ML20039B561
| ML20039B561 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 09/10/1981 |
| From: | FLORIDA, STATE OF |
| To: | |
| Shared Package | |
| ML20039B557 | List: |
| References | |
| 810249-EU, NUDOCS 8112230236 | |
| Download: ML20039B561 (160) | |
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BEFORE THE FLORIDA .
2 PUBLIC SERVICE COMMISSION TALLAHASSEE, FLORIDA 3
'4
. 5 IN RE: Florida Power & Light's l 6
Petition for Interconnection. ,
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1 0
8 9
( 10 BEFORE:
Cornissioner Joseph Cresse, Chairman 11 Cornissioner Gerald Gunter 12 Coraissioner John Marks Coraissioner Katia Nichols 13 Coraissioner Susaa Leisner
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, PLACE:
14 Room 103, Fletcher Building 101 East Gaines Street Tallahasset, Florida 15 DATE. September 10, 1981 16 TIME:
17 Corcenced: 9:34 A.M.
Terainatea: 2:50 P.M.
18 19 REPORTED BY: Cheryl L. Norris 20 Shorthand Reporter Notary Public 21 22 TYPED BY: Yvonne N. Itoore 23 P 24 3
kk N
O O p AAkON LOVETT, PRESCEN7/ OWNER
[ U.S COU4T REPORTER MFERENCE MARTINDALE-HUBBELL exxits,Itc. . o . ,os .1... . ~ ,m, .1
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/ i APPEARANCES:
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2 Representing the Petitioners:
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3~ - Alan Braverman , Attorney at Law Wilmer, Cutler and Pickerene 4 Washington, D.C.
.I 5 and I i
6 David J. Bardin, Attorney at Law :
George Kucik, Attorney at Law !
7 Arent, Fox, Kintner, Plotkin & Kahn l
Federal Bar Building i 8 1815 H Street N.W.
Washington, D.C. 20006 I 9
( and 10 Parker Davidson Thomson, Attorney at Law gi Paul & Thomson 1300 Southeast First National Bank Buildinc 12 Miami, Florida 33131 t~ 13 Representing Florida Power & Light Company:
14 L. Christian hauck, Attorney at Law ,
Jonathan Alper, Attorney at Law I 15 Florida Power & Light Company Post Office Box 529100 16 Miami, FIcrida 33152 17 Representing the Florida Public Service Commitsion Staff:
( 18 Paul Sexton, Attorney at Law 101 East Gaines Street 19 Tallahassee, Florida 32301 20 Representing the Florida Public Service Commission:
21 Virginia Alice Daire, Attorney at Law 101 East Gaines Street 22 Tallahassee, Florida 32301 23 -----
24 25 4AMON LOW 7. PA *aDENTOWNEA
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER Mllh,l P.o Bos 10045 e Tauw. Fkros 32301 e Todophone teor .22 370avos
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2 WITNESS P' AGE 3 GEORGE E. BOYHAN 4 Direct Examination by Mr. Thomson 63 5 Cross Examination by Mr. Hauck 95 l
6 Cross Examination by Mr. Sexton 139 !
l 7 Cross Examination by Mr. Hauck 145 i I
8 JOHN SILKE g Direct Examination by Mr. Hauck 148 to EXHIBITS IDENTIFICATION EVIDENCE 11 Exhibit Number 1 95 95 12 Exhibit Number 2 95 95
( 13 Exhibit Numoer 3 95 95 14 Exhibit Number 4 95 95 15 Exhibit Number 5 95 95 16 Exhibit Number 6 95 95 17 Exhibit Number 7 95 95 k- 18 Exhibit Number 8 95 95 19 Exhibit Number 9 95 95 20 Exhibit Number 10 147 148 21 Exhibit Number 11 149 22 160
( CERTIFICATE Cf REPORTER 23 l
24 25 l
i AARON LOVETT PRESIDENT / OWNER
REFERENCE:
MARTINDALE HUBBELL U.S. COURT REPORTER Mllk,l P.O Bos 100a5
- Tensweee. Fbnaa 32301
- Toephors. (804) 222 3700170$
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PA3E. 3
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1 EE9E5EE1EEE 2 CHAIRMAN CRESSE: Commission will come to order.'
3 Counsel, you want to read the notice?
4 MR. SEXTON: Pursuant to notice stated August 28th,l I
5 1981, this time and place is set asideforpublichearind 6 in Docket Number 810249-EU on the petition of Parsons 1 '
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Vhittemore, Incorporated and Resources Recovery, Dade ,
B County, Incorporated for order requiring Florida Power 9 & Light to interconnect with its facility. .
10 The purpose of this hearing will be to allow the it parties to give testimony and argument regarding the 12 petition for interconnection. According to the petition, 13 Parsons & Whittemore and Resources Recovery are entitled 14 to have Florida Power & Light Company interconnect with 15 their cogeneration facility located in Dade County as provided in Rule 25-17.87 Florida Administrative Code.
16 17 Parsons & Whittemore and Resources Recovery further
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18 assert that the f aciliU is a qualifying f acility under 19 the Commission's rule. Florida Power & Light asserts 20 that interconnection is not required because the facilit) 21 is not a qualifying facility as defined in Rule 25-17.80' 22 and that Parsons & Whittemore and Resources Recovery 23 lack standing requiring interconnection. That - Floric a 24 Power & Light further alleges that this Commission's 25 regulptions do not apply to the case and that
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b b AARON LOVETT. PRESIDENT / OWNER REFERENCE MARTINDALE HUBBLLL U S COURT REPORTER 3l P.O Box 10045 e Tattehasaoe. Fionda 32301 e Toophone (904) 222 370n705
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1 interconnection were constituted ur. fair burden on the l
2 FPL ratepayers.
3 CHAIR)lAN CRESSE: All right, sir. Take appearances.
4 }{R. BRAVERMAN: My name is Alan Braverman. I'm i
. 5 here on behalf of the Petitioner. l 6 COMMISSIONER NICHOLS: Fould you repeat your last 7 name?
8 }iR. BRAVERMAN: Braverman, g CHAIRMAN CRESSE: And you are --
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10 MR BRAVERMAN: Here on behalf of the Petitioners.
11 CHAIRMAN CRESSE: You're an attorney?
12 )!R. BRAVER'! AN: Yes, I am.
13 CHAIR) TAN CRESSE: All right, sir. Then you're 14 with your own firm? Give us your address, also.
15 MR. BRAVERMAN: I'm with the firm of Wilmer, Catler 16 and Pickerene of Washington, D.C.
17 CHAIRMAN CRESSE: All right, sir.
18 MR. BARDIN: Mr. Chairman, I'm David J. Bardin, 19 Counsel to the Petitioners. I'm with Arent, Fox, Kintner, 20 Plotkin & Kahn, 1815 H Street N.W., Washington, D.C.
21 20006.
22 MR. THOMSON: I'm Parker Thomson of the firm Paul 23 & Thomson, 1300 Southeast First National Bank Building, 24 Miami 33131, appearing for the Petitioner.
25 MR. KUCIK: George Kucik, Counsel for the Petitioners, i
L AARON LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE HUBBELL U.S. COURT REPORTER
,l P.o Ses 10045 e Tahaweee. Fionoa 32301 e Tenophone (804) 222 370a3705
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t i l'm with Arent, Fox, Kl7tner, Plotkin & Kahn, same 2 address as Mr. Bardin.
3 MR. HAUCK: Clristian Hauck for Florida Power & Licht 4 9250 West Flagler Street, Post Office Box 529100, Miami 5
33152. The vacant chair will be occupied by Jonathan 6 Alper, Co-counsel for Florida Power & Light, same addres .
7 CHAIRMAN CRESSE: Is the attorney representing 8 Metropolitan Dade County present?
g MR. HAUCK: I see no one.
10 Cl: AIRMAN CRESSE: Is he supposed to be? l 33 MR. SEXTON: They had expressed an interest in the 12 case. I don't know whether an appearance was intended 13 to be entered at this time.
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14 CHAIRMAN CRESSE: Well, they have filed a brief.
15 MR. HAUCK: We left him on the telephone, Commissione 16 If y u could indulge us for about a minute, I could 17 find out. They're on the pay telephone out here. We 1
18 were wondering if they were going to attend,as well.
19 CHAIRMAN CRESSE: Well, let's go see. If they file 20 a brief, we kind of always like for them to come and 21 explain it to us.
22 MR. SEXTON: To continue the appearances,my name is 23 Paul Sexton, 101 East Gaines Stre'et, Tallahassee, Florida 24 32301. Appearing for the Commission Staff.
25 MS. DAIRE: My name is Virginia Alice Daire with the h_
AARON LOVETT, PRESIDENT / OWNER REFERENCE. MARTINDALE HUBBELL U.S COURT REPORTER M ll ,l F.O. Som 10045 e Tenea.assee. Fbetse 32301 e Todophcne (904) 222 370WOS
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1 HR. SEXTON: You could subpoena, but you can only 2 subpoena a witness. You couldn't subpoena an attorne'y 3 to argue in favor of a case. We don't have contempt 4 powers, so I'd expect that they don' t want to be representec 5 the best we could do is just say they default their 6 position. l 7 CHAIRMAN CRESSE: Well, what do we do with the !
Metropolitan Dade County's answer to petition?
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g MR. SEXTON: Well, you may consider it if you choose ,
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10 take it for what it's worth without any supporting 11 argument.
12 CHAIRMAN CRESSE: Well, I had some questions I
( 13 wanted to ask this fellow.
14 COMMISSIONER GUNTER: Do we just interpret that that 15 they are not concerned other than like an appearance?
16 COMMISSIONER MARKS: I don't think that we can say.
17 they are not concerned, I'm just only saying just giv e
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18 weight to what you see in here without them making a 19 statement. And I don't know how much weight -- I wouldn' t 20 think you could give very much weight.
21 CHAIRMAN CRESSE: They raised some questions I 22 wanted to ask -- they raised some issues I wanted to ask
- 23 them questions aliout. How do we get them up here?
24 MS. DAIRE: Mr. Chairman, I believe you can ask thos e 25 questions to the people who are in attendance.
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AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
M ARTINDALE-HUBBELL f [ U.E COURT REPORTER
_ Nillh, P.O. Dos 1004$ e Tene$eesee. Fende 32301
- To*ohone (804) 222-370GT06 a
- , PAGE. 6 4
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Commission at 101 East Gaines, advising the Commission.
2 CHAIRMAN CRESSE: The other two are not a t t o rn ey's .
3, (Short pause.)
4 CHAIRMAN CRESSE: Would the procedure be -- does 5 Staff have a recommended procedure? ll l
6 MR. SEXTON: Well, I believe you had deferred ruling 7 on FPL's motion for continuance for oral argument at the 8 opening of the hearing. I would expect that since it's g FPL's motion that they would want to present it and then
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10 the Petitioners would have an opportunity to respond.
I 33 And since we're at the day of hearing, I would expect -
12 that we would have to have a ruling today, jy CHAIRMAN CRESSE: I thought that since the issue p
34 was so significant in terms of this Commission and this 15 is the first one of these that we've had, that rather 16 than the pre-hearing officer ruling on the motion to 17 Continue, we had had it set -- the Commission's schedule
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18 is somewhat fairly tight,that we'd just wait and hear 19 some oral arguments on the -- I guess it's a petition 20 for continuance filed by the company.
MR. HAUCK: Yes, sir. Chairman Cresse, the County 21 22 indicated they don't intend to be present today. I 23 didn't speak with them.
CHAIRMAN CRESSE: How can we get the County here at 24 25 the table?
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AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE HUBBELL
{ U.S. COURT REPORTER NfilM,l$ P.o non i004s . Ten.n. . rione. 323ei . T.6.pnon too4 222 37aac370s
PAGE: S
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1 CHAIRMAN CRESSE: Okay.
2 MS. DAIRE: It would be fine.
3 CHAIRilAN CRESSE: So, I can ask questions from their 4 MS. DAIRE: Certainly.
5 CHAIRMAN CRESSE: All right. Okay. As ya'll may 6 gather, I'm not an attorney and so I just fumble along 4
7 the best I can.
8 COMMISSIONER GUNTER: Let me ask a question, Mr.
g Chairman, if I may. I see, for instance, I'm just trying k
10 to understand where we have nultiple documents, one ii petition for in+.erconnection order, another one answer 12 of Florida Power & Light to Parsons & Whittemore, Inc.,
13 Resources Recovery (Dade County). Are ya'll holding i
14 yourselves out to represent Dade County?
15 MR. THOMSON: No, sir. We represent a corporation 16 which is a subsidiary of' Parsons L Whittemore. The name 17 of which is Resources Recovery of Dade County, Inc.
I 18 COMMISSIONER GUNTER: Okay. That's part of your 19 title?
20 l'.R . THOMSON: That is part of its corporate name, 21 yes, sir.
22 COMMISSIONER GUNTER: Fine. Fine. I just d$dn't 23 understa'nd bow that was in there. I have never seen a 24 corporate title with pieces of it in brackets.
25 CHAIRMAN CRESSE: All right. Let's go ahead and f(
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AARON LOVETT, PRESIDENTowNER
REFERENCE:
M ARTINDALE-HUBBELL QQ U.S. COURT REPORTER dhll ,l P o. Bos 10045
- Tanahassee. Fbnda 3230t + Temphone (so4) 222-3700'3705
7
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i act on the petition and hear the oral arguments on the 2 Petition for continuance first. If we act on that, we l 3 may -- if we act as FPL has petitioned, which the Resourc e:
5 Recovery, Inc. is opposed to, we may can avoid -- save A 5 lot of time. But we are going to continue the hearing 6 at some subsequent date. Counselor, it's -- you go ahead, sir.
.7 8 MR. HAUCK: Thank you, Mr. Chairman. Our petition, g although buried amidst a number of pages of other to documents, has a very simple request. We ask that the ji Commission defer its consideration of the petition of 12 Parsons & Whittemore to interconnect with their facility 13 in Dade County until the Federal Energy Begulatory Commis -
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y sion can rule on the question of legal status of that 15 facility. That question is before the Commission and 16 we have reason to believe that the FERC will act shortly 17 within the next few weeks.
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18 We ask that the Commission defer to the FERC's 19 deliberations and continue this hearing until 14 days 20 after a final order issues from the FERC as to the status 21 of the facility as a qualifying facility under PURPA 22 or not as a cualifying facility under PURPA.
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23 A rplain reading of the DURPA indicates that the 24 Federal Government has reserved to the FERC under 25 Section 201 the determination of whether a facility meets k
AARON LOVETT, PRESIDENT /OWNEA itEFERENCE: MARTINDALE-HUBBELL U S. COURT REPORTEA hh ,f P.O. Som 10045 e Tahahasese, Flonde 32301
- Te6ephone (904) 222-3700'3705 1
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1 t.'. a standards of PURPA Os a qualifying facility and I
2 has delegated to the states and other areas most --
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particularly in pricing transactions between utilities 4 and qualifying facilities. The cases are cited in both 5 parties' papers indicating that where there is a conflict 6
between the states and the Federal Government in a scheme 7
where the Federal Government has indicated its intention a
to occupy the field, that the Federal Government's juris-9 diction is exclusive. So, we believe for those reasons to that it would be inappropriate for the Commission to 11 act prior to the first determination.
12 If the Commission determines to hear the Petitioner 13 for interconnection before the FERC has acted, it must i
14 neCesSarily decide whether the facility in question is 15 a qualifying facility under PURPA. And thus, there is is a substantial risk that a conflicting decision of this 17 Commission with the subsequent decision of the FERC mignt
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33 obtain to untan~gle the legal rights of the parties with 33 conflicting decisions would be a monumental task, includind 20 among other things a requirement that a certificate from tM 21 Federal Energy Regulatory Commission be obtained in order ;
22 f r the parties to transfer title to the facility once 23 it's been impressed with an interstate character and 24 having generated electricity.
25 Probably most importantly, a determination of the I
- AARON LOVETT, PRE 9/ DENT / OWNER
REFERENCE:
MARTINDALE Hl;BBELL Q@ U.S. OOURT REPORTER khll ,l , P.O. Box 10045 e Tanahassee. Fionda 32301
- Temphone. (904) 222 3700/3705
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1 question at this time would put an end to the active 2 negotiations that are now going on among the three. parties l
3 the County, Parsons & Whittemore, and Florida Power & Ligh
'4 Company, to reach a balanced solution to this situation.
5 The entire bargaining position of both the County and 6 Florida Power & Light on behalf of their restsective .
7 constituents, that is the customers of Florida Power & I 8 Light Company and the citizens of Dade County, would be g emasculated. So, for all these reasons, we ask that
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10 our petition be granted.
it CHAIRMAN CRESSE: Counselor.
12 MR. THOMSON: We must not lose sight of what we're here for. V'e' re here under Commission 's Rule 25-17.87
( 13 14 Providing for interconnection with any qualified facility.
15 This Commission adopted its rules under FURPA and under 16 the FERC inplementing regulations. The Florida Legislatt r
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17 in 1981 confirmed the PSC's authority to do so in 18 Chapter 81.131.
19 Now, Florida Power & Light appealed those rules 20 and sought a stay of the rules from this Commission. Thi s 21 Commission denied that stay. Florida Power & Light did 22 not renew its stay motion to the Florida Supreme Court.
23 The rules are in effect.
24 'i The position of Florida Power & Light that this l
25 Commission has no jurisdiction to act because of FERC --
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AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE. HUB 8 ELL U.S. COURT REPORTER h, P,0. Box 10045 e Tenehessee. Fionde 32301
- Toephone (904) 222 370GP05
PAGE. 32
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1 that this Commission has no right to act under its own 2 rules is just an indirect means of trying to get the stay 3 they were denied.
4 Now, it's the obvious right of this Commission tlp 5 implement and apply its own rules. Only the Florida 6 Supreme Court can change that, which of course Florida
,7 Power & Light is attempting to get the Court to do. l 8 In fact, in the preamble adopting the PLRPA rules, g this Commission made it clear that it contemplated
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10 adjudications on a case by case basis such as we are 11 here under its own rules, and that's what we are here for .
12 This Commission has adopted as its own rule the
(~ 13 FERC definition of a qualifying facility and the FERC 14 qualification of procedure. That's Rule 25-17.80. Both 15 methods were adopted by this Commission. A simple 16 notification to the effected utility, which is the one 17 used by us, or a formal certification procedure. Under 18 the PSC rules, like the FERC rules, the qualifying 19 facility can choose which way to go.
20 FPL bas a right to contest that we are a qualifying 21 facility in this luterconnection proceeding. That's the 22 merits of the matter and that's what we intend to do 23 if, au we submit', this motion of Florida Power L Light 24 is denied.
25 They apparently argue that FERC has exclusive
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AARoN LOVETT, PRESIDENT / OWNER REFERENCE. MARTINDALE-HUBBELL U.S. COURT REPORTER h,l( P.O Bos 10045 e Tanahassee, Fionda 32301 e Te4ephone (904) 222-37001705
PAGE. 33
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l 1 jurisdiction. Well, as I said, they can only argue 2 that if the Public Service Commission's rules are illegal 3 and that's a matter before the Florida Supreme Court.
/ They've argued somehow that Sections 201 complete 5 with 210 and under 201, that's the Federal Power Act, ,
6 only FERC can act. ,
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,7 Aswe'vemadeclearinourmemorandumtotheConnis-;
I 8 sion, this is a boot strapping argument based on chfhitiont g portion of Section 201 of the Federal Power Act, The 10 power company says the definitions are in 201 and argue 11 that other segments cf the Act show a preemption of the 12 states. Ve submit this is invalid reading, even of 201.
13 But under any circumstances, the definition of a qualifying
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facility is right in Section 201 under which FERC acts I 14 15 and under which this Commission has jurisdiction.
16 Any argument of preemption seems strange. Here thid 17 Commission has adopted rules which replicate the FERC I
18 definitions. There is no basis for preemption because 19 they are identical. It has been suggested by Mr. Hauck 20 that if this Commission acted, FERC could act in an 21 opposite direction. We submit,one, that wouldn't happen.
22 'fe submit there is nothing before FERC that would produce 23 -
that result. Mr. Hauck appears to know what FERC is 24 going to do, but our contacts with the Staff do not 25 indicate such action by FERC. The fact is that this matt e:
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l AARON LOVETT, PRESIDEN7(MNER
REFERENCE:
MARTINDALE-HUBBELL U.S COURT REPORTER
,l P.O Bos 10045
- Tar.ahasm. Fbnce 32301
- Te+ phone. (904) 222-37003705
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is before this Conmission under its own rules end can l
2 Proceed. f 3 If it could not, if this Commission could not proceeld.
I I we would have a rather bizarre result. That is, a 5 qualifying facility can operate simply by notification.
f 6 But when it seeks interconnection, Florida Power & Light l
,7 can force us to effectively seek a certification by saying 3 you don't get into it until FERC rules. That could be g forever.
30 We submit that the testimony will show that we it are entitled to an interconnection, this Commission has 12 adopted its rules, they are valid, they provide for an
( 13 interconnection under these circumstances. If they wish 14 to contest that we are not a qualifying facility, they 15 may do so today. There is nothing to stay and nothing 16 to defer and we submit that the motion of Florida Power 17 & Light should be denied and we should continue with
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18 the hearing.
19 CHAIR).'AN CEESSE: Commissioners have any quentions?
20 ,
COMMISSIONER MARKS: Yes.
21 CHAIR)!AN CRESSE: Commissioner Marks.
22 COM!iISSIONER MARKS: My question is centered around --
23 I wrote down some notes here aad they center around one 24 issue. And obviously it depends upon jurisdiction. You 25 know, when you first go to law school, the first thing A
(
AARON LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER hllh, P.O Box 10045 e Tahahasace, Fbnda 32301
- Toiephone (904) 222 3700/3705
PAGE: 15 9 I they tell you before you go to Court is you've got to 2 make sure the Court you go tc can decide the issue.
3 And it appears to me that we haven't even got to that
/ tunnel yet. And that's the basic argument of both sides l 5 is who has jurisdiction over this entire matter.
6 Mr. Hauck, I understand, is indicating th A t FERC
,7 has jurisdiction. And my question right now--Mr. Hauck, 8 let me ask this: If FERC makes a decision, I assume it's 9 your opinion that it would be dispositive of this entire
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10 issue?
11 MR. HAUCK: Yes, Commissioner, and I am sure they 12 have also made the point that it wasn't we that sought 13 the adjudication at FERC, it was the respondent who 14 filed with the FERC for the determination.
15 COMMISSIONER MARKS: Okay. I didn't realize that, 16 but I don't think that's a point. And Mr. Thomson, I 17 understand that you're saying if in fact we shculd wait i
18 and allow FERC to make a decision, that would not be 19 dispositive of tF.is issue?
20 MR. THOMSON: That is correct. And I would point 21 out, for whatever it may be worth, we did not initiate 22 a proceeding at FERC.
23 COMMISSIONER MARKS: All right. We can' t even agrec 24 on that. It appears to me we've got a fundamental prob 1c m 25 here as to who in fact has jurisdiction over this matter.
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AARON LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER h,l P.O. Bos 10045 e TeWesace. Fence 32301 e TeW (904) 222 3700'3705 e -
PAGE: 36 ,
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1 And I'm not so sure whether or not -- the next question ,
J 2 is whether or not we can determine who has jurisdiction.
3 CHAIRMAN CRESSE: Let me ask another question.
4' Let's suppose that -- back up a moment and se,y we started l
. 5 at the beginning of the purpose of the law and the purtsos,e 6 of the Florida Legislature in passing their law. The 7 Purpose of the law is to encourage co-generation and
- I 8 then from that objective -- I think that objective was g supposed to incorporate it into Federal law and that l
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f 10 objective was also incorporated, I think, in the FloridaI 11 law, 366.05.
12 Now, where are we in this issue if FERC adjudicates i 13 that it is not a qualifying f acility and the Florida
-s 14 Public Service Commission says it is a qualifying facility 15 and we order the utility to operate under that basis?
16 Is one saying that the purpose of the law is to develop 17 co-generation and then whichever one is interpreted the
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18 most vividly, to accomplish the objective of that law, 19 that is the one that prevails or whether or not the 20 FERC's decision is final? It seems to me that we're 21 in a situation that if FERC's decision is in fact final, 22 there was no reason for this Commission to adopt any 23 rules or regulations celating to a qualifying facility.
24 So, that is an issue, it seems to me, that it's -- of 25 some concern. I don't know what the answer to that
(. . .
AARON LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE.HUBBELL U.S. COURT REPORTER ,
Mllh,l P O. Som 10045
- Tor.shessee. Fbnde 32301 e Te4 phone (904) 222 370G'3705 f
PAGE: 37 :
t 1 question is. Ya'll have any feelings on that?
2 MR. THO" SON: Well, my feeling is, as I did state, 3 is that the rules were adopted. Obviously we believe 4 that the rules are valid. Florida Power & Light apparently 5 believes they are not, although since they haven't filed e 1 6 a brief in the Florida Supreme Court, I don't know why thc 7 say they are valid. But that's the forn to contest.
8 They did not even seek a stay of the effect of those g rules in the Florida Supreme Court and they are in place 10 and effective until somebody says they aren't.
13 MR. HAUCK: Well, reading Florida Power & Light's 12 papers would indicate clearly what our problem was. And I think the Commission is well aware that we were concerned
( 13 14 about the procedural nature of the proceeding that had 15 these matters before it, the adoption of PURpA rules.
