ML20010A744

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Order Granting FERC 780606 Motion to Compel Amend of Transmission Svc Agreements.Util to File Tarriff,As Substitution for 18 Separate Filings,Incorporating Provisions of Transmission Svc Agreements at Issue
ML20010A744
Person / Time
Site: Saint Lucie NextEra Energy icon.png
Issue date: 12/21/1979
From: Plumb K
FEDERAL ENERGY REGULATORY COMMISSION
To:
Federal Emergency Management Agency, FLORIDA POWER & LIGHT CO.
Shared Package
ML20010A740 List:
References
NUDOCS 8108120163
Download: ML20010A744 (9)


Text

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UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION e

Before Commissioners: Charles B. Curtis, Chairman; Georgiana Sheldon, Matthew Holden, Jr.,

and George R. Hall.

Florida Power & Light Company ) Docket Nos. ER78-19, et al.

ORDER DIRECTING THE SUBMISSION OF A TRANSMISSION TARIFF IN SUBSTITUTION FOR INDIVIDUAL RATE SCHEDULES (Issued December 21, 1979)

On June 6, 1978, the Staff moved to compel Florida Power

& Light Cohipany (FP&L) to file amended schedules governing the transmission services provided to the Florida municipal utilities of Homestead (Docket No. ER78-325) and Fort Pierce (Docket No. ER78-376). Staff requested that each schedule be modified to include a company policy, enunciated by an FP&L executive, regarding the availability of transmission services such as those provided to Homestead and Fort Pierce. Staff

~further requested that FP&L be required to include this state-ment of policy in all future transmission service agreements.

- By order of June 15, 1978, we consolidated the current FP&L power rate proceeding , Docket No. ER78-19, with Docket Nos. ER78-325 and ER78-376 for the purpose of a , hearing. In that order we deferred action on the Staf f motionIntothe af ford additional time interim, FP&L has to consider the requested relief.

filed 16 additional transmission service schedules which have been accepted for filing, suspended and consolidated into Docket No. ER78-19. 1/ We shall now act on the Staff motion.

The policy statement to which Staff refers is recited in the prepared testimony of FP&L vice president Ernest Bivans, filed in Docket No. ER77-175 as rebuttal to certain Staff assertions that FP&L had unduly discriminated among potential usqrs of its trans-

~1/ See Attachment A for identification of the customers served under rates filed in other dockets. The typer of transmission services provided are generally described in .

Florida Power & Light Co., Opinion No. 57 (August 3, 1979)

(mimeo at 32-33), rehearing denied, Opinion No. 57-A (October 4, 1979).

DC-A-39 l

8108120163 810807 PDR ADOCK 05000389 M PDR

Docket Nos. ER78-19, et al. c' o .

missica services. 2/ Mr. Bivans listed four criteria on which FP&L conditions the availability of transmission servicec:

Q. Does the failure of FP&L to file a generally

  • applicable transmission tariff reflect any in-tention by FP&L to preclude neighboring utilities from obtaining transmission service?

A. Most empitatically not. We are willing to provide transmission service when:

1. The specific potential seller and buyer are contractually identified;
2. The m'agnitude, time and duration'of the transaction are specified prior to the commencement of the transmission;
3. It can be determined that the trans-mission capacity will be available for the term of the contract; and
4. The rate for such service is sufficient to compensate.FP&L for its costs. 3/ {

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Staff's June 6 motion submits that the Bivans testimony constitutes an FP&L practice or regulation which affects or relates to the Company's transmission rate schedules. Relying on Section 205(c) of the Federal Power Act and Section 35.1(a) of the Regulations, Staff requests that the Commission order FP&L to include these availability criteria in the transmission service agreements.

l On June 12, 1978, FP&L answered in opposition to this motion claiming that there is no reason to believe that its proposed transmission agreements fail to achieve the policy <

in Mr. Bivans' statement, nor is such a statement a necessary or appropriate part of an agreement to provide transmission service for a particular customer. Citing Otter Tail Power Co.

j 2/ Docket No. ER77-175, which is now pending on exceptions to an initial decision, was not consolidated with the pro-ceedings listed in Attachment A. It concerns ancther type of transmission service provided to New Smyrna under a lower rate, based on an earlier test year.

