garnett 1~1 West Fif th Street P. O. Box H Garnett, Kansas 66032
Dear Mike:
Matters in the electric. industry are not static.
There have been several developments since KCPL forwarded to you'the February 7,1975, draf t of the Municipal Participation Agreement, including the following:
l 1.
The MOKAN Pool has changed the rates' on deficiency charges for reserve capacity and for standby service.
2.
The Federal Power Commission has required Fuel Adjustment Clauses to be stated using a standardized method.
Based on these we have updated Schedules A, B and C and reflected them in j
the attached draf t of the Agreement.
Also, in Article IV, Section 1(b) we have made a change of language to reflect the revised Rate Schedule A.
3 Additionally, we have corrected several typographical errors and have in-serted the date of November 6, 1974, in Schedule F.
I believe the attached July 28, 1975, draft of the Municipal Partici-patton Agreement is up-to-date and, hcpefully, correct in all respects.
1 Shotid you have any questions concerning it, please contact Dick Overton, Bud Mayberry or me.
Sincerely, i
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CITY OF GARNETT 131 WEST FIFT11 STREET - PIIONE 913-448-5496 Post Offwe Box H GARNETT, KANSAS 66032 October 3, 1975 Arthur J. Doyle Vice President and General Counsel Kansas City Power & Light Company 1330 Baltimore Avenue Kansas City, Missouri 64141
Dear Mr. Doyle:
We acknowledge receipt of your letter of August 23, 1975 and the enclosed draf t agreement dated July 28, 1975.
The City Commission has reviewed this contract and found it to be acceptable in all respects except for the following:
1.
The City objects to the rates for long-term service under Sc,hedule E entitled SCHEDULE FOR TRA"SFER SERVICD:.
2.
The City objects to the rates for long-term services under Schedule F entitled SCHEDULE FOR 161 KV TRANSMISSION SERVICE.
In light of the objections to the aforementioned rates, we propose a new Article 2_l, Section 2 to read as follows:
A.
Protest and Refund.
If within thirty (30) days after the initial filing by the Company of this Agreement with the Federal Power Commission ("FPC"),
the City files with the FPC a protest or complaint with respect hereto, the City shall concurrently therewith serve a copy of such protest of complaint upon the Company, and if the rates initially submitted.
herein become effective prior to the resolution of any contested issues set forth in such protest or complaint and.if such initially submitted rates are thereafter reduced in.accordance with proceedings and findings by the FPC, then, within thirty (30) days after such FPC order effecting such reduction becomes final a.1 nonappealable, the Company shall 4
make appropriate refunds (including interest)
October 3, 1975 Arthur J. Doyle Page Two to the City to reflect retroactively such reductions.
The Article 21, Section 2 as contained in the draft dated July 28, 1975 provides for reimbursement by the City to the Company for filing fees which Kansas City Power and Light is required to pay to various governmental regulatory agencies with respect to this agreement.
The City Commission is very skeptical of the reasoning behind this section since KCP&L will be seing the City large amounts of energy during the term of tut. contract at presumably profitable rates.
However, in light of the extended time period it has taken to get this far, we will not object to this section.
May.I suggest that if the new Article 21, Section 2 is acceptable to KCP&l that you submit a new draft to us for execution.
The City would then file a protest with the Federal Power Commission concerning the aforementioned objectionable rates after the executed contract is filed with the Commission.
Please let me hear from you if this is acceptable as we are anxious, as I am sure you are, to conclude these negotiations.
Sincerely,
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,7f, Michael L. McDowe City Manager MLM/jm s
0.5-40 KANSAS CITY POWER & LIGHT COMPANY f330 BALTIMORC AVENUE KANSAS CITY. MISSOURI 6414
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October 7, 1975 File No. 0302 '
Mr. Michael L. McDowell City Manage r
City of Garnett 131 West Fifth Street P. O. Box H Garnett, Kansas 66032
Dear Mr. McDowell:
This will acknowledge receipt of your October 3,1975, letter concerning the draft of the Municipal Participation Agreement 4
dated July 28, 1975.
I recognize that your proposed new Section 2 to Article XI
. has teen copied from-a similar Section in KCPL's Municipal Par-does'pation Agreement with the City of Osawatomie, _ with which KCP tici not presently have an interconnection.
As such, the filing of that Agreement with the FPC will constitute an "ini'.ial rate filing" by KCPL and, in the absence of that Section, 'ne FPC would have no authority to require refunds in the event that the protested rates are later found to be excessive.
Because KCPL presently has on file with 'the FPC the existing Agreement with Garnett, the filing of the proposed Municipal Par-j ticipation Agreement with Garnett would constitute a " changed rate filing" and, therefore, the FPC would have the authority to re-quire a refund of ' protested rates found to ba excessive, even in i
the absence of that Section.
That is the reason why the Section was omitted in the July 28' draft.
It is, in fact, surplusage..In any event, KCPL has no objection to the Section because the end result is the same in either case.
I am, therefore, recommending L
its inclur'on as a new Section 2 to Article XI, with the present Section 2 renumbered as'Section 3.
With respect to-reimbursement of KCPL for FPC filing fees, this is a policy'which.KCPL implemented shortly af ter the FPC adopted these fee. schedules a few years ago.
KCPL is regulated on a " cost j
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4 Mr. Michael L. McDowell October 7, 1975 4
of service" basis.
Its FPC wholesale rates are and for many years. have been significantly below KCPL's " cost of service '
for two reasons:
(1) the' substantial time lag involved in pre-paring historical data for use in determining KCPL's cost of service, and (2) the FPC's methods and procedures used in its determinations which eliminate some costs we believe.should be charged to KCPL's wholesale customers and which KCPL cannot charge to its retail customers.
For exampla, KCPL's present wholesale rates are based on cost of service data for the year ended 1972.
Unfortunately KCPL's sholesale rates are not "p r'ofitable", as one might normally expect, and KCPL does not seek wholesale sales (particularly those involving large amounts of power and energy), but merely provides wholesale service to accommodate neighboring electric suppliers.
For these rea.,ons, KCPL insists on reimbursement of FPC filing fees with respe t tc its wholesale electric service agreements; otherwise these added costs would be an unfair burden to our retail customers.
I hope your City Commission will understand, appreciate and be sympathetic with our position in this matter.
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Because KCPL always finds itself in a " catch-up" position on its wholesale rates, we expect to file with the FPC within the next few weeks for an increase in rates for Wholesale Fire Power
. Service.
By copy of this letter to Messrs. Mayberry and Overton, I will ask them to deliver to you execution copies of the Municipal Particiption Agreement with the new Section 2 of Article XI included.
We will keep you advised as to the filing with the FPC so thac Garnett will have ample oppor: unity to file its protest or complaint
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concerning the rates for Long Term Transfer and Transmission dervices under Schedule E and F, as you have indicated in your October 3,
.1975, letter.
l Sincerely, (w.]Q j
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Mr. J. A. Mayberry Mr. J. R. Miller Mr. R. D.
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November 11, 1975 Mr. Michael L. McDowell City Manager City of Carnett l W West Fifth Street P. O. Box H Carnett, Kansas 66032
Dear Mr. McDowell:
We are again updating our Municipal Participation Agreement for changes since the last subn!ttal of the Agreement to you on August 25, 1975. The attached draft of the Agreement includes, as you re.: quested, ".he addition of the Protest and Refund Section under Article X It slao has been revised by updating Schedule C to the Firm Power pricing of our Wholesale Rate level filed with the FPC on October 20, 1975. The Schedule C Fuel Adjustment Clause includes an adjustment in the factor calculation required by FPC Regulations to adjust for only those transmission losses related to wholesale sales for resale.
It would seem to me that our negotiations of the Agreement should proceed to completion in the near future.
Current operating conditions have proven the inadequacy of our present Contract. Please let us know of any remaining unresolved issues and when we can expect to execute the Agreement.
Very truly yours, omr tu.u..i.mco
'J, A. M AYDERRY J. A. Mayberry Vice President, Marketing JAM /kk attachment Mr.A.J.Doyle!
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Mr. W. K. Frohock Mr. R. D. Overton
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s-CITY OF 'GARNETT 131 % EST FIFTil STREET
'HO.NE 213,448-5496-Post Offkv Box 11 GARNETT, KANSAS 66032 November 17, 1975 J.
A. Mayberry Vict. President, Marketing Kansas City Power and Light Company 1330 Baltimore Avenue Kansas City, Missouri 64141 4
Dear Mr. Mayberry:
We acknowledge receipt of your letter of November ~11, 1975 ontaining the latest draft of the proposed Municipal Participation Agreement between Kansas City Power and Light and the City of Garnett.
The attached draft agreement is satisfactory to the City and I will recommend that the City Commission _ formally approve this agreement at its next regular meeting'on November 25, 1975.
The approval will be subject to our earlier stated objections to certain of the proposed rate schedules and the City reserves the right to object to the revised C:hedule C relcL ng to firm power l
pricing.
Please submit to the City the necessary copies nee'ded for execution by the Mayor at your earliest convenience.
If they reach us prior to November 25, 1975, they could be executed at the ccnclusion of the Commissioner's meeting that night and mailed back to you the next day.
Sincerely,
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Michael L. McDowell MLM/jm City Manager
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sos $7, maassas Csiv. wo Wiel December 1, 1975 Mr. Michael L. McDowell City Mar.ager City of Garnett P. O. Box H Garnett, Kansas 66032
Dear Mr. McDottell:
This vill acknowledge your letter of November 17, 1975 requesting signature copies of the Municipal Participation Agres ent between the Kansas City Power & Light Company and the City of Garnett.
Copics have been furnished to Fr. Overton of'our Paola office and, hopefully, they were delivered to you in time for your November 25 ceeting.
Very truly yours, OnlGIN/ L SIGNED U,A.MAYBERRY J. A. Mayberry Vice President, Marketing JAM /kk cc: Mr. A. J. Doyle Mr. W. K. Frohock Mr. R. D. Overton
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CITY OF GARNETT 131 WEST FIFTil STREET - PilONE 913-448-5496 Post Office Box H GARNETT, KANSAS 66032 December 15, 1975 Mr.
J. A. Mayberry Vice President, Marketing Kansas City Power & Light Company 1330 Baltimore Aver.'le Kansas City, Missouri 64141
Dear Mr. Mayberry:
The City Commission has approved the Municipal Participation Agreement between Kansas City Power and Light Company and the City of Garnett.
As soon as copies have been executed, it will be sent to you along with certified copies of the Resolution approving the contract and authorizing the Mayor and City Clerk to sign it on behalf of the City.
Sincerely yours, E
bf Michael L. McDowell City Manager PLM/jm
, M'r. A. J.
Doyle cc:
Mr.
W.
K.
Frohock Mr.
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D.
Overton 4
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h KANSAS MAIN et FIFTH ~ 755-2146 October 8,1973 Mr. Richard D. Overton Manager, South District Kansas City Power A Light Ccmpany 1330 Baltimore Avenue Kansas City, Missouri 64141
Dear Mr. Overton:
In early 1972, the City of Osawatemie requested a proposed municipal interconnection contract from Kansas City Power and Light C.mpany.
That conthet was dated February 28, 1972, and included schedules for Insured Rulerve Capacity, Emergency Energy, Ecs.orny Energy, and Finn Power.
Though several discussions were held with John Hoodman of Kansas City Power and Light Ccmpany serious consideration of this prcposal was deferred until completion of the Staff Report; Study of Proposed Interconnecticn Between Osawatemie, Kansas, and Kansas City' Pcwer and Linht Ccmoany prepared by tne fort Hortn Regional Office of the Federal Power Cc. mission. This study, which was ccmpleted in January 1973, reccrrrnended that Osawatomie, which is now an " isolated" system, interconnect with Kansas City Pcwer and Light Company.
On April 6,1973, we directed a letter to Mr. Woodman of Kansas City Power and Light Company indicating that we had only two objections ta the Cocoany's proposed contract:
1.
The contract called for Osawatomie to maintain a reserve equal to its largest generating unit (or 60% based on present equipment ratings). We pointed out that other interconnection agreements to which Kansas City Power and Light Ccmpany was a participant required only a ten per cent (10%) or twelve per cent (12%) reserve of their corrpany as well as other members. And, that the largest generating unit requirement was unreasonable and did not implement the major iroortance of an interconnection to the " isolated" utility which is to reduce the need to build and maintain such high reserves.
We requested that the proposed contract be amended to read; "The City shall maintain adequate reserve capacity which shall be equal to 25%
or more above the City's annual peak load, met either by installed generating capacity or by centract for purchase of insured reserve capacity under this agreement, or by insured reserve caoacity obtained frcm other participating generating municipalities located in the company's service area or by any ccabinaticn thereof".
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' 2.
We requested a fee schea11e for transmission of electricity over lines owned by Kansas City Power ed Light Company so that we might l
consider the purchase of electricity from Kansas City Kansas Board of Public 'X*lities; Ottawa, Kansas; or Garnett. Kansas. No transmission schedule was included with the original contract proposal.
l After a long delay and numbrous requests, we received an answer in the form of a new contract proposal on September 10, 1973.
This new contract was not only markedly different than the first proposal by Kansas City Power and L'ight: Company but also cccoletely contrary to our request.
It l
makes a number of modifications including:
1.
You require "A minimum of 2/5 of the City's Reserve Capacity shall at all times be maintained as ready reserve imediately available within ten (10): minutes of any unit outage or other system disturbance and the remainder thereof as a cold reserve". This clause does not i
appear in any other Kansas City Power and Light Company centract and is designed to prevent us from worting-on our largest generating unit.
2.
The addition of a charge of.90 per kilowatt per calendar month for what is called Reserved Interconnection Capacity Service. And, the contract states that the City shall purchase this service each month in the amount of kilowatts equal to the Interconnection Capacity (but in no event greater than the net kilowatt generating capacity of the largest generating unit).
It further defines Interconnection Capacity as that number of kilowatts of its system capacity made available by the Ccmpany to the City at the Point of Intercennection which shall be equal to the i
kilowatt rating of transformers in the substation.
^
This requirement means that the City would currently pay $2,790.00 per month to the Kansas City Power and Light Company for Reserved Inter-connection-Capacity Service or more explicity, nothing. This proposed charge' is cbviously in direct conflict with applicable case law as clearly stated in Gainsville Utilities Department vs. Florida Power Corporation (1971) 402 US 515, 29L Ed. 2d 74.
i-3.
The original contract proposal included a schedule for Firm
)
Power Service.
This schedule carried a demand charge of $2.50 per month per kilowatt for the first 3,000 kilewatts and $2.25 per month per.
l kilcwatt for additional kilowatts. The energy char and the demand was based upon eighty per cent (80%)ge was four (4) mills of the maximum demand for the past eleven (11) months.
The new proposed contract calls for a Firm Power Service demand charge i'
of $4.22 per_ month per kilowatt for all kilowatts of demand, an energy charge of 6 mills hundred per cent (per kilcwatt-hour, and billing demand based on one100 eleven (11) months.
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Even though' the Firm Power requirement is reduced in the new proposal 2
from the largest. generating unit to a twenty-five per cent (25%) reserve.
requirement, the price is -obviously prohibative.
At first glance, one might assume that Kansas City Power and Light Company is-attempting to avoid an interconnection with the City of Osawatomie by establishing prices that are completely out of line with prices for the same service provided to other utilities by the Kansas -City Power and Light Company and by other-interconnection agreements in this geographical area.
If so, such actions are in violation of antitrust laws.
(United States vs.
. Aluminum Company of Arrerica 148 F. 2d 416 (2nd Cir.1945).
4.
Kansas City Power and Light Company eliminated from the new contract proposal the right of Osawatomie to purchase economy power.or wholesale power as was proposed originally.
Kansas City Powe-and Light Company holds a strategic dominance of transmission lines in ts.is area.
The absence of a proposal and willingness to provide economy or wholesale pcwer to Osawatcmie clearly eliminates one of only two alternative supply.
sources available to Osawatomie (transmission over Kansas City power and-Light Company lines is the second alternative).
In all of our discussions
, over the past. ten years, Kansas City Power and Light Corrpany has never claimed that there were engineering factors which prevented the sale of wholesale power to Osawatnmie, this might be co.1strued as an effort to isolate Osawatomie, prevut alternative sources of supply and eliminate competition.
If this is the case, it is quite obviously a violation of antitrust laws.
5.
The contract does not provide for the City of Osawatanie to participate in reserve sharing, pool planning, or economy exchanges.
By withholding use of Kansas City Power and Light Ccmpany transmission lines of which the Company has strategic dominance in the area the Company is eliminating competition and its resulting economies which is the thrust of the antitrust laws. More particularily, the failure to allow such alternatives to the City is contrary to the February 22, 1972, United States Supreme Court decision in Otter Tail Power Company v. United States.
We request a transmission charge and agreement so that the City of Osawatomie can purchase up to 15.000 KH at any time from the Board of Public Utilities, Kansas City, Kansas.
6.
The proposed agreement requires a five (5) year cancellation notice which is clearly too long. A three year notice would be acceptable.
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-.l Concisely put, the new contract proposal smacks of aooarent disregard for rules set down~ by the Federal Power Commission and the law established by the Supreme Court of-the United States. The proposed contract is obviously unacceptable.
The City of Osawatomie wants an interconnection agreement with Kansas
.. City Power and Light Company as recomended by the Staff Report prepared by the Regional Office of the Federal Power Comission. 14e want an agreement for our customers which provides them with the same advantages of reserve sharing, pool planning, economy exchanges, wholesale rate competition, and per centage reserve requirements so advantageously enjoyed by Kansas City Power and Light Company and many other utilities.
lie want a contract which provides fair and equitable rates to both parties. And, we want a contract in accord with the rules of the rederal Power Comission and the laws of this land. These advantages and opportunities are not only our desire but our legal right. 14e prefer to negotiate such an agreement but will proceed with other avenues obviously open to us if a fair and equitable negotiated agreement cannot be reached.
11e request a meeting in Osawatomie with representatives of your Comoany 4
to discuss a possible negotiated agreement at your earliest convenience.
Ife request that discussions take place prior to flovember 2,1973, and if we have not heard from you prior to that date we will assume that this proposed contract constitutes your final offer and that you are not willing to negotiate further.
Yours very truly.
