ML20004C277

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Informs That Contract Will Be Amended by Revising or Deleting Article I,Section 8.If CPC Does Not Agree to Contract Mod,Applicant Will Be Admitted Into Electric Power Pooling Agreement Based on Listed Conditions
ML20004C277
Person / Time
Site: Fermi DTE Energy icon.png
Issue date: 08/13/1971
From: Reasoner H
DETROIT EDISON CO.
To: Price H
US ATOMIC ENERGY COMMISSION (AEC)
Shared Package
ML20004C270 List:
References
NUDOCS 8106020477
Download: ML20004C277 (14)


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". Harold L. Price . .'

irector of Regulation ,
u. S. Atomic Energy Commission Washington, D. C. 20545 RE: Docket No. 50-3L1

Dear Mr. Price:

On August 3, 1971 representatives of Tne Detroit Edison Company and nembers of the Antitrust Division of the Department of Justice met to discuss'the inplications of Article 1, paragraph 8 of the " Electric Power Pooling Agreement" between this Company and Consumers Power Company dated December 22, 1962.

! It was agreed by the parties at the conference that certain clarifica-t:ons of rights and responsibilities under paragraph 8 would be mace ey The Letroit Edison Company and that this Company would use its best efforts to induce the other party to that agreement, Consumers Power Company, to make this clarifi-cation a part of this paragraph, t . Again, on August 4, 1971, representatives of this Com:any and members

! of the Antitrust Divisien discussee the feasibility of the deletion of caragraph E from the " Electric Power Pooiing Agreement". This alternative is acce: table to Letroit Edison. In this instance, Detroit Edison wi'll also use its best efforts to induce Consumers Power Company to ag ee to the deletion of paragraph S.

If this Company is unable to ir.iuce Consumers Power Company to accept

'ther tne clarified version of paragraph 6 or the deletion of Inat paragrap9

' rom the " Electric Power Pooling Agreement", Detroit Edison here:y agrees that it v..il consent to the entry of an applicant to the " Electric Power Pooling Agree-rent" if it meets the following conditions: Abili ty to (1) meet the "peol's"

resently applicable installed reserve capability responsibility criteria (witn-0;t prejudice to the right of existing " pool" members, upon the entry of an a::licant, to prooose such changes, if any, in tre terms and con:itions of " rect' l

empersnip as may De necessary, to allocate eccita:ly all costs a : bene'its c' cool" membership between the existing and ne.. ": col" members.i. (^. participate in " pool units", " interconnections" and " grid lines", (3) operate its system as cispatched by the " pool", (4) provide representation on the five stancing co -

- i ttees , (5) to com:ly wi th the other terms anc conditions of tne "Eie:tric r..- e l  :::iing Agreement", and (6) have sufficient financial standing sc as t: reaser:rb 6;;;re that it can perform fully the various pro.isions of tne. E'.e:tri: :o..c r

!  ;;c..ng Agreement".

P00R ORIGINAL 8106020 N+.

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Fr. Haro!c L. Or*ct During the course of tre conference, the De:crtment of Justice as~ec reoresentatives of :-Is Company ho.. paragrach & of the ' Electric Fo.;er :oul'n.

Agreemert" .as constr.ed by this Com:any in regard to i terconnection agree ents.

kitn reference to paragraph 6 of Article 1, this will a: vise you thc tnis Co cany has on all c::asions construec the provisions tnereof tc ;crni; it ::

enter into interconne:: ion agreements (not pooling) wit- 'thirc cartic! .ci:nc.:

F rs: obtaining the a::roval of Consumers Power Company. By contrac; ~nc Ce:roit E:ison Company wouic ot recuire the consent of the other carty to the " Ele::ric

?ower Pooiing Agreement" in order to establish an interconnection witr a thIrc party regardless of 5.. ether that third party is already purchasing power frc-05e other party to : e " Electric Power Pooling Agreemen:' .

The Detrol: Edison Company has no objection if the Department of .ustice recommends that the substance of the matters discussed in this letter be mace a condition of the construction permit or the operating license.

The Detrol: Edison Company has always regarde: tha:, as a public utility. i it has a legal obligation to serve those dependent upon it for service witncut ciscrimination and u:;n terms and conditions that (1) reflect the cost of service

!us a fair rat.' of return commensurate with that allo.;e: by the reguictors authorities having jurisdiction, and (2) provide a righ:-of-way that will a:mit cf reliable service. The Detroit Edison Company is willing to interconnet: with any third party enga:ed in the generation and distribution of electric energy for retail and whose generating capacity is from time to time in excess of its load obligations for the sale or exchange of emergency power, economy energy, cefi-ciency power, and such other forms of bulk power sales or exchanges for resale made for the purposes or with the ef fect of achieving an overall recuction in the cost of providing ele:tric power supply.