3/ Docke t No . ER77-17 5, transcript page 118.

Docket Nos. ER78-19, et al.  !

v. United States, 410 U.S. 366 (1973), FP& L states that the Commission has no authority to compel a public utility to pro-vide transmission services. FP&L asserts that if the Commission requires the inclusion of a policy statement as requested by Staff / it would constitute a "back door" attempt to compel it to file a general wheeling tariff.

Section 205(c) is a broad mandate that jurisdictional electric utilities file with the Commission:

... schedules showing all rates and charges for any transmission or sale subject to the jurisdiction of the Commission, and the classification, practices, and regulations affecting such rates and charges, together with all contracts which in any manner affect or relate to such rates, charges, classifications, and services.

Section 35.1(i) of the Commission's Regulations, which imple-ments Sectiot. 205(c), requires utilities to file full and com-plete rate schedules, a term defined in Section 35.2(b) as follows:

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. The term " rate schedule" as used herein shall mean a statement of (1) electric service as defined in paragraph (a) of this section, (2) rates and charges for or in connection with this service, and (3) all classifications, practices, rules, regulations er contracts which in any manner aff=ct or relate to the aforementioned service, rates and charges.

This statement shall be in writing and may take the form or a contractual document, purchase, or sale agreement, lease of facilities, tariff or other writing.' Any oral agreement or understanding shall-be c reduced to writing and made a part thereof.

The Federal Power Commission had occasion to define the term " practice," which is also found in Section 4(c) of the Natural Gas Act. 4/ In Michigan Wisconsin Pipeline Company, 34 FPC 621, 626 (1965), the Commission held that a " practice" incl'udes company policy statements:

4/ 15 U.S.C. 717c(c). Provisions of the Natural Gas Act are to be read in pari materia with analogous provisions of the Federal Power Act. FPC v. Sierra Pacific Company,

. 350 U.S. 348, 353 (1956).

Docket Nos. ER78-19, et al. "

t

. . . A consistent and predictable course of conduct of the supplier that affects its financial relationship with the consumer in our opinion is a ' practice' subject to w the filing requirements. The filing of such a procedure as part of the pipeline

- tariff is not only consistent with but furthers the purpose underlying the filing and posting requirements of rate schedules.

A pipeline tariff announces not only what the pipeline has done in the past but the terms and conditions upon which it would, as a matter of policy, provide service _to

  • new customers meeting the tariff's eli-gibility recuirements. Even if the tariff were viewed merely as an informational description of existing service obligations, this description of the pipeline's actual practice would be of real benefit to both existing and potential customers, for it would show them, as well as the Commission, the terms by which gas would be sold upon completion of Section 7 proceedings.

(Emphasis supplied).

The Bivans testimony is an unqualified statement of transmission service availability,'stbject to four objective criteria. It contains no implicit conditions and is not, on its face, contingent on the outcome of litigation in Docket No. ER77-175.

In Florida Power & Light Co., Opinion No. 57 (August 3, 1979), we found that certain proposed availability restrictions in FP&L's wholesale power tarif f had serious anticompetitive effects. In the course of our analysis, we determined that FP&L possesses monopoly power over wholesale and retail sales in a relevant geographic market comprising much of peninsular ,

Florida. We also found that the availability of interchange transmission services, at issue here, did not significantly diminisn that power; however, these services do have a bearing on competitive relationships within the relevant markets. We

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believe that the PP&L policy statement provides useful infor-i mation to potential transmission customers on the availability of interchange transmission services and that its inclusion in FP&L's rate schedules would have definite procompetitive effects. Spacificity should help eliminate the serious problems which faced utilities', such as Homestead and Fort Pierce, when L

Docket Nos. ER78-19,

  • et a l ._

FP&L narrowly construed its wholesale power rate schedule to See, Opinion No. 57, improperly avoid providing service. .

supra (mimeo at 26-32).

