ML20010A749
| ML20010A749 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 10/20/1978 |
| From: | Plumb K FEDERAL ENERGY REGULATORY COMMISSION |
| To: | GULF STATES UTILITIES CO. |
| Shared Package | |
| ML20010A740 | List: |
| References | |
| ER76-816, NUDOCS 8108120173 | |
| Download: ML20010A749 (10) | |
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UN!'"ED STATES OF AMERICA FIDERU., ENERGY REGULATORY COMMISSf6N 3efore Commissioners: Charles 3.
Curtis, Chair:an; Don S.
Smith, Georgiana Sheldon, Matthew Holden, Jr.,
and George R.
Hall.
Gulf States Utilities
)
Docket No. ER76-816 Company
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ORDER APPROVING SETTLEMENT SUBJECT TO CONDITION (Issued October 20, 1978)
On March 13, 1978, Gulf States Utilities Company (Gulf States) filed with the Federal Energy Regulatory Commission lf a Motion to certify Settlement Agreement and Record to the Commission in the above designated docket.
On March 16, 1978, the Presiding Administrative Law Judge certified the Settlement Agreement and the Record to the Commission for its consideration and deter-mination.
Notice of the proposed settlement was issued on March 24,'1978, with comments due by April 14, 1978.
On April 14, 1978, Staff filed comments in support of the settlement.
However, Staff noted that certain lan-guage in the Availability / Applicability sections should be excluded from the rate schedules since these provisions may be unduly restrictive, anticompetitive and contrary to the public interest.
The Commission approves the Agreement subject to condition for the reasons set fo rth below.
On July 29, 1976, Gulf States tendered for filing Rate Schedule WSM "Other Electric Corporation for Resale",
proposing an increase in rate:s for cerhin municipal If This proceeding was commenced before the FPC.
By the joint regulation of October 1, 1977 (10 CFR 1000.1),
it was transferred to the FERC.
The term "Cc= mission",
when used in che context of action taken prior to October 1, 1977, refers to the FPC; when used or.herwise, the reference is to he FERC.
DC-A-l' 8108120173 810807
'- PDR ADOCK 05000389i M
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i cocke No. ER76-816 i
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I custcmers 2/, and rate Schedule WSC " Wholesale Power to Rural ElecEric Distribution Cooperatives" proposing an increase in rates for certain cooperative customers. _3/
In addition the tendered rate schedules were proposed to become applicable to the then existing individual contracts between Gulf States and the members of the Sam Rayburn Dam Electric Cooperative Inc. (San Dam), although no 4/
service was being rendered under these contracts.
Towns of Erath, I
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Rate Schedule WSM-Municipal Customers:
Rayne, Gueydan, Kaplan, Abbeville, St. Martinsville,
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Welsh, New Roads, Louisiana; Cities of Caldwell, and Newton.
Texas; and Kirbyville Light and Power Company, Mid-South Electric Rate Schedule WSC-Cooperative Customers; 3/
Cooperative Association; Ecuston County Electric Co-op,
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Inc.
and. Cajun Electric Power Cooperative, Inc.,
e The members of the Sam Rayburn Dam Electric Cooperative, 4/
Inc. are as follows:
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The Town of Vinton, Louisiana, the Cities of Livingston, 8
Jasper, and Liberty, Texas; Sam Houston, and Jasper-Newton Electric Cooperatives.
By order issued July 26, 1977 in Docket N,os. ER76-816 and ER77-375 Notices of' Caniiellation of the individual contracts with the Sam Dan me:
lar-sMiccepted and effec ive on the dates shown in the attachment to said order.
Since the effective dates of termination have passed, the aforementioned Sam Dam at present, served by Sam Dam through its ameers are,
contract with Gulf States.