Gordon L. Schrader City itanager c.c.:
Robert Zimerman, Kan'as City Power and Light Company Frank Frisk, Anerican Public Pcwer Association Boyd Cole, Federal Power Comission Drexel Jcurney, Federal Power Comission j
United States Department of Justice
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Octabar 15, 1973
- r. Gordon L. Schrnder City !!anager City of Osavatenic, Kansas Main et Fifth Street coa.:sto:ic, Kcasas 66064
Dear Mr. Ochrader:
This is in rap 1y to your letter of Oct bar 3,1973, to Mr. Cverten," Scaager of cur Scuth District.
'!c is currently out of the city, so I en tchin3 the liSarty of replying rather than having eu 'ait for his return.
J Ma sculd like to arranse a public neetir.; uith the City of Os:riatomic officiats, ac -tall as other: that'you wish to Scvc cttend. l~nfertunntely, due to pending cnd prior cerr;tnents, uc cannot reet uith you before I:cvenber 2, 1973, but would like to cuggest the date of 1*ove-Ser 15, 1973.
At this necting, we would have a urittca reply to the specifics of your October 3 latter. Ua uould also vant to discuss the details of en inter-connection enrc2 cent.
Please lat ce hear free you regarding the acceptability of the tiovember 15 date.
Sinecraly yours,
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W J. A. !ayk[ry [
Vice President, Marketing JAM /kh ec:
R. K. Zi.=encn, KCFL Trnnk 7:ick, A:.crican Public ?over Associction Boyd Cole, Federal Power Cc:nission j
l Orenel Journey, Federal Tescr Cc m i:sica United States Ocpart=ent cf Justica bc:
A. J. Doyle W. C. McCarthy R. D. Overton
KANSAS MAIN et FIFTH - 755-2146 October 23, 1973 0AC D
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Kansas City Pcwer and Light Company 1330 Baltimore Avenue Kansas City, Missouri 64141
Dear Mr. Mayberry:
He have received your letter of October 19, 1973, and everything appears in order for our Hovember 16 meeting. Since much conversation relative to this proposal has been verbal and not in writing, and since it has been with several representatives of your company, it seems apprcpriate to clarify our position in writing to you.
(1).
He believe that the City of Osawatomie should pay the total cost of the interconnection including the extension of transmission lines to connect Dith your facilities so that the Kansas City Power and Light Company would have absolutely no capital investment in this interconnection.
And, we therefore assume all cost respcnsibilities for the interconnection.
(2).
The City of Osawatemie is not primarily interested in purchasing Firm Pcwer or Insured Reserve Capacity. We request only to purchase pcwer at a wholesale or econcmy price when and if it is available and will sell power to Kansas City Pcuer and Light Ccmpany en the same basis.
Each party would be obligated to deliver pcwer only en an "as available" basis.
(3). Your company has proposed contracts which include Firm Power and/or Insured Reserve Capacity schedules which we don't want but uculd accept cnly if the rate is comparable to that charged the cities of Ottawa and Garnett, Kansas, and the reserve requirement is based on not more than 25% of the peak load.
(4). He have repeatedly requested but not received transmission rate schedules in order that we might purchase power frcm the Board of Public Utilities, Kansas City, Kansas, which has agreed to sell us power at the wholesale rate. We raiterate cur request for a transmission rate schedule and request that it be provided at the November 16, 1973, meeting.
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We look fanfard to meeting with you'on llovember 16.
Yours very truly, Gordon L. Schrader City lianager e
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R. K. Zirnterman,' Kansas City Power and Light Company Frank Frisk, American Public Power Association Boyd Cole, Federal Power Conmission Drexel Journe), Federal Power Corrnission United States Departrrent of Justice S
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City of'Osawatomic Osavatomic, Kansas Di a r 1:r. Schrader:
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.In reply'to your recent inquiry concerning the pnncible purchase of economy poecr from the-Board of Public Utilitics.
The Board,-in fact, does have economy pouer available on a year to year basis.
L'c wo uld b e willing to' enter into a short term agreement-
'or the sale of this pover.to Ossuntomic, or any municipal who could arrange for the whec3ing of this power to their system.
Sincercly,
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November 16, 1973 Mr. Gordon L. Schrader City Manager City of Osawatomie-Main at fifth Street Osawatomie, Kansas 66064
Dear Mr. Schrader:
As promised in my letter of October 15, this is KCPL's
" written reply to the specifics" of your October 8 letter, as clarified by your October 23 letter.
g At the outset, I want to point out that KCPL has on several occasions during the past 30 years offered to establish an inter-connection of its system with the Osawatomie municipal system.
Specifically, I direct your attention to the Insured Reserve Capacity-Agreement which was proposed by KCPL to the City of Osawatomie in 1964.
Attached is a copy of the transmi*tal letter dated August 21, 1964, signed by Mr. Henry Turrell..That proposal by KCPL was reviewed by your Consulting Engineers, Black 5 Veatch, and discussed in its October 23, 1964 Report to the City.
Please note in the attached copy of the Report, the portions which we have marked by marginal lines.
The City of Osawatomie did not accept our 1964 interconnection proposal, and indicated to us its desire to continue its operations on an
" isolated"~ basis.
You have correctly stated that in early 1972 the City of Osawatomie requested a proposed municipal interconnection contract from KCPL.
To the best of our knowledge, this was the first time that the City initiated any proposal for an interconnection betwe'en our systems.
KCPL promptly responded with a. February 28, 1972, draft of an Insured ~ Reserve Capacity Agreement, which includes provisions for Insured Reserve Capacity, Emergency Energy, Economy Energy and Firm Power.
The City apparently referred KCPL's pro-posal to the Federal Power Commission Staff for a comparative study (1) ' on the basis of ' a reserve capacity requirement equal to
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Mr. Gordon L. Schrader November 16, 1973 the City's largest unit, as proposed by KCPL, and (2) on the basis of a reserve capacity requirement of 25% of the City's annual peak load, as requested by the City.
Please note that on Page iii of its Report, the FPC Staff summarizes the savings which would accrue to the City during a 20-year period on eithe r basis, and the conclusions by the FPC Staff that the City 's electric system can derive monetary benefits using interconnected operations, which would provide a more economical operation and, in general, a more dependable system.
Implicit in the FPC Study and Report is an approval of the February 28, 1972, draft of the Insured Reserve Capacity Agreement proposed by KCPL.
Your October 8 letter asserts that the City wants a contract which provides fair and equitable rates to both parties.
The February 28, 1972, Insured Reserve Capacity Agreement proposed to Osawatomi~e by KCPL is substantially identical to the Insured Reserve Capacity Agreements which KCPL has with the Cities of Marshall and Carrollton, Missouri, and is very similar to KCPL's interconnection arrangements with the Cities of Ottawa and Garnett, Kansas.
KCPL's interconnection contracts with Marshall, Carrollton, Ottawa and Garnett have been in effect and on file with the Federal Pcuer Commission since the 1964-1967 period.
You correct 1v stated that in April, 1973, the City of Osawatomie made only two obiectionsrt<o ACPL's February ?8. 1977. interconnection Drocosal; i.e., the City requested (i) that the reserve capacity requirement be based on 25% of the City's annual peak load, rather than installed capacity of the City's largest unit, and (ii) that KCPL provide a transmission fee schedule which would permit the city to utilize KCPL's transmission ano distrioution f acilities for interchange transactions by tne City with other Kansas municipal systems.
Because KCPL has not entered into contractual arrangements witn any other electric system on either basis proposed by the City of Osawatomie, there was a delay pending study by KCPL of these matters.
At your insistence, and in a sincere effort to satisfy your request concerning the reserve capacity requirement, KCPL, after much study, developed and submitted on' September 10, 1973, another interconnection proposal to the City.
Your letter of October 8 criticizes that recent proposal.
KCPL's reply to your criticisms is as follows:
1.
I direct your attention to the Ready Reserve ~ requirements in the Operating Manual of the South Central Systems of NAPSIC, which provide the reliability ground rules for interconnected operation of the South Central Systens which extend from the Nebraska-Kansas state line to the Gulf of Mexico and from the New Mexice state line ta Celtral Mississippi.
Such Ready Reserve s
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Mr. Gordon L. Schrader November 16, 1973 requirements define Rehdy Reserve as "that capacity above instantaneous control area load-that can be produced and applied to the area loa'd in 10 minutes or less", and provide that such Ready Reserve must include a spinning reserve.
It is KCPL's position that where the City does not provide for its own system a reserve capacity equal to its largest unit, either within its 1
own system or by purchase of reserve capacity, then, in order to i
main 2ain reliability of operation within the interconnected systems, the City must provide its appropriate share of the Ready Reserve l
so as not to unduly jeopardize reliability on the other South Central Systems.
That obligation to provide a Ready Reserve includes the obligation to provide spinning reserves, and such spinning reservec cannot be provided reliably by the City in its 4
largest generating unit when that unit is the only spinning unit in the City'.s system.
Therefore, KCPL has quite properly, in Section 3 of Article II of its September 10, 1973, interconnection proposal, provided that:
"A mini. mum of 2/5 of the City's Reserve Capacity shall.
at all times be maintained as a ready reserve immediately available within ten (10) minutes of any unit outage or other system disturbance and the remainder thereof as a cold reserve.
In no event shall the cold and ready reserves be supplied by the same generating unit."
You correctly state that such provision is " designed to prevent us (the City) from working on our largest generating unit", if you thereby mean that the City's spinning reserves must be provided by the City from another unit when the City is supplying its system load from its largest generating unit, in order not to jeopardize reliability on the interconnected systems.
A spinning reserve carried in the only unit on the line is no spinning reserve at all, since the purpose of the spinning reserve is to protect the load when, due to emergency, such unit fails.
2.
The charge of 90& per kw per calendar month for Reserved Interconnection Capacity Service--a rate which would be available oto all' systems for similar service--reflects KQPL's investment costs and expenses associated with the net burden on KCPL's system resulting from the reservation of interconnection capacity in KCPL's system facilities which would be available for 'the addi-tional reserve capacity needed to maintain acceptable reliability of service on the City's system.
Such burden is demonstrated by a comparison of Tables 1 and 2 of the FPC Staff Report of January,
.1973.
In the - development of this 90c per kw per calendar month charge, KCPL's generating facilities are not included.
An addi-tional charge would be required for any reservation of KCPL's i
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i Mr. Gordon L. Schrader November 16, 1973 generating capacity for the City or for power and energy delivered by KCPL to the' City.
I am advised that such charge is not in conflict with the Gainsville decision, and on the contrary, is directly supported by the Gainsville decision because it is an evaluation of the net burden on KCPL's system when the City provides for itself a reserve capacity equal to only 25% of its i
annual peak load, rather than a number of kilowatts ec.11 to its largest generating unit.
d 3.
You have correctly noted the proposed change of KCPL's rates for Firm Power Service.
On August 17, 1973, KCPL filed with the Federal oower Commission new increased schedules of rates and charges for Wholesale Firm Power Service.
I direct your attention to KCPL's rate proceedings pending before the FPC in its Docket No. E-8365.
Please note therein that the demand charge of
$4.22 per month per kw, and the energy charge of 6 mills per kilowatt-hour are the same rates and charges as proposed by.: CPL for Wholesale Firm Power Service at 34 kv.
It was our expectation that the FPC would permit KCPL's new increased rate schedules to become effective on October 17, 1973.
Therefore we included in our September 10, 1973, interconnection proposal to the City such increased rates and charges for Firm Pcwer Service to the City subject, however, to a credit of 90? per month per kw for each kw of Reserved Interconnection Capacity Service then being pur-chased by the City.
KCPL did ne c want to mislead you into believing that its charges for t'i-m Power Service would be at KCPL's presently noncompensatory cates.
For your information, KCPL's proposed increased wholesale rates have been suspended by the Federal Power Commission until March 18, 1974.
However, since any Agreement between KCPL and the City would be subject to the FPC filing requirements, we have included in' our September 10 proposal the new increased rates and charges being p'roposed by KCPL for Wholesale Firm Power Service, and we would anticipate that upon filing the Federal Power Commission would suspend the effectiveness thereof pending the end of such suspension period, at which time these rates and charges, along with KCPL's other Wholesale Firm Power rates and charges, would become effective either under bond or upon final order of the FPC.
From the above you can see that any assumption that KCPL is attempting to avoid an interconnection with the City by establish-ing prices that are completely out of line is not warranted and that KCPL's rates and charges for Wholesale Firm Power Service quoted to the City of Osawatomie are the same as its proposed rates and charges to other interconnected electric systems under the same service conditions.
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Mr. Gordon L. Schrader November 16, 1973 5.
With respect to " pool planning", I direct your attention to the Southwest Power Pool Coordination Agreement dated December, 1969.
KCPL and most other major electric utility systems in this area are members of the Southwest Power Pool, I suggest that if you wish to participato in " pool planning", you make application for membership in the Southwest Power Pool.
With respect to your reauest for a transmission charge _and
-greement so that tne City of Osawatomie can purchase up to 15,000 kw at any time from the Board of Public Utilitics of Kansas City, Kansas, I am advised that under the Otter Tail deci-sion, KCPL cannot refuse to " deal" with any municipal system within its area and that KCPL has the option to either (i) " sell" to, or (ii) " wheel" for the City.
Having offered to " sell" to the City, KCPL is under,no obligation or duty to " wheel" for the City.
Irrespective of such decision and although KCPL at this time has not yet determined whe.ther it is willing to " wheel" for the City, or, if so, under what conditions it would be willing to do so, we have made economic stuaies to determine the cost to KCPL of reserving 15,000 kw of capacity in our substations, transmissionp subtransmission and distribution facilities to make such " wheeling"J service available to the City of Osawatomie so that it could purchase 15,000 kw at any time from the Board of Public Utilities of Kansas City, Kansas.
Our studies show that the cost to KCPL would oe approximately $1.00 per kw per month.
Without any assurance that KCPL would be willing to provide this requested
" wheeling" service for the City, we will discuss with you terms and conditions and rates and charges for such " wheeling" service and explore the availability of capacity in KCPL's existing facilities for such service.
Thereafter, KCPL will review its position in the light of any such proposed arrangement and at that time will determine whether or not KCPL is willing to enter into such " wheeling" arrangement with the City.
6.
KCPL's September 10, 1973, proposal does contain a five (5) year cancellation notice.
Historically, all of KCPL's contracts have provided for a period of prior notice of cancel-lation approximately equal to the construction lead time for a fossil-fuel generating plant.
Several years ago lead times were in the area of three or four years.
More recently, required lead times for fossil-fuel units are five years.
Such periods of prior notification of cancellation are necessary so that KCPL i
can adjust its construction program to tailor it to its anticipated future loads.
However, please consider this matter as an open issue.
We would be pleased to discuss with you a shorter term v ~
Mr. Gordon L. Schrader November 16, 1973 4.
Within the electric industry the term " wholesale power" reefers to any electric service which is provided by one electric supplier to another at wholesale for resale by the other to its customers.
Our September 10 proposal includes offers by KCPL to furnish " wholesale power" to the City in the form of Reserved Interconnection Capacity Service, Emergency Service, and Inter-connection Firm Power Service, the latter being equivalent to KCPL's Wholesale Firm Power Service to other electric systems, but with a credit of 90C per kw per month for the number of kilo-watts of F2 served Interconnection Capacity Service being purchased by the City.
It is incongruous for you to complain that KCPL has not offered " wholesale power" to the City and at the same time complain concerning the rates, charges and other conditions of service which KCPL has offered in connection with its proposed
" wholesale power" sales to the City.
With respect to Economy Energy, you have correctly stated that KCPL's February 28, 1972, proposal did include an Economy Energy Schedule, but that its September 10, 1973, proposal did not include an Economy Energy Schedule.
For your information, attached is a letter dated November 10, 1969, to KCPL's dispatcher concerning the delivery by KCPL of Economy Energy under flat rate schedules.
Due to unanticipated 1969 curtailment of natural gas supply to KCPL and a coal miners' strike in 1969, KCPL restricted sales of Economy Energy to conserve fuel.
Since that time questionable fuel availability and increased fuel costs have limited KCPL's Economy Energy transactions.
During the past couple of years KCPL has not provided Economy Energy under existing and effective schedules which provide for the sale of Economy Energy at flat rates plus fuel adjustment where the margin is insufficient to warrant the requested transaction.
I direct your attention to KCPL's 1972 Form #1 Report to the FPC.
Under our Insured Reserve Capacity Agreements with Ottawa, Carrollton and Marshall, unin-tentional energy flows are balanced either (a) by returning energy in kind or (b) by payment therefor as Econcmy Energy.
The minor amounts of Economy Energy delivered by KCPL to these cities during 1972 related to energy accompanying Insured Reserve Capacity being purchased by the city or for balancing inadvertent flows.
We did not include an Economy Energy Schedule in our September 10 proposal because we did not want to mislead the City into believing that Economy Energy would in fact be available f rom KCPL to the City thereunder.
However, KCPL has no objection to the inclusion of the earlier Economy Energy Schedule in any interconnection agreement with the City, provided the City understands that KCPL is not willing to make deliveries of Economy Energy to the City thereunder because of current limited availability of fuels to KCPL and its high fuel costs in relation to the rate therefor.
Mr. Gordon L. Schrader November 16, 1973 of cancellation than the five (5) year period proposed by KCPL, if this is a matter of some significant concern to the City of Osawatomie.
I am advised that both our February 28, 1972, and our
' September 10, 1973, interconnection proposals to the City of Osawatomic are in accordance with the rules set down by the Federal Power Commission.and the law established by the Supreme Court of the United States.
It appears to us that the City of Osawatomie does not want an interconnection agreement on the same basis as the Cities of Marshall, Carrollton, Ottawa and Garnett, but on the contrary, is seeking something different and for the special advantage of Osawatomie's own system.
We appreciate your desires to get the best " deal"' you can for the City of Osawatomie and its inhabitaa..s.
Unfortunately, the laws of this land prohibit KCPL from unduly discriminating in favor of any one customer because, obviously, it results in a disadvantage to KCPL's other customers.
I hope that from this letter you will recognize, first, that KCPL has not only offered but urged the City of Osawatomie on several occasions during the past many years to interconnect its municipal system with KCPL's system and not remain an " isolated" system; secondly, that KCPL has offered to interconnect with the City of Osawatomie on the same basis as it operates interconnected with other municipal systems pursuant to agreements on file and in effect with the Federal Power Commission; and thirdly, that when the City of Osawatomie expressed other desires, KCPL endeavored to accommodate those desires by formulating new and proper approaches for an interconnection arrangement which would be more acceptable to the City.