A copy of tr.is letter has been sent to Mr. J. J. Saunders of the Cepart-rent of Justice.

Very truly yours, l CC: Mr. J. J. Saur.:e-s Department of J.stice Mr. E. E. Thoma:

l LeBoeu f , Lamb , Leiby & MacRae 1

! Mr. Harvey A. F'scher I Fischer, Fran..'- e Ford P00R ORIGINAL 4

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March 21, 1974 Mr. Joseph J. Saunders Chief of Public Counsel and Legislative Section U.S. Department of Justice P.O. Box 7513

, Washington, D.C. 200h4 RE: The Detroit Edison Company (Greenwood Units 2 and 3 AEC Docket Hos. 50-452A and 50-453A)

Dear Mr. Saunders:

As a result of conferences. held between representatives of Detroit Edison and the Antitrust Division of the U.S. Depart-ment of Justice, agreements have been reached regarding certain matters in the above captioned docket.

Detroit Edison presently is willing to accept conditions to its construction permit, if and when issued by the Commission, which are identical to those attached to this letter.

Very truly yours,

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l Att.

CC - Wallace E. Brand, Esq.

Antitrust Division U.S. Department of Justice P.O. Box 7513 Washington, D.C. 20044 - N s -

Mr. L. Manning Muntzir.g Director of Recul. . on U.S. Atomic Energy Commission Washington, D.C. 20545 e

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.- Relations Uith other Utilitics Applicant is interconnected with Consu=crs Power Company.

through extra-high and high voltage transmission lines and closely coordinates its planning and operations (including reserve sharing and coordinated development)'with Consumers Power through the Michigan Pool Agreement. -Applicant is also interconnected uith Ontario Hydro system in Canada and with major utilities in Ohio.

Applicant's monopoly of generation in southeast Michigan-is almost cc=plete. Relatively small amounts. of generation are owned and operated by a rural electric cooperative (Thamb Electric Cooperative)., a municipal distribution system (the City of Wyandotte), and a municipal-street lighting system (Detroit), respectively. Applicant supplies power at wholesale to tuo rural electric cooperatives and two small village distribution systems located within its service area.

Results of Aatitrust Review In 1971 we informed the Commission that no antitrust hearing would be necessary in regard to Detroit Edison's Enrico Fermi Unit No. 2. At that time, Applicant submitted a commitment to eliminate or revise a provision in the 1962 Michigan Pool Agreement which might have unreasonably restricted entrance of third parties into the pool or the negotiation of-independent coordination arrangements. In the course of our antitrust revieu of the instant license application, several additional cuestions concerning anticompetitive conduct by Applicant were raised. For its part, Applicant denied that its policies and practices have been or are inconsistent with the antitrust laws. Houever, in order to eliminate any cues-tions as to the policies that it intends to follow during the license period cf the Greenwood Euclear Units, Applicant indicated its villingness to formalize these policies-and to have them included as conditions to the license. As a result of discussions with the Department, these policies have been articulated and are set out in the attachment to Applicant's 1ceter to the Department dated March 21, 1974, which is attached hereto.

In its commitments, Applicant affirms that it will make the following types of arrangements with other bulk power l

suppliers in Michigan: access to the Greenwood Nuclear Units; coordination end snaring of reserves; unit power sales and purchases which would reduce costs .for the partics; and third

( party use of its transmission facilitics for uheeling services.

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Conclusion On the strength of these policy commitments and Applicant's agreement that the Co= mission include them as conditions to the license, we conclude that an antitrust hearing vill not be necessary with respect to the instant application.

Sincerely yours, st.a.k1 THOMAS E. KnUPER c/ WE Assistant Attorney O'eneral Antitrust Division

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harch 21, 1974 Mr. Joseph J. Saunders Chief of Public Counsel and .

Legislative Section U.S. Department of Justice P.O. Box 7513

. Wash ington , D.C. 200L4 l

RE: The Detroit Edison Company (Greenwood Units 2 and 3 AEC Docket nos. 50-452A and 50-453A)

Dear Mr. Saunders:

As a result of conferences held between representatives of Detroit Edison and the Antitrust Division of the U.S. Depart-ment of Justice, agreements have been reached regarding certain matters in the above captioned docket.