The Sam Dam-Gulf States contract was approved by the Commission by order issued May 5,1977, Docket E-8121 and by its terms extends tha Sam Dam-Gulf States power supply arrange-ment until 1980 See Gulf States Utilities Company
??C No. ^9 8~
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Docket No. ER76-816 3-Gulf States further proposed that Rate Schedule WSC sumerceded the existing contract between Gulf Staces and Ca'jun Electric Power Cooperative (CEPCO).
Although CEPCO was not receiving power under their existing contract with Gulf States, it was estimated that the CEPCO points of delivery served by Gulf States would require power in excess of CEPCO's own generation in 1978.
By Order issued August 31, 1976, the Commission rejected acclication of the proposed Rate Schedule W9C to -
the existiEc contracts between Gulf States and Sam Houston Electric Coooerative, and between Gulf States and Jasper-
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Newton Electric Cooperative, as these contracts did not permit unilateral rate changes.
The Commission accected for filing the proposed Rate Schedule WSM to become effective subject to refund as to certain municipals on December 1, 1976,- and accepted for filing the proposed Rate Schedule WSC for certain cooperative customers to become effective on September 2, 1976, subject to refund.
The proposed rates were set for hearing.
Staff served Top Sheets on March 15, 1977, and settlement
' conferences were held.
Testimony and exhibits were served by all parties and the hearing was set for November 8, 1977.
Further negotiations on the morning of the hearing produced the settlement.
SETTLEMINT The crocosed settlement in Docket No. ER76-816 provides for a rev'enue level consistent with the cost of service in
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Staff's revised Top Sheet and provides for an increase in resale revenues of $319,925 under Rate Schedule WSC to the i
I rural electric cooperative customers, and S435,000 under Rate Schedule WSM to the municipal customers based on a test I
ceriod for the twelve months ending December 31, 1975.
The
' agreement provides for refunds to municipal customers for amounts collected over and above settlement rates, and allows the pro-posed rate increase as filed to the cooperative customers.
The settlement rates would not result in an earned rate of return exceeding Staff's recommended rate of S. 9 2% overall including 13.~00% on common equity based on a common equity ratio of
'33.17%.
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i Do cket No. ER76-816 4-1 The agreer.ent further provides for a^rira:Orium on increases an rates prior to April 1, 1979.
Gulf States agrees that it will not use the Tax Adjustment Clause in Rate Schedules WSM and WSC as a basis for a change in rates absent a filing pursuant to Section 35.13 of the co= mission's Rules and Regulations.
As noted in Staff's co==ents filed April 17, 1978, the proposed Settlement Agreement includes language which restricts the customers '
ability to resell power and energy furnished by Gulf States.
Staff believes the language contained in the Availability / Applicability clauses may be unduly restrictive,
anticompetitive and contrary to the public interest.
DISCUSSION We find that the settlement agreement between Gulf States and the named parties, in its totality, is neither unduly preferential nor enduly advantagecus, and it establishes a just and reasonable rate level Accordinciv
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the settlement should be accepted.
The only point of contention concerns the resale re-strictions the settlement places upon the customers of Gulf States.
The crovisions in c_uestion read as follows:
Schedule WSC WHOLESAI.E POWER TO RURAL ELECTPlc DISTFl3UTION COOPERATIVES Availabilitv Availability in the territory in which Gulf States operates to Rural Electric Distribution Cooperatives for r-sale solely to ultimate consumers.
Service under this schedule is subject to the terms and conditions specified in the Agreement for Electric Service to Rural Cooperatives to which' this schedule is attached and made a part thereof.
The char,es specified in this schedule shall ac.oly separately to service supplied at each point o f delive ry.
Schedule WSM OTr_ER ELECTRIC COPSOPATIONS FOR FISALE A=. =licability This rate is applicable under the regular terns and conditions of the Company to other electric corporations who contract for electric service to be used for resale to ultimate consumers.
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b Dccket No. IR76-816,
This Commission's predecessor traditionally looked with disfavor upon resale restrictions in wholesale contracts and rate schedule tariffs.