16 And our objections to the Supreme Court are on those 17 grounds.
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18 The Commission is probably also aware that the 19 Department of Environmental Regulation has initiated a 20 lawsuit naming petitioners and respondents and Dade 21 County as Defendants where it seeks, among other thints, 22 specific performance of existing contracts among the 23 parties. And while this is a matter that should probab13 24 be deferred until a complete look at the picture is 25 decided upon by the Commission, that's another factor in i I s
AARON LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER ih,l P.O Box 10045 e Tone,m. Fenos 32301
- Techone'(904) 222 37001705
PAGE. 16 4
1 this. If that lawsuit were to succeed to enforce these :
2 agreements, the Commission's order seeking to have the 3 parties perform differently, which in effect the petition 1
i for interconnection would do, would leave Petitioner 5 Florida Power & Light Company with a very difficult 6 situation, being ordered by a court to perform a contractI 7 that would have in effect been invalidated by the !
i 8 Commission's order.
g CHAIRMAN CRESSE: Are you suggesting that this I
( I 10 Commission's order could not take into consideration thad ti a subsequent order of a Court enforcing DER's order would 12 not override this Commission? We could not acknoviledge 13 that in our order that in the event this mess that ya'll are
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14 in gets straightened out that that would not wupercede 15 what this Commission ordered?
16 MR. HAUCK: I'm sure that a carefully drafted order 17 could embrace the possibility that a Court could so rule.
18 However, as I mentioned earlier, under the Federal Power 19 Act when facilities such as these become interr.nnected 20 with the FPL system, they are subject,in our view,to 21 the Federal Power Act jurisdiction. jAnd title cannot 22 be legally transferred without an order or certificate 23 of the Federal Energy Regulatory Commission. And all I 24 was suggesting by alluding to the lawsuit is there is yet 25 another complication which now takes in favor of this t .
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUSSELL U.S. COURT REPORTER Chllh, P.O. Box 10045
- Tallahassee, Fwide 32301 e To* phone. (904) 222 370W3705
PA3E: 39 l I
1 continuance.
2 MR. THOMSON: May I observe to the Commission that 3 the Deputy General Counsel of the DER is here and I have i a letter addressed to the Florida Public Service 5 Commission dated today's date which Mr. Botcher would 6 be, I'm sure, happy -- is prepared to give to the
,7 Commission. A.id it points out that an interconnection 8 is required.
g CHAIRMAN CRESSE: Let me suggest that if --
10 HR. THOMSON: And it --
33 CHAIRMAN CRESSE: Counselor, excuse me.
12 MR. THOMSON: Excuse me.
CHAIRMAN CRESSE: If an attorney representing the
( 13 14 Department of Environmental Regulation would like to 15 make an appearance before this Commission and present 16 some information to this Commission, I'm quite sure he's 17 totally competent to come up and sit down and put in an
(
18 appearance. I haven't received the letter that you have 19 reference to. Do you want to make an appearance before 20 the Commission?
21 MR. BOTCHER: If it pleases the Commission, I'm 22 John Botcher, Attorney for the Department of Environmentr 3 23 Regulation. Counselors for Parsons & Whittemore'subpoeno e.
24 the Secretary of the Department Shingle to be here and 25 with their penission allowed me to come. And they would --
'Q ,
AARON LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUSSELL U.S. COURT REPORTER
,l P.O Box 10045 e Taltanassee. nonda 32301 e Teiephone (904) 222 3700/3705
PAGE: 20 l
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they did ask for a letter which we drafted this orning.
2 ., CHAIRMAN CRESSE: I see.
l 3 i MR. BOTCHER: And that's why I'm here.
'4 CHAIRMAN CRESSE: You're here as a witness, not as 1
5 an intervenor.
6 MR. BOTCHER: That's right. Yes, sir. Just to give' I
7 you information concerning a lawsuit and also the Departy t
8 ment'spositionconcerningtheoperationofthefacilitids I
g down there.
(
10 CHAIRMAN CRESSE: All right, sir. Well, we'll then 11 put you in as a witness later on. I guess that's what 12 you're saying. Do you have a letter addressed to the 13 Commission?
(
14 MR. BOTCHER: Yes, Your Honor. i 15 CHAIRMAN CRESSE: I don't think the Commicsion 16 has received it.
17 (Short pause.)
( '
l 18 CHAIRMAU CRESSE: All right. I think -- did you 19 include him on your filings,the attached --
20 MR. THOMSON: We attached a copy of their complaint.
21 CHAIRMAN CRESSE: Yes, sir. I think the Commission 22 has that. Would the -- I guess that's going to have to 23 be put in o'ut.ylde the record sometime as an exhibit; 24 is that correct?
I 25 COMMJSSIONER MARKS: Yes, sir.
.i
's .
i AARON LOVETT, PRESIDENTOWNER
REFERENCE:
MARTINDALDHUSBELL U.S. COURT REPORTER h,l P.O. Box 10045
- Toriehasese. Fbnde 32301 e Te%hore (904) 222 37001705 L
Ni' 2
- - , l l
l 1 Nuclear Regulatory Comnission wouldn't want to be involveld 2 Mi it. I don't see how they --
1 3 MR. HAUCK: Well, sir, it's very parallel to this l 1
4 situation here because under a condition of our St. Lucie' 5 Unit 2 license we have to act in a certain way towards l 6 qualifying facilities. So, the question there was are 7 they a qualifying facility just as Petitioners are urgind 8 here in their petition for interconnection. And that g Commission realized that it was of considerable importanc'e 10 and within the jurisdiction and expertise of the FERC 13 to exercise the issue. So, it's very, very closely 12 Parallel to this situation.
13 COMMISSIONER MARKS: I understand that.
(
l 14 MR. THOMSON: Mr. Marks, Mr. Bardin will respond 15 to your question.
16 COMMISSIONER MARKS: Yes.
17 MR. BARDIN: In our view, the issue of the jurisdic-t 18 tional issue raised is, is this a qualifying facility, 19 is properly before this Commission and no other tribunal.
2c In FPL's view, they have raised that issue properly 21 to FERC, also. The distinction is as follows: The rulee 22 of FERC which are the same word for word as the rules 23 of this Commission define qualifying facilitt as a 24 facility that meets three tests. If it meets the three 25 tests, it is a qualifying f acility; it is a qualifying
.(
k.
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER
,l P.o. Box 10045 e Tal4ahassee. Fionda 32301 e ;esophone (904) 222-3700'3705
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1 MS. DAD Yes.
2 CHAIRMAN C" ESSE: All right. This letter to the 3 Commissic' is going to get in as -- is going to get --
E MS. DAIRE: It would be up to RRD to introduce it. -
5 CHAIRMAN CRESSE: Okay. Excuse me, Counselor.
6 I didn't know if he was here to intervene or under what !
~
7 circums+ances he was here. You breught up a letter to !
l a the Commission we didn't have. Go ahead, sir.
g MR. THOMSON: I brought it up merely because the 10 contention had been made in argument that the -- in some gi fashion and action by the Cosmission on our petition 12 would frustratt the DER's lawsuit.
13 COMMISSIONER MARKS: Let me ask a question. Does 14 this matter of what I call a fundamental issue -- the 15 fundamental issue of jurisdiction. Is it before any othe r 16 tribunal other than this one in any fashion or form?
17 MR. HAUCK: It had been before the Nuclear Regulatory 1
18 Commission. That Comnission deferred to the Federal 1- Energy Regulatory Commission. In its decision to do so, 20 it indicated that this was a case of first impression 21 of some importance to the FERC. So, it would be 22 inappropriate for another federal agency to consider 25 whether a f acility such as this could legally be qualifi( d 24 as a qualifying facility.
25 COMMISSIONER MARKS: I don't understand why the AARON LOVETT. PRE!'OEN7/ OWNER
REFERENCE:
htARTINDALE-HUBBELL U.S. COURT f>E*ORTER C N (ll h ,l P.O. Bor 10ue5 e Tehahassee, Fionoa 32301 e Tewonone (904) 222 370G3705
PAGE: 23 g n
1 facility, quote, unquote.
2 The rules of the FERC also provide, as do the rules 3 of this Commission adopted in April, that at the option k of the qualifying facility, not at the option of the 5 utility, not at the option of the Regulatory Comnission, 6 but at the option of the qualifying facility it may get j
,7 a certificate that it is a qualifying facility by 8 applying to the Regulatory Commission.
9 Our client did not elect to follow that process.
10 All we filed at FERC in March, and I want to clarify is this, was a notice th:.t the facility is in fact a 12 qualifying facility. We filed the notice because the
( 13 law that FERC regulation required us to file a notice e 14 was done for some kind of environmental cataloging of 15 how many facilities there are. It's not the filing of 16 the notice that makes this a qualifying facility, it is 17 the law, the rules of this Commission, the rules of i
18 FERC define. If we're right on the facts, then it's 19 a qualifying facility. If we're wrong on the facts, it 20 isn't.
21 COMMISSIONER MARKS: The assumption obviously, or 22 I assume that Mr. Hauck disagrees with that and he ,
23 believes that FERC is the proper determinant of jurisdic-24 tion in this matter. Is that correct, Mr. Hauck?
25 MR. HAUCK: Yes, Commirsioner.
(
k AARoN LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUB 6 ELL f @[ U.S. COURT REPORTER FGmbG,1fC. eo+ -s 1. .~ 2mi T - a ma = =
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i COMMISSIONER MARKS: That's all you have to say.
2 MR. HAUCK: If I could have just two sentences.
3 COMMISSIONER MARKS: Go ahead, sir.
4 MR. HAUCK: In orders 69 and 70 of the FERC, they .
5 say, and this order granted rehearing, if the utility I 6 considers that a facility does not qualify, it is not i
- 7 obligated to purchase its electric output. In such cases, I
g the facility may seek Conmission certification, which g is exactly the process ensued after the following that 8 10 Mr. Bardin alludes to.
11 COMMISSIONER MARKS: You know, it just appears to 12 me that no matter what we do this morning, it's not
, 13 going to be dispositive of this issue, is it?
34 MR. HAUCK: That's our concern precisely, Commissio e:
15 Marks.
16 COMMISSIONER MARKS: It's not going to be. I don't -
17 if we should even at this point in time determine that 18 we have jurisdiction over this matter and make a decisior ,
19 no matter what the decision is it's going to be, you knov' 20 -- it's going to have to go someplace else.
21 MR. THOMSON: Commissioner Marks, I submit it is as 22 dispositive of any other action of this Commission. The 23 rules a're subject to attack by Florida Power & Light in 24 the Florida Supreme Court. The Florida Supreme Court 25 could.do something differently. It is possible if this a
AARON LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER
,l P.o. Box 10045
- Tallahause, Fionda 32301 e Telephone. (904)222-37001705
PAGE: 25 ;
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i 1 Commission acts that Florida Power & Light will attack 2 this action of this Commission. In that sense it is not 3 dispositive. But the Commission has adopted the rules an'd d is being asked to act under the rules. And in that 5 sense it is a dispositive action of this Commission. I t 'is 6 not subject -- it doesn't mean that Florida Power & Lightj l
7 can't appeal it or take a collateral attack on it or -
8 something of that nature. They can and perhaps will. ,
9 COMMISSIONER MARKS: Perhaps that ~is probably
( ,
10 a little light, from what I can gather from the arguments 11 of the parties. I get -- you are right on those 12 circumstances. When I use the term dispositive I mean 13 a final determination. You know, I'm troubled with the
(
14 problem of whether or not we should defer any action at 15 this point in time and let you all go forth, which 15 appears to me is going to happen anyway, to some 17 traditional tribunal and let them determine in fact
(
18 jurisdiction up front and then come back to us or 19 whether or not we should go ahead on an assumed jurisdic-20 tion at this point in time and make a definite ruling 21 to the ffect that we have jurisdiction and let it go 22 from there. And you know, we may probably,in the final 23 analysis, reach the same result.
24 CHAIRMAN CRESSE: One thing about it, I don't think 25 they can get to the Supreme Court until we act. That's b
AARoN LOVETT, PRES / DENT / OWNER RE/ERENCE: MARTINDALE-HUBBFLL U.S. COURT REPORTER ll ,l , P.O Box 10045 e TeRahassee. Fbnda 32301 e Toephone- (904) 222 37003705
..* PAGE. 20
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i i the way I understand the procedures. We have to act 2 if they want to go across the street. I don't presume 3 that these people would necessarily find any disagreement l
[ with the wisdom of this Commission in resolving an issue
, that is before it. Obviously their argument is whether l
6 or not it's properly before it.
But you know, youcan'tl
,7 prevent people from making an appeal. If they want to 8 waste their resources doing that, I think they are entitl'ec .
g to do so.
10 It's obvious -- it's a unique issue. Either one of 11 two things seems to me to be wrong. We have a set of 12 rules that are in fact from bur perspective what is
( 13 alleged by Florida Power & Light is true or we don't 14 need it because we are not in the determination of 15 the qualifying business, somebody else does that. So, 16 that portion of our rule is irrelevant and immaterial.
17 We shouldn't adopt them in the first place would be 18 Florida Power & Light's argument; is that correct?
19 MR. HAUCK: Yes, sir.
20 CHAIRMAN CRESSE: And it seems to me that our rules 21 are valid and in fact we do have some say so about that 22 or else we wouldn't have adopted rules, we might, you 23 know, be in that business of arguing.
24 Now, the real issue I guess comes in is what 25 happens if FERC rules one way and we rule the other?
,(
sh AARON LOVETT, PRESIDENT / OWNER REFERENCE MARTINDALE-HUBBELL U.S. COURT REPORTER
,l P.O. !bs 10045 e Tanahassee, Fenda 32301 e Tov /ene (904) 222-370G3705
PAGE. U l
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. I 1 I have no idea. Maybe it would be the right thing 2 for us to do is to wade through all that and say we'll 3 reserve a ruling on whether we have jurisdiction or not
. I 4 and let's go on to the merits of the case and car. take
- 5 the record of this hearing and send it up to FERC and !
6 intervene and say here's what they told us down in .
7 Florida. Can we do that? Let me ask my advisor. i 8 MR. DAIRE: There would be no problem with doing g that. I would, at this time, like to suggest that the i
to Commission, on the motion for continuance, it is based 11 upon speculation that FERC will act and it could very 12 well be that FERC is waiting for us to act. I would 3
( 13 recommend to the Commission, and it is cy legal opinion, 34 that if FERC were -- 11 the Commission were to act and 15 FERC were to act in opposite of the Commission's action, 16 FERC's action would prevail. However, until such time 17 as there is conflict, the action of this Commission 18 will prevail.
19 COm!ISSIONER GI!NTER: Let's just take this matter --
20 let's just take this motion under advisement and go aheac .
21 COMMISSIONER MARKS: Mr. Chairman, let me -- Mr.
22 Chairman, I agree to a certain extent. J don't think we 23 ought to take it under advisement. I think we ought to 24 go ahead and crystalize the issue fcr these parties and 25 get it taken care of. And the best way to crystalize N( -
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL Q U.S. COURT REPORTER dhll , P.O. Sox 10045
- Tamsese. Fionce 3?nt e Tosevene (904} 222-3700/3705
ll PAGE. 26
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< 8 i the issue, as far as I'm concerned, is to,right or wrong 2 or whatever,is for this Commission to take jurisdiction 3 or indicate that we're taking jur.sdiction based on the 4 arguments that have been presented today. And if it shoup .-
i 5 turn out some way otherwise, then thut s all right. But l 6 I think we ought to go ahead on it and crystalize because; I
7 we can lollygag and take it under advisement, the juris- l 8 diction of this matter,all we want to but we've got g to get the matter into a posture where it can finally 1
10 be rt;olved. And I believe the best way to do that is 33 for uc to go ahead and indicate under the rules because 12 there are valid arguments, as far as I can see, or there 13 are arguments, I don't know how valid they are.
14 There are arguments on both sides as far as jurisdiction 15 is concerned.
16 And if after we get through today, if Florida Power 17 & Light doesn't like it, then they can take it to the i
18 next step and eventually it may even go all the way to 19 the U.S. Supreme Court as far as jurisdiction is 20 concerned, but I don't think it can go that far until 21 we actually make -- take a stand. So, I would say I 22 would move that we go ahead and take jurisdiction and 23 hear what evidence we're supposed to hear today, 24 COMMISSIONER LEISNER: I agree with what the Chairman 25 said. If the rule's on the books and we believe they're dt.
AAF.ON LOVETT. PRES, DEN 7/ OWNER REFERENCE. MARTINDALE HUBBELL U S. COURT REPORTER (llh, P.O. Box 10045 e Tallahassee, Fiones 32301 o Tonephone (904) 222 370W3705
PAGE- 29
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i valid, then we must have jurisdiction. So, I think we 2 should take the jurisdiction and deny the motion for i 3 continuance. j 4
CHAIRMAN CRESSE: I think we oucht to acknowledge l i
5 the validity of our rules. l l
6 COMMISSIGNER LEISNER: Yes.
l 7 CHAIRMAN CRESSE: That position has set a certain 3 Propelling argument.
g COMMISSIONER NICHOLS: Mr. Chairman, I would second I
to the motion that we take this petition for continuance ~!
ji under advisement at this time and proceed onward.
12 CHAIRMAN CRESSE: All right. Now, we've got two 13 motions. One is to deny the motion for continuance and
(
14 the other one is to -- well, really the continuance argumen-15 is really -- that's kind of a poorly worded deal. You're 16 not wanting us to -- you're asking us to continue it 17 until such time as FERC acts?
('
18 MR. HAUCK: That's correct, Mr. Chairman. In fact, 19 the adoption of the Commission's rules in otfr -- in a 20 sense recognizes that the FERC has the jurisdiction to 21 determine QF status. '
22 CHAIRMAN CRESSE: What sense would that recognize 2a that? We just Edopted the same languagc we developed.
24 What sense does that recognize their superiority in this 25 issue? Where is that in our rules? Can you refer to me s(
s.
AARON LOVETT, PAESIDENT/ OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S COURT REPORTER h ll ,l P.O Bos 10045
- Tenenessee, F4onda 32301
- Te.ephone- (004) 222 37043705
PAGE: 33 l l
t i i i COMMISSIONER GUNTER: Yes, j 2 COMMISSIONER NICHOLS: Yes.
3 COMMISSIONER GUNTER: I would like to just hold it.
4 CHAIRMAN CRESSE: Two Csmmissioners would vote to 5 hold ruling on that motion.
6 COMMISSIONER GUNTER: Until we hear --
7 CHAIRMAN CRESSE: Until we hear all the evidence.
8 And three Commissioners would vote to deny the request g for continuance.
(
10 COMMISSIONER GUNTER: All right.
3i CHAIRMAN CRESSE: Okay. For the record, the prevaili:
12 side was Commissioner Leisner, Marks and Cresse.
Now we've handled that, now we'll go to the petition,
( 33 p I assume; is that corrset, Counselor? Is that --
15 MS. DAIRE: Yes.
16 CHAIRMAN CRESSE: Keep it straight now. You're 17 there to advise us and keep us straight. So, if we 18 start cnything wrong, you just stop us.
19 Now, let me -- before we start, I have a feeling 20 that there is a party indispensable to obtaining all the 21 facts that is not present. And my concern 'is that 22 Dade County is not represented. They have intervened.
23 Now, how do we get them up here an'd people that are 24 f amiliar with this thing f rom 1976, which is incorporated 25 in all this data, get the people up here from Dade County t(
AARON LOVETT, PRESIDEN7/ OWNER REFERENCE. MARTINDALE-HUBBELL U S. COURT REPORTER h, , P O Box 10045
- Tanahassee. Flonda 32301
- TeWphone (904) 222-3700'3705
PAGE. 30 9 I
i the page, Counselor and acknowledge that?
2 MR. HAUCK: Well, just in this sense, Mr. Chairman, 3 that the rules are adopted pursuant to Section 201 in i the Federal Power Act under which the determination of i
5 qualifying status is now being determined.
6 CHAIRMAN CRESSE: It also acknowledges that we're 7 adopting tnem under the authority granted by the Florida i 8 State Legislature.
l 9 COMMISSIONER NICHOLS: When you refer to 201, are
(
10 you referring to 292.201 or am I not following the right ,
11 rule?
12 MR. HAUCK: I'm sorry. 201 of PURPA which relates
( 13 to Sectica 3 of the Federal Power Act.
14 COMMISSIONER NICHOLS: You've got me there. You're 15 not talking about the FERC rules?
16 MR. HAUCK: It would be --
17 COMMISSIONER GUNTER: 292.201 that starts with scone?
18 MR. HAUCK: That's right.
19 COMMISSIONER NICHOLS: Is that what we're talking 20 about? Okay. Then we are talking about the same thing.
21 COMMISSIONER GUNTER: Then we have copies of the 22 Federal Register which are outlined.
23 CHAIRMAN CRESSE: There's been a motion made'and 24 seconded that we deny the motion for continuance. Are 25 there any objections?
AARON LOVETT PRESIDENTiOWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER h ll ,l P.O Box 1:045
- Tallahassee. Flonda 32301
- To'ephone (904) 222 370G170$
l PAGE. 22 i to participate and assist the Commission in understanding 2 what these issues are about? What's the indispensab[e 3, party rule?
4 MS. DAIRE: Mr. Chairman, I do not believe we cannno't 5 I believe we can proceed without Dade County's being 6 here. They have elected not to show up and there's 7 nothing we can do to compell them to show up. But anythin.
8 this Commission decides without their being here --
g CEAIRMAN CRESSE: Are they an indispensable party,
(
10 in your opinion?
ii MS. DAIRE: No, I do not believe they are an 12 indispensable party.
13 COMMISSIONER MARKS: Under the rules of civil
(
14 Procedure, are they an indispensable party?
15 MS. DAIRE: I believe they are not an indispensable 16 party and I believe if they are an indispensable party, 17 they have intervened as a party and they have elected 18 not to come here. So, therefore, if they were an 19 indispensable party, anything this Commission did would 20 be binding on then and they have waived their due process 21 rights.
22 COMMISSIONER HARKS: Do you have the rule on 23 indispensable party?
24 MS. DAIRE: No, sir, I do not.
25 COMtiISSIONER MARKS: Could we get a copy of that?
-(
AARON LOVETT. PRESIDENTOWNER
REFERENCE:
MARTINDALE-HUBBELL U.S COURT REPORTER h,l P.O Bos 10045
- Ten eSesese. Fionda 32301 e Tenophone- (904) 222 37003705
PAGE_ 33 l l
I 11 1 MS. DAIRE: But even if they are indispensable .
2 parties, the fact that they have not shown up, they have 3 waived that right. We have not waived it for them.
4' MR. HAUCK: Can I interject something, Mr. Chairman?[
i 5 It might be helpful. Larry Adams i.s here with us fro")
l 6 Florida Power & Light Company ardhas been~on the telephone !
7 with Gosernor Askew, oneof the County's attorneys, who 8 indicated that they had been so certain that the 9 continuance would be granted that they wished not to
(
10 incur the expense -- additional expenses on behalf of 11 the County. So, perhaps, they can be prevailed upon 12 with this recent ruling of the Commission to reconsider 13 that. We'd be happy to contact them, if you would so
(
14 desire.
15 CHAIRMAN CRESSE: Well, whether or not -- let me --
16 whether or not Dade County is represented here by Counsel 17 is not so much my issue. My issue is that I want to --
(
18 an integral p.rtion of this, it seems to me, to relate 19 to what are qualifying facilities is in fact a qualifying 20 facility is to the question of whether or not there was 21 a preexisting agreement relating to the output of 22 the electricity of the facility itself which is a 23 qusstion. That seems to me to be one of the issues of 24 determination of a qualifying facility. And in order to 25 pursue that issue, maybe the proper thing to do is to e(
\.
l AARON LoVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUSSELL U.S. COURT REPORTER hh! P.O. Box 10045 e Tanahassee. Fionda 32301 e Todene- (904) 222-37003705
il PAGE: 34 l
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i subpoena the people from Dade County.as opposed to whether 2 they come up here with an attorney or not. I don't care 3 if they have an attorney up here or not. Sometimes 4 throughout the course of this hearing and prior to its ,
l
. 5 conclusion, I want to be able to pursue that line of l 6 questioning. And I guess the only way to do that is !
i 7 subpoena somebody from Dade County. I
~
i 8 COMMISSIONER GUNTER: County Administrator or i g somebody. Somebody has --
(
10 CHAIRMAN CRESSE: Mr. Carter or whoever has been ti representing Dade County in these issues from that-time 12 and more, I guess, since 1976. And what their position r 13 is in regards to this issue that is now before the 14 Commission -- I'm disappointed that they are not here.
15 I would have thought they would have ccasidered themselves 16 having something at stake in this issue based upon the 17 data which has been filed in this case by Dade Resources 18 Recovery and as well as the company.
19 MS. DAIRE: Mr. Chairman, would it be inappropriate 1
20 for me to ask for a ten minute recess that I mig $t confer 21 with you and with the Conmission on this issue?
22 CHAIRMAN CRESSE: You want to confer with the 23 Commission?
24 MS. DAIRE: Yes- sir.
25 CHAIRMAN CRESSE: I don't have any objection. Are
.(
s.
AARoN LoVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE HUBBELL U.S. COURT REPORTER h, . P O Box 10045 e Tehaussee. Fende 32301 e T*:ephone-(904) 222 37043705 1
PAGE: 33 1 you talking about -- I don't know how you can confer with 6
2 the Commission during a ten minute recess.
3 MS. DAIRE: There is no ex parte problem, if that's i what you're concerned with'.
5 CHAIRMAN CRESSE: No, but there's a problem of the 6 Commission meeting other than in the public.
7 MS. DAIRE: Oh, I want to advise the Conmission.
8 I do not wish for the Commission to make a decision.
g CHAIRMAN CRESSE: Is there any reason you can't
(
10 advise the Commission publicly?
ii MS. DAIRE: Okay. I can do it.
12 CHAIRMAN CRESSE: I'm troubled, Counselor, is that
( 13 if you want to advise the Co:r.ission , we can ' t go off in l 14 a private room and meet and you advise us.
