ML20010A536

Forwards Responses to Questions Raised in NRC 810414 Ltr Re OL Application Antitrust Review.Appropriate Filings for Regulatory Approval of Definitive Agreement Will Be Made After Execution

ML20010A536
Person / Time
Site:	Clinton
Issue date:	08/03/1981
From:	Koch L ILLINOIS POWER CO.
To:	Toalston A Office of Nuclear Reactor Regulation
References
L-33-81(08-03), L-33-81(8-3), U-0268, U-268, NUDOCS 8108110524
Download: ML20010A536 (15)

Text

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ILLINDIS POWER COMPANY U-0268 ff7 L33-81(08-03)-6_

500 south 27TH STREET, DECATUR. ILLINOIS 62525 August 3, 1981~

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1. gC Mr. Argil Toalicun s 4 Utility Finance Branch gg q, jO f'.) _

Division of Engineering -

Office of Nuclear Reactor Regulation 46 ~j U. S. Nuclear Regulatory Commission g g'.

Washington, D.C. 20555 c',j

Dear Mr. Toalston:

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References:

1) Letter 5/23/80, L. J. Koch, IP to W. M. Zelinsky, NRC, subj ect: Information for Antitrust Review of OL Application.

2) Letter 4/14/81, A. Toalston, NRC to L. J. Koch, IP - OL Antitrust Review Clinton Power Station, Unit 1 Docket No. 50-461 l

Provided below are our responses to the quesulons raised in the reference (2) letter as a result of your OL antitrust review. The l item and page numbers refer to those used in tre referenced letters.

(1) page 5,B.l.H.(1) Illinois Power Company (IPC) first l expressed an interest concerning the purchase by IPC

! of the City of Jacksonville (City) municipal electric j system on August 16, 1963.

l l The acquisition of the City's system was consummated i on February 13, 1974.

l The acquisition price paid for the City's facilities l was $7,162,726.

l l The acquisition of the City's system was not submitted l to the City in referendum form. It was publicized and l approved by the City Council.

l I

The generating capacity of the City's ystem at the time of acquisition was 25,800 kilowatts.

IPC served approximately 61 percent of the customers L

in the City at the time of acquisition.

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(2) page 5,(1)(c) IPC's letter of intent to merge the y Mt. Carmel Public Utility Company (Utility) with j IPC was sent to the Utility on March 19, 1981. j/f -

8108110524 810803 I PDR.ADOCK 05000461' (

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d Mr. Argil.Toalston U-0268' Page #2- L33-81(08-03)-6 IThe Utility's Board of Directors accepted the IPC letter of intent-on March 20, 1981. Mr;~ Albert Barnhard, President of the Utility, signed and'-

returned one copy of the letter to IPC.

i A Definitive Agreement between the parties is expected to be executed in the near future.

Appropriate filings for regulatory approval of the Definitive Agreement will be made after it is executed.

(3) page 5,(2) Copies of the requests-(and IPC's_ responses)

for interconnection or wholesale. service expressed by Farmer City and the Villages of Chatam and Flora, Illinois are attached hereto.

[ (4) page 5 The City of Springfield, Illinois exploratory level approach to Western Illinois Power. Cooperative

, Inc. , pertained to possible " joint participation" in l a future fossil fired generating unit.

l Sincerely, ILLINOIS POWER COMPANY M

L. . Ko:h Vice President GEW/em

cc

J. H. Williams , NRC Clinton Proj ect Manager l H. H. Livermore, NRC Resident Inspector 1

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Light, Pow:;r and Wet:r Utiliti;s Municipally Owned gg Telephone (217) 928 6432

. ALDERMEN f: JimIlammer -

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' ~ "~ WaRu Rhh hwm CITY OF FARMER CITY '

Maurice Miller Roy Ratclitfe

. n.Lc;g 1.mce FARMER CITY, Ill.. James srown

• CalebWayne

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. .- 3.0 in Peithrna May 18, 1979 1"_.aTri.Es

.:xace Mr. H. G. aoers TJ," tilinoi Power Company mya 90 27th Street t> ;.irwta De tur, i11Inots 62525 n m.c., irman IW astcuffe ubject: _ IPC/ Farmer City Interconnect

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Dear Mr. Goers:

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We have received information from our consulting engineer in'dicating mm Illinois Power Company is agreeable to supplying supplemental power natcune.c'amaa

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for the City's Municipal Electric Plant under terms and conditions CC.J'/(ERY& PATJC uein ,chairm have discussed this possibility and are desirous of pursuing the

% matter.