Cincinnati Gas and Electric Company, Docke Nos. E-S885 and E-8546, order issued September 5, 1975; Wisconsin Power & Lich Company, 49 FPC 645 (1973); Mississippi Power Company, 45 FPC 269 (1971), Georcia Power Company, 35 FPC 436 (1966).
This Commission, like its predecessor, has the responsi-bility to consider antitrust policy in exercising its regu-latory authority, including its examination of rates, terms and conditions for wholesale electric service.
Gulf States Utilities Company v.
F.P.C.,
411 U.S.
747, 760-762 (1973).
Gulf States' Applicability / Availability clause on its face prevents further wholesaling of power and energy purchased under the respective rate schedules.
This gives Gulf States the power to eliminate or inhibit its bulk power customa as potential competitors of Gulf States for further whd _Jale sales.
The Commission will not give its imprimatur to the proposed accuisition of market power. _5/
We do not find in the regulatory scheme under the Federal Power Act any public policy basis for allowing public utilities to employ tariff provisions to foreclose wholesale competition i
-5/ The anticompetitive effect is similar to that of a l
market division or allocation of customers between com-l petitors -- conduct which the Supreme Court has held to violate the antitrust laws.
United States v.
Tocco Associates, Inc., 405 U.S.
596, 606-612 (19 72 L. _iThe l
situation here differs substantially from that in Continental
' T. V. ~,~ ~Ific.
v.
GTE Sylvania Inc., 433 U.S.
3 6 __L19.7 7 ), where.
the Court held that the imposition of resale restrictions by manufacturers on distributors of their products could be reasonable and procompetitive in some circumstances.
In that case, Sylvania argued that restraining competition among its retail franchisees in sales of Sylvania television j
sets promoted more significant competition between Sylvania and other television brands.
No such redeeming procompeti-s tive virtues warrant the imposition of explicit resale prohibitions by electric wholesalers; there are no b.cand names to be promoted or brand reputations to be protected l
here.
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1 Docke: Nc. ER76-816 *between a supplier like Gulf States and its bulk, cower pur-chasers.
To the centrary, competition where feasible ecmole-
>ments the regulatory scheme.
According to the Supreme Court in C::er Tail Pcwer Co. v.
United States, "the history of Par II of the Federal Pcwer Act indicates an overriding po.31cy o:. maintaining competition to the maximum extent
, possible consistent with the public interest. "
410 U.S.
366, at 374 (1973).
It is axiomatic that competition creates pressure on electric utilities to reduce their costs and increase en.e r e:,iciency in power supply production and marketing.
This downward pressure on costs supports our direct regulation of rates to the ultimate benefit of consumers of electricity.
i The anticompetitive effect of resale prohibitions is of course not conclusive under the Federal Power Act.
It remains for us to consider whether such prohibitions serve some significant regulatory purpose which cannot be achieved by a less anticompetitive method and which would render them in the public interest notwithstanding that desirable com-petition is impaired.
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In this connection, we recognize that electric utilities must-plan and construct sufficient generation and transmission co meet their future power supply requirements in an orderly fashion.
Proper system planning requires utilities like Gulf States to commit to building necessary fhcilities well in advance of the *4me such facilities are needed actually to serve loads, and the utilities have an important interest in projecting their load growth and requirements as accurately as possible.
Resale restrictions of the sort Gulf States has prescribed do serve this interest; they insure that the I
loads of wholesale customers will not vary by virtue of those customers adding or losing wholesale customers of their own.
These restrictions are, however, an unnecessarily blunt device for this purpose, given their apparent anticom-l petitive effect and the availability of other, well-estiblished l
l ways for utilities to regulate their loads without impairing competition. _6/
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sions for obtaining timely notice of customers' increased and decreased requirements.