15 MS. DAIRE: No, I was going to do it right here.
16 But I have no problem --
17 COMMISSIONER MARKS: You want to do it off the i
18 record?
19 MS. DAIRE: That's what I'd like to do is go off 20 the record is what I'm asking for. But I have no uroblem 21 saying this right here.
22 CHAIRMAN CRESSE: Lets go off the record, Counselor . ,
23 (Whereupon, an off-the-record discussion was had.)
24 CHAIRMAN CRESSE: Wait a minute. Let's go on the 25 record. Go ahead, Counselor.
i
(
AARON LOVETT, PRESIDENT / OWNER REFERENCE. MARTINDALE-HUBBELL U.S COURT REPORTER h ll ,l P.O. Box 10045 e Tanahassee. Fkmda 32301
- Towphone- (904) 222-37001705
l PAGE: d'6 l l
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1 MS DAIRE: Since now we are on the merits of this
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2 Particular case, I've given it a lot of consideration.
3 And it seems to me that if the Commission is he're today l.
's to decide the issue of who has title- to this particuinr
. 5 facility, that issue 's misplaced in that this Commission 6 is not a court of competent jurisdiction to determine i i
7 title. It is my opinion that the unit in Dade County j i
8 in order to be a qualifying facility can be self-defined '
9 as a qualifying facility and that its notice to the 10 FERC that it was a qualifying facility was sufficient. l i
11 My understanding is that FP&L intervened and I believe 12 that I brought this to the Commission's attention when 13 that intervention occurred and I brought it to the
(
g Commission's attention at internal affairs. And I 15 mentioned at that time, and I still feel, that there was 16 no form for intervention. That the rules that the FERC 17 had promulgated made no reference to a form for inter-18 vention in matters of these so.-ts.
ig When one looks at the FERC rules and when cne looks 20 at the criteria for determining qualifying facility 21 one finds out that it has sonething to do with two 22 criteria which are not important today and with one 23 criteria which seems to be at issue. And that criterion 24 is title. If we look to the purpose of the FERC rules, 25 ne see that that particular criterion of title has t'
s AARoN LOVETT. PRESIDENTOWNER REFERENCE. MARTINDALE-HUBBELL U.S. COURT REPORTER
, P O. Som 10045 + Tata%uee. Fbnse 32301
- Te4 phone (904) 222 37003705
l PAGE. 37 4 i
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i something to do with FERC's concern that a utility not 2 receive the benefits of cogeneration rules. So, that'if 3 FP&L had title to the unit in Dade County and was forced I 4 to interconnect with itself, it would be the benefits 6 of the avoided cost payments. And oi iously, FERC did l 6 not want FPEL or any utility to be owning a qualified I 7 facility and receiving the money itself. j 8 The fact of the matter is without even reaching the g issue of title, which I claim is irrelevant to these d
to proceedings, that FP&L is not in possession of the unit ti in Dade County. FPkL will not be receiving the benefits 12 of the purchase price. And therefore, the issue of
( 13 title is moved.
14 So, the Commission could get into the question of 15 ti t l e.' An d I believe that the Commission is not a court 16 of competent jurisdiction to do that or the Commission 17 could just take cognizance of the fact that the purpose 18 of the FERC rules is to disallow FP&L to receive the 19 benefits of the cogeneration rules. And in that, FP&L 20 would not receive the benefits of the cogeneration rules, 21 the order of interconnection would be granted and ;
22 Resources Recovery would be obliged to pay the cost of 23 interconnection. And that if at a later time FERC 24 decided that FP&L -- I mean that RRD was not a qualifying 25 facility, that because of title, which I believe FERC
(
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S COURT REPORTER
,l P.O. Box 10045
- Taha*csee. Fbnda 32301
- Te4ephone (904) 222-3700/3705
PAGE. .lb 1 could not even determine, FP&L could.take possession and 2 the interconnection charge would have already been paid 3 to IP&L's benefit.
4 That 10 my position from the outset. And my concerd 5 would be that 7.he Commission not waste its time on some-6 thing it has no jurisdiction to determine. l i
7 CHAIRMAN CRESSE: The problem wi.th what -- I un.ier 3
~
8 stood what you said, what you said is I don't think FPLL g is claining they own the facility at all.
\
10 MS. DAIRE: I'm sorry, sir. I didn't understand 33 that.
12 MR. HAUCK: We're not seeking to becone a qualifying i 13 facility.
14 MS. DAIRE: No, but my understanding from the 15 Pleadings is that FP&L is contending that because of 16 Preexisting contracts they in fact have title. And that 17 therefore, RRD cannot_be a qualifying facility because 18 FP&L has title, not RRD.
19 MR. HAUCK: We don't make those arguments at all.
20 CHAIRMAN CRESSE: I didn't think so when I read it.
21 MS. DAIRE: All right. Then that is my misunder-22 standing. _
23 CHAIRMAN CRESSE: Now, go ahead, Counselor,'we're 2A going to hear the case on your petition.
25 COMMISSIONER MARKS: Let me ask -- I was going to as k l
(
AARoN LOVETT. PRESIDENT / OWNER P2FXRENCE: MARTINDALE-HUBBELL U.S. COURT REPORTER
}h, P.0 Bon 15045
- Tattahassee. Fionda 32301 e so phone (904) 222 37003705
PA3E: 39 i
..- ..* I 1 a question. Are there really any factuhl disnutes 2 in this matter? ,
6 3 MR. THOMSOM: I do not know whether.there are or not.i l
/ We would be happy to meet with Councel to see if we could i
5 stipulate to the facts. I think that the qualifying ;
6 facility, there are three tests. Megawattage, fuel l 7 and percentage of ownership. That it is located in 8 FP&L's service area, which I would have thought they g would stipulate. That in fact we have requested inter-1 10 connection and that we did so by letter after we completed it the facility. That we offerred to comply with their 12 safety rules, which is also contained in the letter.
< 13 And we offerred to pay the expenses of interconnection.
14 I believe that those are the only matters that are i
15 required by Rule 25-17.87 incorporating the definition of is a qualifying facility.
17 CHAIRMAN CRESSE: Is it clear, Counselor, that our 18 rules are not applicable to preexisting contracts?
19 MR. HAUCK: In our opinion, it's quite clear.
20 CHAIRMAN CRESSE: Do you stipulate to that, also?
21 MR. THOMSON: I don't see anything in the rules 22 that would so state, sir.
23 CHAIRMAN CRESSE: That is a dis' agreement, then?
24 MR. THOMSON: Yes, sir.
25 COMMISSIONER MARKS: But that's not a factual disput e.
i ',
s, AARoN LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL f U.S. COURT REPORTER fG,FC r.ow. s .1.. . r-a, .1 - m m37 3.
l' PAGE; 46 ?
t 1 MR. THOMSON: That is not a factual dispute.
2 COMMISSIONER MARKS: That's a legal argument.
s My question was strictly the question of whether or not 4 there are any disputes as to the facts of this case. ,
5 MR. HAUCK: We believe that the existence and validit-6 of the contracts is beyond dispute. We believe in the 7 geographical characterizations of Mr. Thomson.
8 COMMISSIONER MARKS: Theyareinthisservicearea.l 9 You are not disputing that, are you?
10 MR. HAUCK: We're not. We believe that wnat's befor'e 11 this Commission is a question of whether the PURPA rules, 12 as adopted by the Commission, gives the Connission the 13 power to change an existing arrangement.
(
14 COMMISSIONER MARKS: Okay. Let's look at 25-17.80, 15 and that is the criteria -- the three criteria.
16 CHAIRMAN CRESSE: What are you looking at?
17 COMMISSIONER MARKS: I'm not really looking at the 18 rules, I'm looking at Page 5 of petition for interconnecti.
19 which sets out those things.
20 CHAIRMAN CRESSE: Sets out some of those things.
21 COMMISSIONER MARKS: Some of them. Well, it sets 22 out what I think probably are the pertinent areas of 23 that particular rule. W6 car; get a copy of the rule, 24 if we wanted to.
25 CHAIRMAN CRESSE: Let me -- hold on just a moment.
,(
L AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER Mllh,l P.O. Esos 10045 taw.assee. F'onda 32301
- To.ephone (904) 222-370(13705
PAGE. 41 t
1 Hold on just a moment, please. If what we're suggesting 2 here is to take a moment and try to determine what the 3 issues are that are before this Connission, I think that E suggestion is very well put and I'm going to ask the 5 attorneys to try to get together to see if they can 6 define the issues while the Commission takes -- what they, 1
agree on and what they disagree on while the Commission 7 '
8 takes a 15-minute recess. Then we'll be proceeding in 9 what I think is a more logical measure. And I'll ask our
(
10 attorneys to participate in that and we will not change 1( it to a prehearing conference. We'll just come back 12 and find out where the parties are in thi s case rather
'^
- 13 than us sitting here now and trying to do it.
~
14 MR. HAUCK: Mr. Chairman, we would be willing to
, . - 4."
15 contact the county, if it's your pleasure. Because I 16 think there are considerable interests that should be at IPt' the table that won't be represented here.
- '18 _
CHAIRMAN CRESSE: You can tell them that the 19 *1 Commission is proceeding .with the hearing and at least 20 t'he Chairman thinks -- I'm not using words of art and 21 legal words and so forth -- I consider that indispensabic
^
22 Party for me to understand'the issue.
23 , MR. HADCK: Yes, sir, we'll do that.
24 COMMISSIONER MARKS: In this 15-minute break,
" t 25 specifically what I would like to know, I assume the w
(+ 4
, _% h g4
-g^ AARoN LOVETT, PRESIDENDOWNER REFERENCE; MARTINDALE-HUBBELL U S. COURT REPORTER l P.o Bor 10045 e Tanahassee. Ftnsa 32301 e tow (904) 222-37003705 n ,
l! PAGE: 42
.. .o - s' I
o l
(-
1 other Commissioners would,too, what are the issues
- but more importantly are there any factual discutes? ' I 3 Any disputes as to the facts of the case. And I'm sure i the attorneys understand exactly what I'm talking about 5 when I say are there any disputes as to the facts. If 6 there are no factual disputes, then we can move into f I
7 the other phase of the hearing. That will clear up a l 8 lot of questions right there. And then you can define 9 what the issues are after you determine whether or not I
10 there are any factual disputes. What the exact issue 33 is so we can do what we're supposed to do. And we can 12 have our attorneys participate. In fact, that's the
( 13 bottom line.
14 CHAIRMAN CRESSE: All right. We'll reconvene at 15 quarter till eleven.
16 MR. SEXTON: Commissioners, for your own use, I 17 have drawn up an outline that hopefully accurately i
18 portrays some of the issues and some of the provisions 19 of law and rules that might apply for your --
20 COMMISSIONER GUNTER: Ya'll go through this first.
21 MR. SEXTON: Fine.
22 COMMISSIONER MARKS: Ya'll go through that and then 23 give us that.
24 CHAIRMAN CRESSE: The Commissioners will recess.
25 (Short break.) ,
I k.
AARON LoVETT, PRESIDENT / OWNER REFERENCE; MARTINDALE-HUBBELL U.S. COURT REPORTER Mllh,l P.O. Box 10045
- Tenanassee Flonda 32301 e Telephone: (904) 222 3700'3705 1
PAGE. 43
..' .* f' l
(
1 MR. SEyTON: Mr. Chairman, the two sides, I believe,:
2 are completing our conference and we're going to get an 3 indication of how many facts -- material facts of the 1
4 question are still in dispute and how many have been i 1
5 agreed to. l t
6 CHAIRMAN CRESSE: All right, sir. Let me mention 7 that the attorney for Dade County, or one of the attorneys 8 for Dade County, apologized for not being here this 9 morning because he thought the issue was going to be i
10 primarily on the question of jurisdiction as opposed to is the merits of the issue. And I advised him that we were 12 proceeding, we were going to go ahead and proceed with
(, 13 the issue on its merits. Whether or not we conclude today 14 or have to have a subsequent hearing at some other time, 15 it's too early to tell. Well, let's proceed.
16 COMMISSIONER MARKS: We're on the facts. l 17 CHAIRMAN CRESSE: Yes, you all were going to take
{'
18 the 15 minutes,which got extended to 40,and advise us 19 whether or not you had any -- what the issues were, what 20 the agreements were on the issues or facts. Have you 21 done that?
22 MR. BARDIN: Mr. Chai'r man, we've almost compl et,ed tha t 23 and I think there is-one last point we're trying to close 24 on. We should be ready to report to you on these.
25 CHAIRMAN CRESSE: All right, we'll give you five nore
(
's .
AARoN LOVETT PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUSSELL U.S. COURT REPORTER bill ,l P.O Bos 10045
- Tar.ahasese. Fbnda 323C1
- Te4 phone. (904) 22* 3700705 i
- . .
- PAGE: 44 t
i minutes recognizing that the meter stops because you are
~
2 running late.
g i
3 (Short break.) i
' l 4 CHAIRMAN CRESSE: Comnission cone to order. Counselo
. 5 have you reached an agreement of where we are, what the 6 issues are?
f 7 MR. SEXTON: I believe that the parties are prepared
~
8 to indicate which questions of fact have been stipulated g to and which ones are still under contention.
I 10 CHAIRMAN CRESSE: All right, sir. l ij MR. THOMSON: Mr. Braverman is prepared to read to 12 the Commission what we believe to be the stipulated
( 13 facts and that then the issues of fact which are not 14 agreed to.
15 CHAIRMAN CRESSE: All right, sir.
16 HR. BRAVERMAN: I believe we've agreed to the 17 following: One, that the facility has a maximum megawattage 18 of less than 80.
19 COMMISSIONER GUNTER: Less than 80?
20 MR. BRAVERMAN: Less than 80. Specifically 77.
21 Secondly, that the facility -- less than 80.
22 CHAIRMAN CRESSE: All'right. It's less than 80.
23 MR. BRAVERMAN: Less than 80. Second, that the 24 f acility burns biomass fuel. Third, that there will bc 25 no utility ownership of 50 percent of the facility d
\_
AARON LOVETT, PRESIDEN7K)WNER
REFERENCE:
MARTINDALE HUBBELL U.S. COURT REPORTER h, P.O Bos 10045 e Tanshasese, Flonda 32301 e To.ephone (904) 222 3700 3705
PAGE: 4 I8 l-
. i u
. l 1 existing now or contemplated under the contracts that i 2 have been referred to here.
3 CHAIRMAN CRESSE: No utility ownership of 50 percent i
$ now or contemplated? l 1
5 MR. DRAVERMAN: Cr greater. Fifty percent orgreate[r 6 of the -- no utility ownership of 50 percent or greater jl i
7 of the facility existing or contemplated. Fourth, that !
8 the Resources Recovery facility is in the FP&L service 9 area. Fifth, that the Resources Recovery of Dade County --
10 COMMISSIONER GUNTER: Go slow. Go slow so we can 11 get it.
12 MR. BRAVERMAN: That Resources Recovery Dade County, 13 Inc. has requested interconnection from FP&L. That
.(
14 Resources Recovery Dade County, Inc., this is six, agreed 15 to abide by the safety standards of FP&L in its request 16 for interconnection. Seventh, that Resources Recovery of 17 Dade County, Inc. agreed to pay for the interconnection 18 that it requested. Eight, that Resources Recovery of 19 Dade County, Inc. is presently in possession of the entize j 20 facility. Ninth, that the cost of the electrical 1
21 generation facility is approximately $21 million.
22 Tenth, that the letter fro'n the Department of Environmenta:
23 Regulation be admitted into evidence. Eleventh, that
! 24 Florida Power & Light has paid nothing for the EGF l 25 electrical generation facility. Twelve, that Resources
, ((.
i AARON LOVETT, PRESIDENTOWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER h, P.O Box 10045 e Tanahassee. Flonda 32301 e To.ephone:(904) 222-3700'3705
- PAGE. 46; c j
e _
y
. l 1 e 1
Recovery Dade County, Inc. and Dade County entered into 2 the following three contracts in relationship to the .
3 facility: the purchase contract, a management contract e
4 and an assumption agreement. These three contracts l I
5 were originally adopted prior to the passage of PU2PA l
t 6 but have been amended subsequent to the passage of 7 PURPA. Dade County and Florida Power & Light have entered 8 into an electrical generation facility contract.
9 COMMISSIONER MARKS: Is this 13 you're reading?
\,
10 MR. BRAVERMAN: Yes, I'm sorry. This is 13.
11 COMMISSIONER MARKS: Start all over, please, sir.
12 MR. BRAVERMAN: Certainly. Dade County and Florida
( 13 Power & Light have entered into an electrical generation 14 facility agreement with respect to the facility and that 15 contract was entered into prior to the passage of PURPA 16 and has not been amended since. Final item is that 17 construction of the facility commenced after the passage 4
18 of PURPA.
19 COMMISSIONER MARKS: After the passage of PURPA?
20 MR. BRAVERMAN: After the passage of PURPA. I'm 21 talking about the entire facility.
22 CHAIRMAN CRESSE: Do you have a date when that was?
23 MR. THOMSON: Mr. George Boyhan, who will testify, 24 will testify that it was April 1, 1979.
25 MR. HAUCK: '6e have no basis to challenge that , but 4
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE.HUBBELL U.S. COURT REPORTER
,l , P.O Box 10045 e Tana'assee, Fionea 32301 e Telephone (904) 222 37003705
PAGE: 4I !
i I we can't verify it.
2 MR. BARDIN: Chris, you say you can't verify the 3, exact date?
E FR. HAUCK: That's correct.
5 CHAIR'4AN CRESSE: Is that all?
i 6 COMMISSIONER GUNTER: Now, are you going to non- l 1
,7 agreement items?
8 MR. HAUCK: I think there's some disagreement about 9 what items should be contended about before this Commissior
(
10 at this time.
11 COMMISSIONER MARKS: There's no pr'oblem with 12 what has been read tin,14 stipulated f acts.
13 MR. HAUCK: No, Comissioner Marks, we do stipulate
(
14 to those.
15 CHAIRMAN CRESSE: All right, sir. You want to tell 16 us what the non-agreement issues are now?
17 MR. HAUCK: It's the view of Florida Power & Light t
18 Company that the principal issue is what price to be 19 paid for any electricity produced by that facility. And 20 I believe it is the staff's view, I can't speak for the l 71 staff, that that is not appropriately before the Commissior 22 at this time.
23 MR. SENTON: That's the Staff's position. '
24 COMMISSIONER MARKS: What price should be paid fcr 25 what?
! (
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUSSELL U.S. COURT REPORTER h,l P.O. Bos 10045 e falta$essee. Flonda 32301 e TeWohone (904) 222 37001705 i,
L
PAGE; 46
. l I
1 MR. HAUCK: For energy produced by the Resources 2 Recovery facility. And that as a subset.to that, whether, 3 l such price would be properly passed through the fuel j S
adjustment clause. i t
t 5
CHAIRMAN CRESSE: Does the Petitioner think these i l
6 are issues you say and the Staff does not feel that these 7 i
, are issues before the Commission?
- 8 MR. HAUCK: I don't know the Petitioner's position.
9 We're Respondent in this position, Chairman Cresse and
\
10 that's our position.
11 CHAIRMAN CRESSE: What 's the p etitioner --
12 MR. THOMSON: Petitioner concurs that these matters
- 13 are not before the Commission in connection with this 14 docket. This docket is for the interconnection. .
15 MS. DAIRE: Am I to understand that if the order 16 for interconnection were to be issued, RRD would be 17 willing to take a risk that it would not at this time 18 know what price they would receive at a later date?
19 MR. BARDIN: Yes. Yes, Mr. Chairman, we are prepared 20 to abide by the outcome of many decisions that will 21 have to be made here and in negotiation where else to 22 what the exact price in terms will be. We can resolve 23 it by negotiations and come back to the Commission and 24 report what can be done by negotiations. If it has to 25 be done by litigation, it has to be done by litigation.
.(
w AARON LOVETT, PRESIDEN7K)WNER
REFERENCE:
MARTINDALE-HUBBELL U.S. court REPORTER h,l P.0 Box 10045
- Tallah Fbnce 32301
- To.ophone (904) 222 3700/3705
- ! PAGE. 49 I
. \
1 t We're prepared to go forward on step one, which is the 2 step we've asked for in this petition to get the planh 3 interconnected so it can be up and running. We will l t
4 work through with the other parties and your staff and I !
5 ultimately yourselves the remaining issues. I 6 CIIAIRMAN CRESSE: Let ce ask you a question, sir. j 7 I'm not sure I understood your answer to that last l 8 question. Are you saying that you're willing to abide 9 by the Commission's decision on what is the fair price
(
10 for electricity generated in this facility?
l 31 MR. BARDIN: Yes, Mr. Chairman, we have been asking 1
12 for an opportunity to get for this facility the prices 13 that this Commission determines now and in the future
(
14 are appropriate for a facility of this kind. We simply 15 wanted to be-in on the part. And that's why we elected 16 to come to Tallahassee rather than i.'ashington D.C. to 17 try to get these issues resolved.
I 18 CHAIRMAN CRESSE: To further clarify that, sir, 19 because of the things that you're stipulating to, does 20 your answer mean thatif this Commission reached a decision 21 of a fair price would be that contained in the contract 22 between Florida power & Light and Dade County, Dade 23 . Resources Recovery would abide by that?
24 MR. BARDIN: I would assume that we would try to 25 persuade you otherwise. And if we failed to persuade k(
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S COURT REPORTER Mll ,l P.0 Bon 10045
- Talistassee. Fenda 32301
- To+ephone (904) 222 37003705 l... -
PAGE: 50
. l 1
(
3 you, we'd seek the appellate remedies available in 2 those cases. But we are looking to the processes 3 of this Commission.
4 CHAIRMAN CRESSE: I was just trying to understand
. 5 where you were.
6 MR. BARDIN: Let me give you a specific example 7 as a question of capacity credits, which is not resolved 8 by any of your past orders as to amount. We have a g disagreement with Florida Power & Light on how that should
(
10 be handled. We would like to negotiate it out and 33 persuade one another how to do it. We probably will not 12 succeed. Don't hold me to it, but we probably won't.
( 13 If we don't, what we plan to do between that issue before 34 this Commission through its processes, subject to all 15 appellate rights, every party has, but its processes 16 to get it resolved.
17 CHAIRMAN CRESSE: Okay. I think I understand.
I 18 MR. HAUCK: Mr. Chairman, we, Florida Power & Light ig Company, believe that it would be utterly irresponsible 20 for us to leave here if it's at all possible for us to 21 otherwise with an order requiring us to purchase power 22 without knowing what the cost is going to be. There are 23 many millions of dollars in annual revenues at stake.here .
24 And we very much believe that an order requiring inter-25 connection leaving the second,and probably most important
(.
AARON LOVETT. Pr sENT/ OWNER f@ U.S COURT . PORTER
REFERENCE:
MARTINDALE-HUBBELL
,l P.O Eos 10045
- Tanahassee. Flonda 32301 e Tolophone (904) 222 3700/3705
.,. PAGE. 51
(
I 1 i part dangling,would not be in the interest of the parties.
2 CHAIRMAN CRESSE: Well, fro::: a -- is there any 3 other issues that you all --
4 MR. THOMSON:
The remaining matters,which Mr. Braver {-
5 man can go through,are essentially matters that we would 6 offer testimony. And it is my understanding that Florida 1
-7 Power & Light does not have contrary to us but they :
just don't know. l 8 They are matters that essentially i i
[ g related to a Dade County total cost of plant, things of 10 that sort, like the initial date of construction, ji COMMISSIONER MARKS: These are essentially factual 12 matters?
( 13 MR. THOMSON: These are factual matters which I 14 understand that Florida Power & Light does not dispute i
15 but simply do not stipulate to because they do not have 16 the information to do so.
g 17 COMMISSIONER MARKS: I understand.
18 COM'ilSSIONER GUNTER: Let's go ahead and iinish the 19 non-agreement issues.
20 MR. HAUCK: I think the final thing, and it relates 21 first in effect to the price issue, is the illegal effect 22 of the package of agreements that were described in 23 stipulations number 12 and 13.
24 COMMISSIONER MARKS: The legal effect?
25 MR. HAUCK: That's correct. That 's whether Florida i
AARON LOVETT, PRESIDENTOWNER REFERENCE. MARTINDALE HUBBELL U S. COURT REPORTER h,l P.O. Bc 10045
- Tahahanoe, Flonda 32301 e Towphone (904) 222 3700'3705
..' .* PAGE. 52 g
, l
(
. 1 Power L Light Company has a right to purchase energy ,
2 fram this facility, however it can figure at a certain l 3 price.
4 COMMISSIONER NICHOLS: Items 12 and 13? !
5 )R. HAUCK: Yes, Commissioner. l l
6 CHAIRMAN CRESSE: What it boils down to is a questiop
-7 of whether or not we should enter an order ordering interh 8 connection and if so, what price to pay? Let me sun.narizle
(
g what I have gleaned from all the papers that have been 10 filed. Ya'll correct me if my summary of what's trans-11 P i red is incorrect. Sometime in 1976 Metropolitan Dade 12 County entered into an agreement with Pirsons & Whittenore
, 13 and an affiliate of Parsons & Whittemore for the construo-14 tion of a plant. Have you got sonebody that's going to 15 tell us all this? I'm just trying to get the sequence 16 of events down based on what ya'll have filed. After 17 that period of time, the original company, which entered 18 into the agreement was changed to a different name but 19 it's still an affiliate of Parsons & Whittemore.