Unfortunately, we are not in a position legally, economically or otherwise, to satisfy every wish of the City.
We will be pleased to meet with you further and negotiate an inter-connection arrangement either on the basis of our February 28, 1972, proposal or upon the basis of our September 10, 1973, proposal.
Very truly yours,
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[ J. A. M y ry Vice P sident JAM:cs cc:
Mr.
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Zimmerman Frank Frisk, American Public Power Association Boyd Cole, Federal Power Commission Drexel Journey, Federal Power Commission United States Department of Justice
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Decc=ber 24, 1973 t
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.i Mr. Cordon L. Schrader 1
City M.n:3cr City of Osavatonie, Kansas I
Main at $th Street g
Osaustosie, Kansas 66064 p
d Dear Mr. Schrader N
Picase refer to your Decc=ber 4, 1973 1cteer to =o.
The Co=pany's August 17, 1973 filing with the Federal Power Co:=iicsion for new increased Schedules of Ratos and Charges for tihoiccale Firm Power Service do not re-late to the Insured Reacrve Capacity Acrectent which the Co pany proposed to the City on February 28, 1972. Such FPC filing, however, does npeci-l fically relate to the Interconnection Firn l'over Service included in tha
[
Municipal Interconnec tion Contract propoced by the Company to the City on September 10, 1973.
Picace note that auch Interconnection Firo Pover i
Service is, in ef fect, IToolesale Firm Power Service less Reserved Inter-
}
connection Capacity Service, then being purchaced by the C,ity from the p
Coepany under such type Municipal Interconnection Contract.
The ritcs for Firm Pouer Service under the Company's February 28, 1972 proposed Incured Reserve Capacity Agrecient are still in offect with the FPC and available to the City under that type of an interconnection arr.inge=ent.
llevever, ve cannot assure you that the rites for Firs Pover Service, as set forth in our prcposed February 2P, 1972 Insured Reservo Capacity Agreement vill continue in ef fect cuch Icnger.
The Co=pany presently has this r te for Firm Power Service under its several Insured Reserve C.ipacity Agree:.ents under atudy ed it cay be included as part of another 1 PC rate filing by the Co pany in 1974.
Your le*ter of October 23, 1973, indicates that your City in not interested in purchasing Fir = Pover.
If you prefer, the Fir Power Service provisions c.in be eliminated from our February 23, 1972 proposal.
With respect to "theeling," we are now =aking an engineering review of this na tter to de ter=ine precisely what infor:ation is needed before further diecussion. llovever, the holiday sca:on and year-end vacation
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Page 2 schedules have del.iyed this estter. We now hope to be in a position to give further con.ideration to this ecstter shortly af ter the first of the 4
year.
Very truly yours,
.s J. A. Uayberry Vice Pr.-aident JUf/pt bec1 1.'. C. }!:Carthy A. J. Doylo s
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- CAalr.en 3Att E. SAffit5 ~ Co..:. :.e., TOPEKA, KANSAS 66612 rut:5 v. osty 4RNON A. ST AcatAG Comm! sfone' 5etretary 3ARoLD O. MAIN Cen. Covasel January 7,1974 /AMt3 E. WitL5 Mr. Rob,ert K. Zimmerman Presielent Kansas City Power & Light Company 1330 Baltimore Avenue P. O. Box 679 Kansas City, Missouri 64141
Dear Mr. Zimmerman:
You are handed a copy of letter addressed to Chairman John Nassikas from the City Manager of Osawatomie, which has to do with wheeling of electricity from the Board of Public Utilities of Kansas City, Kansas, to the City of Osawatomie, Kansas. I would appreciate your comments' on this letter at your earliest convenience. Very truly yours, / ale E. Saffels Chairman DES:bc Ench CC: Mr. Gordon L. Schra' der, City Manager Mr. Fred Adam, Director of Utilities I i l [
1 i c.5-53 i . [g:b h UNITED STATES 1)EPAlt PMENT OF JUSTICE 'n l: j WAsilINGTON, D.C. 20~.30 A ^ w January 8, 1974 g", m, m i, .w T.c. " D.W.:ee In$eei.d N.C. i - .a m.i. tw w.a x+ TEK:JJS: WEB l t Air Mail 1 Mr. J. A. Mayberry. i -Vice President, Marketing ih . Kansas City Power & L g t Company f 1520 Baltimore Avenue j-Kansas City, Missouri-64141 -i l l Dear Mr..Mayberry. f Thank you fer your letter of December 20, 1973, trans-mitting copies of two proposals for interconnection offered to the City _of Osawatomie and inviting further questions.- p I would greatly appreciate your advice as to the following: k 1. What is the contemplated installed cost and contem-plated annual cost to your company of constructing and f' operating.its portion of the interconnection facilities? Please list the maj or comp :nents. y I 2. How firm is Insured Reserve Capacity? If you were l furnishing emergency arvice-to any other system and were L.. short of capacity, would you shed-such load before. refusing CQc i l to provide Insured Reserves to Osawatomie? If you were pro-P46 viding service to Osawatomie of that kind, would you shed E your own firm retail customers to continue to supply the city? i Can you quantify the availability of such supply in terms of p. " loss-of-load" (Calabrese, AIEE Transactions, Vol. 66, 1947, [+ pp. 1439-50) or " loss-of-capacity" (Halperin and Adler, AIEE l Report, Ibid.,Vol. 77, 1958, pp. 530-44) probabilities? [ 3. Please' supply similar information rcspecting Reserved Interconnection capacity Service in the September,-1973, ( proposal. ,v' 4. How wa's the 257. of load reserve requirement in the (b,# + 3 1973 proposal selected? 5.. How is your own company's minimum reserve requirement selected? If your. company is part of a reserve sharing pool, N.T G' W' r, b how is the minimum poci reserve determined? l Y43 t. g.(;- m l l i i j- ~ .;u_ .c. ,; '7 . ~.. m i.;j.;Q.,_..e,r ~ . _ ;. - n,.....p ~1. L;: ;. :q ?.p x.;..g gy- ;.,, n,., y y,...,.,.
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If the city were willing to pay for all interconpec-, lb,. ' tg; , $mf - tion facilities and were willing to take emergency service i/.- 2-on an if-and-when-available basis, would you offer them such / service based only on their maintaining the same percentage (1 f, l-of reserves (as a percentage of peak load) maintained as a l minimum by your own system? Your cooperation in providing this information is j greatly appreciated. Sincerely yours, ...u k THOMAS E. KAUPER l Assistant Attorney General Antitrust Division i p v ,8
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~ 3' K M elo es f ~ -)]' J(8 "' January 10, 1974 Honorabic Dale E. Saffels, Chairman Kansas State Corporation Commission 4th Floor, State Office Building Topeka, Kansas GGG12
Dear Chairnan Saffels:
Thank you for your letter of January 7 foruarding to me a copy of Mr. Schrader's letter of January 3 to FPC Chairman Nassikas. During the past 30 years KCPL has offered on several occasions to establish an interconnection uith the municipal system of the There was no indication of any interest by City of Osawatomie. At that time, the City in such an interconnection until carly 1972. ,ity requested KCPL to submit a proposed interconnection agreamont. On February 28, 1972, KCPL responded by delivering to the tho City a draft of a proposed Insured Reserve Capacity Agreement ur der which KCPL would make available to the City several classe clectric service. staff at Ft. Worth. Implicit in the subscquent FPC Study and o: 28, 1972 draft of the pro-Report is an at oroval of the February posed Insured deserve Capacity Agreement. On April 6,1973, the City responded to KCPL's February 28, 1972 proposal by indicating that the City had two objections to the One objection related to the City's Reserve proposed Agrecmcht. blanker "uheelinn" provision in the Agreement which wo i the City to utilize KCPL's transmission, subtranumission and distr - bution f acilitics for the delivery of. clectric power and energy to or from other municipal systems. In an effort to meet the City's first objection, KCPL after10, 1973 much study, formulated and submitted to the City on Sep the City's Reserve Capacity Requirement was reduced from its " largest single generating liability" to 25% of the City's projected annualinclude any p That propcsed Contract did not" and the City was advised that KC perk load. i sblanket " wheel ng 1
DYD ~D ~3~ }h AJ wS S$m Honorable Dale E. Saffeln January 10, 1974 its willingness to provide point-to-point "uheeling" only upon rcccipt of information and data concerning 'che magnitude of loads in kilowatts, directional pouer flous and other data including the expected terms of the interchange uhich related to such "uheeling" cervice. By letter dr cd October 8,1973, Mr. Schrader made numerous ' objections to hCPL's September 10, 1973 p ropocal. A copy of his October 8 letter and subacquent exchange of correspondence with KCPL are enclosed for your information and files. With respect to Mr. Schrader's statement to FPC Chairman Hassikas that the City has been " unable to negotiate an inter-connection agreement" uith KCPL, I direct your attention to the last paragraph on.page 7 of KCPL's response dated November 16, 1973. ~WithrespecttotheCity'srequestforpoint-to-point"wheelin531 [from the Board of Public Utilities, Kansas City, Kansas, to the City of Osawatomie, I direct your attention to Item 5 on page 6 of KCPL's ; response dated November 16, 1973, the second paragraph of Mr. I Schrader's letter dated December 4, 1973, and the third paragraph of KCPL's response dated December 24, 1973. In brief, the present btatus of the "uhecling" matter is that KCPL's Engineering Department ~ is studying its existing interconnections with BPU and KCPL's trans-mi'ssion, subtransmission and distribution facilitics, including protection, control, communic' tion and related facilitics, to deter-a mine how, in what manner and under what conditions 15,000 kw of c1cetric pouer could be "whccled" at any time by KCPL from BPU to Osawatomic. Upon completion of that study, KCPL uill be in a position to request specific data and information from the City ,concerning its proposed interchange agracment with BPU. Upon ireceipt of such information and data from the City, KCPL will then be abic to evaluate such "whccling" proposal; houever, I should point out that although Item 5 on page 6 of KCPL's letter dated November 1G,1973 st ates that KCPL's study shows that its cost for such proposed " wheeling" would be approximately $1.00 per ku per. month, the City has not indicated that a transmission charge to cover such cost would be acceptable to the City. You can be assured that we have b'cen and are giving this matter our full consideration. Should you desire further information, ( please let me know. O Very truly yours, RKZ:cs cc: Mr. Gordon L. Schrader Mr. Fred Adam m O O W
M M 4:UDI 4:UPJ6B W 6Bl!UcedL.) C.5-55 -K ANS AS M Alt 4 et $1FTH - 755 2146 - January 14, 1974 Mr. Robert K. Zimmerman, President lansas City Power and Light Company 1330 Baltimore Avenue P. O. Box 679 ~~ Kansas City, Missouri 64141
Dear Mr. Zimmerman:
Kansas City Power and Light Company is buying coal fired energy from the Board of Public Utilities, Kansas City, Kansas, for 10 mills', marking it up 5% for line loss and 10% for profit and selling it to Kansas Gas and Electric Company for 10.75 mills. Kansas Gas and Electric Company is marking it up.6 of a mill and selling it to the municipal utilities at Chanute and Coffeyville, Kansas, for 11.35 mills. Quantities bought from Kansas City, Kansas, and sold to Chanute and Ce#feyville have been as much as 15,000 KW. Energy is ordered at 3:00 o' clock p.m. for delivery during i the twenty-four hour period beginning at 11:00 p.m. that same day. The decision or behalf of Kansas City Power and Light Company that they coQld and would participate.in-this transaction took approximately two (2) weeks froin the initial request. If an interconnection agreement is reached between the Kansas City Power and Light Company.and the City of Osawatomie, will you buy coal fired energy when available from the Board of Public Utilities of Kansas City, Kansas,at our request and resell it to us for a mark up of 5% for line loss and 10% for profit as you are currently doing in the Chanute-Coffeyville transaction? You are well aware of our power usage from the information provided to you in the Staff Report of the Federal Power Commission. It contained complete pres?nt and future usage projections. He would request the~ same prompt reply that was provided Kai.sas Gas and Electric Company, Chanute, and Coffeyville. Thank you. Yours,very truly, / hh WY' 7e Gordon L. Schrader City Manager c.c. Chairman John flassikas, Federal Power Commission 1 Chairman Dale Saffels, Kansas Corporation Commission Thomas E. Kauper, Antitrust Division, Department of Justice Drexel Journey, Federal Power Commission .~
C.5-56 1 I e 1QM E., ..g--~ g February 1, 1974 e Mr. A. J. Doyle The following information is provided in response to Mr. Brand's letter of January 8,1974: Since the City of Osawatomie has discussed interconnection fa-1. cilities of from 5 to 15 MW capacity, different types of interconnection service, and has.at various times indicated it would pay in some manner for all or part of the. radial line facilities used exclusively for the inter-connection, it is difficult to estimate with any degree of finality the installed cost of constructing and the related. operating cost of the The contemplated in-4 Comp-ny's portion of the interconnection. facilities. stalled cost of the additional facilities ranges from $35,000. to $223,000, depending on the services to be supplied. The. allocable portion of the Since Company's remaining facilities would still have to be determined. the type and quantity of service desired by the City has not been established, 3 the annual cost for direct and allocated facilities c.annot be determined other than to say that rates for. servicts filed with the FPC are cost related. 2. Insured Reserve Service has ' priority over Emergency Service to Insured Reserve Service has a contractual systems outside KCPL's control area. priority equal to Firm Service. As a practical matter, since KCPL has auto-matic load shedding facilities on its retail loads, portions of the retail load would be dropped by automatic operation 'before interruption of Insured Reserve Service occurred. In the event of a continuing system or area disaster, Incured Reserve Service customers could expect to have their service limited as long as retail customers are curtailed. Unless the municipality were simultaneously suffering an emergency condition on its owh system, a curtail-ment of Insured Reserve Service would not result in less of municipal load, since by de'finition o'f Insured-Reserve Service, the municipality would have ~ Since the MOKAN Pool sufficient capacity on its own system to carry its load. maintains a loss of load probability of one day in ten years, any small mu-nicipality operating on a normally closed interconnection with KCPL would have a loss of load probability much less than one day in ten years (higher reliability), since it would expect to lose load only in the unlikely event-of simultaneous disasters, assuming there is adequate interconnection capacity. 3. In the February 28, 1972 offer, the Company supplied only that por-tion of the reserve capability needed by the City to maintain the same degree In the of reliability as that of the Company, as a member of the MOKAN Pool. September 10, 1973 offer, to maintain the same degree of reliability (with . reserve expressed as a percent of peak load) the Company has to allow for the 1 e = ---.y pr-.-.< v-w- - y 9- +- r -n w,,, p --.,c- .--r y v +- 1 --+--r
Mr. Doyle February 1, 1974 Page 2 e allocation of its f acilities up to the limit of the interconnection capacity. Since the interconnection capacity has not been established by the City, the ra'nge of estimates for the additional investment would not be less than exclusive of any allocable portion of $35,000, but might exceed $223,000, the Co=pany's remaining facilities. The City selected a load reserve requirement of 25%. 4. KCPL's minimum reserve criterion presently ~ 5. For planning purpor is 15% of its projected annuat peak load. KCPL shares reserves with other Participants in the MOKAN Pool under a General Participation Agreement dated Each Participant presently is required to make provision March 28, 1962. for a minimum reserve of 15% of its projected peak loao for each Contract Such minimum reserve capacity percentage requirement is subject to change from time to time by action of the Executive Committee of the MOKAN Year. Pool. ~~ Each of the MOKAN Pool Participants and Associated Systems are meubers of the Southwest Power Pool under the Southwest Power Pool Coordination 16, 1969. In the planning of capacity additions, Agreement dated December the Southwest Power Pool Planning Criteria require that the MOKAN Pool, as a Group, provide reserve capacity equal to not.less than 15% of the Group's predicted annual peak load obligation, or alternatively, based more often than one day in ten years, provided that the Gnoup's reserve capacity is not less than 12% of the Group's predicted annual peak load The Executive Committee of the MOKAN Pool, in exercising its obli ga tion.determines a minimum reserve capacity requirement for its Partici-
- judgment, pants, including KCPL, af ter (1) a loss of load probability study based on
..% Jay in ten years, and a criterion of loss of load not more 4f;u.. (2) consideration of uncertainties in prediction of loads, hour-by-hour characteristics of load, availability of quick-start generation, and the effects of system interconnections and agreements with neighboring systems. Generating capability is based upon a demonstration by actual test under most adverse conditions that might exist during the peak load period being In addition, the MORAN Pool Executive Committee considers considered. scheduled cotage requirements for maintenance, fuel availability., energy. availability from ourchased power and load diversity, both within and without the MOKAN area through utilization of system interconnections. By action of the Southwest Power Pool or the MOKAN Pool Executive Com-mittee, the minimum reserve requirement may be increased based on future 1 forced cutage experience with larger generating units, maintenance scheduling considerations, and fuel availability. It has been the practice of KCPL to provide a reserve in excess of the In the last five years, the reserve has exceeded the mini =um requirement. minimum requirement and, expressed as a percent of p ojected load, has ranged up to 22% of KCPL's projected load.
February 1, 1974 Page 3 / I The criteria of the question assumes that the City would, under the t 6. "if not available" condition accept curtailment of part or all of its load Only if the interconnection were normally open, would there be a truly "1f-and-when available" basis. However, for the City to operate with a normally closed interconnection and maintain the same degree of reliability as that maintained by KCPL, as a member of the M0KAN Pool, the City would require either (1) a dedication of a portion of KCPL's ' generation and transmission system, or (2) the in-These concepts are the basis for the agreements offered t Osavatomie. In essence, a reserve expressed as a percentage of peak load in and of itself is meaningless unless the degree ci . liability associated with the percentaBe is known. requested percentage of peak load or generation unit sizes, quantifie dedication of KCPL's interconnection facilities with a closed interconne f i &W L. C Rasmussen 'LCR/pt t [ t E O i 5 8 9 i i n.