Td3m., The City Council has requested R. B. Schmidt, of Rogers-Schmidt name Engineering Co., to prepare the necessary technical information

" #"* you will require and to it'itiate discussion on behalf of the City.

Jgg,,c Time is of essence in t!.a decision making process and ultimate wun completion of the facility and we trust the specifics of the ar-rangment can be developed promptly. You may look forward to Og^yhcE Mr'. Schmidt's contacting you in this regard. For your convenient reference our consultant's address is s.co L;!a,chadman Panuna Rogers-Schmidt Engineering Co.

annra 8712 Manchester' Road

%g St. Louis, Missouri 63144

% ,, % Very truly yours l Rhodes

"" CITY OF FARMER CITY,*I LINOIS QVILDEFENSE O! PhS

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/] A /  ; W Tom McConkey, Mayor Co/

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/ l ROGERS-SCHMIDT ENGINEERING CO.

Oonsu[ilng Enginaass l -h ( l 8712 MANCHESTER RoAo ST. Louis, Missoun 63144 a p# 84 September 20,'1979 hTG / _ pf 7 Mr. Miro P. Mladiner Manager of Rates Illinois Power Company 500 South 27th Street Decatur, T114 nois 62525

Subject:

Purchase Power Agreement Illinois Power Company

Dear Mr. Mladiner:

This is to confirm my telephone conversation with you on September 20, 1979, regarding the verification of the basis upon which the demand charge will be billed to customers being served under Illinois Power Co.gany's Wholesale Electric Service Agreement for Municipal Utilities.

As a result of our conversation, it is my understanding that the basis for the billing demand charge shall remain as the highest average kilovolt-amperes (KVA) delivered during any fifteen minute period, and that there are no plans under consideration, or known about, at the present time to char.ge the demand basis from kilovolt-amperes to kilowatts (KW).

The verification of the KVA demand basis is important to us because we are presently in the design stage for new interconnect metering facilities for some of the Illinois Municipal utilities. A change to a KW demand basis would affect our design work.

If my understanding of this is incorrect, please advise.

Very truly yours ROGERS-SCHMIDT ENGINEERING CO.

6dl%,o Charles Ahorn c

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- ROGERS-SCHMIDT ENGINEERING CO..

Censutsg Engtaan 8712 MANCHESTan ROAD Sr. Louis, Messount 63144 October 19, 1979 Mr. Miro P..Mladiner

. Manager of Rates 1111nois Power Company 500 South 27th Street '

'Decatur,-Illinois 62525 .

Subject:

Farmer City, Illinois

• Interconnect Schstat;on i

Dear Mr. Mladiner:

[ With reference to, cnd confirming our-discussions concerning the proposed Interconnection between Farmer City, Illinois'and Illinois Power Company, .

l the City of Farmer City has Instructed us to proceed with negotiations and -

j- -: plans directed toward estabitshing an interconnection and subsequent pur- -

l chase of power at 69 KV from Illinois Power comoany under the terms of the j IPC," Wholesale Electric Service Agreement".

j The plan which appears to be the most favorable is' the one calling for the -

}

construction of a 138 KV/69 KV substation at a point along the existing Illinois Power Company's 138 KV (Bloomington to Champaign) transmission line near Farmer city. The City of Farmer City would construct and operate a j 69 K" cransmission line.from this substation into the City's power plant i substation in Farmer City, a distance of approximately 5.5 miles. A site j for the 138 KV/69 KV interconnect substation'has been tentatively lo-cated near the point where the 138 KV line presently crosses Highway 136.

)- In order to provide for future projected demands of Farmer City, it appears 4

advisable for the interconnect substation to have the capability of supply-ing Farmer City with 15 MVA of power.

Please consider and give us your comments and views on the folicwing items

,! concerning the 138 KV/69 KV substation:

i

1. Ownership of the site on which substation is to be built.

l 2. Which items in.the substation would be provided by Illinois

- Power Company and which items would be provided by Farmer i City and where would Farmer City's ownership begin?

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l" 3 It has been indicated that Illinois Power Company would  ;

prefer to meter power at 69 KV; please verify.

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fi l October 19, 1979 Hr. Hiro P. Mladiner

Illinois Power Company Decatur, Illinois 62525 Page 2 RE: Farmer City, Illinois .

interconnect Substation Would Illinois Power Company or Farmer City be responsible 4.

for the over-all design of the substation in corroboration with the other party?