20 Sometime in 1977, Metropolitan Dade County entered 21 into an agreement with Florida Power L Light for the 22 operation of the electric portion of that plant, I think 23 it contemplated that Metropolitan Dade County would at 24 one time take ownership of it or something. And then they 25 also entered into an agreement -- Metropolitan Dade County AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER Mllh, P.O Bou 10345
- Tanausese, Flonda 32301 e To.ephone-(904) 222 37043705 1
1
,,. PAGE. 63 e l
. i E
1 had entered into an agreement,which is your nanagement , l l
I 2 contract for the operation and Resources Recovery unit.
l t
3 And still between that -- between then and now, there i
4 has turned into a dispute who has done what to whom on
- I those agreements. But s essentiallythoseagreementshave{
6 not yet been consumated and they are subject to a dispute'
- 7 between Dade County and Parsons & Whittemore and one of ;
8 their subsidiaries, Dade Resources Recovery. !
g I also gleaned from the file that Parsons & Whittenor<
10 has requested that those issues be subjected to arbitratio:
gi The status of what's happened on that is not included 12 in the file. And that there presently exists a substantial amount of confusion about what everybody's
( 13 14 Parties -- who owns what, who owes what to whom and 15 so forth and so on,which the parties apparently have 16 reached no agreement on. And some of this stuff goes 17 back to early 1981 or even earlier than that.
18 Secondly, that -- then you have filed with this 19 Commission the determination or request order for Florida 20 Power & Light to hook up to you and that you would intend 21 to provide electricity to Florida -
& Light under 22 our cogeneration rules and regulatious. And that's about 23 where we are now.
24 It's not clear to me, one, how you could provide 25 any electricity unless you had some agreement with Dade AARON LOVETT, PRESICJNT/ OWNER
REFERENCE:
MARTINDALE.HUBBELL f @[ U.S. COURT REPORTER FOciiG,1fC. e.o % . dr. . - mar. - - m = =
... . . . PAGE. 54 ,
i 4
1 County to provide biomass. Biomass,sonetimesreferredte(
2 as garbage or waste, which is also in here. So, I am I 3
at least somewhat confused as to how this deal could l 1
I 4 ever come about anyway. Who owns what and how you are r
~
5 going to provide electricity if Dade County is coing to j 4 6 haul your garbage and whether or not you have an agreement i
7 for Dade County to haul your garbage.
8 MR. THOMSON: Mr. Chairnan, as the testimony will ;
( 9 show, the facility is currently grinding garbage.
l 10 CHAIRMAN CRESSE: All right, sir. Bring on your j witness, Counselor.
11 l 12 MR. HAUCK: Excuse me, Commissioner. Do you agree
( 13 that -- is the Commission under the view that those are l 14 the issues as stated, then? l 15 COMMISSIONER MARKS: Those two issues?
I
+
16 MR. HAUCK: Yes, sir.
17 COMMISSIONER MARKS: Yours which -- you're saying 18 is price. Principally they are in dispute that you have 19 as what price to be paid that you produced by RRD?
20 MR. HAUCK: Yes, and the regulatory treatment o f su c'h .
21 COMMISSIONER MARKS: Well, our Staff has indicated f I
22 to us that that aatter is not before us at this point. l 23 And, of course, we don't w' ant to get involved -- I don't 24 think we should get involved in a manner that is not 25 properly before us. Is that still Staff's opinion?
,(
t AARON LOVETT. PRESIDENT / OWNER REFERENCE; MARTINDALE.HUBBELL U.S. COURT REPORTER h,l P.O. Bos 10045 Tawsm. Ftrea 32301 e Te ephone (904) 222 37003705
,,. . . . PAGE. Eb l
i l
I
( l t MS. DAIRE: Yes, sir. [
~
i 2 CHAIRMAN CRESSE: Let me ask you this: Under our j t
3 rules and regulations and what we've adopted at this 4 point in time, it seems to ne if one would deternine [
5 that it is a qualified f acility and we order Florida Dorer l
. 6 & Light to hook up to it; that two, we have determined i I
,7 also the price that they would pay for the decrer. ental {
g cost for electricity under the rules and regulations g we have adopted.
10 MS. DAIRE: Yes, sir, we have in our rules the 33 formula whereby that price is to be determined at a later 12 date.
CHAIRMAN CRESSE: My understanding is, and let me
( 13 14 look at it here, if I might, that on -- that we have 15 ordered each utility to incorporate the following rates 16 in its tariff on order issued 8/11/81.
17 }tS. DAIRE: Yes, sir, that's correct.
(
18 CHAIRMAN CRESSE: And I was just wondering why, 19 then, if we order them to hook up as a qualifying facility 20 that the effect of this rule would'not be applicable 21 or the effect of this order would not be applicable?
22 MS. DAIRE: Sir, that order went on to say that if 23 the utility objected to those pr' ices, they would request 24 a hearing. And that docket is not yet closed. And in 25 fact, on September 21st, the Commission will consider
,(
(
AARON LOVETT PRESIDEN7/ OWNER
REFERENCE:
MARTINDALE HUBBELL U.S. COURT REPORTER
, , P.o. Bon 10045 e Tanahassee, Fionda 32301
- Telephone (904) 222-3700'3705
..- ..
- PAGE: 56 ,
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1 whether to conduct a hearing in that dor Aet. And that '
2 is the appropriate docket for.the.dete2mination of what 3 a cost price to be paio by FP&L to its qualifying !
4 facilities that have been hooked up.
5 CHAIRMAN CRESSE: All right. Then we have indicated i
I 6 in the rule that they would pay decremental cost and the !
i 7 only issue remaining then is a determination as to whethe'r i
8 or not decremental costs would be that -- those figures i i
g included in that rule or sone other figure which would 10 be determined subsequent to a hearing that's been 11 requested on docket 81-0296?
12 MS. DAIRE: Yes, sir.
, 13 CHAIRMAN CRESSE: However, an I correct in that 14 in the event that there is no agreement on the price to 15 take after the fact decremental cost that the cogenerator 16 would have the option of taking the prices as are listed 17 on our order if those prices do not change by subsequent 18 Commission order?
19 MS. DAIRE: Sir, at this time those prices are not 20 in effect.
21 CHAIR::AN CRESSE: I understand that.
22 MS. DA:RE: Okay. So, I'm not sure I understood 23 your cuestion.
24 CHAIR:;AN CRESSE: Let's ask this question then:
25 All the utilities were ordered to file a tariff?
C.
AARON LOVETT, PRESIDENTOWNER
REFERENCE:
MARTINDALE-HUSSELL U.S. COURT REPORTER Md , P.O Bos 10045 e Tahahassee, Ftonda 32301 o Teeechone (904) 222 370G1705
) PAGE: 57 l
- i .
it i MS. DAIRF: Yes, sir. l z CHAIR'JAN CRESSE: And, of course, the order is subject 3 to rehearing? I assume that hearing has been requested?
4 MS. DAIRE: Yes, sir. l 1
5 CHAIRMAN CRESSE: And what you're saying is until I 6 the end of that hearing, none of these prices are in !
I
.7 effect. ,
8 MS. DAIRE: With regard to FPLL, that is correct.
g CHAIRMAN CRESSE: Now, what I'm asking is if we
[
10 hold that '. earing and we in subsequent -- after that 13 hearing determine that these prices which are incorporated 12 in 10198 are in fact those which the corporation will have to file, then those prices would be in effect but
( 13 14 they are not in effect today?
15 MS. DAIRE: Yes, sir.
16 CHAIR'JAN CRESSE: All right. Let me ask one other 17 question. Counselor, am I correct that the agreement
(
18 which you entered into in 1977 was to pay Dade County an 19 average steam cost?
20 MR. HAUCK: System average stream cost, that's 21 correct. Plus the average carrying cost of similar 22 investments in ger.eration equipment plus operation and 23 ma'intenance expenses.
24 CHAIRMAN CRESSE: All right, sir. And would average 25 steam costs be fairly close to average fuel costs? -
(I .
AARoM LOVETT, PRES /Off/T/ OWNER REFERENCE. MARTINDALE-HUBBELL U.S. COURT REPORTER Ehll , . P.O Box 10045
- Takhassee. Fbnda 32301 e Te* phone (904) 222 37003705
.. pace: SS
(
g, }!R . HAUCK: It's approximately 25 percent lower
~
2 than our decremental fuel costs. i 3 CHAIRMAN CRESSE: I'm not talking about decremental 4 fuel costs. I'm talking about average fuel costs. If 5 you're paying average steam costs,and I'm used to the 6 term average fuel costs -- i
. 7 MR. HAUCK: Yes, sir, excuse me. I'm speaking about I
8 decremental.
l t
g CHAIRMAN CRESSE: I'm not talking about decremental.
10 I understand that's the issue.
33 MR. HAUCK: They are very closely -- they match 12 very closely.
13 CHAIRMAN CRESSE: So, if one looked at what it was
( :
34 you thought you had in that agreement with Dade County 15 and so that in January, 1978 that the average fuel cost 16 was 1.850 per kilowatt hour when you -- approximately 17 at the time of that agreement. And we now look at average 18 fuel costs and it -- we know what that's forecasted to ig be in the next six months because the Commission is using, 20 -- has the fuel adjustment charge where we use fuel fore-21 casts is 33C per kilowatt hour.And if we look at the 22 question of whether or not you pay average or decremental 23 and if in fact decremental is 60, what in effect we're 24 arguing here is 210 per kilowatt hour for electricity 25 generated; is that what the petition is all about?
AARON LOVETT PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER dhllh, P.o. Bos 10045 e TaRa%ssee. Fionda 32301
- To.ephone (904) 222-3700'3705
... ..* S PAGE. Id' ;
l
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i MR. HAUCK: I don't know the numbers exactly, Mr. ,
I 2 Chairman, but there has been a dramatic increase in what!
3 we would pay for average price of steam, if that's your E
4 point from the date mentioned to the current time period.
5 CHAIRMAN CRESSE: I'm making two points. I'm saying 6 that the time it was in agreement, of course, fuel prices
.7 and, therefore, steam prices have increased substantially?
8 MR. HAUCK: Yes, sir.
9 CHAIRMAN CRESSE: And if you bought it average -- if
(-
10 you assumed average was 33C, you could calculate what ,
i 11 you would be paid. On the other hand, if you're lookind 12 at average versus decremental, which I think is what
( 13 the Commission's rule provides for qualified cogeneration 14 is decremental fuel costs, that there is a wide differenc e 15 between decremental and average and I'm asking you, is 16 that what this issue is all about?
17 MR. HAUCK: Yes, sir, that's correct.
18 CHAIRMAN CRESSE: Now, in order to put it in a 19 further perspective, what is the estimated number of 20 kilowatt hours that this usually generates in a year?
21 MR. HAUCK: It's been stated, I believe, 360 -- is 22 it 360,000 megawatt hours?
23 MR. BARDIN: What's that? When it's going --
24 after the startup, when it's going full blast, doing 25 what it was doing and I think it can do, the net generation
,(
AARON LOVETT, PRESIDENTK)WNER
REFERENCE:
MARTINDALE-HUBBELL U S. COURT REPORTER dhN , , P.O Box 10045 e Taitahause. Flonda 32301
- Tephone (904) 222-37001705
- ,. . . . Pass 60 3
i u
i ',
1 that is the net of the on-consumption which will be a i
2 substantial amount, might be on the order of 350 million '
i 3 kilowatt hours. I don't -- I want you to understand i
. I 4 that subject to actually running its fuel and seeing 5 the heat rate, it's a non-conventional fuel in a convention:
6 boiler. But it gives you an order of magnitude.
7 MR. HAUCK: Yes, all our testimony will be based 8 today on 360,000 megawatt hours or 360 million kilowatt g hours. Same thing.
4 10 CHAIRMAN CRESSE: All right. Thank you. I just l
I 11 needed to get that. '
12 MR. BARDIN: Mr. Chairman, could I just respond to
,( 13 the same question you asked Mr. Hauck? It's slightly 14 differently. I understand the analysis of the 2ic 15 difference, but from where I sit I think what we're 16 really up against here is one alternative ir; which we 17 don't have anything working. We're not selling at 33C 18 per kilowatt hour. The County and PLW and FP&L don't 19 have this thing going. What we have is an idle plant ,
a 20 that could be substituting for foreign oil and could be 21 doing all these things, but it isn't doing anything.
22 All right. As against working out through the Commission 23 rules, they come out to whatever they come out. I do '
24 want to make clear that we are one of the parties that 25 has petitioned this Commission to make some changes 1-n the
'k L
AARoN LoVETT. PRESIDENT /OWNFR I
REFERENCE:
MARTINDALE.HUBBELL U.S. COURT REPORTER h ll ,l P.O. Box 10045 e Tar.aussee. Ftonda 32301
- Tenophone (904) 222-370G3705
..- ..* PAGE. U l
l I
i 1 August lith order. I say we will abide by the decisional:
2 Processes, whatever they produce, we are participants in 3 those processes. Let us present our hearing and hopefull-l 4 persuade you from time to time as to how to handle these!
I I
5 questions. But the real choice is that if the facility 6 is able to operate under PURPA in a state like Florida
. 7 which is really encouraging co-generation and really 8 encouraging small power production, we think it has a 9 good fighting chance of getting off the ground and workin't 10 And that's what it takes to do it.
ii Obviously some of the decisions you're going to 12 make months ahead on how PURPA is to be interpreted q 13 could be very important to this facility where it was 14 built after ,PURPA was passed.And we would like to see 15 treated like every other comparable facility, comparable 16 note, comparable factors that is billed in Florida to 17 provide qualifying small power production.
I.
18 MR. HAUCK: May I have an equal time for an opening 19 statement?
20 CHAIRMAN CRESSE: Yes, sir.
21 MR. HAUCK: What's really at stake here is whether 22 the Petitioner ought to be allowed to reap the windfall 23 of PURPA and be allowed out of its existing' contracts 24 which benefit Florida Power & Light's ratepayers by 25 allowing them to purchase electric energy at less
's AARON LOVETT PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER
@FO<litG,rc. ..o .. , o s . v.a.- . ~. 3m, .1.- ,m m 3-
' '*
- PAGE: 62 ;
I 1 avoided costs.
2 The. Petitioner is' holding the water supply of i
3 Dade County hostage in the negotiations and they seek 4 to use this Commission to prove their ends and we hope I
to show the Commission that there won't be an interest o fi 5
i 6 the ratepayers and the Commission interests lie precisely l e
7 with Florida Power & Light's in protecting the rate- l 8 payers to allow this interconnection.
g g CHAIRMAN CRESSE: Well, that's what I was trying to 10 get clear, what the issues were. Call your witness.
11 MR. BARDIN: We do not feel that that is the issue 12 today. Going down the road, that is the issue in our
< 13 negotiation. I want tomakeclearwefeelthosecontract!s 34 are invalid for any other reason which we are not 15 troubling this record with today.
16 COMMISSIONER GUNTER: On your item 8, where you said' j7 RRD was presently in possession of the facilit*/. Is
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18 the ownership of the facility under -- the facility itsel f, 19 is the ownership under litigation? Is there a question 20 regarding ownership being litigated today or in discute?
21 MR. THOMSON: As to who presently owns the facility?
22 COMMISSIONER GUNTER: Whether you all or Dade County '.
23 MR. THOMSON: I do not'believe there's any dispute 24 that we presently own the facility.
25 COMMISSIONER GUNTER: I'm not saying that. Is the
(<
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE HUBBELL U S. COURT REPORTER h,l , P.O. Box 10045
- Tanahause. Flonda 32301 e Te6ephone (904) 222-3700'3705
..* ..
- PAGE: 62 ;
I i
1 contract between Parsons & Whittemore and Dade County j i
2 under dispute? ;
3 MR. THOMSON: In a fashion, that is correct.
4 COEISSIONER GUNTER: Okay. That's the answer to I
~
5 my question.
4 S MR. THOMSON: Yes, sir.
. 7 CHAIRMAN CRESSE: All right, sir. Bring on your i 8 witness. -
i g MR. THOMSON: Mr. Boyhan, please. j
(
- 10 CHAIPJ1AN CRESSE: Has the witness been sworn in?
ii Everybody who intends to testify, please stand and we'll 12 swear everybody in at one time. Please hold up your i a 13 right hand.
14 (Witnesses sworn.)
15 hHEREUPON, 16 GEORGE E. BOYHAN 17 was called to the stand, having been first duly sworn, was
(
18 examined and testified as follows:
19 DIRECT EXAMINATION 20 BY MR. THOMSON:
21 Q Please state your nane, sir.
22 A George Boyhan.
23 Q Have you prepared testimony for this hearing?
24 A Yes.
25 MR. HAUCK: We don't have a copy of it.
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL g{
~
U.S. COURT REPORTER h,l P.0 Box 10045 e Tanahassee. Fionce 32301 e Tephone (904) 222-370G1705
PAGE: 64 ;
.. ' , *.
- I 1 COMMISSIONER GUNTER: No, we don't, either.
2 (Short pause.)
3 Q- Mr. Boyhan, I show you a copy of prepared testimony.
4 Is that testimony that has been prepared by you?
5 A Yes, it is.
6 Q And are the answers therein and the questions
.7 stated therein all true and correct?
8 A Yes, sir.
g MR. THOMSON: We would like to offer this prepared to testimony as an exhibit.,
i3 CHAIRMAN CRESSE: Sir, we don't put prepared testimony 12 in as an exhibit. We can insert it in the record as
( 13 though read and if you want him to summarize his testimon y.
14 MR. HAUCK: We would object to its insertion before 15 we have a chance to review it, Mr. Chairman.
16 MR. SEXTON: Mr. Chairaan, I also point out it is 17 single spaced so it can't be inserted, it would have
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18 to be copied.
19 BY MR. THOMSON:
20 Q Mr. Boyhan, would you please state your profession?
21 A I am a professional engineer.
22 Q How long have you been an engineer?
23 A Oh, I was first licensed in 1952 in the State of 24 New York.
25 Q Where are you licensed?
((
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER M Il , P.O. Bos 10045 + Tanahassee. Fionda 32301
- Toephone (904) 222-37001705
i
- . * *** PA3d 65 ;
. i i
I i A Florida, Alabama, New York, New Jersey, the Provinco i
2 of Saskatchewan in Canada and New Brunswick, Canada.
3 Q How long have you been licensed in Florida? l.
4 A Oh, for about ten years.
i 5 Q Where did you receive your college degree and in !
6 what field? ,!
7 A 1 got a B.S. in Mechanical Engineering from Stevens! i 8 Institute of Technology.
i
, g Q Did you do any graduate work, sir?
(
10 A Yes, I did some -- took some courses up at Renssalear gi Polytechnic Institute.
12 CHAIRMAN CRESSE: Excuse me, Counsel. Is it your 13 intention to go through this entire testimony?
14 MR. THOMSON: No, sir, I was not going to go through' 15 it all because some of it has been covered in any case 16 by the stipulation.
17 CHAIRMAN CRESSE: All right, sir. Well, do you i
18 want it copied into the record as though read and have 19 him summarize or just -- I'm trying to figure out where 20 I'm going.
21 MR. THOMSON: That would certainly be agreeable to 22 me.
23 CHAIRMAN CRESSE: He has an objection to it being 24 copied until he has the opportunity to read it so that he 25 can cross examine the witness.
,(~
AARON LOVETT, PRESIDENT / OWNER REFERENCE; MARTINDALE HUBBELL U.S. COURT REPORTER h ll , P.O 9o: 10045 e Tanahassee. Fbnda 32301
- Toephone (904) 222-3700'3705
DAGE: 66
[ ;
. 1:
t 1
1
(
i MR. HAUCK: There may be some objectionable questions 2 that are asked and answered in these.
l 3 CHAIRMAN CRESSE: What I'm trying to find out is j
. I 4 what procedure do we want to follow? Do you want some j 5 time to review it, Counselor, or do you want him to go i 6 ahead and just put the questions and answers and put it i
.7 in -- :
i 8 MR. HAUCK: In the interest of time, we'd be happy l g to take whatever plans for lunch the Commission has.
(
10 CHAIRMAN CRESSE: All right. Let me make this ;
11 suggestion: If there is some testimony which is going tc 12 be inserted into the record, let's have the parties distribute that to the attorneys and the Commission at
.( 13 14 this point in time. We will recess for lunch and reconvent 15 at one o' clock. And during the interim period of time, 16 we want you to have lunch and have read the testimony 17 so that when we come back, we can proceed in an orderly
(
18 manner.
19 Prior to breaking for lunch -- Mr. Dickens, do you 20 want to make an appearance?
21 MR. DICKENS: Not at this. time.
22 CHAIRMAN CRESSE: All'right, sir. So, why don't we 23 do that and that will give everybody an opportunity to 24 review the testimony and see if there are any objections.
25 MR. HAUCK: Yes, sir.
(
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTIND ALE-HUBBELL
%{@' U S. COURT REPORTER
,l P.O. Box 10045 e Tallahassee, Flonda 32301 + Te4 phone. (904) 222 3700'3705
PAGE. 67 i i
t i CHAIRMAN CRESSE: Before copying it into the record.
2 When we reconvene at one o' clock --
3 COMMISSIONER FARKS: Let's get the testimony.
[ Anymore prefiled testimony?
5 MR. HAUCK: We have none.
6 COMMISSIONER MARKS: 10 this all you have in a :
I 7 written form? l 8 MR. THOMSON: That is correct.
9 COMMISSIONER MARKS: All right.
10 COMMISSIONER NICHOLS: You have none that's prepared ,
11 but you're going to put on testimony?
12 11R. HAUCK: That's correct, Commissioner.
( 13 CHAIRMAN CRESSE: We'll reconvene at one o' clock.
g (Lunch break.)
15 CHAIRMAN CRESSE: Commission come to order.
16 MR. THOMSON: Mr. Chairman, during the break Mr. Hatrck 37 and I met with an attempt to see if we could cut through r 18 some of this, the issue.
l
- g CHAIRMAN CRESSE: All right, sir. When we recessed 20 we were at the point of determining the status of Mr.
I 21 Boyhan, is that the way you pronounce that? Mr. Boyhan's l
22 testimony. Now, you want to divert from that for some 23 other discussion? '
24 MR. THOMSON: Just for one minute.
25 MR. HAUCK: All right. We're willing to stipulate l
.s AARoN LoVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL
@ U S. COURT REPORTER FO<niG,lfC. .o u. i s . r. -. 2mi .1-m mum.
.. * ** ' PAGE. 68 l i
v 1 that absent contractual concerns and absent concerns of 2 title and some of the other concerns that the papers 3 raise that this plant physically could be characterized 4 as a QF, qualified facility. It is of the proper size, !
I 5 it earns the proper materials and so forth. If that 6 simplifies the issues, we're willing to stipulate to it. l l
7 In other words, if this plant appeared out of nowher:e 8 today and the owner came to us and said do you recognize 9 this as a QF, we would say, yes, it is. So, if that
(
to helps, we'll stipulate to that.
11 We also stipulate, if it helps, that the Commission 12 would need to deliberate and take evidence on the issue
( 13 of the price, if it wants to determine price, and 14 whether that be at this hearing or a subsequent hearing, 15 it's of little moment to us. As I mentioned in my opening 16 statement, our only concern is that we not be ordered to 17 interconnect and buy power at an unknown cost and with 18 unknown risks, as to the rate treatment.
19 I think that is the substance of what we discussed 20 at the break.
21 MR. THOMSON: Let me just make sure that I understand 22 it. It is my understandin'g, Chris, that you agree that 23 we have net all of the factual requir,ements of being 24 a qualified facility in the portions of the interconnect a
25 rule that we're petitioning under subject to your r'ight AARoN LOVETT, PRESIDENTOWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. court REPORTER h,l P.O Bos 10045 e TaAshassee, Flonda 32301
- Toephone (904) 222-37003705
s A
+ PAGE:
i 1 ' to contest that this entity is not a qualified facility 2 for lega] , reasons including the existing -- existence
'3 of a -- of the prior contract between FP&L -- at FpL and!
~ ;. l 4 Dade County and legal issues of title; is that correct? I 5 ' MR. HAUCK: I don't think so entirely, Mr. Thomson.'
I We think that the legal arrangements among the parties 6
i
.7 prevent this facility from ever being united as a qualifyin 8 facility. If it was to be legally united, that is the g trash processing and burning and steam making side, legally
( '
10 united with the electric generation side, then that 11 integrated complete unit would be physically a qualifying 12 facility.
\
13 Also, I understand that some of the interconnection --
34 some of the work necessary to meet the interconnection 15 standards is executory but that you agree to do that. We 16 don't stipul$tte that it's been done.
17 COMMISSIONER GUNTER: Where do we go?
(
18 MR. HAUCK: Well, as to Mr. Boyhan?
ig CHAIRMAN ChESSE: No, I think I understand what s
20 you're saying is that -- excuse me. I think I understand 21 what you're saying is that if it was not for the pre-
.s E ' existing agreement it would be a qualified facility. But 22
. 23 the pre-existing agreements prsclude it from being a 24 qualifying"iac1lity.
25 MR. HAUCK: Yes, sir.
' ~. .
s.
.. AARON LOVETT, PRESIDENTOWNER
REFERENCE:
MARTINDALE-HUBBELL
, U S. COURT REPORTER
' ~-
h, P.o Box 10045 e TaAagssee, Flonda 32301 e Tom (304) 222 3700'3705
PAGE: 70 ,
i CHAIRMAN CRESSE: That's the bottom line. Ithoughtf 2 if we had gotten at that point this morning at ten o'clodkl 3 we would have the issues kind of clear.
4 COMMISSIONER MARKS: If this plant, as Mr. Hauck sape t
5 if this plant was to show up today in his service area {
6 or just appeared on the scene at this point in time, ,
,7 P h ysically the plant is a qualifying facility. The l 8 physical characteristics of this plant is that it has I-
, g all the f acilities well resolved to be a qualifying facilit:
to MR. HAUCK: I guess so, Mr. Commissioner. I' 11 COMMISSIONERS MARKS: But for the contracts, it is 12 not a qualifying facility as defined by PURPA?
( 13 MR. HAUCK: That is our view, yes, sir.