FP&L does not contest the relevance of its four avail-ability criteria to the interchange transmission services itstate offers. Mr. Bivans' as a defense intoreaching certaina decision antitrust allegations made b in Docket No.

on this statement Under the circumstances, it would be unreasonable ER77-17 5. 5/

for FP&L to have anticipated anything other.than that these availability criteria would be givenTherefore, publication althoughand e schedules for services to which they apply. t ment made by a utility, the circumstances of this ca that the four transmission availability criteria be included.

We must make it clear that we are not prejudging the just-ness Rather, and wereasonableness simply require thatof the four*

FP&L include criteria in this in its rate order.

schedu l

es its currently effective policy on the availability of wheeling.

_3 The justness and reasonableness of this policy is a subject of contention in Docket No. ER77-175, and final any Commission order in that judgment de cket.

on this question will this be made in ourNonetheless, unless and policy in Docket No. FR77-175 or some the Company to change other proceeding, the four criteria Michigan constitute Wiscon-effe to be advised of that policy and to rely on it.

supra, 34 FPC at 626.

sin Pipeline Co._,

. its offers of 5/ FP&L recently advanced this wheeling policy anc' the Commission decisionSee, in Florida Power opinion & supra n._ 2 (mimeo '

No. _57-A, No. 57, supra, n. 2.

at 3). It is of special~importance that exis' ting and pros-pective customers be aware of those FP&L transmission serv available to wheel alternative sources of wholesale power and energy. FP&L has been four.d to have blocked those sources

- by means of an illegal division of the wholesale power market.

See, Gainesville Utilities bepartment v. Florida Power &

Light Co., 573 F.2d 292 (5th Cir. 1978), cert. denied,

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  • U.S. ___, 99 S. Ct. 454 (1978).

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Docket Nos. ER78-19, o et al. .

(~

FP&L's citation to Otter Tail Power Company v, United States, supra, is unavailing Our action here does not in any way expand the transmisLion service obligation which FP&L has voluntarily undertaken through its enunciated policy. This order simply requires that FP&L include its own stated terms and conditions of transmission service in its filed rate schedules as

- expressly required by Section 205(c). The Court in Otter Tail noted that these terms and conditions governing transmission services are subject to our oversight. 6/ The only effect of this order on FP&L's obligation to provTde transmission services is that, once having promulgated a company policy on availabil-ity in a record stdtement, it may not subsequently alter the transmission availability criteria without first obtaining a determination from this Commission that to do so would be just and reasonable under Sections 205 and 206. .

As noted earlier, FP&L has rubmitted for filing an average of one transmission rate per month over the last 19 months.

Whatever the reason may be for serial filings regarding each customer, and we perceive none in this case, there are several compelling reasons why FP&L should employ a single comprehen -

sive tariff instead. Not even FP&L would argue that each

- filing is a de novo application, for the rates do not vary according to the specified transactions and the supporting {]

testimony and exhibits are simply rolled over from one filing to the next. Each filing has been suspended for one day, made effective subject to refund, and consolidated with FP&L's whole-sale rate proceeding, Docket No. ER78-19. 'The similarity of these agreements 7/ and the proximity of filing dates lead us to conclude that transmission services are being purchased by a number of utilities under'the transmission availibility cri-teria discussed above. In accordance with Section 205(c), all service agreements must contain these availability' criteria.

The individual agreements may purport to be limited to a specific customer; however, FP&L's statement of company policy apparently controls in all instances where service is requested. Moreover, because a postage-stamp rate is involved, FP&L would be required "

to demonstrate that a different rate offered to a new customer would not be unduly discriminatory. This is, in effect, a tariff service.

6/ 410 U.S. at 376-77.

7/ Although characterized as such by FP&L, most of these

" agreements" have not been executed.by the customers. The

. service provided to these customers is, therefore, indis-tinguishable from that available under a tariff.