5 Any other steps of procedure necessary for the Clty to undertake in order to get this project underway.

The City ~1s anxious to proceed with this project as soon as possible, and.a prompt reply will be most appreciated. .

Very truly yours, ,

ROGERS-SCHMIDT ENGINEERING CO.

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Charles Ahorn CA:mJ

i. cc: Honorable Tom McConkey, Hayor Mr. Caleb Vayne Mrs. Ranella Wills, City Clerk th,'~."

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j hay _I]f500 SOUTH 27TH STREET, DECATUR, It.LINOIS 62525 November ~2, 1979 tF Mr. Charles Ahorn -

Rogers-Schmidt Engineering 8712 Manchester Road St. Louis, Missouri 63144

Dear Mr. Ahorn:

In response to your October 19, 1979 letter, I am enclosing a draft agreement for the Purchase of Power by. Farmer City from Illinois Power Company. This agreement is modeled after the Company's agreement with the City of Mascoutah which receives service from-our 138 Kv system.

Paragraphs 2, 3 and 4 of Section IL paragraph 1,Section V, and Exhibit B respond to questions 1, 2 and 3 in your October 19,

- 1979 letter. Exhibit C, the Faciliti u Rental Agreement, has not been included in the draft agreerrat but would become a part of the agreement if Farmer City wouli. desire to rent certain facilities from Illinois Power.

t In respc..se to question 4, Farmer City would be responsible for the overall design of the substation in corroboration with Illinois Power v.,:eany.

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After Farmer City personnel has reviewed the attached draft agreement, I would suggest a meeting between the parties to work out details and establish a ti.me frame for the project.

I Very truly yours, IL NOIS POWER COMPANY d31 b -1 M. P. Mladiner Manager of Rates l

MPM/mb l cc: Mr. Larry D. Haab, IPC Honorable Thomas E. McConkey, Mayor 105 South Main Street Farmer City, Illinois 61842

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be: H. C. Mees A-13 G. R. Sweeney C-25 I

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VILLAGE OF CHATHAM 117 East MULasaar

• Paoxa 4S3-2451 g/ . l CHATHAh!, ILLINOIS 62629 I

.gs.m J'M I- F. WHITNE1*

%dbcn Prendent . January 29, 1979 i

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, C. W. Wells Vice President - Illinois Power '

l 500 S. 27th St.

i Decatur, IL 62525

Dear'Mr. Wells:

The Village of Chatham owns and operates its ,

municipal electric distribution system. We purchase wholesale i electric power from Central Illinois Light Co. Last fiscal year our power amounted to $943,585.

l l The Village is attempting to .tscertain the options l available to it in regards to the wholesale supply. We need to determine whether your company is able to enter into contract to

' supply the wholesale power need of th.e Village of Chatham.

Specifically, do you have the ability to assume the current.

j position of CILC0'and sell power to the Village.

A written response will be most appreciative.

Yours truly, ,

x W . WdnLje John F. Whitney Village President Clifford Hill Trustea - Electric Dept.

cc: Wendall J. Kelley - Illinois Power

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W. T. Hi;rt February.2,.1979 Mr. John F 1hitney.

Village . resident Villa e of Chatham' .

- 11 East Mulberry

atham, Illinois 62629 l-

Dear Mr. Whitney:

i. .

We received your January 29 letter asking if' Illinois Power is able to enter into a contract to supply wholesale power to the Village of Chatham. I have asked our engineering. and oper-ating. people to study our electrical system to see how we could serve you. It will probably take two or three weeks to arrive I

at some' general conclusions, If you have any questions or comments during this period, feel free to contact either W. E. Warren, our vice president-in charge of operations, or me. Once we understand our ability to serve, we will be in touch with you again.

' Sincerely, c+ .)

C. W. Wells Executive Vice President cc: Mr. Clifford Hill Trustee - Elertric Department e

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Srr l- gle, VILLAGE OF CHATHAM-117 EAsr Mmataar

• PaoNa 483-2451 CHATH.ut, IM.1N0!S 62629 .