14 MS. DAIRE: May I ask a question? Am I to understan d 15 that you're saying you're willing to interconnect except 16 for the issue of price right now?
17 MR. HAUCK: Ms. Reber, as we understand PURPA and 18 the Commission's rules, it's perfectly possible for a 19 utility and owner of a facility like this to enter into 20 agreements just the same as agreements that we have and 21 they be enforceable. We don't think the Commission's 22 rules supercede existing ' contractual arrangements.
23 We're. concerned'that the Commission may take the position 24 that not only can interconnection be ordered, but it 25 can take some action that transcends our existing right
(
AARoN LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER hllh, P.O. Box 10045
- Takahassee, Flords 32301
- Tesophone (904) 222 3700/3705
- -
- PAGE: D ;
i i
I i .to buy power, to buy, steam at a certain price. And ;
2 that's -- that's the companion problem that we're trying 3 to raise here in our arguments.
4 COMMISSIONER GUNTER: Counselor --
5 COMMISSIONER MARKS: Before you do that, let me !
6 qualify my last statement. I said something wrong. But
. 7 for the contract it would be a qualifying facility pursuan-l 8 to PURPA? l g MR. HAUCK: That's what I heard you say.
10 COMMISSJONER MARKS: It was a little bit ditferent 33 from that. But I think that's correct.
12 COMMISSIONER GUNTER: Counselor, let me ask you one question. In the hearings on cogeneration and testimony
( 13 14 and discussions and what have you, correct me if I'm 15 wrong, but after the PURPA rules came out and we subse-16 quently made our rules which were companioned and tailorcd 17 to fit Florida, subsequent to that time contractual arrarg-t la ments between the parties was permissible outside of the 19 -- of our rules; is that correct?
20 MS. DAIRE: By issue price, yes.
21 COMMISSIONER GUNTER: An issue price. All right.
22 Those contractual arrangem'ents which were in existence 23 prior to PURPA were also excluded, wasn't that true?
24 MS. DAIRE: Those contracts that were for the 25 Purch2se or sale of electricity were good.
.I 2
AARON LOVETT PRESIDENT / OWNER REFERENCE SHRTINDALE-HUBBELL QQ U.S COURT REPORTER k ,l P O Box 10045 + Tar.a*.assee. Fionda 32301 e TWphone (904) 222-370G"3705 l
- .
- PAGE: U l l
?
i COMMISSIONER GUNTER: Okay. Fine. I just wanted 2 to make that -- I was sure that was the way I understood
- 3. it.
k COMl!ISSIONER LEISNER: Mr. Hauck, let me ask you 5 a question.
6 MR. HAUCK: Yes, Commissioner. !
, 7 COMMISSIONER LEISNER: What if this Commission were1 8 t rder an interconnection at the price specified in g the Dade County coritract?
l 10 COMMISSIONER GUNTER: Under terms and conditions of' 11 that contract.
12 MR. HAUCK: Well, that would be acceptable to Florida 13 Power & Light Company.
g 34 CHAIRMAN CRESSE: As a matter of fact, they would 15 'be'very pleased. That's what you agreed to do in the 16 first instance; isn't that correct?
17 MR. HAUCK: Yes, sir.
f 18 CHAIRMAN CRESSE: All right, sir. Do you want to 19 proceed? You're getting the issues very narrow.
20 COMMISSIONER MARKS: I don't know if we need to 21 Proceed with this testimony because I think this testinony 22 covers what's been stipulated to.
23 MR. HAUCK: In reading it, Commissioner Marks, and 24 we have no objections to any of the questions, I think 25 it Puts before the Commission a more full picture than AARoN LOVETT, PRESIDENTK)wNER REFERENCE; MARTINDALE-HUS8 ELL U.S. COURT REPORTER h,l P.O Box 10045 e Tai.awassee. Flonda 32301
- Tene#cne (904) 222 3700/3705
..- . . - l' PAGE: 73 :
t 6 i
1 our 14 factual stipulations, including relevant portions 2 of the contract which were the very sections that we
- 3. would have put before the Conmission in our oral l i
4 testimony. So, we would not object to the testimony. ~
5 In fact, we would encourage that the record show Mr.
6 Boyhan's evidence. l
, 7 CHAIRMAN CRESSE: Without objection, it will be i copied into the record. f 8 ,
g Q Please state your name. l 10 A George E. Boyhan.
ii Q What is your profession?
12 A I am a professional engineer, f
- 13 Q How long hase you been an engineer?
14 A 37 years.
I 15 Q Where are you licensed as a professional engineer?
16 A Alabama, Florida, Colorado, New York, New Jersey, 17 two provinces in Canada.
18 Q How long have you been licensed as an engineer?
19 A Since 1952 in New York.
20 Q How long have you been licensed in Florida?
21 A 10 years.
22 Q Where did you get you'r college degree and in what 23 area?
24 A I received a B.S. in mechanical engineering from 25 Stevens Institute of Technology in 1944.
1 AARON LOVETT, PRESIDENT / OWNER REFERENCE. MARTINDALE-HUBBELL U.S. COURT REPORTER Mlb,l P.O Box 10045 e Tana%ssee. Fence 32301 e Tewohone. (904) 222 3733705
PAGE- 74 '
.o* ,
I
-t 1 Q Did you do any graduate work?
2 A I took graduate courses in 1950-51 at Renssalear i
- 3. Polytechnic Institute.
A Q Are you a member of any professional societies?
5 A Yes, the American Society of Mechanical Engineers ,
6 and Technical Association of the Pulp and Paper Institute.
7 Q Have you written any articles?
8 A Yes, Ihavewrittenarticlesrelatingtotheuseoff 9 tropical hardwood in producing pulp and paper, the use of l
10 bagasse, an agricultural residue left over in the manufacture 11 of raw sugar, in the manufacture of paper, and the problems 12 of building manuf acturing plants in less developed countries.
g 13 Q What is your present job?
14 A Actually, I have three. Executive Vice President 15 of Resources Recovery (Dade County), Inc., Vice President of 16 Resources Recovery (Dade County) Construction Corp., and 17 Vice President of Parsons & Whittemore, Inc.
(,
18 Q Where do you work?
19 A I work at,the resource recovery facility located in 20 Dade County, Florida, which was built by Resources Recovery 21 (Dade County) Construction Corp. and is operated by Resources 22 Recovery (Dade County), Inc.
23 Q What do you do there?
24 A Presently I run the operation of the facility. Befc rt 25 that, I had substantial responsibility for design of the
.(
~
AARON LOVETT, PRESIDEN7/ OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER hll ,l P O Box 10045 + Tariahassee. F4onda 32301 + To.ephone (904) 222 370G3705
... .. - PAGE: 75 ;
. l ,
i i
i facility, and I was in charge of construction of the facility.,
2 Q What was your job prior to working at the resource recovery facility? '
3.
A 4
I participated in the design, development, construc-l 5 tion and operation of the Alabama River Pulp Company pulp 6 mill, a plant which converted soft and hard woods into 7 bleached hard wood and soft wood pulp for world markets. -
l 8 Q During what period of time did you work there?
9 A 1975-1979.
10 Q What did you do prior to working for Alabama River I i
13 Pulp Company?
12 A I held similar positions and performed similar
. 13 functions at the St. Anne Pulp and Paper Mill and the Prince 14 Albert Pulp and Paper Mill in two provinces in Canada.
15 Q Are you f amiliar with the manner in which solid 16 waste is processed and electricity generated in the resource 17 recovery facility?
18 A Yes, I am.
19 Q Would you please describe the general function of 20 the resource recovery facility?
21 A The resource recovery facility is an integrated 22 facility designed to receive and process certain types of 23 contractually defined solid waste. Essentially the facility 24 - accepts solid waste and separates the solid waste into combust-25 ible and non-combustible portions. Recyclable materials in
(
l AARoN LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL
@[ U.S. COURT REPORTER b(ll , P O Bor 10045 e Teha%ssee. nonda 32331 e Ts ephone (904) 222-37003705
PAGE- 76
,'o* i I
i of i the non-combustible portions such as aluminum, scrap netal 2 and glass are captured and sold, non-recyclable portions are
- 3. landfilled. The combustible portion of the solid waste is ,
4 processed into fuel. The fuel is sometimes called " refuse 5 derived fuel." Fuel produced from the solid waste is burned 6 to raise steam which in turn is used to drive turbo-generator.S 7 to produce electricity. l 1
8 Q Have you examined the document that has been marked 1
g as Petitioners' Exhibit 3 and that is attached to this io testimony?
it A Yes.
12 Q Could you describe what Petitioners' Exhibit 1 is?
, 13 A Yes, it is an aerial photograph of the layout of 14 the resource recovery facility.
15 Q Does Petitioners' Exhibit 1 fairly and accurately 16 Portray the layout of the resource recovery as it appears 17 today?
I 18 A Yes.
19 Q Is there anything different about the resource 20 recovery facility today as opposed to the way it is depicted 21 in the photograph?
Yes. Because construction had not been completed
~
22 A 23 when the photograph was taken and constructi'on now has been 24 completed, certain changes have occurred. The facility site 25 now has been cleared of the debris that is shown; and items t
0 AARoN LoVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER
,l P o Box 10045
- Tanahause. Fbnos 32301
- Te phone (904) 222-3700'3705
PAGE 7~ ;
l i
1 that were not finally completed now are. The layout of the 2 buildings, is, however, the same.
- 3. Q What is depicted on the photograph?
E A The two parts of the resource recovery facility --
5 the solid waste processing part and the power plant part.
6 Q Would you indicate bv reference to the letter design,a-
,7 tions on Petitioners' Exhibit 1 the solid waste processing 8 part of the resource recovery facility?
g A The refuse processing plant is designated by the
\
10 letter "A".
11 Q Would you indicate by reference to the letter 12 designations on Petitioners' Exhibit 1 those parts of the 13 resource recovery facility that constitute the power plant?
14 A The Fuel Storage Area is designated by the letter 15 B. This is the building in which resource derived fuel is 16 stored for e>centual use in the boiler. The four boilers are 17 designed by the letter "C". The four electrostatic precipita-4 18 tors connected to the boilers are designated by the letter 19 "D". The two stacks are designated by the letter "E". The 20 two condensors are designated by the letter "F. The cooling 21 tower is designated by the letter "G". The two turbogeneratons 22 are designated by the letter "H. And the two step-up 23 transformers, transmission' lines and switch yards are designated 24 by the letter "I". I should note that only the beginning 25 of the high voltage line appears in Exhibit 1. The line i
s AARoN LoVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUB 8 ELL U.S COURT REPORTER hllk,l P.o Ben 10045 e Tar,aussee. Fionda 32301
- Te4 phone (904) 222 3?00"3705 t
PAar: 76 I
I l
j continues for about three-quarters of a mile, with a second I, l
2 switch yard near the end of the line. I I
3 Q In general, how is the refuse derived fuel manufac-4 tured?
5 A Generally speaking, the facility uses machinery to 6 separate the combustible and non-combustible fractions and ;
i
.7 then to convert the combustible fraction into a uniform low 8 density fuel.
9 O Have you examined the document that has been marked 1
10 as Petitioners' Exhibit 2 and attached to this testimony?
ji A Yes.
12 Q What is it?
I 13 A It is an operational diagram of the entire facility.
34 Q Is Petitioners' Exhibit 2 a fair and accurate 15 representation of the manner in which the resource recovery 16 facility processes solid waste and generates electricity?
17 A Yes.
I' is Q How is electricity generated?
ig A The fuel processed from the solid waste is burned in 20 conventional boilers to raise steam. There are four boilers, 21 all available to feed steam to each turbine. Only three 22 boilers need to operate at any bne time for the facility to 23 operate at des'ign capacity. The idle boilers will serve as 24 backups. The steam drives the two conventional turbogenerator s 25 and from there discharges into a large condensor, one located
(
AARON LoVETT. PRESIDENT / OWNER REFERENCE- MARTINDALE-HUBBELL U.S. COURT REPORTER hllh, P o Bos 10045
- Tana$essee. Fonda 32301 e Teasohone (904) 222-370&3705
E PAGE: 79
.. - ,- ;,I t
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i under each of the two turbogenerators. The cooling water 2 from the condensors flows to a conventional cooling tower .
3 with six cells and the coolad condensate is then returned to l 4 the boilers. The waste ash is fed into bins for ultimate l
'5 rale, if possible. l I
6 Q Have you examined the document that has been marked i
~7 as Petitioners' Exhibit 3 and that is attached to this testimon' i
g A Yes.
l 9 Q Could you identify it? '
( .
10 A It is an operational diagram of the manner in which*
11 electricity is generated.
12 Q Is Petitioners' Exhibit 3 a reasonably accurate repre-
, 13 sentation of the manner in rhich the resource recovery facility 14 generates electricity? ,
15 A Yes, it is. I would only add that Petitioner's Exhib f 16 3 is not entirely complete in that it does no' depict the 17 fuel storage building which is also part of the power plant.
I 18 Q Turning back now to the construction of the resource 19 recovery facility, who built the facility?
20 A The facility was built by R'esources Recovery (Dade I 21 County) Construction Co. as assignee of Resources Recovery 22 (Dade County), Inc.
23 'Q For whom was it built?
24 A The facility was built for Dade County pursuant to a 25 series of contracts.
I AARON LOVETT. PRESIDENTOWNER REFERENCE MARTINDALE-HUBBELL U.S. COURT REPORTER hllh, P O Scz 10045
- Tamause. Fonca 32301
- To+m (904) 222-370G1705
pact. 60 t
i 9 Are you familiar with those contracts?
2 A Yes, I've had to work with them continuously.
3 Q Would you describe the contracts pursuant to which
[ the resource recovery facility was built' 5 A There were four contracts. Under the first, called 6 the Purchase Contract, Resources Recovery (Dade County) Inc.
7 agreed to construct the soild waste processing part and the ;
i R major portion of the power plant part of the resource recovery g facility for Dade County. Under the second, the Management 10 Contract, Resources Recovery (Dade County) Inc. agreed to 33 operate the facility for 20 years. Under the third, the 12 " Agreement for Assumption of Rights and Obligations Under i 13 Electrical Generation Facility and Steam Delivery Agreenent,"
34 which I will refer to as the Assumption Agreement, Resources I I
15 Recovery (Dade County) Inc. agreed to assume the County's 16 obligation to sell to FP&L the remaining portions of the power 17 plant part of the resource recovery facility. The County had I
18 undertaken that obligation pursuant to a contract with FP&L 19 entitled the Electrical Generation Facility and Steam Delivery.
20 Agreement. I will refer to that contract as the EGF Agreement .
i
! 21 Q Did the EGF Agreement specify what portions of the 22 Power plant were to be conveyed'to FP&L?
23 A Yes.
24 Q Have you reviewed those contracts to determine those 25 portions of the power plant that were to be conveyed to FP&L?
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AARoN LOVETT, PRES / DENT / OWNER
REFERENCE:
M ARTINDALE-HUBBELL U.S. COURT REPORTER hllh, P.O Bon 10045
- Tanahassee. Fionda 32301 e Toephone (904) 222-37043705
PAGE: 8) .
, I iI 4'
1 A Yes. !
2 Q Have you reviewed the document narked as Petitioner '
i 3_ Exhibit 4 and that is atthched to this testimony?
4 A Yes. !,
5 Q What is Petitioners' Exhibit 4? !
l 6 A It is a compilation of those sections of the EGF !
,7 Agreement that define what portions of the power plant part l
8 of the resource recovery facility were to be conveyed by g Resources Recovery (Dade County), Inc. to FP&L.
(
10 Q What parts of the power plant were to be conveyed by 11 Resources Recovery (Dade County), Inc?
12 A Under the EGF Agreement with the County, FPEL was 13 to acquire title to contractually defined transmission 14 facilities and the generation facilities.
15 Q What were the transmission faci'lities?
16 A The transmission facilities included the following:
17 First, a complete 240 KV switch yard. Second, a 240 KV three-18 phase overhead transmission line. Third, a complete substaticn 19 including 13.8-240 KV transformers.
20 Q What was included in the generation facilities?
21 A The generation facilities included two 38 megawatt 22 turbine generator systems.
23 Q What were these transmission and generation faciliti e:
24 called under the EGF Agreement?
25 A Under the EGF Agreeuent, they were called the Ela:tries
- l AARON LOVETT. PRESIDEN7/ OWNER
REFERENCE:
MARTINDALE HUBBELL U.S COURT REPORTER h,k P O Bom 10045 e TallaMassee, Flonca 32301 e To.e:*one (904) 222-3W3705
PAGE. 62 1 Generation Facility. j 2 Q Was the entire power plant part of the resource I 3 recovery facility to be conveyed to FP&L? ,
E A No. Only a minor fraction of the power plant component was to be conveyed. 5 5
6 Q What was to happen with the remaining narts of the ;
i 7 power plant? l
{
l 8 A Dade County was to receive and retain title to those g parts, along with all of the waste processing part, pursuant
(
10 to the terms of-the Purchase Contract.
11 Q what parts of the power plant oftheresourcerecovelr:
l 12 f acility were to be conveyed to the County?
! 13 A The foar ooilers, the two condensors, air ejectors,j 14 condensate pumps, the cooling tower, the fuel storage and 15 handling equipment, the four precipitators, mechanical 16 cyclones, and the two stacks were to be conveyed to and owned 17 by the County.
i 18 Q What was the purchase price of that part of the 19 resource recovery facility that was to be sold to Fp&L?
20 A Approximately $21 million.
21 Q Is $21 million half of the power plant part of the 22 facility?
23 A No, it is way less than half.
24 Q What was the purchase price of that portion of the 25 resource recovery facility that was to be sold to the County?
I AARON LOYETT, PRESIDEN70wNER REFERENCE, MARTINDALE-HUBBELL U.S. COURT REPORTER hllh, P O Bos 10D85 e Taraussee. Fionda 32301
- Tog %one (904) 222-37003705
, , . so
- PAGE- b3 g
- t' 1 A Approximately S128 million.
2 Q Of the $150 million total purchase price for the t 3 resource recovery facility, what proportion was attributable !
. I 4 to the power plant part of the facility? I 5 A Well over half.
6 Q Has the County paid any portion of the purchase 7 Price for the resource recovery facility? f 8 A No.
g Q Has Florida Power & Light paid any portion of the '
\ f 10 Purchase price for the resource recovery facility?
ii A No.
12 Q Have you reviewed the Purchase Contract to identify 13 those provisions that set forth the conditions for the 14 passa'ge of title to the various parts of the resource recovery 15 facility that are to be conveyed to the County under that 16 contract?
17 A Yes.
18 Q Have you reviewed the document that has been marked 19 as Petitioners' Exhibit 5 and that is attached to this 20 testimony?
21 A Yes.
22 Q Wh i t .s Petitioners Exhibit 5?
23 A Petitioners' Exhibit 5 sets out all the provisions 24 of the Purchase Contract that set forth the conditions that 25 must be satisfied before title will pass to the County.
AAEON LOVETT, PRES! DEN 7/ OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER
, P o Box 10045 + Ta'eassee Fonca 32301 + Tee:tcre (904) 222-37003705
PAGE: 64 4 l 1 Q What are these conditions?
l 2 A Essentially title passes to the County upon payment i
- 3. of the contract price or the percentage of the contract price i due upon substantial completion of the facility, whichever 5 5 first occurs.
6 Q Has payment of the contract price or any portion 7 of the contract price been made by the County?
8 A No, it has not. l l
g Q Has title to any part of the resource recovery 10 facility passed to Dade County?
11 A No, it has not.
12 Q Who presently holds title to the resource recovery 4 13 facility?
14 A Resources Recovery (Dade County) Construction Corp.
15 constructed and presently owns the facility.
16 Q Who presently operates the resource recovery facility' 17 A Resources Recovery (Dade County), Inc.
I 18 Q Have you reviewed the EGF Agreement in order to 19 identify those provisions that set forth the conditions for 20 the passage of title to the parts of the resource recovery 21 facility that were to be conveyed to FP&L?
22 A Yes.
23 Q Have you reviewed the' document that has been marked 24 as Petitioners' Exhibit 6 and which is attached to this 25 testimony?
N(a
~. AARoN LoVETT, PRESIDENT / OWNER REFERENCE. MARTINDALE-HUBBELL
@[ U.S. COURT REPORTER ill ,l P.O. Box 10045 Tana .assee. Florida 32301 + Te4 phone (904) 222 3700 3705
PAGE: E5 e i 1 A Yes.
2 Q What is Petitioners' Exhibit 6?
3 A Petitioners' Exhibit 6 sets out all the provisions
'4 of the EGF Agreement that set forth the conditions that 5 must be satisfied before title to the transmission facilities 6 and generation facilities will pass to FPLL.
7 Q Are you familiar with those c*onditions? -
. I 8 A Yes.
g Q Has title to any part of the resource recovery l
10 facility passed to FP&L?
ii A No, it has not.
12 Q Who presently holds title to those parts of the 13 resource recovery facility that were to be conveyed to FP&L?
(
14 A Resources Recovery (Dade County) Construction Corp.
15 does.
16 Q Who presently operates those parts of the resource 17 recovery facility that were to be conveyed to FPkL?
18 A Resources Recovery (Dade County), Inc.
19 Q Has the construction of the facility been conoleted?,
l 20 A Yes.
21 Q Is the facility operational at this time?
22 A Yes.
23 Q When did'the facility become operational?
24 A The facility became operational as of January 9, 19E l.
25 As of that date, the facility was capable of accepting solid u(
AARoN LOVETT. PRESIDENT / OWNER
REFERENCE:
MARDNDALE-HUBBELL U.S COURT REPORTER p, P O Bon 10045 o Tana%ssee, Florca 32301 e Toephone (904) 222-3700 3705
PAGE: 66 g ff l '
a' 3 waste, separating combustible and noncombustible portions, 2 and producing steam and generating electricity from the 3 combustible portion, j Q Has the resource recovery facility been accepting i
5 and processing solid waste? 8 l
6 A Yes. Starting in April 1981 and continuing to the !
Present time, the resource recovery facility has been i
.7 8 accepting and processing solid waste.
9 Q How much solid waste has the resource recovery faci 11 10 processed since April 1981?
y A Since April 1981, the resource recovery facilitt i
12 has processed 5,505 tons of solid waste.
13 =Q Has the resource recovery facility been generating l 34 electricity from the processing of solid waste?
15 A Yes. Since April the resource recovery facility 16 has generated 2,010,000 kilowatt hours of electricity.
17 Q Wnat does the resource recovery facility do with 18 the electricity it generates?
ig A The electricity is used to operate the resource 20 recovery facility.
21 Q What is the design capacity of the resource recovery 22 facility for processing of solid waste?
23 A The design capacity for processing solid waste is 24 3,000 tons of solid waste per day, or 18,000 tons per week.
25 Q Is the resource recovery facility presently capable s
AARON LoVETT, PRESIDENnoWNER
REFERENCE:
MARTINDALE-HUBBELL U.S COURT REPORTER ll , . P o Bos 10045
- TaRaw. Fonce 32301 e To ophone. (904) 222-37003705
,,e .. .
PAGE: bI I
. t I
(
1 of processing the design capacity of 3,000 tons per day of 2 18,000 tons per week without an interconnection?
3 A .No .
E Q Why not?
5 A Because the facility has not been interconnected 6 with the FP&L transmission grid.
,7 Q Why is the resource recovery facility not canable l 8 of operating at design capacity absent an interconnection?
g A Without an interconnection, the resource recovery 10 facility can only generate as much electricity as the plant it itself can use. This limitation on the amount of electricity 12 the facility can generate limits the amount of steam that 13 the facility can produce. The resource recovery facility is 14 not equipped to handle or dispose of an' steam that cannot 15 be used to generate electricity. Therefore, the resource 16 recovery facility can process only the amount of steam which 17 can be used to generate electricity for the resource recovery
(
18 facility's own use.
19 Q How much solid waste can the resource recovery 20 facility process absent an interconnection?
21 A The resource recovery f acility can process approxistel_
l 22 600 tons per dav to produce the' maximum useable level of steam.
23 At times, the resource recovery facility has processed up 24 to 1,000 tons of solid waste' and stored the excess refuse-25 derived fuel. Operation at this level cannot be sustained,
(.-
AARON LOVETT,PRESIDENTCWNER
REFERENCE:
MARTINDALE-HUBBELL U.S COURT REPORTER
,l P.O Bos 10045 e Tana$assee. Fenca 32301 e Te+ phone- (904) 222-37003705
PAGE: 6S
- l
- i i however, because storage capacity for the fuel is limited to 2 9,000 tons.
3 Q Since the resource recovery facility began
~
I 4 processing solid waste, what costs, if any, has the facility l 1
5 incurred?
6 A It is very costly to operate the facility; the facil'i 4
7 has incurred significant labor, maintenance, andothercosts.f b Q Is Resource Recovery (Dade County), Inc. orResourcel5 g Recovery (Dade County) Construction Corp. incurring any 10 other costs in connection with the resource recovery facility?;
it A Yes. Resources Recovery (Dade County) Construction l
12 i Corp. is currently paying to its banks approximately 380,000 4 13 Per day ,in interests costs.
14 Q What do these interest payments represent?
15 A Interest payments on loans incurred for construction i
16 of the facility which remain unpaid because neither the County I
i 17 nor FP&L has paid anything for the construction of the facility
' l 18 9 What is the power production capacity of the resource 19 recovery facility?
20 A The resource recovery facility has an installed 21 Power production capacity of 77 megawatts.
22 Q What is the primary energy source for the resource 23 recovery facility?
24 A The primary energy source for the resource recovery 25 facility is refuse-derived fuel, made from municipal solid 3
AARoN LOVETT, PRESIDENT, OWNER REFEAENCE MARTINDALE HUBBELL U.S COURT REPORTER h, . P.O Ben 10045 e TeneMueo. Fenoa 32E1
- Te+:fone (904) 222-37003705
PAat bb I
i waste biomass. l 2 Q What do you mean by biomass?