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.t: U T.V .[ s33o BALTtMonc avcNuc 7.;. ,j KANSAS CITY, MISSOURI 64141 ) / February 1, 1974 m%q; -,-t f'5h Mr. Cordon L. Schrader h City Manager City of Osawatomic f Main at Fifth Street Osavatomie, Kansas 66064 yj lJ; ~
Dear Mr. Schrader:
mW In accordance with our letter of December 24, 1973, wherein we stated, with respect to " wheeling" from BPU to Osawatoisie, we were making an engineer-t ing review to determine precisely what infomation is needed, we submit the following: { The attached KCPL preliminary engineering drawings 57-2127-B1 and 57-2127-B2 [- describe the type of interconnection facilities which,the City could expect to 4 furnish and install at its cost and expense. Briefly, they are (1) a 34.5 kv substation, including grounding transforcer(s) and circuit breaker (s), (2) telemetering equipment, devices and leased telephone circuits for continuous E transmittal of censurements of power and energy flows through the intercon-nection to KCPL's system dispatching office in Kansas City, Missouri, (3) a 34.5 kv radial line from the City's substation to the Point of Interconnection, Ff (4) a structure for KCPL's primary instrument ~ transfomers, (5) an underground i duct line in the City's 34.5 kv substation with metering cables from the metering instru=ent transfomer structure to a City supplied metering cubicle sufficient i for housing KCPL's =eter equipment, and (6) the cost of transferring and space on d the City's 34.5 kv line poles for KCPL's existing single phase distribution facilities, such space being suffi: lent to provide for possible conversion to ?
- three phas'u.-
~ ); All facilities would be subject to KCPL's approval with regard to reliability d and safety prior to construction. 7 To complete our study as to how, in what manner, and under what conditions such point-to point wheeling service could be provided to Osawatomie by KCPL, T the following infomation is required: fMp4' l. What types of power and energy services does the City contemplate re-ceiving from BPU? MM y. . 2. Over what period of time does the City want KCPL to reserve its facilities for each proposed service from BPU? (i Y $. 6-2.YM 3m
O O Mr. Cordon L. Schrader . February 1, 1974
- 3. Does thn City cesire to contract for the minimum 5000 kw of inter-connection capacity, or for greater amounts?
during each year of the contract term? If greater amounts, how much 4. of each type of power and energy service anticipated from BPU? 5. Will BPU maintain reserves associated with the various types of power it proposes to make available to the City? furnish a copy of the Agreement between the City and BPU.In this connection, please 6. In the event that the City's scheduled deliveries from BPU become unavailable from BPU for any reason, or if receipt by the City exceeds quan-tities scheduled by the City, does the City contemplate opening the int connection with KCPL's sy' stem? er-7. In the absence of delivery of, power and energy scheduled from BPU does the City expect KCPL to provide any substitute power and energy to the City, and if so, what type? 8. will supply the.de=and and energy lo'sses associated with th 9. that the City will at all times maintain the same minimum deg as KCPL when the interconnection is operated closed? reliability 10. services it contemplates receiving from BPU and/or the Com cerning the physical facilities involved in the interconnectio , practicable. If we should ha.ve additional questions,.we;will contactgyou.. Very truly yours, J. A. Mayberry Vice President, Marketing e Attachments
~/ c.5-58 l s February 5, 1974 Mr. Robert A. Olson Chairman of the Board Kansas City Power & Light Company 1330 Baltimore Avenue Kansas City, Missouri
Dear Mr. Olson:
Enclosed herewith is a proposal for interconnection between the City of Osawatomie's municipal electric system and Kansas City Power & Light Company at a point on KCP&L's trans-mission line approximately one mile east of Osawatomie's city limits'. Two' copies of the proposal have been signed by Osawatomie's City Manager and it is requested that KCP&L sign and return one copy to the City so that the City can commence construction as soon as possible. Under this proposal, Osawatomie will. construct, own and operate at its expense all interconnecting facilities, except the metering facilities. The proposal provides for interconnected operations including mutual emergency.and scheduled raintenance service, economy energy exchange, re-serve sharing, and transmission service under rates in accordance with current utility standards. 9 l l l l
f f Mr. Robert A. Olson February 5, 1974 Osawatomic is an isolated electric' generating system, and, as you know, it is generally desirable for economic and engineering reasons that such a system be inter-connected with the regional transmission grid so that it can participate in coordinated interconnected operations with neighboring systems. Osawatomie desires such an interconnection now for these reasons. Moreover, there is now an urgenc need for an immediate interconnection because of the national fuel and energy crisis. Osawatomie operates 8,135 kw of generation (dual-fuel, gas and oil) to serve a load of approximately 5,000 kw (30-minute demand). Osawatomie's base fuel is gas, but it has been recently notified it will be curtailed drastically (100% curtailment for 7 mo'nths and 80% for 1 month). As a pr'actical matter, Osawatomie's gas supply will be sufficient only during the months of June through Septenber 1974. Unfortunately, the alternate No. 2 oil fuel is not now avai,lable for purchase and Osawatomie is forced to use a heavier oil which endangers the equipment under con-tinuous use, and substantially increases maintenance costs. Moreover, the price of fuel oil has tripled in price from 11.5 cents / gallon in January,1973 to 32.4 cents /sallon in January, 1974. Gas generation costs approximately 3 mills per kwh for fuel, while the latest oil cost amounts to 20 mills (2 cents) per kwh. Moreover," federal and state officials are urging generating utilities to shift from oil to coal generation in order to conserve oil for other essential usages. See, for example, Federal Power Commission's Order No. 496 of November 23, 1973. Osawatomie is in the fo"tunate position of being able to secure fuel conservation energy from Kansas City, Kansas, Board of Public Utilitics' coal-fired generation at an economic rate. This supply of energy will enable Osawatomie to curtail all or substantially all of its oil generation and substitute " coal-by-wire" from KCBPU. Osawatomie's generation i o
f Mr. Robert A. Olson February 5, 1974 r will be kept in a ready-reserve condition, operable on 10 minutes' notice, with a 10-day oil storage supply. Thus, it can be operated at any time in the event KCBPU is' required to curtail deliveries, or at any time KCP&L has ~ any need for Osawatomie's generation in time of emergency or maintenance shutdown. In addition to conserving oil in the' national interest, the purchase from KCBPU will save Osawatomie upwards of $100,000 per year, and at the same time will provide additional revenues to KCP&L for transmission services (at no additional cost to KCP&L since these ser-vices will utilize existing facilities). For the foregoing reasons, Osawatomie desires to proceed forthwith with construction of the interconnection so that these savings and benefits can accrue as soon as pos sible. Every rr.onth of delay costs the national economy some 100,000 gallons of oil and Osawatomie an average of close to $10,000 per month. It will be appreciated if you will give this matter your immediate attention. Osawatomie is prepared to meet with you, or to supply additional information, at your convenience. Very 'ruly yours .m.a ~~ M Gordon L. Schrader City Manager Osawatomie, Kansas cc: Kansas State Corporation Commission, Attn: Chairman Dale E. Saffels Federal Power Commission, Attn: Drexel D. Journey, Esq., Deputy Gene,ral Counsel Kansas City, Kansas, Board of Public Utilitics, Attn: L. V. Olm, Director of Marketing & Industrial Services l l l Moe e o, ww. p ememe ye e m o et =w*=e see e aeg= , e = = een gpg ae e e g g-eq ,g g up A,- ee e *g we s g to WQ s
( 1 e (h) Transmipi nn %rvice: KCP&L shall provide transmission service at an annual rate of (4.30 por kilowatt of demand based on the amount of el, ctric power iod energy transmitted to or received from the Board of Public Utilities Kansas City, Kansas, ("KCBPU") or other generating municipality inter-connected directly with KCP&L, payable monthly at 1/12th the annual rate. The minimum monthly demand shall be 2500 kw. Osawatomie will absorb the trans-mission losses. l Five years subject to termination (i) Term: upon 24 months' notice af ter. the third year, by either l party. Osawatomie 5. Upon written acceptance below by KCP&L, will commence construction, and the parties will prepare and j 1974. execute a formal agrument prior to June 1, l l THE CITY OF OSANATOMIE, KANSAS i [ :* i By m, s. 1 / Gordon L. Schrader City. Manager Accepted: KANSAS CITY POWER & LIGHT COMPANY By Date: THE' D.NSAS CITY STAR c.5-s February 14, 1974 0 S $}n a T 0**0 f 6w ' Osawatomie, K.C.P..& L-
- To Negotiate Transfer Dea u ni sevs o.
s~"* sas Board of Public L'tilities. Osswa'umic,,K:,n.-Attorr.cys! GorJan Schrador, city manag-
- for this city 'and tht Kansas!cr. said the agreernent came :f -
City Power & 1.!;ht Co; have:ter a meeting Feb. 6 in Wash. ? .agxed to nego'sa.e a contract'ington between city attorneys ,nd Federal Power Commission for the interconnection and a transfer of electric power to this gge g3'only an agreement to city from the Kansas City: Kam , It's. agree," he said. "There are a lot of details to be worked out yet. But it represents a.real movement forward from the stdemate we had before." Schradcr said the negotiatcrs had set a March 6 deadline for preliminary phase of negotia. tions. He said there was no guarantee the agreement cot.!d be reached by then. 0>awatomie officials, he said, want an agreement to " wheel" or traa>fer power on K.C.P.&L. l . lines nnd an agreement govero.p
- ing the intercotmecticu ci thei-l lines and transformers :t Osa.
'l watomie."The K.C.P.&L. moved for-l ward frcm their position a few { wecks a o when they refused to s cuote us a reasonable rate on the trar.sfer a g r e e m e n t," Schrader said. i He said the city and the pow-er firm have not yet agreed to 1 details of the interconr.cetion under which Osawatomie has of. i fered to construct the ' trans-fo-'r.ers at its own cost. .Osakatomie agreed to a ten- ' tative contract with the B.P.U. after that utility offered to pro- ' dde coal-generated electricity cheaper than the numicipal util ,ity here can operate'on diese!!
- el o-a.tu nl gas ta generate n
! efectricPy.
- ' Diesel is getting too expen-j.sive and natural gas.idt av i! g able,", chrader said.
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S c.5-60 KANSAS CITY POWER & LIGHT COMPANY s330 f*aLTia.orar avLeduc an m un s.oovt.c KANSAS CITY.MISSOUlt! 64141 .............u March 11, 1974 File No. 0302-41 George Spiegel, Esq. Spiegel.& McDiarmid Watergate Office Building 2600 Virginia Avenue, N.W. Washington, D.C. 20037 Re: KCPL-Osawatomie: Municipal Interconnection Contract
Dear Goerge:
Per our discussions on March 7, 1974, enclosed herewith are: Ia) copies of a 3-11-74 draft of the captioned Contract; (b) KCPL's range of incremental energy costs for the ' Contract Year June 1, 1974 through May 31, 1975, for both on-peak and off-peak periods; and (c) data with respect 34.5 kv Paola-Centerville line.to capacity availability on KCPL's With respect to the Contract please note the following: (1) In t.rticle I we have inserted dates to reflect an initial five-year term of agreement. If the City desires a longer term, KCPL would not object. (2) In Article II, Section 1 we have lef t a blank to fill in the distance from the 34.5 kv line to the Interconnection Role. We expect to have this number and a new plat available for our Friday meeting. (3) In Article II, Section 2 we have added the last sentence with respect to KCPL's underbuilt distribu-tion facilities, letter to Mr. Schrader.as mentioned in our February 1, 1974, (4) In Article III, Section 1 we have' inserted the word " therefor" after the word " supply'for grammatical purposes only. (5) In Article III, Section 1 we have changed the City's Generating Capacity to 8,235 kw, per Mr. Schrader's telephone call to me this date. < '..y.- - = e.
... March 11, 1974 o George-Spiegel, Esq. .In Article III, Section 2 and 4 we have left blank L (6) the percentage of the City's Annual Peak Load, but we will-have data available for our Friday meeting 1 i-to discuss-this matter further. (7) In Article III, Section 2 we have added the last sentunce which was missing. We can fill in the blank in Washington, if Mr. Schrader will furnish t.he appro- ^ j priate information. In Article Ill, Section 3 we have reworded the second (8) line for grammatical purposes only. In Articles V, VI and VII we have inserted the desig-(9) nations of the relevant attached Schedule. In Article XI, Section 1 we have inserted a missing (10) phrase immediately before " labor disturbance". On the Service Schedules attached we have placed the (11) designation of each Schedule in the upper right-hand corner for ease of reference which follows KCPL's normal format currently being used. 4 On the Service Schedule for Firm Power Service we (12) have left the values of the Capacity and Energy Charges blank. As previously discussed with you, KCPL is willing.to omit this Schedule from the Contract at the present time and include it as part of the Contract at a later date in as much as the City will not require Firm Power Service during the next few years. You may find other minor typographical corrections. As I mentioned to you in our March'7 meeting, KCPL is not f willing to include a " blanket wheeling" provision in any of its During recent months KCPL has been f interconnection contracts. Because of studying the question of " point-to-point wheeling".the tremendo be involved in " point-to-point wheeling" and particularly with KCPL is to any transaction involving less than 5,000 kw, this time. j respect not willing to. agree to any " point-to-point wheeling" at to give further consideration to this matter i KCPL would be willing" point-to-point wheeling" service were only if a particular necessar'y to protect the public because of some emergency or o,ther . compelling reason. Y G t ~ L
George Spiegel, Esq. March 11, 1974 After you have had an o?portunity to review these documents, if you should have any questions, please do not hesitate to contact me. In any event, we will plan to meet with you and City Officials in Room 5200 of the FPC offices on Friday, March 15 at 9:30 a.m. Very truly yours, k -4 MV\\ AJD-be Enclosures cc-Mr. Jules Doty Mr. Michael L. McDowell Mr. Willis N, McQuary Mr. Leslie V. Olm Mr. Gordon L. Schrader Mr. Drexel D. Journey 1 I 4 e
c.5-61 MEMORANDUM To: File March 18, 1974 Re: Osawatomie, Kansas File No. 0302-41 FPC Complaint 1 On Friday, March 15, 1974, KCPL representatives (Messrs. Mayberry, McCarthy, Rasmussen, Luiken and Doyle) met in informal conference before the FPC (Deputy General Counsel Journey presiding) with representatives of the City of Osawatomie (Messrs. Spiegel, Schrader and McQuery). Mr. Journey put into the record copies of all correspondence that he had received since the last meeting c,n February 6,1974. Mr. Spiegel then submitted for the record his letter of February 27 and its attached revision of KCPL's Insured Reserve Contract dated February 28, 1972. Mr. Doyle then advised that KCPL had received Mr. Spiegel's letter of February 27 with its attached revision, had found some revisions to be acceptable in principle and language, had found some revisions to be acceptable in principle only, and had found others to be objectionable. Therefore, KCPL prepared a revised draft which was dated 3-7-74 and submitted it to the City's representatives at the March 7 meeting in Kansas City. As a result of such meeting it appeared that such 3-7-74 draft (with one minor language change) was acceptable except in four specifics --i.e. the City was requesting 1) a favored nations clause on each rate schedule; 2) bilateral contract provisions with respect to economy and emergency service; 3) a reserve requirement based only on 15 percent of annual peak load; and 4) wheeling from Kansas City, Kansas, although the City hrd indicated that it might drop such requirement at this time, and take the matter in two steps deferring the wheeling to the later date. Mr. Doyle also put into the record substitute pages 2, 4 and 5 and the plat to be included in the 3-11-74 draf t to bring it up to date (3-15-74) and fill in all blanks (except the blank rates for firm power service). Mr. Doyle then reviewed the changes showing the derivation of the City's Generating Capacity, Firm Generating Capacity and largest unit from revisions of page 4 of the FPC report which had been furnished to him by telephone from Mr. Schrader. Also, Mr. Doyle pointed out that the 25 percent of annual peak load had been reduced to 20 percent and showed the 11 year history of KCPL's act.ual reserves. Mr. Spiegel responded, acknowledging that the parties had made substantial progress in negotiation and pointed out that at the
March 7 meeting he had indicated agreement in principle, stating that he wanted to reserve the right to review the specific details of the language. He then stated that his position was as follows: 4 (1) The contract should include a favored nation clause and described it as one which goes beyond or clar~i-fies the law. service should be bilateral (2) Economy and emergency's excess generating capacity because then the City would improve KCPL's reliability and KCPL could receive credit for it. h) The City might be willing to drop its demand for point-to-point wheeling at this time and has been I studying the savings that could be achieved through Economy Energy but wanted to know what uther various types of service was being furnished by KCPL for fuel conservation. (e.g., Short Term, Emergency, Economy or other types with any system, including major interconnections.) ,J (4) With respect to the 34.5 Kv line capacity, the City requested data with respect to directional power flqws. (5) With respect to the Interconnection Pole, the City wanted to know the reason for the one span separation from KCPL's 34.5 Kv line. ,(6) With respect to the corrections of the FPC data, page 4, Mr. Spiegel acknowledged that the figures submittad by Mr. Schrader were correct; the other computations made by KCPL were subject to check. (7) With respect to the City's required reserves, Mr. Spiegel said the City was in agreement except for the word " greater" should be changed to " lesser ' in refer-ence to the largestunit v. 20 percent of annual peak load, and that the 20 percent should be reduced to 15 percent. He also spoke at length that this was a device being used by the Company to prevent the City from putting in its most economical size generating unit so as to raise the City's cost of operation and permit the Company to take an unfair compatitive advantage. (8) Mr. Spiegel questioned KCPL's load and capability data demonstrating its actual reserves. the FPC's expert on Mr. Journey brought in Mr. Bill Ballet, Mr. Spiegel stated that it must be recognized that lking about reliability. .when comparing KCPL's and the City's system, we are taThe City is sugg'esting sizes. systems of significantly differentthat these should be operated as integra On the other hand, another view is to determine the City's present reliability and then determine its reliability if it were being operated He stated tha. because the City's system is so interconnected. although it small in comparison with the Company's system that, times it would be very difficult will have some excess capacity at li to effectively use such capacity because of the operating difficu t es Therefore, he would apply the test determin-involved in scheduling. that on an ing the City's reliability as an isolated system v.To do that you would examine interconnected basis. determine a load model and study the forced outage rates, loads,He would then add the tie and repeat the probability of outage.He stated that based on his examination he felt that the result would be no substantial difference than that indicated in study. the FPC's Ft. Worth study of January, 1973. An unidentified staff member stated he did not share those He pointed co the dispute involving the City of Cleveland with Cleveland Illuminating Company and the Illinois Power Company views. the Commission had resolved each of these dispute and stated thatthat the City provide a percentage reserve equal on a requirementto that required of the Company in its area reliability pool. Mr. Journey pointed out that under the Gainsville decision that the the City was entitled to the same percentage Court did not hold that but stated that each situation would have to be reserve requirement, determined on its own engineering studies as to reliability. Mr. Doyle then responded to Mr. Spiegel's points stating that: With reference to the favored nation clause, if it goes (1) beyond or " clarifies" the law,the Company was not interested in including it. The City's offer of Emergency and Economy Energy to (2) the Company was" meaningless"and would be of no value Further KCPL could not get credit for the to KCPL. City's excess capacity in the McKan Pool. (3), The proposal by KCPL would permit Emergency Service to and the City due to fuel shortage or unavailability,f the Energy if it were merely the question o Economy City's cost of fuel. there With respect to line capacity, it was obvious that capacity in KCPL's 34.5 Kv line as shown (4) was sufficient 11, 1974. by the data submitted with the letter of Mar < h. =--,
(5) With respect to the requirement for one span separation, Mr. Rasmussen stated that he did not know the reason but assumed that it was necessary because the pole from which the ta busy. p would be made in KCPL's 34.5 Kv line was very He called for a picture which Mr. Schrader pro-duced. He pointed out the need to add a pole top switch the point of interconnection and suggested that the at present pole in the line would be too busy. (6) With respec~t to the City's required reserve capacity, Mr. Rasmussen pointed out that he was in good company. The FPC report from Ft. Worth in January of 1973 specifically noted the necessity of a reserve equal to the largest generating unit in order to provide equivalent reliability. Mr. Spiegel stated that the City would not sign a contract with a requirement that the City provide a reserve equal to its largest After much discussion and because the hour was growing late, unit. Doyle advised that to show the Company's good faith, he would Mr. submit for the record and to the City and to the staff of the Commission a signed copy of the 3-15-74 Insured Reserve Capacity (which included all the up to date changes but with the Agreement Firm Power Service Schedule removed because the City was not interested in Fimm Power at this time and the rates therein were left blank.) Mr. Mayberry signed and submitted such contracts. Mr. Journey then called upon Mr. Spiegel to submit any changes which he might wish to suggest by March 20, 1974. Mr. Spiegel agreed to do so but suggested he did not want to go to Kansas City again, therefore the Commission should set another date for another informal conference. Mr. Doyle objected stating that due to prior commitments and Commission hearings, he could not see his was clear to agree to a specific date prior to mid-June. Mr. Spiegel then stated that it was most urgent they proceed with the interconnection and they might have to file an application with the Commission for construction of the facilities leaving the switch open. Mr. Doyle advised that he would not have the opportunity during the rest of March to look at a single document, but it was possible that without fixing a specific date there might he could give sometime in early April.be some open period of a day which The meeting was adjourned on the basis that Mr. Spiegel would submit any suggested changes he might have to Mr. Doyle as soon as possible and after review by Mr. Doyle, the parties would endeavor to resolve their differences and failing that, notify Mr. Journey that another conference should be scheduled. A. J. Doy
- AJD:cs law orrects C.5-62 SPiccEI. & McDIAaMan 2600 VIRGINI A AVENUC N W W ASHINGTON. D. C. 20037 EgMGE SPff0EL WO:cm C. =c o""*
March 20; 2974 EAm34tA J. STRt5tb -NOItaf A. JAeLON TELEPHONE $ 2028 333 8860 J:,ut9 H. HORwCOD gETEst M. M ATT fvuGedse 8A4 Omtfl JAME3 CAmL POLLOC8C 1 1 Drexel D. Journey, Esq. Deputy General Counsel
- 825 North Capitol Street 4[4 Washington, D. C.