(-

Docket Nos. ER78-19, et al.

We conclude tr.at the objectives of Section 205(c) of the Federal Power Act and 3ection 35.2 of the Regulations would be better se ved by a single tariff than by the maintenancethe .

of numerous service agreements. Under either arrangement, i

further availability of wheeling is, at least for now, de-A termined by FP&L's criteria and not by this Commission.

single tariff will also provide us with a more efficient means '

of regulating these transmission services.

Therefore, we shall order FP&L to file one rate schedule, a tarif f, which incorporates the volur.tarily-established con-ditions of availability and the postage-stamp rate, and lists separately in an appendix those customers now receiving trans-into ad-mission service. If in the future FP&L should enter ditonal or changed transmission service agreements containing in the rates, terms and conditions identical to those set out the tariff tariff, it need only file a service agreement under and substitute appendix pages with the Commission instead of 2

additional rate schedules.

The. Commission orders:

(A) The Staff motion of June 6,1978, in Docket Nos.

)

ER78-325, ER78-376 and ER78-19, to compel issue inthethese amendment of 18,consol-transmission service agreements at idated dockets is hereby granted.

(B)

Within 40 days of the date of this order, FP&L shall file a tariff, in substitution for the 18 separate filings in incorporating the provisions of these consolidated dockets, issue, including the several transmission service agreements at the four criteria governing FP&L transmission service avail-ability which were recited in the testimony of Mr.. Ernest Bivans in Docket No. ER77-175 and listing the individual customers now receiving transmission services in an appendix thereto.

in <

(C)

The Secretary shall promptly publish'this order the Federal Register.

By the Commission.

('S E A L )

b

- Kenneth F. Plumb,

. Secretary.

. ATTACHMENT A m

COMMISSION DOCKETS INVOLVING -

O T}(

LIGHT CO. TRANSMISSION FLORIDA >

RATE FILINGS AT POWER THE & IDENTICAL POSTAGE-STAMP RATE r

m Suspension and Consolidation Order [

Docket Customer _

% >2 May 19, 1978 jyO y

1) ER78-325 Homestead, Fl. . June 15, 1978 og

_( Ft. Pir:ce, Fl. I

( 2) ER78-376 August 9, 1978 lj 3'Om (f '

( 3) ER78-478 Lake Worth, F1. August 23, 1978

( 4) ER78-508 Tampa Electric Co. August 30, 1978 of ER78-527 Homestead , Fl . (suppl.) ln>  :

September 21, 1978

( 5)

( 6)

ER78-566 vero Beach, F1. September 21, 1978 jug 30 j

I 7)

ER78-567 Ta.npa Electr ic Co. (suppl.) November 30, 1978 Chy<

( 8) ER79-44 Tampa Electric Co. (suppl.) March 22, 1979 ER79-162 Homestead, Fl. (suppl.) O

( 9) March 22, 1979 C E R79-171 Ft. Pierce, Fl. (suppl.) March 22, 1979 (10)

(11) ER79-172 Ft. Pierce, Fl. (suppl.)

ER79-352 New Smyrna Beach, F1. (suppl.) June 28,20, 1979

{ l (12) (suppl.) August 1979 $

(13) ER79-452 Jacksonville, Fl. September 14, 1979 (14) ER79-522 Ft. Pierce, Fl. (suppl.) 5 Z

ER79-554 New Smyrna Deach, F1. (suppl.) September September 14, 14, 1979 1979 (15) ER79-56 3 Lake Worth, Fl. (suppl.) l (16) September 14, 1979 (17) ER79-574 Florida Power Corporation 4, 1979 l ER80-8 New Smyrna Beach, F1. (suppl.) December l (18) ,

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Attachment 3 City of Homestead, Florida'v. Florida Power &-

. Light Company,-FERC Docket No.'EL78-28, ~O rde r

' Termina't.ing Proceeding", - November 8, 1979 I i

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