3 -A Materials not derived from fossil fuel.
'4 Q Is Resource Recovery (Dade County) Construction I
5 Corp. an electric utility or part of a public utility holding 6 company system? I 7 A No. !
~
l 8 Q Is Resources Recovery (Dade County), Inc. an electrife I
g utility or part of a public utility holding company system?
10 A No.
ii Q Has Resources Recovery (Dade County), Inc. given 12 notice to FERC of the status of the resource recovery facility 13 as a qualifying power production facility?
(
14 A Yes. On March 13, 1981, Resources Recovery (Dade 15 County), Inc. submitted to FERC a Notice of Qualification, 16 Pursuant to 18 C.F.R. S 292.207(a) of A Resource Recovery 17 Facility in Dade County, Florida, As a Qualifying Small i
18 Power Production Facility.
19 Q Are you familiar with the Notice of Qualification 20 submitted by Resources Recovery (Dade' County), Inc. to FERC?
21 A Yes, I signed it.
22 Q Have you reviewed the' document marked as Petitioners '
23 Exhibit 7 that is attached to this testimony?
24 A Yes.
25 Q What is it?
k..
AARON LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE.HUBBELL U.S. court REPORTER hllh,l P.O. Box 10045 e Tanahassee. Fbnce 32301 e Teiephone (904) 222 3700/3705
pAag 90 ;
I i
1 A It is a copy of the Notice Resources Recovery (Dade 2 County), Inc. filed with FERC.
3 Q What utility serves the area in which the resource 5 recovery facility is located?
I 5 A FPEL serves the area in which the resource recovery 6 facility is located.
~
7 Q Has Resources Recovery (Dade County), Inc. requested 8 interconnection with FP&L's transmission grid?
9 A Yes. On June 11, 1981, by a letter from me to 10 Robert Tallon, Executive Vice President, FP&L, Resources 11 Recovery (Dade County), Inc. formally requested FPEL to 12 interconnect the resource recovery facility.
I 13 Q Have you reviewed the documcnt marked as Petitioners '
14 Exhibit 8 that is attached to the testimony?
15 A Yes.
16 Q Can you identify it?
17 A Yes, it is the letter of June 11, 1981, that I
(
18 sent to Robert Tallon, requesting interconnection.
19 9 What did FPLL do in response to Resources Recovery 20 (Dade County), Inc.'s request for interconnection?
21 A Resources Recovery (Dade County), Inc. did not 22 receive a response from FP&L.
23 Q What did Resources Recovery (Dade County), Inc.
24 do upon receiving no response?
25 A FPLL did not respond to Resources Recovery (Dade
(
AARoN LoVETT, PRESIDENT / OWNER ^ REFERENCE. MARTINDALE-HUBBELL U.S. COURT REPORTER h,l P.O Bos 10045
- Tena%uee. Flonda 32301 e To ophone (904) 222 37003705
PAGE. 91 ;
i i
1 County), Inc.'s request for interconnection. Resources 2 Recovery (Dade County), Inc. then filed a petition dated fune 3 24, 1981 for interconnection before this Commission to I
i require FP&L to interconnect the resource recovery facility.
l 5 Q Has Resources Recovery (Dade County), Inc. agreed !
6 to pay the cost of interconnection as specified in the 7 Florida Public Service Commission rules? l 8 A Yes. As stated in the letter of June 11, 1981 g from me to Tallon, attached as Petitioners' Exhibit 8, Resource:
(
10 Recovery (Dade County), Inc. has agreed to pay FPEL any costs:
ij of interconnection. We have already paid for all the trans-12 mission, switching and transformation equipment in the 13 facility.
14 Q Has Resources Recovery (Dade County), Inc. agreed 15 to meet the system safety standards for interconnection 16 developed by FP&L?
17 A Yes. As stated in the letter of June 11, 1981, f~
18 attached hereto as Petitioners' Exhibit 8, Resources Recovery 19 (Dade County), Inc. has agreed to meet the system safety 20 standards for interconnection develop'd e by FP&L in accordance 21 with applicable rules of the Florida Public Service Commissioq.
22 .Q Did Resources Recover'y (Dade County) Construction 23 Corp. construct those parts of the power plant of the resource 24 recovery facility that were to be conveyed to FP&L under the 25 Assumption Agreement pursuant to the specifications that
-(
AARoN LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U S. COURT REPORTER h ll ,l P.O. Box 10045
- Tanahassee Fonda 32301
- Teestene (904) 222 3700'3705
PAGE- 92 .
i
! +
i FPLL required in its EGF Agreement with Dade County? !
2 A Yes, with one clarification agreed to by FPkL con- l 3 cerning the turbines.
l E Q Did FPkL take any steps to find out whether the l 5 resource recovery facility was constructed in compliance .
6 with its specifications?
,7 A Yes. ,
8 Q Please describe those steps.
I 9 I Q First, FP&L received a copy of and had an opportunity
(
10 to object to all drawings related to those portions of ,
it the resource recovery facility that were to be conveyed to FDLL.
12 Q Did FPEL ever send back drawings with modifications
, 13 and corrections?
14 A Yes.
15 9 In addition to reviewing drawings, did FP1L take any, i
16 other steps to determine whether Resources Recovery (Dade l 17 County) Construction Corp. was in compliance with its i
18 specifications?
19 A Yes. FPEL had personnel at the site to observe the '
20 construction.
21 Q How many employees did FP&L have at the site?
l 22 A Lennard Averett super' vised the FPEL oversight of i 23 construction and he was on the sit'e full time since the 24 early days of construction. FPEL had other technical personnel 25 on the site at all times, but the number and identity of
.(
s AARON LOVETT, PRESIDEN7/ OWNER REFERENCE MARTINDALE-HUBBELL U.S. COURT REPORTER
, P o Ben 10045 + Tana*mssee. Fenca 323C1
- Te+ phone (904) 222-37003705
PAGE 93 t c
i
.{ l i these employees varied depending upon the phase of construction.
. I 2 Q Was FPLL given access to observe construction? l l
3, A Yes. FP&L personnel were allowed to observe the l 5 construction. <
5 Q Did FPEL personnel inform Resources Recovery (Dade i i
6 County) Construction Corp. of any modifications or changes :
7 in construction that it wanted? 4 8 A Yes. FP&L personnel held routine monthly meetings g with Resources Recovery (Dade County) Construction Corp.
(,
10 Personnel to discuss construction progress and plans. At ji those meetings, FP&L informed Resources Recovery (Dade 12 County) Construction Corp. of any changes that would be 13 required to conform to its specifications.
(
14 Q As a result of those meetings, did Resources Recovedy 15 (Dade County) Construction Corp. ever modify its construction 16 Plans?
17 A Yes.
(
18 Q Has the facility been constructed completely in 19 accordance with the specifications that FP&L required in its 20 EGF Agreement with Dade County?
21 A Yes.
22 Q Do you know whether FP&L was reimbursed for the 23 time its personnel spent' overseeing construction of the 24 facility?
25 A Resources Recovery (Dade County), Inc. received
.k AARoN LOVETT. PRESIDENTowNER
REFERENCE:
MARTINDALE-HUBBELL U.S COURT REPORTER
, P O Box 10045 e Tana$am. Fionda 32301 e Tewone (904) 222 370G1735
... l PAGE: 94
,.o i
I
-(
1 from the County a copy of a document entitled " Florida Power 2 & Light Summary Actual Cost & Billing," dated December 10, 3_ 1980. The bill sets out a cost of $257,484.66 forengineerinh E and overhead relating to the facility. The County informed 5 Resources Recovery (Dade County), Inc. that the County had I
6 paid the $257,484.66 to FP&L, and the County requested
, 7 Resources Recovery (Dade County), Inc. to reimburse the County; 8 for this payment.
g Q Have you examined the docunent that has been marked
(.
10 as Petitioners 5 Exhibit 9 and attached to this testimony?
13 A Yes.
12 Q Can you identify it?
13 A Yes, it is the bill from FP&L that I just referred to.
14 MR. THOMSON: And I gather that the exhibits referred 15 to therein would be admitted?
16 CHAIRMAN CRESSE: We will identify the exhibits 17 as Petitioners' Exhibit I will be Exhibit 1, Petitioners'
(
l 18 Exhibit 2 will L< Exhibit 2. Petitioners' Exhibit 3, the 19 map, 4, 5, and what is 8?
20 MR. HAUCK: We have some cr'ss o examination.
21 CHAIRMAN CRESSE: I understand. I'm just trying 22 to get them identified.
23 COMMISSIONER NICHOLS: 6, 7 and 8.
24 CHAIRMAN CRESSE: Are there any exhibits other than 25 9?
.(
s AARON LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUSSELL U.S. COURT REPORTER h ll h ,l . P.O. Bon 10045 e Talia%ssee, Fionda 32301 e To.ephone (904) 222 3700/3705
% .. + ! PAGE: 95 ,
i I
i l
I' 1 COMMISSIONER NICHOLS: You're right. I've got 9. l 2 MR. THOMSON: There are nine.
3 CHAIRMAN CRESSE: All right, sir. And nine exhibits, I,
4 will be identified as Exhibits 3 through 9; is that co rrec -
t 5 Counselor? j 1
6 MS. DAIRE: Yes. l
, 7 (The instruments last above-referred to were marked l 8 as Exhibits I through 9 and admitted into evidence.) f I
g MR. THOMSON: We have no further questions of Mr. l
\ f 10 Boyhan oc. that basis. We believe that the stipulation l
t ji plus his testimony says that we have met the qualific. tion 12 rule -- I mean the interconnection rule.
( 13 CHAIRMAN CRESSE: Mr. Hauck.
14 CROSS EXAMINATION ,
15 BY MR. HAUCK:
16 O Do you have a copy of your testimony before you, 17 Mr. Boyhan?
f IB A I don't have one here now, no.
19 Q You want to go from memory?
20 A I better not.
21 (Short pause.)
22 Q Mr. Boyhan, on Page 8'of your testimony, the questioni '
23 is stated ras title to any part oftheresourcesrecoveryfacilln:
24 passed to Dade County and you answered no, it has not.
25 What is the reason that title has not passed to Dade County?
AARON LOVETT PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER
,l P.O Box 10045
- Ta:a$essee. Ftrea 32301 e To ephone (904) 222 37003705
PAGE: 96 i
('
1 A Dade County has not paid for the facilities. ,
l 2 Q And it has not been transferred? l 1
3 A No, it has not.
l 4 Q To them. Do you know of any reason to believe thatl 5 if Resources Recovery were to transfer title to the facility -j-6 to the County, that the County would not transfer title to ;
7 the EGF, Electric Generation Facility,~to Florida Power L Liglit 8 Company as its contract provides?
g A
(
I don't think I can respond as to what the County -I 10 Q Do you know of any reason why they wouldn't do that?!
I ii A I'm sorry. Your question is if title was transferre'd 12 to the County, do I know of any reason why the County in turn 13 would not transfer title to FPL?
(
. 14 Q Right.
15 A I don't think I can respond to that question. I l 16 don't know what the County's reaction may be.
17 Q You can respond --
(
18 CHAIRMAN CRESSE: The question was, sir, do you 19 know of any reason. He didn't ask you did you know what 20 the County would do. Do you knoiv of any reason they 21 would not do it?
22 WITNESS BOYHAN: Not o 'ffhand, no.
23 Q On Page 10 of your testimony you discuss the present 24 operating arrangements of the plant. Does the plant have a 25 reliable source of solid waste?
AARON LoVETT,PRESIDEN7/ OWNER
REFERENCE:
MARTINDALE-HUBBELL
@{- U.S. COURT REPORTER h,hb P.O. Box 10045 e Tanamassee. Fionda 32301 e To ophone (904) 222 3700'3705
- 't , , , - .
i ;- -
. . . . - pi PAGE: 97 [
I 5
Q n .
33 .,-
3 %;
'A We're recei"ing solid waste today Irom indeoendent
- 2 callers. We have been able to get up to about 1000 tons a
, 3 day. I would say it's reasonably reliable up to that level.
w And how %many megawatts of generation would that 4 Q
~g 5 support?
,6 A Oh, I would say we could put out about 10 meras, f
7 Q Do you anticipate that outside of a --
8 A Let me just clarify that. That's about the maximum
.s g we have produced under those conditions.
( -
10 Q I see. Do you anticipate that another source of
. 11 Solid waste, then Dade County would be available?
12 A I t ' s p o s s i E'l e .
i 13 Q Do you anticipate that it will be?
14 A It's a question of transport costs really. We have
. 15 l some waste now coming in from Broward. Just how much we could 16 build this up to, I don't know. We looked into it six or 17 eight months ago and it looked like we could get up to 2000,
-l' 18 2500 tons.
ig Q Would the Dade County source of solid waste be the 20 optimum source for which the plant was designed?
% A I don't know as I can answer that. There are about 22 eight private haulers involved down there. As to which would 23 be most optimum, it's a transport question and we have never 24 r'eally investigated that.
25 Q Well, is it your testimony that it would be possible
~.
Q
^
- AARoN LoVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE.HUBBELL Q@{ U.S. COURT REPORTER k ,l P.O Box 10045 e Tanahassee. Fbnca 32301 e Te4 phone (904) 222 37003705
... . . . ! PAGE: 98 e i
1 or likely that the plant could operate at full capacity with 2 the source of garbage other than Dade County's garbage?
- 3. A I don't think at full capacity, no. But frankly, 4 I must confess, I'm not sure of that. We've never taken it f
5 to that limit and we've never investigated it' thoroughly. l I
6 We have some indications from the private haulers, as I say, i
.7 that we could get up to over 2000. But whether we actually :
a could or not is a question. And also please bear in mind the g nature of that solid waste is considerably different than to what we get from household garbage.
13 Q Of the 10 megawatt output level that you've achieved, 12 how much of that is used on site?
All of it.
( 13 A 14 Q So, there's no net output at 10 megawatts?
15 A At that level there was none, but we were running 16 all kinds of idle machinery.
17 COMMISSIONER GUNTER: Mr. Hauck, let me ask a t
18 question, if I may. Mr. Boyhan, are you planning on 19 operating this plant on six days a week?
1 20 WITNESS BOYHAN: The basic 'et s up in this -- on this 21 P l ant is we'll be receiving solid waste six days a week.
22 We have 6000 tons of stora'ge in our pit. We have 9000 l l
23 tons of storage in the fuel storage. We'd be receiving i 24 garbage six days a week and running that generating 25 facility seven days a week.
(
1 Qg' .
AARON LoVETT, PRESIDENT / OWNER U.S. COURT REPORTER
REFERENCE:
MARTINDALE-HUBBELL ll , P.O. Box 10045
- Tsushassee. F1onda 32301 e Te4 phone (904) 222-3700'3705
'.* ** - PAGE: 99 i
6
( '
1 COMMISSIONER GUNTER: The reason I asked is I looked 2 on Page 10 and I had another document I was looking at i I
3 and trying to reconcile figures. And on your -- in respo.n-4 to a question asked on Page 10, Line 359, through your I 1
5 response on Line 362, I was just trying to clarify that. '
6 You're saying design capacity in the process of solid
'7 waste is 3000 tons of solid waste per day or 18,000 t o r.s i
g per week. Actually you would process more than that, !
I 9 would you not?
(.
10 WITNESS BOYHAN: Actually we receive over six days si an average of 3,000 tons a day for 18,000 over a seven 12 day week. But whatever surplus we have that doesn't go
, 13 into our boilers, goes into the fuel storage and we run 14 over the Sunday from that storage capacity.
15 COMMISSIONER GUNTER: Do you have enough experience 16 to know how much actually you can dispose of through 17 this system? How much you burn in order to-generate i
18 electricity, theoretical or practical. If you're going 19 to run at capacity, how much garbage are you going --
20 WITNESS BOYHAN: Well, very'quickly I can give you 21 annual numbers which I think have already been cited herc .
22 This plant is designed to process 936,000 tons a year, 22 short tons of solid waste. And we can generate from 24 that approximately 350,000 megawatts net out which is 25 probably about, oh, at about 100 to 1000 for plant uses,
(
AARON LOVETT, PRESIDENT / OWNER REFERENCE- MARTINDALE-HUBBELL U.S. COURT REPORTER h,l P.O. Son 10045 e Takahassee. Flonca 32301
- To oprone (904) 222-37003705 e
PAGE: 100 :
t I
1 so I'd say up around a 450,000 gross level.
2 COMMISSIONER GUNTER: All right.
- 9
- 3. MR. HAUCK: May I proceed, Commissioners?
4 CHAIRMAN CRESSE: Go ahead.
5 BY MR. HAUCK:
6 Q Mr. Boyhan, under the original contract, sir, who
,7 was to own and operate the electrical generation facilities? l 1
8 A Under the original contracts, and you're relarring g to the EGF contract, Florida Power & Light. j 5 ;
10 Q And how would it obtain title and sequence of 13 transactions under the original arrangements?
12 A Well, that's a pretty complicated transfer of title.
I don't know if I can cover it in detail. I believe the
( 13 14 title was initially to go La the County and then ultimately 1
15 go to FPL.
16 Q And then FPL was to buy the facility from the County ;
17 is that correct?
t 18 A I believe that's correct. Well, when you say buy it ,
19 you are going to buy it through the vehicle of deducting 20 from the power we generated.
21 Q An installment payment arrangement?
l 22 A Beg your pardon?
23 Q Would you say that's an installment payment arrange-l 24 ment?
25 A Yes, over 2r years.
<(
s- .
1
! AARoN LOVETT, PRESIDENT / OWNER REFEnLNCE. MARTINDALE.HUBBELL U.S. COURT REPORTER
,l P.O. Box 10045 e Tana*.assee. Fonda 32301 e Teaeonone (904) 222-37003705 t
s* **
- PAGE: 3OI
}
(
1 Q This is covered in your Exhibits 4, 5, and 6; is #
2 that correct? You put these in the contractual terms, not 3 for payment but for the trancfer? '
i 4 A Well, I believe Exhibit 4 sets out the equipment l 5 for the transfer and 5 sets forth how the title will be l 6 transferred under the parchase agreement.
7 Q Okay. And six.
8 A That sets forth the equipment of the EGF that was 9 to be transferred on title.
jo Q Are you aware of any impediment what_ver to the ij full operation of this plant under the original agreements?
12 A Well, I would say from my viewpoint the fact that i 13 we have spent $175 million as of today and haven't received i4 any payment at all, I don't know what company would go ahead 15 and operate a plant under those conditions. I would consider 16 that a major impediment.
17 Q So, the reasons are economic?
18 A Very definitely.
19 O Did the project err in projecting revenues from the 20 output of the plant?
21 A Well, when you say made an error, let's clarify that .
22 These discussions on these contracts, I believe, and I wasn't 23 Privy to them, commenced back in 1972. The final contract, 24 the purchase agreement and the management agreement were 25 executed in '76 and EGF agreement in '77. A lot of water went at t.
I AARON LoVETT, PRESIDENTOWNER
REFERENCE:
MARTINDALE HUBBELL Q@{ U.S. COURT REPORTER l ,l P.O Bor 10045 + Tataa.assee. Fknla 32301 e To ephone (904) 222 37043705
PAGE- 3U2 ;
i' over the dam over that time frame and since then up until i
l 2 now we've had tremendous inflation, we've had the loss of
- 3. aluminum; sure there's been changes in the revenue of the 4 plant. l t
5 Q Are you aware of the general trend in fuel prices I
6 over that same period of time?
I
.7 A Yes, to some extent. i 8 Q And is it your understanding that the price that 9 Florida Power & Light Company was obligated to pay for the j 10 steam produced by the facility was dependent in large measurej 33 on fuel prices?
12 A Yes, sir.
( 13 Q S that the revenues to the project have increased 34 by some measure since the inception of the contract?
15 A Like all costs.
16 MR. HAUCK: I don't have any further questions.
17 MR. THOMSON: No redirect.
18 CHAIRMAN CRESSE:
Let me ask you a question, please,I ig sir. In terms of impediments, I believe your Counsel l 20 asked you a question do you know'of any major impediments 21 to implementation of the original agreements. Your 22 response to that appeared to be' economic. Areyousayind 23 that the -- your company *cannot. conclude that original 24 agreement because of the costs to your company?'
25 WITNESS BOYHAN: No, I don't say that. In fact, we i
s AARON LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT r* MRTER h ,l P.O Box 1004s e Tallahassee, Fionda 32301 e Toephone (904) 222 37003705
,*** PAGE.- 10.*
( have stated over and over again that we intend to carry 1
2 out all.the terms and conditions of the contract if *eed 3
be. But these contracts have not been complied with, 4 more specifically by the County. I mean we achieved 5 substantial completion back on the 9th of Januar3 At 6 that time we would receive 70 percent of our money. We j 7 weren't paid a dime. We kept our Staff on site. I have' 8 160 men down there on the site today. You've heard in i 9 the stipulation -- well, I guess it's not a stipulation, to but our interest is running S80,000 a day. I think in }
33 all fairness there's been a complete default of this 12 contract on the part of the County.
CHAIRMAN CRESSE: Do you own the la:;a that this
( 13 14 facility sits on?
15 WITNESS BOYHAN: No, the land is owned by the Count >I.
16 CHAIPJ!AN CRESSE: Well, apparently there's some
, 17 dispute between you and the County which Florida Power &
18 Light is kind of caught in the middle of; is that correctj?
- 1 19 WITNESS BOYHAN: Well, I don't know if Florida Power 20 L Light is necessarily caught in'the middle of it.
21 CHAIR'.!AN CRESSE: Are they caught up in it? I 22 wouldn't want to say directly in the middle. Are they 23 caught up'in it someway?
24 WITNESS BOYHAN: Yes, I would say so.
25 CHAIRMAN CRESSE: Well, from another legal standpoiri
- l AARoN LOVETT, PRESIDENT / OWNER REFERENCE. MARTINDALE-HUBBELL Qg[ '
U S. COURT REPORTER k h,l P.O Bor 10045 e Tanahassee, Fonca 32301
- Teaoprone (904; 222 3700370$
p: PAGE: 3M l I i but from what is a fair and equitable standpoint, why g
2 is it that Florida Power & Light is the one who is, I 3
guess, being asked to provide more funds than what das 4 provided for in the original agreement? What is equitab1;e 5 about that? l l
6 VITNESS BOYHAN: Your question is directed to the i
7 fact that the facility is trying to take advantage of 8 PURPA rates.
g CHAIRMAN CRESSE: No, sir, I guess what my question to is directed to is I understand what ya'll have agreed n to, and let me go oack to this. I think your attorney 12 has agreed that in Item 12 of the agreed to facts 13 Resources Recovery in Dade Coun'v entered into a purchase
(
14 contract and they entered into a management contract and 15 they entered into an assumption agreement. And then thatl - '
16 those agreements were entered into prior to the adoption 17 of PURPA. And then subsequent to that Dade and FP&L have 18 entered into an electrical facility generation agreement 19 prior to the passage of PURPA. Now, what I'm gathering 20 from the testimony is that somewhere between -- somewhere 21 the agreement between R&R and Dade County, whether it 22 was in the purchase contract or whether it was in the .
23 management contract or whether it was in the assumption 24 agreement, ya'll had a falling out in some way. You 25 didn't have a meeting of the mind. And is it not --
i AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL QQ[ U.S. COURT REPORTER
,l P O Box 10045
- taw.assee Florca 32301
- T phone (904) 222 37003705 w
. , . . pAag: 105 ;
I i and therefore, as a result of that, for some reason, 2 Dade County's agreement with FP&L entered into subseauent 3
Dade County cannot deliver on. Is that where we are now?
4 WITNESS BOYHAN: Well, sir, I think we were there 5 in January of this year. As f ar as we were concerned, 6 this plant was substantially complete under the contracts.
7 We had four engineering companies, two of whom are the l 8 largest in the world, certified that this plant was I
( g complete, ready to process this garbage and run. Under to the contracts we were entitled to receive, I think, was ji 70 percent of our money, roughly $90 million less the 12 value of those items which we had not completed. _Dade
( 13 County did not live up to that agreement, did not make 34 any payment to us, totally in my view abrogated this.
15 contract, and that's where we are today.
16 CHAIR 1AN CRESSE: When did that take place?
f, 17 WITNESS BOYHAN: On January the'9th of this year, 18 we declared that this project was substantially complete.
19 And as my writ and testimony reveals, since that time we 20 have processed over 5,000 tons and generated over 21 2 million kilowatt hours of power.
22 CHAIRMAN CRESSE: I think just --
23 WITNESS BOYHAN: I mean,Mr. Chairman, if I may cay, 24 on the basis of the facts and what actually happened on 25 thct plant, I speak now as an engineer and a man who 1-s ,
AARON LOVETT, PRESIDENnoWNER
REFERENCE:
MARTINDALE-HUBBELL Qg[ U S. COURT REPORTER k h,l P.O Bon 10045
- Tau *.assee. Fbnce 32301
- Te+orone (904) 222 3700'3705 f
PAGE: 306 .
D ;
I r(
spent 37 years of his life building plants all over the I
2 world. I simply cannot understand how a responsible.
3 County with bona fide contracts does not live up to 3 heir I 4 agreement.
t 5 CH AIR!!AN CRESSE: Well, sir, obviously if you don't 6 understand it, I don't understand it. I'm not involved l l
7 in that particular issue other than as an answer to that 8 item in this particular issue. The record reflects --
( g let me ask you: Are these petitions and answers to 10 petitions part of the record?