A related concern -- that a member of a wholesale class might gain a resale customer whose usage l
would make it inappropriate for the wholesale customer to continue to be served at the. class rates can similarly be accom=cdated by permitting Gulf States and ot.5er such whole-salers to include in their rate schecules accroariate lancuace describing the class on the basis of such ch'itehia as kW ica5, i
load factors, etc.-
Docko No. ER75-816.
We hold, therefore, that direct resale. restrictions, such'as the ones here, imposed by power suppliers en their wholesale customers are unreasonable and unjust.
- Moreover, we conclude that any such restrictions are so devoid of redeeming value in light of the availability of other well-established means of accomplishing the legitimate purposes of regulated utilities that they s.hould be declared eer se.
unlawful in this and all other cases in which the tsaue may be presented,.
The public interest does not re. quire and should tolerate any further record inquiry of this issue.
not By our action today we announce to all persons interested in
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our proceedings that we intend to consistently apply the precedent established in this case to strike down any similar resale restrictions presented for our approval.
Accordingly, we will direct Gulf States to remove the offending resale restrictions. 7/
However, recognizing Gulf States' legitimate need for orderly power supply planning, we will declare these restrictive provisions null and void and of no legal effect ninety (90) days from the date of issuance of this order.
This time period will permit Gulf States to refile substitute tariff provisions appropriate for system planning purposes.
The Commission finds:
The settlement agreement filed in this docket on March 13, 1978, by Gulf States Utilities Company, as conditioned herein, is just and reasonable and should be approved and made effec-tive as hereinafter ordered.
7/ We note that the contract between Gulf States and the Intervenor Sam Dam (Gulf States Utilities Company Rate
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Schedule FPC No. 98, SR-2) contains equally restrict ve resale provisions as Rate Schedules WSM and WSC.
Our of the per se rule today renders such provi-annogncement sions unenforceable.
(On September 1, 1976, Sam Dam petitioned to intervene in the instant docket on beh~ lf a
of its members whose individual contracts with Gulf States were affected by Gulf States' initial ratc application in EA76-816.
Sam Dam was granted intervention by Order issued November 8, 1976.)
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Docket No. ER76-815.
The Commission orders:
(A)
The settlement agreement filed with the Commissicn in this proceeding on March 13, 1978, as conditioned herein, is incorporated by reference, approved and made effective as of September 2, 1976, for Rate Schedule WSC, and as of December 1, 1976, for Rate Schedule WSM.
(3)
Within 90 days of che date of issuance of this order, Gulf States Utilities Company shall file revised rate schedules excluding the restrictive language frc= the " Availability" section of Rate Schedule WSC, section of Rate Schedule WSM. and from the " Applicability" to Gulf States to file within thatThis order is without prejudice ninety day period appropriate tariff provisions in accordance with the discussion in the body of the order.
Such refiling shall be subject to Commission review and approval.
(C)
Within 30 days of the filing of the revised Rate Schedules WSC and WSM, Gulf States Utilities Company shall refund all excess amounts collected over and above the rates stated in the settlement agreement with interest at 9% per annum.
(D)
Within 15 days after refunds are made, qulf States Utilities Company shall file a compliance report with the
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Commis sion showing monthly billing determinants and revenues under prior, present, and settlement rates.
The compliance shall show the monthly settlement rate increase, report the monthly revenue refund, and the monthly computation, together with a su= mary of such information for the total refund period.
A copy of the report shall also be furnished each State Commission within whose jurisdiction the wholesale customers distribute and sell electric energy at retail as well as to each affected customers.
1 (E)
Insofar as this order accepts the settlement agreement filed with the Commission in this proceeding, i
it is without prejudice to any finding c'r order which has been made or which l
may hereafter be made by the Commission, and is without prejudice l
to any claims or contentions which may be made by the Commission, l.
its Staff or any party or eerson affected by this order.in any proceeding nou pen, ding or ".ereaf ter instituted by or against i
Gulf States Utilities Company or any other person or,carty.
(F)
The
, Secretary shall cause prompt publication of this vrder to be made in the Federal Register.