Detroit Edison presently is willing to accept conditions to its construction permit, if and when issued by the Commission, which are identical to those attached to this letter.

Very truly yours, n' 8. Dh - c 44.

Att.

CC - Wallace E. Brand, Esq.

Antitrust Division U.S. Department of Justice P.O. Box 7513 Washington, D.C. 20044 -

's Mr. L. Manning Huntzing Director of Regulation U.S. Atomic Energy Commission Washington, D.C. 20545

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l Attachment 2

. POLICY COMMITMENTd Ur THE DETROIT EDISON CL;G; .i'

- TO BE APPENDED AS CO 'DITIONS TO .

GREENWOOD NUCLEA?. UNI.TS NO. 2 AND NO. 1 AEC LICENSE AEC DCCKETS 50r-452A and 50-45?;

i. March 21, 1974
l. As used herein:

(a) " Southeastern Michigan" means the ccrnties of: Huron, i

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! Ingham, Lapeer, Lenawee, Livingston, Oakland, Macomb, Monroe, St. Clair, Sanilac, Tuscola, Washtenaw, and Wayne. An entity shall be deemed to be in the " Southeastern Michigan area .Iif .

it has electric power generation, transmission, or distribution facilities located contiguous to, or in whole, or in part in the above-described area.

(b) " Bulk Power" means the electric power, and any attendant

energy, supplied or made available at transmission or subtrans-mission voltage by one entity to another.

(c) " Entity" means person, a private or public corporation, a municipality, a cooperative, an association, a joint stock es sociation or business trust owning, operating or proposing to own or operate equipment or facilities for the generation, transmission or distribution of electricity, provihed that, except for municipalities or rural electric cooperative, e

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-? Attacfment 2 "entit " is restricted to those whien nrc- or will be public utilities under the laws of the state .in which the entity transacts or will transact business or under the Federal Power Act, and are or will be providing electric service under a i

contract or rate schedule on file with and subject to the regulation of a state regulatory commission or the Federal -

i Power Commission.

(d) " Cost" means any operating and maintenance expenses

involved together with any ownership' costs whic'h are reasonably allocable to the transaction consistent with industry practices.

No value shall be included for loss of revenues from sale of power at wholesale or retail by one party to a customer which another party might otherwise serve. Cost shall include a reasonable ' return on ' Applicant's investment. The sale of a portion of the capacity of a generating unit shall be upon the bacis of a rate that will recover to the seller the pro rata part of the fixed costs and operating and maintenance expenses of the unit, provided that, in circumstances in which Applicant and one or more entities in the Southeastern Michigan area take an undivided interest in a unit in fee, constructicn N costs and operation and maintenance expenses shall be paid pro rata.

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".. (n) Applicant shall i i tcrconnect with, cnd coordinato . .

rcherves by means of the cale and purchase of emergency and/or scheduled mnintenance bulk power with,'any entity (ies) in the Southeastern Michigan area engaging in or proposing to engage in electric bulk power supply on terms that will provide for Applicant's costs in connection therewith and allow the other e

party (ies) full access to th'e benefits of reserve coordination. ,

, (b) Emergency service and/or scheduled maintenance service to be provided by each party shall be furnished to the fullest extent available from the supplying party and desired by the party in r..ted. Applicant and each party (ies) shall provide i ' to the.other emergency service and/or scheduled maintenance 1

service if and when available from its own generation and from generation of others to the extent it can do so without impair-ing service to its customers including other electric systems ,

to whom it has firm commitments.

(c) Applicant and the other party (ies) to a reserve sharing arrangement shall from time to time jointly establish the minimum reserves to be installed and/or provided under contractual I

arrangements as necessary to maintain in total a reserve margin sufficient to provide adequate reliability of power supply to l.

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  • the intercunneuwed systems of the p rt ::. If Applicant plans its reserve nargin with other Michignu ecmpanies, the reservc jointly established hereunder shall be on the same basis.

Unless otherwise agreed upon, minimum reserves shall be calculated as a percentage of estimated peak load responsibility.

No party to the arrangement shall be required to maintain ,

greater reserves than the percentage of its estimated peak load responsibility which results from the aforesaid calculation, 1

provided that, if the reserve requirements of Applicant are increased over the amount Applicant would be required to maintain without such interconnection, then the other party (ies) shall be required to carry or provide for as its (their) reserves the full amount in kilowatts of such increase.