11 MR. SD: TON: Yes. s 12 CHAIRMAN CRESSE: All right. The record appears to 13 reflect that there was some dispute between you and the
(
14 County as to whether or not there was substantial 15 completion. I don't know if maybe I'm misreadin g what 16 was in there, but I understood they had a deal where 17 they could hire an engineer and make a determination
(
18 when it was substantially complete. Is that an issue 19 that's at dispute between you and tLe County?
l 20 WITNESS BOYIIAN: Yes, that 's i a point of dispute.
l 21 The County had a consulting engineer of their own on 22 the site with seven representatives and we declared sub-23 stantial completior. there, consult -- wrote a rather 24 voluminous report trying to state why the project was 25 nt substantially completed.
.(
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL Qg[ U.S. COURT REPORTER k ,l P.O. Bos 10045 + Tawassee. Fbnda 32301 e Telephone (904) 222-37043705
PAGE' 3bI l
( l i CHAIRMAN CRESSE: Is there any issue between you and 2 Dade County other than whether or not the facility is 3
substantially complete? Is there -- what about the. '
4 management contract? Haie ya'll executed the management 5 contract? l 6 i KITNESS BOYHAN: I believe -- there's been no on- f 1
7 going negotiations for quite some pavind of time now. i 8 I believe there's very significant and su'istantial areas 9 of agreement on all the contracts between us and Dade County. l 10 CHAIRM u' CRESSE: Well, is their payment to you !
33 12 then contingent upon two things? Jne, that it be first 13 substantially complete. I guess there's a final payment.
(
34 Somewhere you said 70 percent when you're substantially 15 complete and is there then a provision for paying 100 16 percent?
17 WITNESS BOYHAN: Yes, under specific performance 18 requirements in the contracts we were to receive the 19 balance of our monies.
20 CHAIRMAN CRESSE: Is the balance of your monies t
21 contingent up:.n your entering into a management ceatract?
l 22 W1; NESS BOYHAN: I'm sorry, pir, my hearing is pretdy 23 bad and the acoustics in this room, I have difficulty' 24 hearing.
25 CHAIRMAN CRESSE: All right, sir. Is the balance of l.
i.
AARON LOVETT, PRESIDENT / OWNER REFERENCE MARTINDALE-HUBBELL l Q@[ U.S COURT REPORTER
,l P.O Box 10045 e Tatahauee. Fbnda 32301 e Te!ephone (904) 222 37013705
- s. .. .
PAGE. 3gg l l
1 k' 1 the payment contingent -- the 30 percent contingent 2 upon you entering into a management contract?
]
3 WITNESS BOYHAN: Yes. -'
4 CHAIRMAN CRESSE: A 1 you have not.yet entered intoi 5 a management contract? I 6 WITNESS BOYHAN: Well, mi understanding, and I'm !
i 7 not a lawyer, I don't know if the management contract i i
8 would come into effeet until and at such time as the l t 9 County effected payment under the purchase agreement.
10 CHAIRMAN CRESSE: Well, I guess I'm trying to find 11 which is the chicken and which is the egg. It seems to ,
12 me there's about two eggs that have to be laid or maybe t
[
t
{ 13 three before you get to the point. One, they have to 14 pay you 70 percent. That's based upon substantial 15 completion. Two, they've got to pay you 30 percent,and j t
16 that's based upon your getting a management contract (
- 17 agreement; is that correct?
18 WITNESS BOYHAN: Well, that 's based upon the management [
t 19 contract coming irto effect and our achieving specific l
20 design performance of the plant. [
21 CHAIRMAN CRESSE: Well, then -- and there's not any 22 dispute between you and Dade County as to whether or not 23 Item I has been done, which, is substantial complete and 24 there's a dispute between you and Dade County as to 25 whether Item 2 has been done, which would then -- you would
- k. l l
l
~
AARoN LoVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL QQ{ U.S. COURT REPORTER khll ,l , P.O Bos 10045
- Tata%ssee. Fbnda 32301
- Te4 phore (904) 222 37001705
s - *-
i PAGE: 109 ,
i I
i
( \
1 be in a -- you are going to operate this facility? !
2 i WITNESS BOYHAN: That's right.
] l 3 -
CHAIRMAN CRESSE: That's the original intent; it '
d that correct? f 5 I WITNESS BO HAN: That's correct.
l 6 b CHAIRMAN CRESSE: And that was part of the management 7 i contract?
8 WITNESS BOYHAN: That's right.
t 9 CHAIRMAN CRESSE: And you and Dade have not reached 10 an agreement on that yet. Am I correct in understanding 11 that if you all reach agreement on that or if your 12 agreement, sir, settledbf a court of a competent jurisdic-13
( tion that then the agreement which Florida Power & Light 14 has with Dade could become operative?
15 b1TNESS BOYHAN: I suppose that's potentially possible, 16 yes.
17 CHAIRMAN CRESSE: All right. Unless they had a 18 falling out with Dade County in some manner?
19 WITNESS BOYHAN: Right. Although I believe under l 20 our assumption agreement we have replaced the County.
21 CHAIRMAN CRESSE: You have replace'd the Coun'ty?
22 WITNESS BOYHAN: Well, in terms of performance, 23 et cetera, I believe under our assumption agreement we 24 in fact stand in place of the County.
25 CHAIRMAN CRESSE: The payments then which would be
.(
AARoN LOVETT, PRESIDENT / OWNER Q@[
REFERENCE:
MARTINDALE-HUBBELL U.S COURT REPORTER k ,l , P.O Box 10045
- Totahassee. Fionoa 32301
- Teephone (904) 222-3700"J705
% * ,* PAGE. 110
.c made to the County under the agreement with Dade County i
2 would in fact go to your company? ,
3 . WITNESS BOYHAN: That's right. ,
4 CHAIRMAN CRESSE: All right, sir. Well, what's 5
holding this deal up?
6 WITNESS BOYH AN: You've got so many lawyers here.
7 Negotiations. ;
8 CHAIRMAN CRESSE: That may be all the explanation l j g you need for the Chairman. You've got too many lawyers to involved. Are you familiar -- is your disagreement withi 33 Dade that they either won't pay you enough garbage dump 12 fee?
33 WITNESS BOYHAN: No, we have no disagreement on that
{
34 particular item at the moment.
CHAIRMAN CRESSE: All right. Now, Dade is willing 15 to pay you a garbage dump fee. Are you willing to assume 16 17 Dade's contract with FPEL and then before you get the 18 revenue f rom the electricity--that revenue f rom the elec-19 t;icity is 21 times what it was in 1977. That's about 1C and I know the average fuel cost is 3tc. And in my 20 21 math, that's 250 percent increase from what it was in 22 1977 when Dade made the deal. And I'm trying to figure out what's holding'this deal up. Is it lawyers or is 23 24 it greed?
25 . MR. THOMSON: Mr. Chairman, just for clarification, AARoN LOVETT, PAESIDENT/ OWNER REFERENCE. MARTINDALE-HUBBELL U.S COURT REPORTER h,l P O Scu 10045 e Tateussee. Fbnca 32301 e Te+ phone (904) 222-37003705
s . ,... PAGE- 313 l
l I
(
i after the contracts -- pardon me. After paymcat was not 2 made, RRD issued a notice of termination with respecA to 3
all contracts between Dade County and it. That is one 4 of several items pending in an arbitration which is --
5 which has been commenced.
6 CHAIRMAN CRESSE: I see.
7 MR. THOMSON: All those contracts have been terminated, l
8 Purchase contract, management contract, assumption agreej l
{ g ment.
l 10 CHAIRMAN CRESSE: So, we don't --
11 MR. HAUCK: We'll stipulate to that, by the way.
12 CHAIRMAN CRESSE: I understand. From your perception I
( 13 of the issues, there does not now exist any contractual 34 relations between you and Dade County?
15 E!R . THOMSON: That's correct.
16 CHAIRMAN CRESSE: And that issue is subject to 17 arbitration under the jurisdiction of a court somewhere.
18 MR. THOMSON: Under a jurisdiction of an arbitration 19 board, yes.
20 CHAIRMAN CRESSE: That's kind of a quasi-judicial 21 body.
22 COMMISSIONER GUNTER: What k4nd of --
23 CHAIRMAN CRESSE: Kind of like this Commission.
24 COMMISSIONER MARKS: That was in the contract.
25 MR. THOMSON: An arbitration board appointed in
(
AARON LOVETT. PRES! DENT / OWNER REFERENCE.- MARTINDALE-HUBBELL Qg{ U.S. court REPORTER k h,l P.O Box 10045 e Teram, Fonda 32301 e Telephone (904) 222-37003705
- s. o. PAGE: 112 e lli !
't ;
I i
'(- i accordance with the contract.
COMMISSIONER MARKS: '
2 Just as a dispute, they we:e 3 . sent into arbitration. That's part of the contract.[
4 CHAIRMAN CRESSE: That's attached here to your ;etition?
i 5 MR. THOMSON: I guess they are attached to the i 6 petition. Many items, including'the ones that you've j 7 mentioned, Mr. Chairman, of substantial completion are !
involved in that arbitration.
l 8 But determination or notice
( 9 of termination with respect to all the contracts is 10 less involved. From our point -- f rom the company's poin;t i3 of view, there are no contracts.
12 COMMISSIONER MARKS: Did the crux of Dade County's 13 dispute, Mr. Boyhan, that they don't believe that the
(~
14 plant is substantially complete or something like that at -
15 :he time that ya'll said it was substantially complete?
16 WITNESS BOYHAN: That was the contention at that
, .17 time.
18 COMMISSIONER MARES: And that's what precipitated 19 the break or the non-payment or dispute in the contract?
20 MR. BOYHAN: Yes.
21 MR. THOMSON: Mr. Marks, again, just for clarification, 22 I think I can respond that in fact before that date --
23 'before the date that Mr. Boyhan has mentioned of January 9, 24 1981, Dade County announced that it would not pay the 25 money.that Mr. Boyhan has testified to and instituted a
(
AARON LoVETT, PRES / DENT / OWNER Qg' U.S COURT REPORTER
REFERENCE:
MARTINDALE NUBBELL k Ml , . P O Bon 10045 e Tataa euse Fionca 32301 e Toe:*cne (904) 222-37003705 n.
, ' ' ."* ll prot: 113 :
I i i
i i lawsuit. That lawsuit was later dismissed. That lawsuit 2 was filed in December, 1980. .
3 MR. HAUCK: Since we're clarifying, I should also 4 clarify that the County apparently believed that Parsons 5 & Whittemore wasn't going to perform under the agreement ,
6 at that time.
7 COMMISSIONER GUNTER: So, we've got everybody l
8 Pointing at everybody else.
( g COMMISSIONER MARKS: What I'm just trying to figure 10 out is why the whole thing was sent to arbitration. Why 1
ii it had to get to the arbitration point pursuant to the -4 12 well, no, I'm -- I understand it was sent pursuant to 13 the contract and I'm trying to figure out what in
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14 essence precipitated that. And I think what you're 15 saying is that Dade County didn't believe that you all 16 were going to perform. You said you were going to
( 17 perform; Dade County at that point in time said we're 18 not going to pay you because we don't believe you're 19 going to perform. At that point in time they filed suit l 20 which eventually was dismissed.
21 MR. THOMSON: Seeking recision of all the contracts 22 or cancellation of all the contra, cts.
73 COMMISSIONER MARKS: Because they did not believe 24 that you all were going to perform pursuant to the 25 contract.
AARON LOVETT, PRESIDENT / OWNER REFERENCE.- M ARTINDALE-HUBBELL Q@[ U.S. COURT REPORTER k h,l , P.O Box 10045
- TalWssee, Fbrea 32301 + Totephone (904) 222 3700'3705
s . ,... PAGE: 134 I
k MR. THOMSON: So they alleged, that is correct.
1 2 COMMISSIONER MARKS: I understand that. .
3 MR. THOMSON: I'm not disagreeing. That was their 4 allegation, that's correct.
COMMISSIONER MARKS: So, at this point in time, ~
5
)
6 because there's that arbitration, you don't believe you !
l 7 have a contract? However, the arbitration agreement --
l 8 the arbitration intheAmericanArbitrationAssociation?!
I g MR. THOMSON: It's being conducted under the rules.
10 COMMISSIONER MARKS: Could eventually rule there is 11 a valid contract between you and Dade.
12 MR. THOMSON: It could rule that. It could rule a 13 lot of things.
(
14 COMMISSIONER MARKS: No, I'm just saying it could 15 rule that. And then we would have that contract in effect.
16 And we would -- where would we go from there if they should 17 rule that? That those contractual agreements that's 18 before them now are ineffective.
19 MR. THOMSON: The company would, of course, comply 20 with whatever the ultimate disposition of the matter 2' was.
a, COMMISSIONER MARKS: That vi]1 put us where we are --
23 where it was anticipated everybody would be in the first 24 place.
25 CHAIRMAN CRESSE: You know --
(.
AARON LoVETT, PRESIDENDOWNER REFERENCE. MARTINDALE-HUBBELL Qg[ U S. court REPORTER k ,l P.o Boa 10045 e Tanahauee. Flonde 32301
- Te4 phone (904) 222 3700/3705
3 . ...- PAGE: 3lb ;
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( 1 MR. THOMSON: Under that string of hypotheses, that i l
2 - is possible. . 1 i
~
3 - CHAIRMAN CRESSE: I didn't failtohearyourstatemeft 4 of Counsel which says the company will comply with the l
5 ultimate determination which means maybe seven years l l
6 from now we'll know what that is if the ultimate determina-i 7 tions are -- take as long as controversial and complex; 8 issues can sometimes take.
t 9 In the interim period of time, Dade County is based 10 in injunctive violation of an agreement which, at least .
11 f rom LTR standpoint , as they have done on the disposal 12 of trash or garbage or biomass or whatever words you want 13 to call it, which Mr. Thomson furnished to us. And
(
14 let me ask you something, sir. Are you Parker D. Thomson?
15 MR. THOMSON: Yes, sir.
16 CHAIRMAN CRESSE: Would you turn to that portion of 17 the letter, the answer of Florida Power & Light which
{
18 apparently has your name on it. My copy is scratched off 19 your attorneys -- it just had Attorneys at Law at the 20 top. The name of your firm was off of it but your 21 signature is on the second page.
22 MR. HAUCK: Can you direct u,s to the document, Mr.
23 Chairman?
24 CHAIRMAN CRESSE: Yes, sir. It's the answer of 25 Florida Power & Light -- Appendix C.
k AARON LOVETT, PRESIDENT / OWNER BEFERENCE: MARTINDALE-HUBBELL QQ[@
k ,l ,
U.S COURT REPORTER P O Box 10045 e Tattaussee. Fbnda 32301
- Toephone (904) 222 37001705
s- *
, .
- PAGE: 336 6 i
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1 COMMISSIONER NICHOLS: Unnumbered pages. !
l 2 CHAIRMAN CRESSE: Unnumbered pages, which is or. dinar'ily 3
a quarter-point on equity. , ,
l 4 COMMISSIONER NICHOLS: Would it be true that the ;
5 heading at the top of tnat page ought to be Paul & Thomson 6 -- Thomson & Paul? j i
7 MR. THOMSON: Yes, Commissioner, that is correct.
8 COMMISSIONER GUNTER: That's an interesting letter.
(.. 9 CHAIRMAN CRESSE: Is this, Mr. Thomson, the beginni$
10 of the -- or seems to me this letter was written 21 daysj ij after there was a -- apparently Dade County refused to 12 Pay you. I think you said earlier on January the 9th 13 it was --
(
14 MR. THOMSON: On January 9th the plant was certified 15 by the company as being substantially complete, yes, sir.
16 CHAIRMAN CRESSE: And then Dade County -- Metropolitan 17 Dade County said it wasn't to their engineer. Ya'll were 18 logger heads.
19 COMMISSIONER GUNTER: What was that date they said 20 it wasn't ready?
21 MR. THOMSON: I don't have that date. I would 22 estimate it to have been late January.
23 COMMISSIONER GUNTER: But it could have been later 24 than that?
25 KR. THOMSON: It could have been. My recollection b ,
i AARON LOVETT, PRESIDENTOWNER
REFERENCE:
MARTINDALE-HUBBELL Qg[ " U.S COURT REPORTER k h,l , P.O Bos 10045
- Tar.a assee. Flonca 32301 e Teechone (904) 222 37001705
- s. ,... PAGE: 337 #
- i i
V -
of the time periods and the escrow agreenent would be 1
2 the basis of my estimate. .
3 - CHAIRMAN CRESSE: Okay. Well, let me ask you tj21s, 4 sir, and maybe the coincidents are not conincidental. l 5 But it appears that prior to January the 30th, you and 6 Dade County had somehow come to logger heads. l 7 MR. THOMSON: That is correct. And they instituted l ;
8 a lawsuit.
t 9 CHAIRMAN CRESSE: And that must have been over 10 some economic considerations. And your letter seems to 11 suggest that there's a way out for Dade and a way out 12 for you all because some law was passed called PURPA.
And that under the PURPA deal ya'll could get an additional 13 14 $500 million over the life of the project'; is that what 15 v e're all about here?
16 MR. THOMSON: In fact, Mr. Chairman, it is our 17 contention,as a matter of lawithat the facility is a 18 qualifying facility and PURPA,even if the contracts were 19 In place, that the legal effect of that night have to be 20 interpreted by this Commission or by a Court. But that 21 is our belief.
22 CHAIRMAN CRESSE: Well, let me ask you this question,i 23 Mr. Thomson: Do you think what's right and just that 24 that ought to be the issue that this Commission decides 25 on as.to whether or not in fact that agreement would
,s -
ms
..W 4 LOVETT, PRESIDENTOWNER REFERENCE. MARTINDALE-HUBBELL QQ U.S COURT REPORTER k h,l P.C Bos 10045
- Tana".assee. Fionda 32301
- Toephone (904) 222-3700'3705
5
- PaGE: Ilb
.' - l I
t I
i come under PURPA for PURPA rates as though the agreements 2 had been executed?
3 MR. THOMSON: No, I think that we truly are in a new 4 -- a new set of facts. And the new set of facts is that l
5 we have built -- my client has built a plant at a cost
]
6 with interest escalating in the range of 170, $180 million.
7 It has not been paid for. It is aperating that plant 8 at the tune of a thousand tons per day of garbage. It g g is prepared to continue to do so. It needs to inter-10 connect so it can operate. As'the DER letter which has I ji not formally been admitted but has been stipulated, may 12 be admitted as an exhibit and which I will move to enter 13 in moment, says the interconnection is necessary. Thos!e
{
i4 are the facts.
15 1 do not know and cannot tell you when or if we 16 would be paid -- we will ever be paid for having built 17 that plant. But we are prepared to operate it and that's 18 what the interconnection is necessary for. It's a 19 different set of facts.
20 CHAIRMAN CRESSE: Yes, sir. Let me -- let me kind 21 of be blunt and tell you what my concern is. It appears 22 to me that based upon the facts that have been agreed to 23 that Florida Power & Light had entered int 6 an agreement 24 with Dade County for the utilization of steam and the 25 generation of electricity from this waste plant, Resource s
.s AARON LoVETT, PRESIDENT / OWNER REFERENCE. MARTINDALE4-upBELL Qg[ U.S. COURT REPORTER k h,l , P o Box 10045
- Tanahassee, Fbnca 32301 e Toephone (ilo4) 222 37043705
% * **o PAGE: 33b j l
i l
l 4~ Recovery Plant, prior to the passage of PURPA. After i
2 that, for reasons which are not clear to me, it appears 3
that PURPA passed and whatever agreements existed bei. ween!
4 Dade County and your company somebody said, uhn, if 5 we didn't have that agreement with FP&L, then we could j 6 g :t that under PURPA. Either one, we could pay less ;
7 for the garbage dumping fees or,two, we could get a whole t
8 lot more money out of the electricity that's being
. g generated. You pointed that out to the Commissioner, 10 which I assume is the Dade County Commissioner, in your ji letter of January 30th, 1981. So, there must have been 12 some financial difficulties that you and Dade couldn't 13 have reached, out, however, the agreement with FP&L
(
14 in some way could denegate it that that would provide 15 the additional funds necessary to make the contract, 16 the project go on fr-vard. That's troublesome to me.
17 It's really troublesome because clearly PURPA was 18 not intended to interfere in any way in accomplishnent 19 to great lengths. And this Commission went to great 20 lengths to say that this was not intended to interfere 21 with existing or prior contracts. And I think this 22 Commission said we don't want our,. rules and regulations 23 to interfere with prior contracts. As a matter of fact. . ,
24 we said we want this_to be in the event people cannot 25 enter agreements. And what's troublesome to me is that ik AARoN LOVETT, PRESIDENT /OWNEA REFEREA'CE. MARTINDALE-HUBBELL Q @ [ ;' U S. COURT REPORTER k ,l P.O Box 10045 e Tana%ssee, Fonda 32301
- Te4prone (904) 222 37003705 J
5 * ,* PAGE: I T' 5- 1 it seems to me that based on this data in front of me :
l 2 a deal had been made. What reason is not clear. Ihat l 3 - deal was not consumated. And that's not clear becadse ,
i 4 there was nothing in this record.
l 5 Bat obviously shortly after that deal was not i 6 consumated, the Dade County Commiscioners were advised ,
7 that here's tne way to consumate the deal, which means I I
8 more money from FP&L and the electric ratepayers. And g g they can put up the money to make the deal consumated.
l t
to Now, that may all be fine and dandy if it hadn't 33 been the previous agreement. And I think we're getting 12 Pulled into something that -- not all the parties have 13 given to me to adequately gain all the information I
(-
14 need about this subject.
15 COM!JISSIONER GUNTER: On this stand. j 16 CHAIRMAN CRESSE: It's a tough one. You see, my l 7
17 problem, sir, is very simple. I think that facility 18 ought to be operating, also. Incidentally, so the record 19 will be very clear, I've visited that facility and I I
20 think that most of the Commissioners have visited the 21 facility.
22 COMMISSIONER NICHOLS: All of s us have.
23 CHAIRMAN CRESSE: We'know the. facility. We've seen 24 it. It's a tragedy it's sitting there doing nothing. It 's 25 a tragedy that that dump is sitting there a few blocks k
AARON LOVETT, PRESIDEN7/ OWNER Q@[ U S COURT REPORTER
REFERENCE:
MARTINDALE HUBBELL l
}
h,l P.O Son 10045 e Tatanassee. Fionda 32301
- Te+ phone-(904) 222 370n705
s . ,... PAGE. 123 l
(
i away from you, according to DER, infiltrating the water 2 which the -- over a million people may be depending _on.
3 - Those are all tragedies. And I'm willing to do what_ever 4 is fair and equitable to assist in resolving that.
4 5 I think the key point to that is not present at 6 this hearing.
7 CO.'NISSIONER LEISNER: Mr. Chairman, might I point 8 out something at least that I thought I heard. I know
( g Mr. Hauck said he'd be willing to interconnect at the 10 contract price, correct?
11 MR. HAUCK: Yes, Commissioner.
12 COMMISSIONER LEISNER: And I believe that Mr. Bardin 13 said that he'd be willing to connect at the old contract
(~
14 price.
15 MR. BARDIN: No, Commissioner, I said we're willing 16 to interconnect and sell at the prices determined when g
17 they are determined by the processes-by which they will 18 be determined, even if we don't know the price on day one.
19 That's not the issue we've raised in this proceeding. It 20 will be determined by your processes for all qualifying 21 facilities.
22 COMMIS'SIONER LEISNER: Right< Would you be willing 23 to interconnect in the meantime until all those processes 24 are finished at the old contract?
25 MR. BARDIN: We would be willing to try to arrive AARON LOYETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL Qg[ U.S. COURT REPORTER h,l P.O. Som 1004$ e Tana",assee, Fbnda 32301 e To:ephone (904) 222 37073705
g . ,.,. PAGE: 322 j 1
I
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at a temporary price in consultation with FPL and bring I,
3 2 a proposal back to you, if we don't have in place a .
3 - mechanism for PSC approved price. We do believe ver.y :
i 4 strongly the next Resources Recovery Facility which 5 may be built in Broward County should not be discriminate ld i
6 in favor of as against the one in Dade County. We don'tl t
7 think there should be discrac.ination in favor of Dade I i
8 C unty, either. We don't tlunk the electricity con sumet ion !
i g -- consume it should subsidize the plant but up to the 10 non-subcity level that you determine is appropriate in 33 qualifying facilit'.es in this state, we believe thic 12 plant as a plant, whoever owns it today or seven years 13 from now, whoever operates it today or seven years from
(
14 now, this facility in RAM, I might say, should enjoy 15 that level. f 16 But let me say again, that's not the issue we raised 17 in our pleading for this hearing. It's not the issue 18 that was raised in response to the pleadings filed by 19 FPL and filed by the County. The only thing we're 20 asking for now is to interconnect, let us start operating 21 in paraHel a-d then we will take our chances. What happens 22 later on in the price --
23 COMMISSIONER LEISNLrt: You would operate and not 24 ;
charge him for the electricity? What are you saying?
25 MR. BARDIN: Sure there will be a charge determined
(-
AARON LOVETT, PRESIDENDOWNER
REFERENCE:
MARTINDALE-HUBBELL Qg U.S COURT REPORTER k h,l P.O. Box 10045 e Ta'!aSassee. Fionda 32301
- To ephone (904) 222 37001705 j
s . , . . , PAGE: 123 ;
i I
I 1 I
(- I by the usual processes.
2 COMMISSIONER LEISNER: How can you interconnect, 3 _. if you don't have a price.
]
4 MR. BARDIN: There are rules of this Commission.
5 There's an order issued on August lith. FP&L challenged 6 Part of the order. We have challenged part of the order.
7 There are -- there's a small measure of controversy.
8 But basically the philosophy of this Commission is
(
g fairly well established. We have confidence in the 10 course which is taken in dealing with these PURPA 11 questions and we're willing to take changes on the 12 ultimate outcome.