20426 Re: OGC:0.sawatomie, Kansas Kansas City Power & Light Co. (Interconnection)
Dear Mr. Journey:
Enclos5d herewith is a copy of Osawatomie's March 18, 1974 revision to KCP&L':s draft contract of March 15, 1974. It is in a form which the city is prepared'to execute as an interim compromise and settlement in view of KCP&L's refusal to date to agree to the transmission of capacity and energy from the Board of Public Utilities of Kansas City, Kansas. This will be executed on the understanding that 4 KCP&L will negotiate in good f,aith for the providing of transmission service for pu-rchases of capacity aid energy by the City from the Board of Public Utilities of, Kansas City, Kansas. 4 l-We have inserted in the economy ener,gy schedule (EE-MIC-2) a provision placing a ceiling cf '6 mills per kwh I, plus ' fuel adjustment. - This provision can be eliminated when KCP&L agrees to transmit power and energy from BPU to the City upon satisfactory terms. Before executing, the City reiterates its request that it be furnished a monthly tabulation, begianing January 1, 1973, showing KCP&L's sales (kwh and charges) for all sales in the category of economy, emergency, f-el conservation, rhort-term and the like. This will enable the City to evaluate the. benefit to be derived under the economy energy clause. ~ sh ~ ^,... ,p --, ----i a jy e+ - - -
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. =. - f. O o 2 -- March 20, 1974 1 Drexgl D. Journey,'Esq. While most-of the other modifications shown 'are subject to further discussion, the City cannot recede from (Article III, its modification of the reserve provision Section 2) because the City. cannot feasibly plan economic bxpansion if it must' hold as reserve capacity an amount equal to its largest generating unit. The City greatly appreciates the work df the ~ Staff in this matter, and hopes that its efforts will be successful. and that the Company will execute the contract 17 in the form enclosed. In making this proposal, the City does not waive - but rather reserves all its rights and previously stated positions in this matter. ~ Respectfully submitted, Gaorge Sp.tegel Attorney for the City of Osawatomie, Kansas GS/njz Enclosure ~ Arthur J. Doyle, Esq. cc: General Counsel Kansas City Power & Light s Willis N. McQuary, Esq. . City Attorney-Osawatomie' o o i Mr'. Gordon L. Schrader City Manager ~Osawatomie 9 e
p pq, mm .m 0 3-C.s-63 2_ MWATOftjilE GR,.PHIC-NEWS oo o March 21,1974 Osawatomie, Kansas At Hearing ~ BY TOM CORDON conference were City Manager said the city wanted its reserve Washington Reporting Program Gordon Schrader and City Attor-capacity,which would be used to WASHINGTON - City offi-ney Willis H. McQueary. KCPL meet power needs during peak i cials of Osawatomie, Kan. and representatives present were W. demand periods, to be based on a representatives of Kansas City C. McCarthy, vice president; J. percentage of its annual peak Power and Light Co. concluded a A. Mayberry, vice president of load. In its contract, KCPL said - three-andene half hour inter-marketing; I4uis Rasmussen,. the reserve capacity should be connection conference at the manager of rates and contracts; based either on the operatmg. Federal Power Commission and Arthur J. Doyle, vice presi-capability of the city's largest here Friday, but several differ-dent and general counsel FPC single generating unit or 20 per ences b!ock the signing of an in-Deputy General Counsel Drexel cent of its annual peak load, terconnection contract. .. Journey moderated the confer-whatever would be larger. George Spiegel, the city's ence. - Spiegel said the city would counsel, said the two eides may Toward the close of the meet-p;efer a percentage so that it choose to negotiate interconnec-ing Doyle submitted the city a could sell more power and not tion before discussing transmis-slightly changed version of an have to keep so large an amount sion of power along the line from interconnection contract drawn of power in reserve. Under the Kansas City, Kan, to Osawa-up by KCPL March 11. Journey KCPL proposal the city would tomie. asked Spiegel and the city offi-have to retain on reserve its Two Routes cials present to note their objec-largest single generating unit of The city wishes to purchase tions to the proposal in writing 3100 kilowatts. electric power from the Kansas and submit them to the FPC by Rate Opposed l City, Kan. Board of Public Utili-March 20. Both sides agreed to hkQueary and Schrader also . ties,butitcanonly do soifinter-attempt to meet some' time in objected to a provision under connected to a line owned by. April. which the city would purchase KCPL. The city also wishes an Several objections each month insured reserve - interconnection with KCPL to Spiegel said the city objected capacity equal to the greate=t obtain additional power sources to several provisions in the margin by which the ' city's an. for emerge ' economy KCPL proposal, including that nual peak demand exceeded its needs. dealing with the city's required " firm generating capacity" (de-City officials p.'sent at the amount of reserve capacity. He termined to be 5135 kw). Schrader said the city would end up paying insured reserve 4 ' capacity ' rates based on 'the greatest peak demand even when actual power demand would be at a much lower levet Spiegel added that KCPL's provisiot. for the purchase of " economy energy" would cost the city mere than if it bought the economy energy directly from the Kar.sas City, Kan., Board of Public Utilities. Econo-my energy is the surplus cheap-er energy transmitted by one - supplier to another utility faced with producing energy from kcarce higher cost fuel. "If we're not going to get transmission from Kansas City, Kan., then we need a lower economy energy rate," he said. -4
a -J . / C.5-64 FEDERAt POWER COMMISSION I~ WASHINGTON 20426 D**
- D'T ocC e J
. J,J MAR i S 1974 wo e Mr. Jules Doty, Cornissioner Kansas State Corporation Commission State Office Lullding Tercka, Kansas 66612 l Mr. Laslic V. Oln 8 Director of liarketine- 'Trd!!,! 1.t *.' Y C ana Industrial services Board of Public. Utilitios, i.a te r, Light and Power 1211 Jorth 8th Strcot nannas City, nansas 6G101 i I.c : Osawatomis, Kansas O cansas city roaer anc night Cor.7.any i J>. nticuen : I Enclosed is a copy of a letter with an annexed dratt I form of intercontioction agreenont furnished te the Cocmis-nion staff by George Spiegel, Counsel for the City of P on watonic. see conference recorc of narc 5 15, 1974, ':3. G7G. Your cotments on this enclosure arc requested, along l' . tith colments on any other mattorc discussed at~ the March 15 conference. In particular, I direct Mr. Olm's attention to i tae conference record Tn. 669, and your joint attention to Y th-discussion at vr.. 623-679. rho state corporation Comic-cien and une ' oard of Publ'ic Utilities were not representcG J at t:1e i.arci.15 conference. 1heno cre significant issues presented. Your partici-puuion tnrouga a statement of your respective vicus is rc. ucated. -g-
4 q n 9 q p.10 ' D b uluuiJLLs D U iU: U-Jr. Julos Doty Mr. Loslie V.' Oln As you will noto from the conference record of March 15, the next conference dato will be arranged fol-lowing discussion of Counscl. Sincerely, OREXO.D.JOURNiv Drexel D. Journey Deputy Cenoral Counsel Enclosuro: Ccpy of lettor dated !-iarch 20, 1974 f rcra Georce Spiegel. cc: dr. Arthur J. Doyle General Counsel Kansas City Power and Light Conpany 1330 baltimore Avenuo Kansas City, Missouri 64141 dr. George Spiegel spiegel & McDiarmid 2600 Virginia Avenue, N.W. Uachington, D. C. 20037 s-
.:.. -g .r - $ late of.*b,ansas - . i ~ ~ ~ - ~' 2.Y '\\ C.5-65 M4 ,;-.. ' r ! . ;.- eg lGb2 Of]> ora llon ommi3Jion nostar n. DO:nno' c...uner a DAtt t.- Affit$ Chehmen TOPEKA, KANSAS 66612 I - Jutts v. Don commiu!.a., l.- viaNoH A. sT8CltRo Co==luioner. ' April 4,1974 - DARotD D. MAIN sect.fory Jaars t. weits c. c.....t Mr. Drexel..D' Journey Deputy General Counsel Federtl' Power Commission Washint on, D. C. 20426 t / Re: Osawatomie Kansas Kansas City Power and Light Company Your file: OGC
Dear Mr. Journey:
In reply to your letter of March 25, 1974, conce rning the contract negotiations between the City of Osawatomic and the Kansas City Power and Light Company, I wish to state for consideration by all parties, the position of the Kansas Corporation Commission in this matter. Our position is that we are concerned only that Kansas City Power and Light enter into no agreement or agreements which may impair i the reliability of the capacity to serve the customers of that company, whose service is regulated by our commission. We also will, in exercising our regulatory jurisdiction, prevent any of the costs associated with a contract of this type being borne by the regulated customers of the ccmpany. The foregoing is, in brief, the position of our commission, which I am sure is not novel nor unique. Sincerely, s k.l y f./ 1 Jules V. Doty, l Cominis sione r JVD/fmw cc: (see attached)
C.5-66. -.__.,_, 1 2 N orth 8th Stre et BOARD OF PUBLIC UTELITIES -..c9 x(W Kansas City, Kansas 66101 WATER, LIGHT AND POWER j April 15, 1974 Mr. Drexel D. Journey 4 " Deputy General Counsel Federal; Power Commission Washington, D..C. 20426 Re: Osawatomie,. Kansas
Dear Mr. Journey:
In reply:to your letter of March 25, 1974, concerning negotiations between Kansas City Power & Light Company and the City of Osavatomie, With reference to TR-669, The Board of Public Utilities-has recently offered the City, a three year contract for electrical service on our rate MUN-I, -(copy attached). However, we note that Kansas City Power & Light will not . agree to "pofut to point" wheeling. We feel that K.C.P. & L.'s refusal to wheel has certainly hampered our operations in the past, and,.of course, in the case of Osawatomie,- they are certainly hampered in-the operation of t..eir utility. We doubt if the operating and accounting problems involved in wheeling would be nearly as complex as K.C.P. & L. claims. We do hope that these proceedings will resolve these matters and allow -smaller municipal systems such as Osawatomie, a chance to survive. Sincerely, ,_s'- 7 '. - ~ ..g [ vfl $ + L. V. Olm, Director Power Services LVO:je encl. cc: Mr. Jules Doty, Commissioner Kansas State Corporation Commission ', State-Office Building - Topeka, Kansas 66612 . cc: Mr. Arthur J. Doyle, General Counsel Kansas City Power &-Light Company 1330 Baltimore Avenue - Kansas City, Missouri 64141 -cc: Mr. George Spiegel Spiegel & McDiarmid 2600 Virginia Avenue,-N. W. Jashington, D. C; 20037 l l 1 ~ Q ~
c.5-67 KANSAS CITY POWER & LIGHT COMPANY 8330 BALTIMORE AVENUC KANSAS CITY, MISSOURI 64141 Amtsua s. oovte April 23, 1974 File No. 0302-41 Mr. Leslie V. Olm Director of Power Services Board of Pub lic Utilities 1211 North 8th Street Kansas City, Kansas 66101 Re: KCPL-Osawatomie, Kansas Interconnection
Dear Mr. Olm:
This will acknowledge receipt of a copy of your April 15, 1974, letter to Mr. Drexel D. Journey. It appears that your secretary inadvertently failed to attach the enclosed three year contract for-electrical service by BPU on its rate MUN-1 to the City of Osawatomie. I would appreciate receiving a copy of the missing attachment,as we are endeavoring to respond to Mr. Spiegel's letter of March 20, 1974. Sincerely, i b AJD-be cc-Mr. Drexel D. Journey Mr. Jules Doty Mr. George Spiegel i A T ---,--n --._,-v -.w-.- --,.w,-n..
.C.5 -o. L Aw of r ect s 4 .M l'8 I;Gl-;t. & M (*DI AIL Ml17 2 600 VIRC St.l A AVENUE,N W W ASHING 10N, D. C. 20037 6. opct test &tL May 16, 1974 . ne st C ascosaputo ". ou,.,. .tSu 1 t L E P De O N E (2028 333 8060 I3ntRT A J a 9 LO*e tuts n coawoon - $114 A. MATT peeGwse das Deegg) ' 4&stS CSEL POLLOCR 4 i j. Drexel D.-Journey, Esq. Deputy General Counsel Federal Power Comm ssion i l 825. North Capitol Street Washington,,D. C. 20426
Dear Mr. Journey:
This is with reference to the request of the for a Gainesville_ type inter-City of Osawatomie, Kansas, ("KCP&L"), connection with Kansas City Power & Light Company together with an agreement for the transmission of surplus energy which Osawatomie can purchase from the Board of Public (" Kansas City"). Most re-Utilities of KL,.tsas City,. Kansas cently, this has been a matter discussed in your letters of May-3 and 4, 1974 and mine of May 14, 1974. Osawatomie operates an isolated electrical system with 8235 kw capacity in diesel generation and a most recent Osawatomie seeks an gross peak of approximately 5000 kw. interconnection with KCP&L' the dual purpose of power interchange-with KCP&L and for pur-chase over KCPE4's system of surplus energy from Kansas City in order to displace number 2 diesel fuel where cheaper coal-Conferences have been held fired generation is available. 1974. with the Commission Staf f on February 6 and March 11, l l i 1 9 ' ' me 3 w e y..
Drexel D. Journey, Esq. May 16, 1974 As a result, Osawatomic sent to you and KCP&L a proposed draft of contract by my letter of March 20, 1974, and KCP&L has rcegunCcd by letter of April 30, 1974. KCP&L takes issue with a number of the provinions proposed by Osawatomie. All of these, with one exception, can, in my opinion be worked out by a meeting of attorneys. The one exception is the matter of installed reserve generating capacity (Article III, Section 2). KCP&L insists that the reserve must be equal to the largest single generating lia-bility (or 20% of Osawatomic's peak load, if greater) and Osawatomic insists that the reserve requirement be set at 15% of the peak. Osawatomie's position is based upon the Commission's decision in the Gainesville case. II The resulting difference has a substantial ~ccanomic impact. Under KCP&L's requirement, the reserves would need to be 3100-kw. Under Osawatomie's proposal the current reserve would be approximately 730 kw, increasing at the rate of 15% of the load growth, a uing the difference at KCP&L's current wholesale power rate, it amounts to some $8,200 per month. I discussed this matter yesterday with Mr. Arthur J. Doyle, General Counsel of KCP&L, and KCP&L is unwilling to budge on the issue. Accordingly, I proposed that we finalize the agreement as to the subsidiary items, and insert appropriate language pro-viding that the reserve provision be determined by the Federal Power Commission under its statutory authority, preferably on the basis of a stipulated statement of facts. KCP&L is un-willing to proceed on this basis, and insists that the contract must be executed in the KCP&L form, at least as to the rcscrve provision. Osawatomic is unwilling to execute on this basis. _/ Gainesville v. Florida Power Corporation, 40 F.P.C. 1227, O 41 P.P.C. 4 (1969), 4 25 F.2d 1196 (Sth Cir. 1970), 402 U. S. 515 (1971). O*/ Por proposed settlement FPC Docket No. E-8365, Notice issued May 1, 1974 (53.46/kw/ month). e 1 W
t
- May 15, 19%1 Drexel D. Journey, Esq.