I (d) The parties to such a reserve sharing arrangement shall i

provide such amounts of operating reserve capacity as may be adequate to avoid the imposition of unreasonable demands on i

the other in meeting the normal contingencies of operating its system. However, in no circumstances shall the operating reserve requirements exceed the installed reserve requirement.

(e) Interconnections will not be limited to low voltages when higher voltages are available from Applicant's installed 1

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  • facilitics in the area where interconnectinn is desired, when the proposed arrangement is found tr.- be technically and 1

economically feasible. Control and telemetering facilities shall be provided as required for safe and prudent operation ,

of the interconnected systems.

i (f) Interconnection and coordination agreements shall e

not embody any restrictive provisions pertaining to inter-system coordination. Good industry practice as developed in the area q

l from time to time (if non-restrictive) will satisfy this I

provision. .

3. Applicant williell bulk power from new generating capacity I

planned or under construction at its costs to or purchase bulk power from any other entity (ies) in the Southeastern Michigan area engaging in or proposing to engage in generation of electric power when such transactions would serve to reduce the overall costs of new bulk power supply for itself or for the other party (ies) to the transaction. This refc.rs specifi-cally to the opportunity to coordinate in the planning of new generation, transmission and related facilities. This provisien shall not be construed to require Applicant to purcpase or sell l

bulk power if it finds such purchase or sale infeaaible or its e

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.' ccacts in connection with sue" ..urchase or sale would e:xcced its benefits therefrem.

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4. Applicant and any successor in title shall offer an Units 2

. opportunity 'to participate in the Greenwood Nucien:

and 3 to any entity in Southeastern Michigan which s, hall

' indicate its interest therein prior to June 30, 1974 and i

I shall offer an opportunity to participate in any. nuclear f

generating unit (s) which they or either of them may construct,

' own and operate in the State of Michigan, severally or jointly, during the term of the instant license, or any extension or r

renewal thereof, to any entity (ies) -in the Southeastern Michigan area by either a reasonable ownership interest in such unit (s),

or by a contractual right to purchase a reasonable portion of the output of such unit (s) at the cost thereof if the entity (ies) so elects.

Such notice of intention to participate in future units must be given to Applicant in writing prior to the placement of orders for major equipment.

In connection with such access, Applicant will also offer transmission t

service as may be required for delivery of such power to such entity (ies) on a basis that will fully co:.pe,nsate Applicant s -

for its cost.

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5. (-; priicant shall facilitatt t:.. _n:hange of bulk
  • power by transmission over its transmi__ ion facilities between or among two or more entities in the Sbutheastern Michigan area with which it is interconnected; and between any such entity (ies ) and any entity (ies) engaging in bulk power supply outside the Southeastern Michigan area between whose facilities Applicant's transmission lines and other transmission lines ,

would form a continuous electrical path, provided that (1) per-mission to utilize such other transmission lines has been obtain ed, (2) provided that the reliability of Applicant's ,

bulk power system is not thereby impaired, and (3) the arrange-ments reasonably can be accommodated from a functional and technical standpoint. Such transmission shall be on terms that fully compensate Applicant at applicable filed rates.

[ Any entity (ies) requesting such transmission arrangements shall give reasonable advance notice of its (their) schedule and requir2ments. (The foregoing applies to any entity (ies) to which Applicant may be interconnected in the future as well as those to which it is now interconnected ) .

(b) Applicant she.11 include in its planning and construc-N tion program sufficient transmission capacity as required.for l

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Attachment 2 the transactions ref rr:.6 to in subparagrap:. ') of this *

. paragraph, provided thut any entity (ics) in ene southeastern Michigan aren give Applicant sufficient advance notice as may be necessary to acco:::nodate its (their) Tequir:2:nts i' rom a functional and technical standpoint and that such entity (ies) fully compensate Applicant for its cost. Applicant shall not i

be required to construct transmission facilities which will be of no demonstrable present or future benefit to Applicant.

6. Applicant will sell power at applicable filed rates for resale to any entity (ies) in the Southeastern Michigan area l now engaging in or proposing to engage in retail distribution t

af electric power.

7. The foregoing conditions shall be implemented in a manner consistent with the provisions of the Federal Power Act and l Michigan Public Act 106 of 1909 as thereafter amended and all rates, charges or practices in connection therewith are l

l to be subject to the approval of regulatory agencies' having jurisdiction over them.

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