C&W JOHN F. WHITNEY -

• Village President February 26, 1979 Mr. C. W. Wells Executive Vice President Illinois Power Company 500 South 27th Street Decatur, Illinois 62525

Dear Mr. Wells,

I am in receipt of your letter of February 2 and am most pleased that your company is exploring the possibility of servicing Chatham as a wholesale customer.

s This letti" is written in an attempt to ascertain a target date that we might expect in regards to a determination of the ability of Illinois -

Power Company to provide wholesale power to Chatham. Obviously, a 12.5 line with appropriate substation would be necessary. This will require Village conversion - which we are now preparing. It is imperative that the Village be advis_l of your intentions in a short time. Perhaps, your engineering and operating departments could advise us of their project schedule for this initial phase of negotiation.

In addition, I would like to pose another question for your consideration.

Is Illinois Power Company able to negotiate for the purt base of the Chatham municipal electric distribution system? This question should not be con-strued as to superceed in importance the previous inquiry. It is asked simply to ascertain whether another option is available for the Village's consideration.

I thank you for your prompt response to my letter of January 29. Your consideration of the questions posed is greatly appreciated.

Very truly yours, 3-p A' a m .

~

\ John F. Whitney [

• Village President cc: Clif ton Hill, Trustee -

Electric Department I

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-1LLINUIS POWER 00MPANY:

March 9,.1979 Itc.' John F. Whitney -

Village President village of.Chatham

• 117 East Mulberry Chatham, _ Illinois 62629 ,

Dear Mr. Whitney:

. By letter dated January 29, 1979, you requested a response from Illinois Power Company concerning possible service to the.

Village of Chatham. In your letter dated February 26, 1979, you -

mentioned that consideration be given to negotiations for the purchase of the Chatham Municipal Electric System by Illinois-Power Company.

We have completed a preliminary engineering study which is based on providing wholesale electric service from Illinois Power Company's facilities. Based on this study, we have deter-mined that service to Chatham could be provided from the Company's-69,000 volt line located north and west of the' Village. It would be necessary to construct approximately 7 miles of 69,000 volt line to connect'to your system under this alternative. Based on our experience, approximately 3 years is required to construct such facilities. There would be a cost to the village to provide transformation to the distribution voltage required by the Village.

As an alternative the village could rent the transformation from Illinois Power.

. Service to your community could be provided under the terms of the attached agreement for the purchase of power. This agree-ment would have to be executed by the parties and accepted or approved by the appropriate regulatory agencies prior to the con-struction of facili* ties. Exhibit A to the attached agreement provides the rates to be charged for electric energy. The rates contained in Exhibit A are currently being charged for total )

requirements fimm wholesa3e electric service. These rates are now pending approval by the Federal Energy Regulatory Commission (FERC),

and are subject to change in the future by unilateral application of the company to the FERC. W12n applied to the village's energy usage during the twelve months ended December 31, 1978, these rates would have resulted in an annual energy cost of approximately $715,000. l t

Other methods of service which may ba considered would involve partial use of Central Illinois Public Service Company or Central

, Illinois Light Company electric facilities along with Illinois g

Power facilities to provice power to the Village. Since this would i

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. involva othar utilities and.possibly regulatory approval, we have

.- not made a. cost comparison of this method of service. Should the Village of-Chatham desire to pursue this, method of service, we assumo you will present the matter to the other utilities and' obtain any.necessary consc: t or approval.

Any consideration of a possible sale to Illinois Power Company of the ^ municipal electric system. would require a lengthy and expen-sive study. Due to the location of the Village's system and the cost of facilities required to properly serve the Chatham system from our system, we do not believe it would be appropriate or pro-ductive to pursue such an alternative at this time.

There may be other options available to the village that could' ,

result in reduced-power supply costs. We recommend that the Village explore.all alternativ's. e Should you have any questions regarding this response, please 1 feel free to contact me. .

Very truly yours,

s.

, ILLINOIS POWER COMPANY

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-- k Larr'y D. Haab Vice President IDH:ciw cc: Mr. Clifford Hill Trustee, Electric Department Village of Chatham

'Chatham, Illinois 62629 Mr. C. W. Wells, B-13 Mr. W. E. Warren, A-14

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'# t f C2439 j WILLI AM J. GIVEN, Mayor f ,'!E. 122 North Main Street

'bi' ] Phone (618) 662-8313 City Hall Building e

December 7,1978 u,c,,

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,g Mr. Ed Chamberlain, Manager gg,[g,==

Illinois Power Company 37;c4,,

Mt. Vernon, Illinois' 62864 Re: Request for Electrical Energy Service Flora, Illinois l

Dear Mr. Chamberlain:

l Inherewith accordance with your request to our Engineer, please find enclosed one (1) copy of the previous 24 month's invoices from Central 4

} Illinois Power Service Company.