Osawatomic gives notice that it believes that KCP&L's refusal to narcc to an interconncction on the laws and reserves Gainesville basis violates the antitrust all its rights to initiate appropriate action. In addition, KCP&L continues in its refusal to discuss the matter of transmitting surplus energy from Kansas City to Osawatomic. In effect, it is refusing to Osawatomie does not insist that this transmit this energy. be resolved as a condition to execution of an interconnection In other words, Osawatomie will execute a proper agreement. interconnect' ion agreement even though KCP&L continues to refuse to transmit energy to Osawatomie. Osawatomie, however, gives KCP&L notice that it believes KCP&L is violatia.; the antitrust its remedies. laws by this refusal, and it will separately pursue The losses which Osawatomic will suffer as a result of this refusal are substantial. Accordingly, The need for an interconnection is urgent. Osawatomie is proceeding with its program for construction of the interconnection even in the absence of an agreement, so that the If necessary, interconnection may be operable by the Fall of 1974. to the Commission for an Osawatomie m a y make an application emergency interconnection order under Section 202(c) of the Federal Power Act. However, Osawatomie believes that, on the basis of the factual record before the Staff, the Commission has an affirmativo duty to take steps to rectify the apparent violation of the Federal Power Act by KCP&L. Osawatomic is a small system with limited resources for litigation, while KCP&L has unlimited litigation resources. 9 r,
a J 3. Drexel D. Journey, Esq. May.15,~1974 a lOsavatomie is prepared to cooperate fully with the ' Commission and the Staff in this 2.Jg r'. 4 i Respectfully yours, r, f George Spiegel j GS/njz cc: Honorable Jules Duty Commissioner i Kansas State Corporation Commission State Offico Building Topeka, Kansas 66612 l Mr. Gordon L. Schrader City Manager, i j Main at Fifth Osawatomic, Kansas 66064 'f Arthur J. Doyle, Esq. General' Counsel Kansas City Power & Light Company. 1330 Baltimore Avenue Kansas City, Missouri 64141 Mr. Leslie V. Olm Director of Marketing and Industrial:-Services. Board of Public Utilities 1211 North 8th Strcot- ' Kansas City, Kansas 66101 I i 4 I k s e ) 1 w,, v e-r e+-e-v,-r'-',tr-e ..e- - -, - - + = - -ew- -m- ~ * -. - e - = v
c.5-69 MANSAS CITY POWER & LIGHT COMPANY en oenrwcc:w:c...t KANSAS CITY.MISSOI RI 64141 M y 29, 1974 File No. 0302-41 George Spiegel, Esq. Spiegel & McDiarmid 2600 Virginia Avenue N.W. Washington, D. C. 20037
Dear Mr. Spiegel:
This letter is in response to your May 16, 1074 letter addressed to Mr. Drexel D. Journey, Deputy Genera Counsel of the Federal Power Commission ("FPC") with reference to the proposed interconnection of the municipal system of the City of Osawatomie, Kansas (" City") with the electric system of Kansas City Power & Light Campany ("KCPL"). As the transcript of our February 6 and March 11, 1974 ~ ' conferences before the FPC Staff will show, KCPL has on several. occasions during the past 30 years suggested to the City that it should not operate its electric system isolated, but should interconnect with KCPL's system. In fact, KCPL has submitted to the City proposed interconnection agreements, but on each occasion prior to 1972 such overtures by KCPL were unavailing. For your convenience and that of other interested parties, I am transmitting to you herewith a 5-24-74 draft of Municipal Interconnection Contract which is based on, and incorporates the changes referred to in, my letter of April 30, 1974, in response to your letter of March 20, 1974. Per the attached exhibits, which are part of the record of our February 6 and March 11 conferences with the FPC Staff (Tr. 452-3 and 553), we have shown in the proposed Contract enclosed that as of this date the City's Generating Capacity is 8235 kw; that the City's Firm Generating Capacity is 5135 kw; and that the City's largest single generating liability included in the City's Generating Capacity is 3100 kw. The attached exhibits furnished by the City also show that the City's highest net thirty-minute peak system load experienced during the past 11 months was 4870 kw. Since the City's Firm Generating Capacity (5135 kw) exceeds the City's Annual Peak Load (4870 kw) the City would be under no obligation to purchase
t George Spiegel, Esq. May 29, 1974 Insured Reserve Capacity from KCPL at this time and would not be required to make any payments to KCPL at this time, except for such amounts of Emergency Service, Economy Energy Service or Firm Power Service which it might elect to purchase. \\ The City's Annual Peak Load forecast for the su=mer months of 1974 is 5140 ku, as shown on the attached exhibits. That is 5 kw more than the City's Firm Generating Capacity, and under Section 1 of Article IV of the enclosed Contract, the City should make provision to supply such excess load and may, if it so elects, do so by purchasing 5 kw of Insured Reserve Capacity from KCPL under the attached Contract. The cost to the City therefor would be $6.25 per month for the month in which such peak load is. experienced and for each of the succeeding 11 months, for an aggregate of $75 for the year. As shown by the transcript, KCPL has had in effect and on file with the FPC Municipal Interconnection Contracts with the Cities of Marshall and Carrollton, Missouri, and Ottawa and Garnett, Kansas, which are identical or at least similar to the attached proposed Municipal Interconnection Contract with the City. The January 1973 FPC Staff Report to the City recognizes that a reserve generating requirement approximately equal to the largest gener..<.ng liability may achieve an equivalent degree of reliability so aat such load can be carried on all but one day every ten years. If the City were to provide a lesser degree of reliability than KCPL has provided for its system, then the interconnection would result in a net burden upon KCPL's system for which it should be compensated per rationale underlying the Gainesville decision. In short, KCPL's position is that it 1 will accept a minimum installed reserve capacity requirement for i the City equivalent to that provided by KCPL for its own system, 1 i.e., the same criteria on loss of load probability. Also please note at Page 556 of the transcript, that KCPL in 1973 had an actual reserve of nearly 257. and estimates an actual reserve for 1974 of nearly 25% of its system peak responsi-bility. It is difficult for KCPL to understand why the City should be permitted to contribute a lesser degree of reliability to the interconnection than that contributed by KCPL without just compensation therefor, especially where, as in this case, the interconnectica would be an absolute liability and result in no l benefit to KCPL's system operations or customers. If you will explain to us your factual and economic justification for a Reserve Capacity requirement for the City of less than its largest single generating liability, KCFL will be pleased to review it
George Spiegel, Esq. May 29, 1974 and reconsider-its position with respect to the City's minimum Reserve Capacity requirement. Perhaps you will want to request the FPC Staff to do a loss of load' probability study for the City to determine what needs to be done by the City to achieve or pay for a degree of. reliability equivalent to KCPL's system reliability. We have~ reviewed the decision in the Otter Tail case and an only conclude that (1) the FPC has no authority to require KCPL to " wheel" electric power and -energy to the City, (See Southern California Edison Company Docket No. E-8176, Order issued Sept. 21, 1973, and Pacific Gas and Electric Company Docket No. E-7777, Orders issued March 14, 1974 and May 14, 1974) and (2) KCPL has no duty to " wheel" electric power and energy to the City because'KCPL has offered to sell electric power and energy to the City under rate schedules in effect and on file with the FPC. In Otter Tail, 410 U.S. 366, the Court did not i ~ say that a utility must " sell and wheel," it held that a utility J must " sell og wheel,"-in. order to satisfy antitrust obligations. KCPL agrees with the City that an interconnection contract should be executed at this time and the interconnection con-structed and put into operation thereunder without awaiting resolution of the " wheeling" request by the City. ft is possible that KCPL and the City may in due course be -able to work out some form of a " point-to-point wheeling" on a double s cheduled capacirv basis with the City and BPU. This type of " wheeling" might avoid some of _ the operating problems, and KCPL is willing to investigate this further with BPU and the City. If this can be arranged, Article VIII~ of the attached Contract provides that-such arrangement could be _ included thereunder as a supplement or an additional service schedule. In any event, coal-fired gener-ation would-be available to the City from KCPL's system under the attached Contract under the several types of electric service h;whichwouldbeavailabletotheCity. KCPL stands ready to-execute the attached Municipal Inter- - connection Contract. It appears that the City has no need for Firm Power Service at this time. Upon final settlement of FPC Docket No. E-8365 a Firm Power Service Schedule can be completed and included as an additional service schedule under th e attached Contract, including-the' rates and-charges as may then be approved by the FPC for comparable Firm Power Service to KCPL's other municipal wholesale customers. 4 i l l L t
- George Spiegel, Esq. May 29, 1974 If you have any questions with respect to this matter, please do not hesitate to contact me. Very truly yours, IuL w A. AJD:db h Enclosures-4 cc: Drexel D. Journey, Esq. Honorable.Jules Doty Mr. Gordon L. Schrader Mr. Leslie V. Olm Department of Justice e e e 1 .-,--.y,-e e d.
C.5-70 LAW orF4CES SPIEGEL & M cDIAltMID 2600 VIRGINI A AVLNUE.N.W W ASHINGTON. D. C 20037 CEORGE SPIEGEL CO!ERT C. McDiARMio September 26, 1974 .AnoRA s. sinceEL _, _ g, ROCERT A. JABLON JAMES N. HORWCOD PETER M. M ATT JAufs CARL POLLOCM Mr. Arthur J. Doyle, Vice President and General Counsel Kansas City Power & Light Company 1330 Baltimore Avenue Kansas City, Missouri 64141
Dear Arthur:
This is with reference to our telephone conversation today, the last paragraph of your letter of September 21, 1974, and the paragraph on pages 3-4 of my letter of August 22, 1974. I would like you to prepare a proposed draft of a municipal participation agreement for Osawatomie and any other document such as the reserved transmission capacity agreement, which Kansas City Power and Light deems necessary for completing the anticipated contractual arrangements with Osawatomie. In making th.is request Osawatomie is not waiving any of its objections to the proposals that have previously been made by KCP&L. We seek to have before us the complete proposed contractual documents as proposed by KCP&L to be used as the basis for seeking to negotiate a final overall agreement. Best wishes. S_incerely, OA/. Wyl. GS/njb George dpiegel cc: Drexel D. Journey, Esq. Attorney for City of Osawatomie, Kansas Honorable Jules Doty, Commissioner Steven M. Charno, Esq., DOJ Richard Weiner, Esq., DOJ j Mr. Gordon Schrader i Mr. Virgil Hogland Lee Dewey, Esq., AEC l
bl'E k-7 C.5-71 KANSAS CITY POWER & LICHT COMPANY l ino..ui-ont wc.uc KANSAS CITY,bMSSOUR164141 ARTHUR J. DOYLE October 18, 1974 - " ~ " * " ' ... m...u o-m File No. 0302-41 George Spiegel, Esq. Spiegel & McDiarmid 2600 Virginia Avenue,- N.W. Washington, D. C. 20037
Dear George:
As requested by your September 26, 1974, letter, enclosed is a draf t of a proposed KCPL-Osawatomie Municipal Participation Agreement, per the last paragraph of my letter dated September 21, 1974. l / Your attention is directed to Schedule F entitled, " Reserved Transmission Capacity," under which KCPL would wheel power from BPU. to Osawatomie at 50c per kw per month on a Short-Term Interruptible basis or at $1.40 per month on a Long Term basis. With respect to Schedule D for Econe-Energy Service, enclosed is a revised range of incrementa. energy costs for Economy Energy Interchange, which KCPL's Production Department has prepared. You will note that since last March fuel costs-have escalated at an unprecedented rate. From the City's range of decremental energy costs and a forecast by the City of Economy Energy transactions, you should be able to estimate the total annual dollar savings to the City for the next 12 month period. As to the rates set forth in Schedules E and F, KCPL's Rate Engineers are now preparing a Cost of Service Study to detail the justification for these rates. I have been advised that such study will be completed and available by October 30. As you may know, Steve Charno has recently advised me that he has a conceptual problem concerning the compensation to be paid by the City to reimburse KCPL for the burden to be imposed ,-(
b 4 l ~ e . October 18, 1974 ,.orge Spiegel, Esq. i ibution on KCPL's 34.5 kv Paola Substation and local distr connection to KCPL's 161 kv bus in its Paola Substat This will be discussed at a conference to be held at my office com-mencing next Tuesday, October 22, with Mr. Charno and perhaps other representatives of the Department of Justice.and the I would appreciate receiving your Atomic Energy Commission. comments at an early date, because the Justice Department must soon make itc recommendation to AEC as to whether or not an antitrust hearing should be held concerning KCPL's application for a nuclear license for Wolf Creek's Unit #1. Sincerely, D f ~ AJD:db Drexel D. Journey, Esq. cc: Honorable Jules Doty, Commissioner Steven M. Charno, Esq., DOJ Lee Dewey, Esq., AEC Richard Weiner, Esq., DOJ Mr. Gordon Shrader, Osawatomie Nr. Virgil Hogland, BPU bec.: Mr. R. K. Zimmerman Mr. J. A. Mayberry Mr. W. C. McCarthy Mr. D. T. McPhee Mr. J. R, Miller Mr. L. C. Rasmussen 6
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c.5-72 j KANSAS CITY POWER & LIGHT COMPANY saao eaa+ cat a.cnut KANSAS CITY,. MISSOURI 64141 ARTHUR J. DOYLE ..cs ears.oe=t February 12, 1975 File No.0502-32 0302-41 George Spiegel, Esq. Spiegel & McDiarmid 2600 Virginia Avenue, N. W. Washington, D.C. 20037 Re: Municipal Participation Agreement: Osawatomie, Kansas
Dear George:
This will acknowledge receipt of your January 23, 1975, filing with the Nuclear Regulatory Commission (NRC) in Docke'. No. 50-482A and your letter dated January 27, 1975, relative to KCPL's 12-18-74 draft of the captioned Agreement. I appreciate your kind remarks concerning the definitions in Article III; how-ever, I cannot take full credit. Note that these definitions track comparable provisions in the MOKAN Pool (the General Partici-pation Agreement dated March 28, 1962, i.e., KCPL's FPC Rate Schedule No. 32) and the Municipal Participation Agreement dated July 8,1964, with the Board of Public Utilities (BPU) of Kansas City, Kansas (i.e., KCPL's FPC Rate Schedule No. 54), each mentioned in Paragraph 3 of your Supporting Affidavit filed with . NRC on January 23, 1975. KCPL's responses to the comments in your January 27, 1975, letter are as follows: A. Article I, Section 1, 2 and 4 Under KCPL's FPC Rate Schedules 32 and 54 all of the "trans-mission facilities" constituting the Interconnected Systems in Western Missouri and Eastern Kansas which are operated and avail-able for reserve sharing by and among Missouri Public Service Company, The Empire District Electric Company, Kansas Gas and Electric Company, The Kansas Power & Light Company, KCPL and BPU, are 161 kv facilities. To effect reserve sharing thereunder on a basis of each participant providing a minimum reserve of
2-February 12, 1975 George Spiegel, Esq. .J: y/ less than 15% of its estimated annual peak load responsibility, not Standby Service is made availabic between directly interconnected participants at 161 kv on the 161 kv facilities provided by them therefor. The reserve interchange voltage in the M0KAN area is 161 kv and each participant in such reserve sharing arrangement has provided at least one 161 kv interconnection for its system with the 161 kv facilities of one or more other participants. Under this M0KAN Pool arrangement each participant for itself (i) to reduce its reserve capacity requirement to has been able a kw amount less than the kw capability of its largest generating (ii) while still maintaining service reliability on its unit system and (iii) without burdening the local distribution facili-ties of its neighboring interconnected participants. As shown by Mr. McCarthy's testimony (Attachment A) filed January 16, 1975, in FPC Docket No. E-8365, in which ffice participated, KCPL's " integrated transmission system"your o does not include 34.5 kv facilities at the Osawatomie Interconnection. All of KCPL's 34.5 kv facilities are " local distribution facilities" used exclusively by KCPL for service in its East District and each outside of KCPL's Metropolitan Area District. South District, As shown by the 679 page transcript of the February 6 and Osawatomie complaint proceedings before the FPC, .March 15, 1974, KCPL has for many years offered Osawatomie a 34.5 kv interconnection based on the City maintaining a kw reserve equal to the kw capa-i bility of its largest-unit. Pursuant to KCPL's License Condition 2(c) and at your request, the 12-18-74 draft of Agreement offers Osawatomie the same reserve requirement as assumed by all other members of the MOKAN Pool (i.e. minimum 15% of estimated peak load responsibility) and the delivery point for Standby Service to Osawatomie (to effect such reserve sharing) is designated as KCPL's closest 161 kv bus, the same 161 kv reserve interchange other participants in the MOKAN Pool. voltage as provided by'in accordance with the principles of the is This relationship' where the 115 kv interconnection established Gainesville case by Gainesville was the same voltage as the 115 kv interchange voltage as then utilized by Florida Power Corp. in its reserve sharing with other neighboring interconnected systems under the Florida Operating Committee Coordination. (See 40 F.P.C. 1227, 41 F.P.C. 4, 425 F. 2d 1196,1.c. 1198 and 91 Sup. Ct. 1592, 1.c. 1593). KCPL appreciates that designation of the 34.5 kv Osawatomie Interconnection as the point of delivery for Standby Service and the elimination of the transfer charge between KCPL's Paola 161 kv bus and the 34.5 Osawatomie Interconnection would " greatly simplify the text" of the Agreement; however, it would result in an undue burden upon KCPL's local distribution facilities in its South District. KCPL cannot impose such an uncompenstated cost
) 7" F,.bruary 12, 1975 George Spiegel, {f q. J l c) l ts other customers. If Osawatomie wishes to accept burden upon i for its the benefits of a 15% minimum reserve sharing arrangement also bear the related burdens associated with it must
- system, and establish or otherwise provide a 161 kv inter-that arrangement avoid burdening connection of its sys tem with KCPL's so as to (a)