By the Commission.
i (SIAL)
Kenneth F.
Ple=b, i
Secretary.
UNITEE STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of
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FLORIDA PCWER & LIGHT COMPANY
)
Docket No. 50-389A
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(St. Lacie Nucl(ar Power Plant,
)
August 7, 1981 Unit No. 2)
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CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing was served upon the following persons by hand delivery (*) or by deposit in the U.
S. Mail, first class, postage prepaid this 7th day of August, 1981.
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- Peter B.
Bloch, Esq.
- Michael C. Farrar, Esq.
Administrative Judge Atomic Safety and Licensing.
Atomic Safety and Licensing Board Appeal Board Nuclear Regulatory Commission Nuclear Regulatory Commission Washington, D.
C.
20555 Washington, D.
C.
20555 Michael A.
Duggan, Esq.
Donald A. Kaplan, Esq.
Administrative Judge Robert Fabrikant, Esq.
College of Business Antitrest Division Administration Departr.ient of Justice University of Texas Washington, D.
C.
A.
Bouknight, Jr., Esq.
- Robert M.
Lazo, Esq.
Lowenstein, Newman, Reis &
Administrative Judge Axelrad Atomic Safety and Licensing Board 1025 Connecticut Avenue, N. W.
Nuclear Regu'atory Commission Washington, D.
C.
20036 Washington, D.
C.
20555 John E. Mathews, Jr.,
Esq.
- Ivan W.
Smith, Esquire Mathews. Osborne, Ehrlich, Alternate Member McN tt, Gobelman & Cobb Atomic Safety and Licensing Board 1500 American Heritage Life Nuclear Regulatory Commission Building Washington, D.
C.
20355 Jacksonville, Florida 32202
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- Jerome E. Sharfman, Chairman Reubin O.
D.
Askew l
Atomic Safety and Licensing Appeal Greenberg, Traurig, Askew, Board Hoffman, Lipoff, Quentel Nuclear Regulatory Commission
& Wolff, P.A.
Washington, D.
C.
20555 1401 Brickell Avenue l
Miami, Florida 33131 t
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m William C. Wise, Ecq.
Robert R.
Nordhaus
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1200 18th Street, N.
W.
Van Ness, Feldman, Sutcliffe, Suite 500 Curtis & Levenberg Washington, D.
C.
20036 1050 Thomas Jefferson St.,
N.W.
7th Floor William H.
Chandler, Esq.
Washington, D.
C.
20007 Chandler, O'Neal, Avera, Gray, Lang & Stripling Janet Urban, Esquire P.
O.
Drawer 0 Department of Justice Gainesville, Florida 32602 P.
O.
Box 14141 Washington, D.
C.
20044 Daniel H. Gribbons, Esq.
Herbert Dym, Ecq.
- Chase Stephens, Chief Covington & Burling Docketing & Service Section 888 16th Street, N.
W.
Nuclear Regulatory Commission Washington, D.
C.
20036 Washingten, D.
C.
20555 t
Florida Power & Light Company ATTN:
Dr. Robert E. Uhrig Vice President Vice President Advanced Systems & Technology P.
O.
Box 529100 Miami, Florida 33152 Benjamin H. Vogler, Esq.
r Ann P.
Hodgdon, Esq.
Counsel.for NRC Staff Nuclear' Regulatory Commission Washington, D.
C.
'20555 a
Robert A. J lon i
A'an J.
Roth Coseph Van Eaton i
Attorneys for_The Lake Worth Utilities Authority, the Utilities Commission of New.
Smyrna Beach, the Sebring Utilities Commission, and the Cities of Alachua, Bartow, Fort Meade, Key West, Mount Dora, Newberry, St. Cloud and Tallahassee,. Florida, and the Florida Municipal Utilities Agency August 7, 1981 Law offices of:
Spiegel & McDiarmid
.2600 Virginia Avenue N.W.
Washington, D.C.
20037 i
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