I l We sincerely trust that the City can have a meeting wit r,ur Vice-i 4.y cf Flora

} President for the purposes of cons dering servicing the

at the earliest possible date. I, our City Attorney-Jack . Ieyer and Engineer, Roger Edmison will be the ones who will attend the meeting i once you have it scheduled. We recognize that this request will take

• considerable time and effort to reach its conclusion, but I assure you i that the City is most sincere in its request subject to negotiations

! being what we feel will be the outcome of the cost benefits study.

I If there is anything we can do to expedite your data collection and feasibility study, please do not hesitate to call either myself, our

] Engineer or our City Attorney.

Respe ctfully, THE CITY OF FLORA i.

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W. J[ven, Mayor WJG/ rae/nmc

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cc: Mr. Vernon Hanes, City Clerk i cc: Mr. Jack Meyer, City Attorney l  ; cc: Mr. Roger A. Edmison, P. E.

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500 SOUTH 27TH STREET. DECATUR. ft.UNOIS G2525 January'26. 1979~ .

l The Honorable-W. T. Given Mayor, City of Flora

• 122' North Main Street Flora, Illinois 62839 l

Dear Mayor Given:

4 In response to your December 7, 1978 request of Ed Chamber- '

land, we have studied alternative methods for providing wholesale electric service to. your community.

~ ~

We have considered service from facilities owned entirely -

by Illinois Power Company. In such case,.we could serve the City' from a 345,000/69,000 volt substation to be located in or near Section-6 (T3N, R5E) in-Clay county. The City'would be required to construct the 69,000 volt transmission lines from our substation location to the City's distribution substation. We estimate that three years would be required to construct the facilities.- Because of the size of the investment required-to initiate service, we would require a ten year contract.

Service to your community could be provided under the terms of the attached agreement for tne purchase of power. This agreement would need to be executed and approved.by the appropriate regulatory l agencies prior to our construction of the 345,000/69,000 volt sub-l station. Ef.aoit A, " Wholesale Electric Service for Resale," to the agreement provides for the rates to be charged for electric energy.

The rates contained in the attached Exhibit A are the rates currently

(~ being charged for total requirements firm wholesale electric service.

l These rates are now pending approval by the Federal Energy Regulatory Commission (FERC). They are subject to change in the future by unilateral application of:the Company to the FERC for rate modifi-cat. ions. These r:tes, when applied to the City's energy u' sage during the twelve. months ending September 26, 1978, would have resulted in an annual energy cost of about $1,120,000.

Paragraph I-D of Exhibit A to the service agreement provides that the company will construct, without cost to the City, facilities costing 'pu to one and one-half times the estimated annual revenues derived from those facilities. Construction costs in excess of this

! amount would be paid by the City. We estimate that the cost for constructing the 345,000/69,000 volt substation to be S2,250,000 and the 69,000 volt transmission lines to be $1,155,000. Based on l

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The Honorable W. T. Given -

Mayor, City of Flora ^

Page 2 '

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January 26,'1979 -

this cost, the City would be required to pay approximately '

$570,000 of'the construction costs for.the 345,000/69,000 volt -

suostation in addition to " constructing the. 69,000 volt trans- - '

mission system. These charges would be paid prior to commence- -

ment of~ construction. *

~Another method of service which was also considered would ,

involve partial utilization of' Central Illinois Public Service ,

Company's (CIPS) facilities along with Illinois Power facilities to provide power to the City. Since this would involve CIPS and .

possibly require regulatory approval,1we have not made a cost comparison of this method.of service. Should the City of Flora /

desire to pursue this' method of service, we assume that you will t

i present the matter to CIPS and obtain any necessary consent or approval.

There may be other options available to the City that could

-result in reduced power supply costs. We recommend that the-City explore all alternatives.

Should you have.any questions regarding this proposa.1, please j feel free to contact me. .

Very truly,yours, ILLINOIS POWER COMPANY ,

$15%. ila.T! 9. t!MB s Larry D. Haab Vice President Attachnent -

cc: Mr. W. E. Warren Vice President Illinois Power Company 500 South 27th Street I Decatur, Illinois. 62525 i

Mr. E. J. Chamberland Service Area-Manager Illinois Power Company 2610 Broadway Mt. Vernon, Illinois 62864 bc: Mr. William T. Hart Schiff Hardin & Maite 7200 Sears Tower 233 South Wacker Drive {

Chicago, Illinois 60606 l

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