KCPL's local distribution facilities or (b) compensate KCPL for accepting such burden. KCPL will not object at any time if Osawatomie wishes to extend its facilities and interconnect its system at either the 34.5 kv or 161 kv bus at KCPL's Paola Substation, provided it gives KCPL proper and reasonable advance notice thereof and Osawatomie If pays all costs and expenses related to such interconnection. Osawatomie should establish such interconnection at the 161 kv bus, then, of course, the Schedule for Transfer Service would not be applicable; however, if Osawatomie should establish such inter-connection at the 34.5 kv bus at KCPL's Paola Substation, then only the rate for the 161/34.5 kv substation facilities under the Schedule for Transfer Service would be applicable. Finally, I remind you that these charges for Transfer Service were established by KCPL at your request to save Osawatomie the cost of construction, operation and maintenance of 34.5 kv or 161 kv facilities from With reference to "under-its system to KCPL's Paola Substation. building" see Response N. L. Article III, Section 2 The words "at all times" in Section 2(b) of the Agreement are the same words "at all times" as those in Section 2 of Article III of KCPL's FPC Rate Schedule 54 with BPU. These words serve two functions under our interconnected operations in the MOKAN Pool: For capacity not owned by a participant to be accredited 1. to its System Capacity that capacity must be available for the the year (except for participant "at all times" throughout scheduled and unscheduled outages) so as to provide sufficient even during the lowest off peak periods when the area reserves, larger area units are normally scheduled for maintenance under the coordination of scheduled maintenance. (See Article IV, Section 3, page 11 of the Osawatomie Agreement). Deletion of the words "at all times" would jeopardize area reliability because a participant could then purchase capacity from outside the area only during its peak load period and that capacity would not be available during off peak periods, thus burdening its neigh-boring interconnected systems. 2. Even though a participant might have an ownership in-terest in or purchase participation power from a unit outside it must also provide a firm contractual trans-of its system, "at all mission path which is available to the participant times" throughout the year (except for scheduled and unscheduled outages) in order to make such generating capacity available to N v-
~ \\ ceorge Spiegel, Tj p. j <}ebruary 12,~1975 the participant's system load to be accredited to its System Capacity for reserve. sharing purposes; otherwise, its neighboring interconnected systems would be similarly burdened. For the above reasons, the words "at all times" are appro-priate and a necessary part of the definition because without them area reliability could be adversely affected and a partici-pant could burden its neighboring systems without compensating such systems for the burden. C. Article IV, Section 1(b)(ii) An analysis of Article IV of the Osawatomie Agreement will show that Section 1 is related exclusively to " capacity" and Section 2 is related exclusively to " energy". Section 1(b) relates to the effect of an after-the-fact " capacity deficiency" and part (i) covers only chat portion-of a kw deficiency up to the minimum 15% required reserve, while part (ii) covers that portion of any kw deficiency which might exceed the minimum 15% required reserve. Therefore, part (ii) would be applicable only if a participant had failed to provide any reserve capacity whatsoever and, in fact, its Net Load had exceeded its accredited System Capacity. (See Article IV, Section 1(b) of KCPL's FPC Rate 4 Schedule No. 54 with BPU.) The demand charge for Firm Power under Rate Schedule C is the charge applicable to that portion of the kw deficiency in excess of the reserve requirement only for the purpose of computing the monthly payment for the "ca i that something more than just "pacity deficiency". It recognizes reserve" capacity has been shared. Its payment does not effect an automatic sale of Firm Power to any participant for any period. No minimum Billing Demand for Firr Power is thereby established and the City is not entitled to purchase energy associated with Firm Power based thereon. The " capacity deficiency" at the time of a participant's annual i peak establishes an annual cost burden on its neighboring systems, not a cost burden for that month only, and the energy associated with that " capacity deficiency" is Standby Service under Section 2. Therefore, under Section 1(c) the monthly payment is continued for each month after the peak " capacity deficiency" until one of the conditions in Subsection (c) is triggered to change the amount of, or terminate, the monthly charge. Section 1(b)(ii) relates to the pricing of the capacity deficiency monthly charge under reserve sharing and capacity equalization for failure to have provided any reserve capacity and for an absolute deficiency of capacity to meet load. Under Section 2 the City is entitled to receive Standby Service, under the conditions specified, irrespective of whether any monthly deficiency charge is required. Standby Service is l l \\
I Fgbruary 12, 1975 ccorge Spiegel. Frq. 1 Es available even though no monthly deficiency charge is due and related to the the amount of Standby Service available is not magnitude of any deficiency charge then being paid. The reference in Section 1(b)(ii) to the demand charge then in effect for Fira Power is merely a cost factor based on the burden of the absolute capacity deficiency imposed on the neigh- -(See Article IV, Section 1(b)(ii) of KCPL's FPC boring system. Rate Sheedule No. 54 with EPU and Article V1, Section 2(b)(il) of KCPL's FPC Rate S chedule No. 32 under MOKAN Pool.) Your suggested additional language would be inappropriate. D. Article IV, Section 1(c)(i) KCPL agrees that the words "in the capability of the City's generating facilities" is not now appropriate because at your request Section 2(b) of Article III has been added. I suggest that Article IV, Section 1(c)(1) be changad to read as follows: (i) "the City's System Capacity is redetermined due to an increase or decrease in the capa-bility or capacity qualified to be included therein, or" e E. Article IV, Section 1(c)_[ The first' proviso recognizes that June 1, which is the be-also the beginning of the peak ginning of a Contract Year, 4 3 load season in this part of the country. That season continues from June through September. This proviso means that the City must have made provisions for its required System Capacity and have it available by the beginning of the peak season. If the City increases its System Capacity after June 1 (i.e. during the Contract Year) that will not reduce any monthly payments other-wise required under Subsection (b) for the remainder of the Contract Year. Those payments continue throughout the Contract Year or until a new peak reestablishes the amount of the monthly payments which then continue for the remainder of that Contract Such proviso recognizes that annual capacity costs are Year. incurred in this part of the country based on peak summer loads. The second proviso is an exception to the effect of the first If the City had a new unit under construction and proviso. scheduled for commercial operation prior to June 1, which was delayed due to an Uncontrollable Force and the City complies with Subsection (d), then completion of such capacity addition after June 1, will as of the first of the following month following completion trigger a change in the amount of monthly payments due under Subsection (c) or termination thereof for the remainder of the contract Year if the capacity of the new addition is of such magnitude that no deficiency would have been incurred had that capacity addition been available on June 1 but for Un-controllable Force. D 3~ M
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] ceorge S ieSel. F'q. 6-F-Aruary 12, 1975 P (p i I hope that the above explanation is a source of clarifi-cation and not confusion. F. Article IV, Section 1(d) KCPL is the best judge as to whether or not it will have available on short notice sufficient capacity in order to undertake a sale of Fira Power to the City in view of KCPL's estimated peak load requirecents and firm commitments to others. The City's protection in the even: KCPL determines it does not have Firm Power available to the City therefor is to be found under Section 2,(b)P;_s because KCPL's obligation is to supply Standby Service "at such rate of delivery as may be required to supplement. such of the City's own capacity sources as are then available G. Article V, Section 1(b) Please see the Response F above. The inability of KCPL to supply Firm Power on short-term notice may be the result of either generating capacity limitations or transmission capacity limitations, in KCPL's own system or from purchased power sources available to KCPL. Note that KCPL's obligation to supply Standby' Service ex-tends to KCPL's " generation or purchase and delivery of such energy. Thus reliability of operat. ion on the City's system is assured not only by KCPL's capabilities but by KCPL's obligation' to " purchase and deliver" energy from other sources to enable KCPL to provide Standby Service to the City. Other coordinated trans-actions will be handled under Section 4 of Article V. See Response I below. H. Article V, Section 1(d) KCPL is willing to delete the four-line proviso if you insist; however, I wish to point out that it is in there for the protection of the City, not KCPL. Please note that under Section 8 of Article VI, metering facilities to be installed on the 34 kv side of the City's transformers will be compensated to the 161 kv Paola Delivery Point where the City will receive all services here-under except Firm Power which will be delivered to the City at 34.5 kv. Thus the proviso in Section 1(d) neutralizes for Firm Power and accompanying energy the loss compensation built into the meter readings. As for the applicable rate schedule for Firm Power, Osawatomie is a municipal load which has annual load characteristics similar to other MOKAN area municipalities, i.e. its annual peak has a high coincidence on KCPL's annual peak. As pointed out to you in FPC Docket E-8365, the annual peaks of the two Kansas Cooperatives have a relatively low coincidence on KCPL's annual peak. Therefore, KCPL's proper rate schedule applicable to Firm Power is the $3.46 per kw per month Demand Charge with a Transformation Credit of 20c
/- racruary 12, 19/> q ucorge spieret, csq. If per kw per month allowed to the City for providing its own trans-formation down from 34.5 kv, the same municipal Demand Charge and the same Transformation Credit as approved by the FPC in Docket j No. E-8365 I. ' Article V. (Proposed) Section 4 For reasons previously discussed with you at length, KCPL is not willing to ur.dertake " carte blanche blanket wheeling" for any electric system. To do so would require KCPL to do it for all interconnected systems. To do that would jeopardize reliability of KCPL's system for service to its own customers. KCPL will study each wheeling proposal as requested on an ad hoc basis and will comply with License Condition 5(a) which it has agreed to accept. J. Article V See response I above. K. Article VI, Section 1 Your proposal is superfluous; however, KCPL has no objection to the insertion of the words " subject to the provisions of Article X hereof" between the words "shall" and "have" in the second sentence of Section 1 of Article VI. L. Article VIII, Section 2 Again your reference to Article X is superfluous; however KCPL has no objection to inserting af ter the word "may" in the first sentence of Section 2 of Article VIII the following: " sub-ject to the provisions of Article X hereof,". For obvious reasons a prior six month notice provision is not acceptable with respect to an intentional violation of a material provision or a willful default under the Agreement. M. Article X, Section 1 Needless to say, KCPL intends to comply with all of its legal obligations. We do not need a contractual provision stating that KCPL will remain sinless and law abiding. N. Attachment A During our recent negotiations you objected to a "one-sentence" provision in the Agreement which would have permitted KCPL to underbuild a portion of r.he City's 34.5 kv line. KCPL agrees that a " Joint Use Agreement" is not properly a one-sencence arrangement. Numerous provisions are required for the mutual protection of the parties. For that reason, KCPL deleted that one sentence from the Agreement, although inadvertently the related references on Plat A were not deleted. Attached are 9"T 9 f fy 'rQ ~ y oWj LM A A 2
k, George Spiegel, I}q. '[,bruary12, 1975 substitute alternative Plats A which we propose be substituted in the 12-18-74 draft of the Agreement. There is no need to encumber this Agreement at this time with a separate " Joint Use Agreenent" to cover an acrangement not now contemplated and at best only a remo.e future pcssibility. O. Schedule B for Standby Service Thank you for noting our typographical error. The reference should be to Section 2(a) not to "3(a)". We are agreeable to such change. KCPL is not agreeable to the deletion of the word " replacement" or defining " replacement fuel" on a LIFO basis. (See FPC Order No. 520, dated November 29, 1974.) P. Schedule C for Firm Power This Schedule with respect to both the Demand and Fuel Adjust-ment clauses is identical to those clauses in KCPL's Wholesale Firm Power Schedules which recently have been approved by the FPC in Docket No. E-8365. Q. Schedule D for Economy Energy Service If energy is ever available from the City at a cost lower than KCPL's crst of generation or purchased energy from other sources, it can be purchased by KCPL and sold by the City without any written agreement or other " rate schedule" because the City is not subject to FPC rate regulation jurisdiction. It is incon-cleveable that KCPL with generating capacity resources some 30,000% greate-than that of the City and with major interconnections throughout the M0KAN Pool and interregional ties to provide KCPL with an additional 30,000%, that economy energy would not be avail-able to KCPL during any period at a cost less than that available from the City. Furthermore, such minute quantities of economy energy as could be made available by the City would not justify its scheduling expense. Interchange transactions in the MOKAN area have been based on a 5 FM minimum because of scheduling limitations, accounting problems and expense. Normal telemetering equipment is not so sophisticated as to be able to read with any degree of accuracy load flows below 5 MW. For these reasons we see no need to so encumber this Agreement or mislead the reader into believing that through this interconnection the City could pro-vide any significant benefit to KCPL. With respect to " fuel costs" see Response O above. With respect to " economy energy pricing" see Response M above. R. Schedule E for Transfer Service See Response A above. With respect to the rates for Transfer Service please s 'e the Affidavit and Cost of Service Study by nd A Rn"= r=
""M '~ L"ULUdly L4, Ly/) Ocus6u "Y e %.' s e Mr. Louis C. Rasmussen (Attachment B) which is the Cost of i Service Study previou::ly furnished to you and representatives of the Department of Justice and NRC. Also, see the testimony of Mr. McCarthy filed in FPC Docket No. E-8365 (Attachment A) and Mr. McCarthy's January 28, 1975, filing in FPC Docket No. 8969 (Attachment C). S. Schedule F for Transmission Service See Attachments A, B and C, each based on a test year ended December 31, 1972. KCPL does not agree with Mr. Simon's " rolled-in" allocations, costing theories or computations. KCPL seeks nothing more for such proposed Transmission Service than to be fully compensated for its costs, including transmission losses associated therewith, as specified under KCPL License Condition 5(a) which it will accept. With respect to the " Applicability" and " Transmission Service" lauses, see Response I above. The term " double scheduled capacity basis" describes the method by which such " wheeling" will be accomplished. With respect to the deletion of the words "in i'es sole judg-ment determines that it" in the " definition" clause..under "Long-Term Transmission Service" see Responses F, G and I above. The " Scheduling and Accounting Charge" is comparable to KCPL's service charges under KCPL's FPC Rate Schedule 31 C with KG&E and KCPL's FPC Rate Schedule 31 D with KPL. These are' costs related to special services and not included in KCPL's general and administrative costs allocable to all of its customers. These are special handling costs separately incurred on account of the special Transmission Service to be furnished by KCPL to the City and subject to reimbursement by the City over and above the bare-bones transmission facilities cost. George, I have tried to be responsive to each of your comments. I recognize that you are endeavoring to conclude an arrangement for your client which will give the City superior service and reliability at little or no cost to the City and permit the City to effect cost savings by deferral of future generating additions and power purchases. This is comendable. However, KCPL cannot participate in such arrangement if its effect would be to unduly burden KCPL's system without proper compensation for its cost of service. To do so would unreasonably and improperly shift cost burdens from residents of the City to the Company's customers who are not residents of the City. At your request, this matter has been pending before the FPC for more than one year and has undergone two lengthy formal conferences before the FPC. In my view, we now have no basic QO e
~ ~ ~ George Spiegel, Esq. 10 - February 12, 1975 + ( (- disagreement as to any principle involving " antitrust" and you are now merely " haggling about the price". Therefore, I must object to your atte=pt to use Section 105(c)(5) of the Atomic Energy Act as a le"crage by which you would seek to secure for the City rates and service conditions which would be imprudent and improvident butdens on KCPL's customers under the threat of delay of construmtion of Wolf Creek Unit #1 if KCPL refuser, to accede to the City's unwarranted demands. For this reason, KCPL is going to object to the City's intervention in NRC Docket No. 50-432A and oppose the City's request for hearing there-in. If you and the City are not satisfied with the 12-18-74. raft of the Municipal Participation Agreement (amended as KCPL agrees to do in Responses D, K, L, N and O above) then I suggest that the City's recourse properly is before the FPC under the pro-visions of the Federal Power Act (KCPL License Condition 7), as supplemented by the Protest and Refund provisions of Section 2 of Article X as required by the Justice Department to protect the City on an initial filing. By copy of this letter being forwarded to Mr. Drexel Journey, General Counsel for the FPC, KCPL hereby requests that a date be set and the FPC conference in this Osawatomie matter be reconvened so that the record therein can be completed at the earliest practical date. If you have any questions, please do not hesticate to call me. Sincerely, 0_. g_ v AJD:be cc: Drexel D. Journey, Esq. Hon. Dale E. Saffels Mr. Gordon Schrader Mr. Virgil Hogland Steven M. Charno, Esq. Mr. Abraham Braitman Lee S. Dewey, Esq.
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C.5-73 law orrects SI sect:1. & McDianMio 2 600 viriGINI A AVENUC.N.W. -1 W ASHINGTON, D C. 20037 TELEPHONE (202) 333.aS00 D ANiEL t b.w 3 5 C N N GEORGE SPIEGEL FR ANCES E. reANCIS M ROB E RT C. McosAMMID THOM AS N ucHuGH.JR 3 S ANDR A J. STRE DEL PETER M M ATT ROBE RT A. JAOLON 'g D ANaCL J GuttuaN JAM E S N. NORWOOD JAuES C ARL POLLOCM July 1, 1975 Eg. .ns Arthur J. Doyle, Esq. 2 Vice President and General Counsel [ Kansas City Power & Light Company ja 1330 Baltimore Avenue '[ Kansas City, Missouri 64141 2 Re: Osawatomic: Mud cipal U Participation Agreement ta
Dear Arthur:
u 1 ? Osawatomie's 34.5 kv interconnection with KCP&L is scheduled to become operational in Septenber, 1975. In order for .q Osawatomie to receive service through this interconnection, a schedule must be filed at the FPC. It is my understanding that KCP&L intends to make 3 available the Municipal Participation Agreement dated n December 18, 1974 and as revised by your letter of February 12, m 1975, to provide such service. We would appreciate a clean copy of the contract, anticipatory to securing the necessary L.j signatures to make the contract effective, subject to a J reservation by Osawatomie to object to any of the provisions n in a proceeding at the FPC. Of course, the filing by KCP&L .9 at the FPC would also be subject to the' Justice Department .? conditions that rates charged thereunder would be subject to f. E refund, to whatever the just and reasonable rate is determined to be.' Osawatomie expects to receive energy from the Kans l' City Kansas Board of Public Utilities, pursuant to its 'h;, 5 existing contract, after the interconnection is energized and l would like to inquire as to the estimated losses on the KCP&L system for which the City will be charged because of these 1 transfers. In addition, Osawatomie would like to discuss the availability of economy energy from KCP&L and the charges R d I associated therewith. In order to confirm these arrangements, l M 'i si "1 .i-i. t
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Arthur J. Doyle, usq. July 1, 1975 9 I should like to request a meeting at your earliest convenience between the operating staf f raembers of both KCP&L and Osawatomie. As to your earlier request for an FPC mceting to resolvo expeditiously.the specific terms of the Municipal Participation Agreement, I have also attempted through numerous telephone conversations and correspondence with various members of the FPC to arrange a meeting of the FPC Staff, KCP&L and Osawatomie that would resolve these terms without the need for formal proceeding. I have likewise been unable to persuade FPC Staff to set a date for such meeting. Accordingly, I believe that the above procedure would best resolve the practical issues necessary to authorize KCP&L-to provide needed service to Osawatomic. Yours truly, J' gLuv b. 124a w ~ Frances E. Francis Attorney for the City of cc: Osawatomie, Kansas Lee Scott Dewey, Esq., Nuclear Regulatory Commission Drexel Journey, General Counsel Federal Power Commission Daniel Lamke, Esq. Federal Power Commission Gordon Schrader, Manager Osawatomie, Kansas Joseph Saunders, Esq., Antitrust Section Department of Justice g Atomic Safety and Licensing Board
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.b & ; t Y ' N a.:. ' l..; A ').('? ~ 3.. ~ ~,, . g. ~. E ~1f all goes as planned; Osawad sas City, Kan. If' power is Idown. T' Schradertoldcommissionersa ~ ~ ,tomic's electrical system will be purchased from the latter firm, As to generating costs Schra.. monthly electric bill of $100. now tied to that of the Kansas City the city will have to pay' a der explained that it costs the i. being paid by many residents, city 2.4 cents to generate a kilo-would drop to about 580 a month watt of electricity. That is only('if power had been. purchas Power & Light Co. this, fall, " wheeling" charge to KCPL.- around mid-October. f City Manager.Gordon Schra-City commissioners approved ~ der, who led the city's negoth-the liesel fuel cost. Other. items from the Kansas City, Kan. firm. an interconnection contract with I tions with KCPL, said he felt the notincluded arelabor, insurance "I think this contract will save n .KCPL at a special meeting. contract was the best that could.and depreciation on' the plant. - Osawatomie electric customers Monday night. It was an historic be secured. lie pointed out.it was In. contrast, the city could have i slo to $30 a month in the years to occasion and marked the cul- - agtter contract for the purchased electricity from the /come'," the manager said.' i mination of years of talk and. city than _ the orie KCPL wh-Board of Public Utilities last Isolation Is Worry month for 1.4 cents per kilowatt.. The manager also expressed. negotiation. Final details of the rrlitiid 4 years ago. +.. contract were worked out in ; -The cuy manager said he felt That cost includes the 'Nheel-. concern about the local plant ' Kansas City Thursday by rep. aninterconnection agreement ing" fee. , F" e 'being isolated. Only one other resentatives of the city,and the was necessary for two reasons: FuelCosts Rise city. owned plant in Kansas does
- utility.
ONE. Big Utility plants can Rising electric costs have been.. not have irterconnection agree > w: From Tw o Sources ~ generate electricity cheaper passed along to Osawatomie ments with other utilities. That
- Signing of the contract means. most of the time than the city's residents all summer because plant is at Baldwin.
i the plant has been operating on f By approving the agreement, .that the city can purchase elec. plant. ne - ,tricity from either KCPL or the '1wo. The local plant should dieselfuelinstead of the cheaper Schrader said the city insures no, . Board of Public Utilities at Kan-not be isolatedin case of a break. natural gas as in previous years. loss in electrical service should .r..... .w I,the !ccal plant have an explosion Schrader said. But if the FPC' tract discussions. Because he is meeting in a row. He said he 'like that of 1%7.. .t says 'a lower rate should be_ an employe of KCPL, Goodeyon : didn't have enough information S Parts for the city-owned en. a!! owed, the utility ill have to left the room before the discus-on expenditures... Jgines are becoming increas F refund the overcharge 4-?.gyF.O sions began to avrid a conflict of ? Mayor Henness.said he felt . interest charge. He did not vo'e.any commissioner should feel fingly difficult to secure..The i Nordberg Co., which manufac- - e manager sage city t on the contract. free to ins t the bills at an - ttured most of the city's genera- {oba wo d buy mo pow Commissioners Melvin Heri-time by st ping by City Hall gp glors, no longer makes the en-ness and Don F. KeIIey voted to Henness said he didn't think the ties rather than KCPL but that d BPU had a total of He,said the approve the centract. Goo eyon J c .gines. Some parfs for engmes th.is would change'. returned to the meeting room have copies of bills made and . have been on er&r forhears. 2 140,000 kilo-after the vote. delivered to homes of commis-p <URIFree on whcc y Under terms of the contract, watt hours in excess apacity ln other action. commissioners. sioners~ e' i D ** '~ ' phe city and KCPL do not agree ' approved the budget for next-Schrader estimated the con-year.No one attended the public Kelley said he had received wn 'the " wheeling" charge. An { unusual clause, inserted in th'e tract will save from $100,000 to hearing. The mill levy for next complaints from. two residents Leontra'ct at the insists.cc of the 5 00,000 per year. T ' - ~ - year will be 32.91 mills. Of this, about sewer problems. Schrader said both of them were on U. S.' Department of Justice, . Debt on the power plant is in 20.09 mills will,be for bond and , llows for the " wheeling" price excess of $400,000. - - interest. private property and were the do be determined by the Federal Goodeyon Abstains Commissioner Kelley voted : responsibility of the owners. power Commission.The city will Commissionerk W. Goodeyon' against approving the appropria-An electrician's bond was ap-l ptart paying the higher rate, did, not participate in the con. " tion ordinance for the second s. proved for F. R..Colbert. j
C.5-75 e L AW OFFK.E S SP4EGEL & McDIARMID 2600 V8RGINI A AVENUE N.W. i WASHINGTON, D C. 20037 TELEPHONE 4 2C2l 333 4500 GEORGE SPsEGEL DANIEL 1. DAVIDSON C01E RT C. MCOIARMfD FRANCES E FRANCIS S ANDR A J. STREBEL CO2E RT A. JABLON THOM AS N McHUGH. JR. PETER K. M ATT JAME S N. HORWOOO DAN 8EL J GUTTMAN JAMES CARL POLLOCK August 21, 1975 Arthur Doyle, Esq. Vice President and General Counsel Kansas City Power & Light Co. 1330 Baltimore Avenue Kansas City, Missouri 64141 Re: Municipal Participation Agreement
Dear Arthur:
I trust that the above agreement has been submitted to the Commission. In my meeting with you on August 7, 1975 in Kansas City, I inquired as to whether the above contract would cover the transmission of economy energy that the Kansas City, Kansas Board of Public Utilities has agreed to make available to Osawatomie. You indicated that KCP&L would not transmit such energy to Osawatomie because of administrative and other problems which you preferred not to disclose. I am enclosing a cop Osawatomie economy energy.y of the KCKBPU offer to sell I am formally requesting that KCP&L inform us whether the above contract covers trans-mission of this power or whether KCP&L is willing to discuss transmission of this nower for the remainder of the year. I should appreciate a prompt response inasmuch as Osawatomie will be able to receive such economy energy, as you well know, by October 15 of this year. PTe~lUie Teel free to contact either Gordon Schrader or me as to any other information KCP&L believes necessary to work out the details of such transmission, if you still adhere to your position of August 7 that the above Municipal Participation Agreement will not cover the economy energy transfers. Sincerely,
- h. b' MW Frances E. Francis Attorney for the City of Osawatomie, Kansas inclosure
a c.5-76 KANSAS CITY POWER & LIGHT COMPANY 3330 0aLTaMORE AVENut KANSAS CITY. MISSOURI G4141 . 7,'..' C 212.., September 10, 1975 File No. 0302-41 Frances E. Francis, Esq. Spiegel & McDiarmid 2600 Virginia Avenue, N. W. Washington, D.C. 20037 Re: KCPL-Osawatomie Municipal Participation Agreement Dated August 11, 1975
Dear Frances:
Reference is made to your letter dated August 21. After execution of the Agreement it was' discovered that there were two typographical error, on page 2 of Schedule C-MPA-2. The base fuel cost was incorrectly stated at 0.43c per kwh, instead of 0.434c per kwh, and the words "the Company in the" were omitted in the second sentence. Attached is a copy of a substitute page 2, which I understand has now been approved and initialed by the parties. The FPC filing data are being assembled and I expect the filing to be made within the week. We will request an FPC effective date of 30 days after filing or about October 15, which I understand is the earliest date the parties now believe the interconnection might. be completed and made operational. Your letter of August 21 confuses me. In two instances you '~ (refer to economy energy as " power". If you are talking about a proposed amendment to the BPU-Osawatomie Contract, under which BPU would sell "interruptible economy power", to Osawatomie, then KCPL would have no objection to the transmission of such power under ' Schedule F of the captioned Agreement. However, if you are talking fabout an amendment for " economy energy", then I must remind you cha KCPL indicated that it would be Willing to " wheel" only on a double <g scheduled capacity basis from point-to-point. ECPL is not willini; to. assume the administrative burdens of tracking minutic ar.ounts of senergy on a hour-to-hour basis with no telemetering control and in ; 9
o Frances E. Francis, Esq. September 10, 1975 1 amounts so insignificant that KCPL's System Dispatchers would not be able to recognize their flows. KCPL has no concern as to the price or rates which BPU might charge Osawatomie for electric power or energy. If BPU and Osawatomie want to amend their Contract to provide for " interrupt-ible economy power" with no demand charge, and an energy charge based upon fuel costs at the time of delivery and efficiency of the unit generating the energy, KCPL would have no objection to transmitting such "interruptible economy power" under Schedule F of the captioned Agreement, provided that the maximum amount of "interruptible economy power" to be scheduled during any month would be scheduled by Osawatomie with, and accepted by, KCPL's System Dispatcher prior to that n.onth, that KCPL would then schedule hourly rates of delivery up to that maximum "interruptible ev.onomy power" with BPU per Osawatomie's daily schedule, and that such hourly schedules would not be changed unless reduced or cur-tailed by BPU for the balance of the day, all subject to KCPL interrutpions as provided in Schedule F. KCPL's Transmission Service charge for each month would be applicable to the amount of kw of "interruptible economy power" previously arranged. The administrative nightmare involved in tracking kwh is one reason why KCPL is not willing to wheel except on a capacity basis and I have so advised your office on numerous occasions during the past couple of years. Sincerely, b-e AJD:be Enclosure bec: Mr. D. T. McPhee Mr. W. K. Frohock Mr. J. A. Maberry Mr. R. D. Overton
-m __ _ ~ 1 L.aw cn.m C.5-77 i SI*IF/JEL & McDI AnMin 2600 VIRGINIA AVENUE, N. W. WASHINGTON, D. C. 20037 TELEPHONE 1202)333 4500 PETER M. MATT GitOf!;GE SP8EGEL DANIEL J GUTTMAN J RORE CT C. WCDIARulD SONNIE S. BLAIR SAf*DRA J. STRE9EL DAVID A. GI AC ALONE ' COCERT A. JASLON JAME t> N. HORWOOD 4 JAMES CARL POLLDCM . AL4N J. ROTM ROBERT MARLEY BE AR j FRANCES E. FRANCIS DANir L t. D AVIDSON May 18,-1977 TsouAsu.veuuGssa. Arthur J. Doyle, Esq. Kansas City Power & Light 1330 Baltimore Avenue Kansas City, Missouri 64141 Re: Transmission of 25 MW of SPA Power Purchased By Kansas City Board of Public Utilities.
Dear Arthur:
This is to confirm my telephone request to you en May'16, requesting'that Kansas City Power & Light revise its proposed draft of Schedule E-MPA of its Municipal Participa-tion Agreement with the Kansas City Board of Public Utilities sent by letter dated January 14,.1977. As we discussed, the Board is presently in the process of arranging transmission -service for the 25 MW of its SWPA allotment over the trans-- mission facilities of the Ass "'_ated Electric Cooperative so that it might commence service on June 1, 1977, as stated in its proposed contract with SPA. It is my understanding that Associated presently is interconnected with SPA and KCP&L at several interconnection points and has various agreements with KCP&L that would enable Associated to arrange this service. Our arrangement with Associated is for a one-year period, un-til we can work out the details of a long-term transmission agreement to cover the 25 MW allotment, either with KG&E, Empire and KCP&L or possibly with Associated. c It has-been disappointing to me that we have not been 'able to'get the paperwork together to complete a transmission path among SPA, BPU, KCP&L, KG&E and Empire prior-to the June 1, 1977 commencement date. However, given the immediacy of 3 O a \\ I --w,m - = rem -m-w v e =y s -t
. _ -. ~ ? Arthur J. Doyle,. Esq. - May 18, 1977 .3 of-the. SPA-BPU contract;date,_the Board felt that it had to 1 explore every_ opportunity to commence service-'by June 1, 1977, especially in light of the possible supply problems it may face this summer. I am still hopeful that.the~ additional time afforded by the Associated arrangement will permit all parties to work out a long-term transmission arrangement to 4 get the SPA allotment to BPU's, system' for.the life of the 4 contract. Sincerely, I w 7'%c.44 ^ i 4 ~ Frances E. Francis I i cc: Philip Lorton, Esq., BPU Mr. Gilbert Hanson, BPU j j FEF:jbs t i 't i I 4 i I i I } ,---<,,--,-ew,.7 .----w--,--. ~, - - ,--,--.,---,.e--,-.. ,..o rw- +
~* KANSAS CITY POWER & LIGHT COMPANY 1330 SALTmCRC AVENUC KANSAS CITY,NSSOURI 64141 ARTHUR J. DOYLE sesserews wcs passiosat May 25, 1977 File No. 0303-26C Frances E. Francis, Esq. Spiegel & McDiarmid 2600 Virginia Avenue, N. W. Washington, D.C. 20037 Re: SPA-BPU 2?> MW Hydro Capacity Purchase
Dear Frances:
Reference is made to your' letter dated May 18. You will re-call that in response to your suggestion that AEC receive the 25 MW from SPA and deliver it to KCPL for transmission to BPU, I ad-vised that all of the capacity in AEC's 161 kv transmission system from its interconnections with SPA is contractually committed for the delivery of up to 478 MW of Hydro Capacity made available by SPA to AEC and the Western Missouri Companies (KCPL, NPS and EDE) plus some 29 MW to be made available by SPA to six named Edssouri municipalities under the Associated-Companies Contract dated March 29, 1962. Because AEC's 161 kv transmission system would be overloaded at such levels (if isolated), it was contractually recognized and agreed that 190 MW would be delivered by SPA to EDE arl cransmitted through the systems cf the Companies. Should AEC accept an additional 25 MR from SPA's interconnected system, that wo.uld contractually displace an additional 25 MW on to the systems of the Companies raising 190 MW to 215 MW. To do that would require the consent and agreement of the intervening systems,under Section 5 of the Western N1ssouri Interconnected Power Systems-Memorandum of Understanding signed February 4, 1966. I think your idea was good but not a solution to the problem. I have heard recently from EDE that its negotiations with KG&E are back on the track having been delayed for some time. Hopefully, that will permit the paper work to be completed
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.o NrancesE. Francis, Esq. ~ ~ 2-May 25, 1977 - If SPA is going to make 25 MW available to BPU and BPU wants to schedule energy in early June, 1977, perhaps we can work out by telephone and confirming letter some terporary arrangement. Please call me Friday A.M. or Tuesday and let's see where the situation stands at that time. Sincerely, AJD:be Phillip Lorton, Esq. cc: Mr. Gilbert Hanson Ralph Foster, Esq. Mr. R'. C Allen d t e e,m> . - om e _ _ we. .m =-e - -.- eew e w ea e .. go w ==== e me+----e ew -- amme-*- -w
_jLGRAM SERVItt Lt A yn w w vi.E T U e N, VA. 22645 l s t u I c.5-73 ( 2-019a06E180 06/29/77 ICS IPMMTZZ CSP KCHS i 2023334500 NGM TOMT WASHINGTON OC 135 06-29 104cA EST ( ARTHUR DOYLE ESQ i MANSAS CITY POWER AND LIGHT CO I !330 dALTIMORE AVE ( i KANSAS CITY MD 64141 i I [ (~ r t SUBJECT PURCHASE OF 25 MW OF SWPA POWER BY KANSAS CITY KANSAS BOARD CF f PUBLIC UTILITIESTME CONTRACT BETA'EEN SOUTHWESTERN POWER ADMINISTRATION ( ( AND THE KANSAS CITY KANSAS BOARD OF PUBLIC UTILITES CALLS FOR SERVICE l TO COMMENCE ON JULY 1 1977. INASMUCM AS THERE REMAINS CERTAIN PAPERn0RK t TO BE COMPLETED BEFORE THE PARTIES CAN FILE THE NECESSARY CONTRACTS ( t aITH THE FEDERAL power COMMISSION, WE ARE REQUESTING THAT THE SERVICE t COMMENCE ON JULY 1 1977 UNDER THE PRESENTLY AGREED UPON PRINCIPLES. ACCORCINGLY, WE a0ULD REQUEST THAT THE PROPER NOTIFICATION BE GIVEN TO ( I THE DISPATCHERS TMAT THE BOARD WILL BE PREPARED TO RECEIVE P0wtR FOR SPA, AS SCHEDULE 0, AT 10AM ON JULY 1 1977 ( IF T HL.,E ARE ANY OUESTIONS AS TO THE STARTING DATE, PLJASE CONTACT GILBERT HANSON AT THE BOARD (913-281-6163) IMMEDIATELY. VERy TRULY YOURS ( (. FRANCES E FRANCIS 10: 00 EST l MGMCOMP MGM ( l L L L r i I (
4 ) ~ I c.5-80 F December 5, 1977 I j l i 1. ~Mr. R. W. Fisher Mr. W. D. Webb We have received notice from FERC that our filing of Amendatory Agree-ment'No. 2, dated September 29, 1977, to the Municipal Participation Agreement between KCPL and the Board of Public__ Utilities of _ Kansas City, Kansas, has been accepted for fning. All Sc'..edules, with the exception of Schedule E-MPA for Transmission Service, were accepted for filing effective July 1,1977 as requested. Schedule E-MPA for Transmission Service was accepted for filing, and suspended for one day, to be ef-J fective July 2, 1977. A copy of FERC's Order in this Docket No. ER76-25 is attached for your information. I ? i I R. B. Sullivan M kd 3 attachment cc: A. J. Doyle J. A. Mayberry .J. R. Miller D. T. McPhee i S. G. Jameson S. P. Cowley (D. L. Smith) I' A. L. Samuels Warren Wiehe i 'l PEOPLE NEED UNDERSTANDING: What we need is a little less power, a little more light. _ _-}}