COMMISSIONER LEISNER: You've gotten me totally
( 13 ,
14 confused now. I thought you said earlier you would be 15 willing to interconnect. That's all you want is to 16 interconnect and the priceis to be determined later.
17 MR. BARDIN: Right.
18 COMMISSIONER LEISNER: Now you-said you can't 19 interconnect without a price.
20 MR. BARDIN: No. No. You asked me if we would 21 -- maybe I misunderstood you, Commissioner Leisner. I 22 thought you were asking would we agree to interconnect 23 at a price to be fixed now at a level substantially belov 24 the avoided cost rates that have been fixed or are in 25 the process of being fixed by this Conmission for all ds.
AARON LOVETT PRESIDENT / OWNER
REFERENCE:
M ARTINDALE.HU8 BELL g{ U.S. CoCRT REPORTER
,l , P.O Bon 10045 e Tanauneo Fence 32301
- Te4 prone (904) 222 3700370$
,s- . . - PAGE. 3M l 1 .
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(- 1 other qualifying facilities. And I expressed my 2 objection to a discrimination against this. You must 3 understand during the interim it's not operating under 4 the old contracts. It doesn't have the benefit of County I
i 5 or State financing low interest rates, i
6 COMMISSIONER LEISNER: I understand. l l
7 MR. BARDIN: It has a carrying cost associated with' 8 a very, very heavy burden.
g COMMISSIONER LEISNER: So, what you want us to do 10 is order in connection but you wouldn't interconnect 33 until you negotiated a price; is that right?
12 MR. BARDIN: We would proceed to interconnect just 13 as fast as we enn work physical arrangements out. We
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14 have to start the plant up.
15 CHAIRMAN CRESSE: Let me ask you --
16 MR. BARDIN: We would run garbage and then we would 17 learn experience and we would work out the billing 18 afterwards.
19 CHAIRMAN CRESSE: Let me ask you what I think is 20 the key question. You would also interconnect if the 21 garbage dumping price was highs enough, wouldn't,you, 22 and if Dade County paid you in accordance for your 23 construction contract?
,34, MR. BARDIN: Mr. Chairman, I don't know. That 25 question hasn't come up in any discussions I participatedin Ik. .
^
AARON LOVETT, PRESIDENT / OWNER REFERENCE. MARTINDALE HUBBELL QQ[ U S COURT REPORTER
- EFG9N3,ItC. > 0 m. s m.s 1.e.s.. . r-. = T .-m ====
,s .
.... pact- 325 i I a !
i
(- 1 CHAIRMAN CRESSE: Well, let me ask you this: Do ,
l 2 you agree that PURPA does not effect, and let me read it l 3 - from the law, "nothing in this subpart effects the ,_
4 validity of any contract entered into between a qualifying 5 facility and an electric utility for any purchase. The !
.6 PURPA is not applicable if there is a pre-existing 7 contract."
g MR. BARDIN: I am troubled with the applicability
'- 9 of that sentence from the regulations to it, the contractjs I
10 we're talking about.
33 CHAIRMAN CRESSE: I understand that, sir.
12 !!R. BARDIN: But as we were pointing out, those 13 purported to be steam contracts. You accept them as
(
14 steam contrscts rather than electricity contracts. I'm II 15 not sure that there's anything there that applies to 16 those contracts. We have also problems as to the validi y
- 17 of those contracts when entered into.
18 COMMISSIONER NICHOLS: Let me ask you a hypotheticalj l
19 question. If you decided to go buy a Mercedes and you 20 went out and you went to the dealer and he said yes, I I
21 can give you that model. It will cost you $20,004 but 22 it will take me eight months to get the color and the 23 options you want on it. And eight months later that car 24 comes in and that car is now selling for $25,000. You 25 had a contract with~him for 20. Is he entitled to $25,0C O?
.(
AARoN LoVETT. PRESIDENT / OWNER REFERENCE MARTINDALE HUBBELL t
Q@[ U S. COURT REPORTER dGM,K p o son icons . T n.m . rwe. 323ci . Tv.m m m37omos
,% - *** PAGE: 320 '
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1 The price has changed. Circumstances beyond your contro l
2 but you had a contract that you agreed to. Would it be ,
3 - the same if the price went down? :
?
4 MR. THOMSON: You're presuming an ongoing invalid I
$ contract. I assume they would get the contract price. ;
6 Of course, we have no contract with Dade County and never 7 did. I mean with Florida Power & Light and never did.
8 COMMISSIONE!( NICHOLS: All right. Now, if you're {
l
, g -- you speak of three contracts here. The purchase, the to management and the assumption contracts. Let's assume l 13 for the moment that the first two went without hitch, 12 everybody was happy. Would you be here today questioninc, 13 the third contract which then gets into the price to
.(
14 FP&L?
15 MR. THOMSON: I'm sorry, Commissioner Nichols, I 16 can't answer that question. All the contracts were 7
17 terminated. You're saying if we hadn't terminated any 18 other contract, would we have terminated this? I assume 19 we wouldn't have had the grounds to terminate the 20 assumption contract under that basis.
21 COMMISSIONER NICHOLS: But the issue of whether it 22 fell under contractual right prices s or PURPA prices 23 would still be out there floating around in the air.
24 MR. THOMSON: That is correct. I th ir.k I -- if I 25 understand your question, as I said before, it is our
'( -
AARoN LO$ ~ PRESIDENTIOWNER Q@[@ ,l U.S. Q.4T REPORTER
REFERENCE:
M ARTINDALE-HUBBELL P O Bos 10045 e Tataussee Fbnda 32301 e Towphone (904) 222-37003705 I
,i- .- PAGE: 327 ,
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'I i I position that this entity would be a qualifying facility, i
2 even if all the other -- all the con;racts that have 3 - been referred to are in effect. The next question whs 4 if it -- assuming that I am correct and it were a 5 qualifying facility, would pURpA rates apply to it.
6 We believe they would. l 7 CO"!!ISSIONER NICHOLS: Even if you had an existinc 8 contract with different prices in then?
f 9 MR. BARDIN: Commissioner Nichols, that's a very 10 hard question to answer in the abstract. You have to see i3 the circumstances of the contract, what was being sold, 12 was the structure -- it is possible,certainly in a new 13 contract today,it is possible for us to negotiate a
(
14 contract with FpL which produces a result different from i
15 what this Commission's rules produce. You would have to
- g submit that contract to the Commission under its rules 17 with an explanation why we deviated. And if the Commission 18 didn't disapprove the contract, we could end up with a 19 result different from that prescribed by the rules.
20 But if you ask me about previous contracts, you 21 have to look at the circumstances. Utilities are not 22 like automobile sellers in a comp,etitive situation of a monopoly utility. It's very different. The governments, 23 24 federal and state, superimposed many legal requirements 25 on top of utility contracts,indeed this Commission's
(
A. ARON LOVETT. PRESIDENT / OWNER FEFERENCE MARTINDALE-HUBBELL Q%g U S COURT REPORTER k h,l P O Bos 10045 e Tana assee Fence 32301
- Te* phone (904) 222-3700'3705
..c.. PAGE 120 l
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PURPA rules.If he would want to cone to you today,would l 2 that hold contract and we said that was a qualifying ;
i 3 _ facility sale contract. We would have to explain to' you !
l 4
and justify to youlas I read your rule,why this contractj is deviating from what your rules would offer.
5 I don't lt 6 think, Commissioner Nichols, that that would be --
l 7 CO3D ISF~ONER GUNTER: Counsel, let me ask you one 8 question, if I can just kind of non-lawyer -- I'm I
g thoroughly confused. You've done a magical job of 10 confusing me. Let's say all of a sudden you all qualified ti a physical plant as a quali~fied facility.
12 Ya'll couldn't reach an agreement so you got rates that 13 were published and were currently under review of the
{
34 petition from this company and those rates were being 15 charged and all of a sudden this all -- Dade County 16 disappeared. And just as an attorney, would the contract' 17 between Dade County and Florida Power & Light apply 18 at that time or would the financial -- sould the rates 19 that are being charged at that time, would they juu+
1 20 be rolling? As an attorney, in your professional 21 opinion?
22 MR. BARDIN: The contract would not necessarily be 23 resurrected. It might not come back to life, number one.
24 Nuinber two, I presume that if Florida Power & Light at 25 some. point felt that it had paid more than the law justifie<
.L AARON LOVETT, PRESIDEN7/ OWNER REFERENCE. MARTINDALE-HUBBELL !
QQ{ U.S CoVRT REPORTER
,l P O Bos 10045
- Tans %use. Flonos 32301 e Toophone (904) 222 37043705
pAGE: lb i
,i.....
i
( 1 that they would seek release from the appropriate form, I t
2 not only for the future, but to recover damages for , !
3 - anything that they had paid excessively in the past.,
4 CHAIRMAN CRESSE: Let me make a comment. ',
5 MR. BARDIN. Does that answer your question, Mr. >
6 Gunter or am I still confusing you? That's a very serious burden. !
7 i
8 COMMISSIONER GUNTER: I told you I'm not too bright.
g I understand what you're saying.
10 CHAIRMAN CRESSE: Commissioners, let me -- hold on l
11 just a moment. Seems to me that the situation is fairly 12 complex and, for example, Florida Power & Light is in 13 a Peculiar position where they believe they have an
(
14 existing contract. I think they're also in a peculiar 15 position of recognizing this Commission does not take l 16 lightly the voluntary application and existing contract 17 involuntary to take more money for fuel, steam, electricity, 18 what have you than they previously contracted for.
19 The company is probably in a peculiar position of saying, 20 you know, if we go to renegotiate this contract, 21 what's the old, bad Florida Public Service Conmission 22 going to do? Are they going to hold us being negligent 23 in for manages because we had provided electricity
- 24 cheaper for the customers of Florida Power & Light than 25 what.is being offered today? And I'm not very bright, i
I AARON LOVETT, PRESIDENT / OWNER Q@[@
k ,l ,
U.S. CoVAT REPORTER
REFERENCE:
MARTINDALE-HUBBELL P.O Box 10045 Tallahause. Fbnda 32301 Te4ephone (904) 222 3704370b
,i.... PAGE: 330 ,
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b- i but I'm bright enough to know that if that has not crossed 2 Florida Power & Light's mind, then they are no as 3 - bright as I think they are. And as one Commissione$--and 4 I think the Commission unde,rstands that there are times !
5 and conditions when prior agreements are from whatever j 6 happens cannot be implemented. And I don't think that'sj i
7 this Commission's responsibility. I think that the 8 PURPA rules do take cognizance of prior agreements.
9 Now, the probler, from a legal standpoint, as I 10 think you're telling me, is that yes, they had a prior 13 agreement with Dade County. Yes, we were going to assumo 12 that agreement. And from a legal technical standpoint 13 that assumption may have never taken place. If it did --
{
14 if it had taken place, then they had an agreement with 15 ya'll and then you wouldn't be here arguing this mess.
16 The thing that's troublesome to me is whether or not 17 this Commission and Florida Power & Light is getting 18 caught in a squeeze play between Dade County and this 19 company. And there's an economic relief found by --
20 a very intelligent and design solution on Dade County's 21 waste garbage problems could be accomplished.
22 Now, with my understanding, sit may not be under-23 standing, but with my concern about that e'xpressed in 24 that way, I'm going to ask the witness some questions.
25 .What is your title in the company?
't
^2 AARoN LOVE 1T, PRESIDENT / OWNER REFERENCE MARTINDALE-HUBBELL Q[Q U S COURT REPORTER !
ER36N3,1fC. e o u. = > ~~ 1--===
l
,i.,.. PAGE. 10 r
i
(- 1 WITNESS BOYHAN: I'm the Vice President of PW, 2 .In c . in'New York and Executive Vice President of ._
3 -
Resources Recovery, Inc. (Dade County), Inc. and VP[
4 Resources Recovery (Dade Counti-) Construction Corp.
5 CHAIRMAN CRESSE:
Are you aware of any discussions l 6 to you or any member of your firm, your affiliated firms,!
7 have had with representatives of Dade County about the 8 financial advantage that could be obtained by both you g and Dade County if you could get rates under PURPA to as opposed to that that's been previously agreed to by ti Dade County thrergh Florida Power & Light?
12 WITNESS BOYHAN: I myself have not been present 13 in any such discussions.
(
14 CHAIRMAN CRESSE: Are you aware of any discussions 15 that have taken place on that subject matter between 16 representatives of your firm and representatives of 17 Metropolitan Dade County?
18 WITNESS BOYHAN: No, I'm not.
19 CHAIRMAN CRESSE: Are you familiar with the letter ;
t 20 which Mr. Thomson wrote to a Commissioner of Metropolitan' 21 Dade?
22 WITNESS BOYHAN: What was the date of that letter?
23 CHAIRMAN CRESSE: January the 30th, 1981.
24 WITNESS BOYHAN: I can't say that I am cognizant of 25 that letter, no.
(
AARoN LOVETT, PRESIDENT / OWNER QQ[ U.S COURT REPORTER REFERENCE. WARTINDALE-HusBELL k ,l ,
P O Boa 10045 e Tata5assee Fbnce 32301
- Towhone (904) 222-37003705
,n -
.'o. PAGE. 332 l i
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( 3 MR. TH O.'dSON : Would you like us to show it to him?
2 CHAIRMAN CRESSE: No, if he's not familiar with,it
?
3 - and has not seen it -- a re you -- do you want to lools; at 4 it just to refresh your memory to be sure that you have j 5 not seen it? l i
6 (Short pause.)
f 7 WITNESS BOYHAN: I'm not familiar with this j 8 specific letter, no.
g CHAIRMAN CRESSE: Are you familiar with the content $
1 10 of the letter? j ij VITNESS BOYHAN: Yes.
12 CHAIRMAN CRESSE: Do you know whether or not persons in your company provided the economic data which is
[ 13 34 included in this letter?
15 WITNESS BOYHAN: The economic data prepared here 16 I believe was prepared initially by Stanford Research 17 InstitLGe of California.
18 CHAIRMAN CRESSE: Did you provide it to the writer 19 of this letter to incorporate?
20 WITNESS BOYHAN: I'm sorry.
21 CHAIRMAN CRESSE: Did you provide the data, for 22 example, the last paragraph of the first page says the 23 rates provided i'n FP&L's contract for the County of 24 Resources Recovery project are fa. less than the rates 25 prevailed under pSC's proposed rules. As applied to the
(
i AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL Qg[ " U.S COURT REPORTER k ,l P.O Sci 10045
- TaRaussee. Fonda 3230, e Toiephone (904) 222 37003705
s .
. . . I rAag: 135 ;
t
'( 1 project these rules could provide the project over 2 5500 million of additional revenue. Parsons & Whittsmore' 3 - have asked their consultant to review these preliminhry 4 engineering revenues for use in a c'esentation to the ;
i 5 PSC. Both the County officials and Parsons & Whittemore 6 have understood for a long time that introduction of 7 funds of this magnitude and to the project would create ,
a revenues sufficient to recover costs and the project g would become a profitable venture for all the participants.
10 WITNESS BOYHAN: Your question is an I aware of it that fact and that presentation?
12 CHAIRMAN CRESSE: Was this data provided by your ,
l company to the writer of this letter?
( 13 I i
14 WITNESS BOYHAN: Well, as they say, the original I l
15 study and evaluation on these ratc.s was done by SRI. l 16 And as a matter of fact, I believe with interest they 17 came up with something like one and a quarter billion 18 dollars, if my recollection is correct. And I believe 19 they have done some analysis on rate structure, too. ;
20 And I believe that is the background information to this 21 Ietter. l 22 CHAIRMAN CRESSE: How could the -- could the intro-23 duction of funds of this magnitude into the project 24 create revenues sufficient to cover costs and the project 25 would.become a profitable venture for all the participants?
-(
AARON LOVETT, PRESIDENT / OWNER REFERENCE MARTINDALE-HUBBELL Q
[ U.S. COURT REPORTER
,l P.O Bez 1045 e Tapaussee nonce 32301 e To.ewone (904; 222 37003705
i ,... { PAGE: 134 l r :
'I i
l
( Is it your understanding that all the participants mean i
i j 2 your company and Dade County? .
3 - WITNESS BOYHAN: I think it means everyone. D$de 4 County, us and FPL.
5 CHAIRMAN CRESSE: Could you exp3ain to me how FP&L L 6 it could be profitable for FP&L to pay you approximately 7 20 more per kilowatt hour of elt- -icity generated from 8 that plant than for what they had a preexisting contract g to pay for?
10 WITNESS BOYHAN: Mr. Chairman, I thinkit'sabasicl 33 question. Is the plant entitled to -- is it a qualifyin 12 facility, which apparently it is. Is it entitled to 13 PURPA rates, I think it is. And if it is, why shouldn't
(
14 these revenues flow to this project?
~5 CHAIRMAN CRESSE: That's not my ques *: ion, sir. You' re 16 trying to get me off the track that I'm asking you and l 17 that's --
18 WITNESS BOYHAN: I'm sorry.
19 CHAIRMAN CRESSE: My question is how could it become i
20 more profitable for FPEL to pay you about 20 or pay Dade! ,
21 County about 20 mere per kilowatt hour for electricity 22 generated than what a preexisting contract would provide?
23 WITNESS BOYHAN: Well, it obviously can't.
24 CHAIRMAN CRESSE: It can't?
25 EITNESS BOYHAN: No, it can't.
AARoN LOVETT. PRESIDENT / OWNER REFERENCE. MARTINDALE-HUB 8 ELL g{ - U.S. COURT REPORTER
,l P.0 Box 10045
- Tans %sssee. Fonos 32301
- To eohone (904) 222 37003705 U
PAGE: 3 f
l i
(- l !
1 CHAIRMAN CRESSE: All right, sir. So, does that l i
2 mean then that the other two participants, it would. l 3 - become a profitable venture for them, meaning you add l 4 Dade County? !
t 5 WITNESS BOYHAN: Yes, sir. I wouldn't say profitab1b, 4 I 6 i but would make the thing viable.
l 7 CHAIRMAN CRESSE: What is it, sir, then, that -- ;
8 do you think that potential of an agreement which may not.
I g be unprofitable -- which may be unprofitable as it j i
10 exists with the potential of an additional $500 million I 13 whereby it could become profitable to both parties might 12 be incentive enough for the remaining two parties to 13 not in 11'ill their original agreement?
(
14 WITNESS BOYHAN: Are you saying do you think that 15 there was collusion between the two parties?
16 CHAIRMAN CRESSE: I didn't ask that. That may be 17 a question I'll get to later on. I'm asking you if you 18 think that the potential as outlined in this letter is 19 sufficient incentive for the two parties who may currently 20 not be involved in a profitable venture to violate 21 their existing contract so that the venture they had 22 previously entered into could beq,ome profitable? You 23 understand my question?
24 WITNESS BOYHAN: I think so. Dade County's primary 25 cc_cern in this entire matter, as far as I understand,
(
AARoN LOVETT PRESIDENTOWNER
REFERENCE:
MARTINDALE-HUBBELL U.S. COURT REPORTER h,l P.O. Box 10045 e Telamassee, Fionda 32301 e Telephone. (904) 222 3700'3705
,A3E j 3 3e ;
l
(' 1 was whether we would carry out the contracts. They were 2 concerned because we had a plant at Homestead that would 3 -
shut down. They were concerned whether we would stay 4
with the contract because they recognized that the l
5 aluminum revenue had disappeared and costs had increased j 6 rather significantly. I think that was the underlying 7
reason for them nr.t paying for and for everything that's, 8 happened subsequent to that. I don't believe any of 9 the action here vis-a-vis FPL and the other party has 10 anything to do with a relationship between Dade County 11 and ourselves.
12 CHAIRMAN CRESSE: Do you agree that if you could 13
{ get about two -- if you could get PURPA rates as opposed 14 to contracted rates, that the venture would become 15 profitable for Dade County and Parsons & Whittemore, 16 or excuse me, Resources Recovery of Dade County?
17 WITNESS BOYHAN: On our projections, and there are 18 quite a number of projections because it involves inflation 19 rates and a whole host of questionable cost factors, 20 we show that after,I believg some three to five years of 21 initial operation this project becomes a break even 22 situation and over the 20 years can be profitable.
23 CHAIRMAN CRESSE: Is the key to that --
24 WITNESS BOYHAN: But that's all conjecture, please.
25 CHAIRMAN CRESSE: Yes, sir. Is the key to that then d.
AARON LOVETT, PRESIDENT / OWNER REFERENCE. MARTINDALE-HUBBELL Q@{ U.S. COURT REPORTER l
samam ro.,. 1..., ~.,m,.1. - - .
f PAGE: 137 ,
I i,
e
(
- g the question of how much you get as a dumping fee for 2 garbage as well as how much you get from electric -
3 electricity generated? .. i 4 WITNESS BOYHAN: Well, there's a number of revenue ,
5 streams coming in here. There's a by product revenue f 6 stream, there'sadumpfeeandthoseitemsarerelativelyl t
7 small in comparison to the revenues one gets for electric 8 energy. There's no question that the viability of this 9 Project is very much tied up in the revenues for the I
10 electric power generated.
n ! CHAIRMAN CRESSE: Well, let me see if I got this 12 correct, sir. I think it was earlier stated that your
( 13 economic forecasts were based on 360,000 negawatts per g year or 360 million kilowatt hours per year; is that 15 correct?
16 WITNESS BOYHAN: Correct. Roughly correct, yes.
17 CHAIR?.:AN CRESSE: That means then that on the average 18 that you're expecting about 40 megawatts of production 19 over 8,760 hours0.0088 days <br />0.211 hours <br />0.00126 weeks <br />2.8918e-4 months <br />; is that --
20 l KITNESS BOYHAN: Sounds right. That's net out, j 2; CHAIRMAN CRESSE: That's net out after what you 22 use to operate the plant, yes, sig. Now, is that the 23 outside limit based upon the garbage caincity or is that 24 the limit based upon the generating capacity?
25 WITNESS BOYHAN: Well, no, it's -- it's strictly
(
i AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL }
Qg[ U S COURT REPORTER d ,l P.O Bom 10045 + Tanahassee Flunca 32201 e Temprene (904) 222-37043705
a .
o I PAGE- 335 i I
,i
'(- 1 based on the -- it's design capacity' based on the RGF 2 produced in the plant, the generators have significa.ptly 3 - more power capability than that. They have very many 4 megawatts and we're only talking gross generation 50 and 5 average net out 40.
6 CHAIRMAN CRESSE: Do you think the potential exists 7 for it to do better than that?
8 WITNESS BOYHAN: I hope so, sir.
9 CHAIRMAN CRESSE: All right, sir. Now, based upon 10 360 million kilowatt hours a year, am I correct if I've 11 put and said that average fuel cost is now 3tc that that's 12 worth 12,600,000 a year and electric production or if 13 it's 5tc which is approximately our present decremental
(
14 estimate, that that would provide about another $7.2 million 15 to you?
16 WITNESS BOYHAN: That's correct.
17 CHAIRMAN CRESSE: Does the company really care 18 whether it gets S7.2 million more in electric revenues 19 or $7.2 million more in dumping fees?
20 WITNESS BOYHAN: I don't think sc.
21 CHAIRMAN CRESSE: Thank you, sir. I have no further 22 questions. s 23 MR. SEXTON: Mr. Chairman, if I might ask one 24 question.
25 CROSS EXAMINATION AARoN LOVETT, PRESIDENT / OWNER RffERENCE: MARTINDALE.HUBBELL Q@[ U.S. COURT REPORTER
,l , P.O Box 10045 e Tanaw3 Fionda 32301
- Tesphone. (904) 222-37003705
! , ,. PAGE. I 3 f' l l
i 3 BY MR. SEX'IM :
2 Q Mr. Boyhan, it's been previously stipulated tha.I 3 .this facility will operate using biomass as a fuel sourcel 4 Is that the correct characterization?
5 A Yes.
6 Q Is waste not the proper characterization?
7 A Well, the definition of biomass is, I believe, a 8 non-fossil fuel and generally derived from any kind of g vegetable matter, if you will. The biggest part of the waste 10 -- combustible waste product is a paper product which probably gi makes up 40, 45 percent of the so-called total solid waste.
12 Now, if you want to go backwards, the paper product is made 13 from trees. So, you have to go back to biomass.
(
14 Q Well, the FERC's regulations make reference to those 15 biomass and wastes. Do you know what the difference between 16 wastes and biomass is?
17 A In that context, I'm afraid I don't. I mean they 18 use two terms, biomass and wastes?
19 Q In the rules, yes.
20 MR. BARDIN: If I may try to be helpful, lir. Sexton.
21 Those regulations made a distinction between the industrial 22 waste chemical type wastes such ap waste oil and the 23 municipal type waste which they classified as biomass.
24 MR. SEXTON: Okay. Thank you. I have nothing furth er.
25 Commissioners, I'd like to point out one thing that perhaas h
QQ@'
REFGiltG,ltC AARON LOVETT. PRESIDENT / OWNER U S. COURT REPORTER REFERENCE. MARTINDALE-HUBBELL ou.ms.1 - - 1 ~.<m -==
a
, ,o PAGE: 149 L. i you -- was not clear from the FERC regulations and 2 generated a lot of inquiry and disc 2ssion, And hat,.is 3 _ the provisions of Section 292.301 sub-B2 where the .
4 regulations were not to effect the validity of any contract 5 entered between a qualified facility or electric utility 6 for any purchase. And I'd point out the word purchase 7 is defined in Section 292.101 B-2 as meaning the purchase 8 of electric energy or capacity or both from a qualifying 9 facility by an electric utility. And I don't think it to applies to this contract which is for the purchase of ti steam. So, that -- the question of the pre-existing rate 12 for steam contract is not -- would not preclude the 13 establishment of any price under the regulations for
.(
14 the purchase of electricity out of this if they were 15 determined to be a qualifying facility.
16 CHAIRMAN CRESSE: Yes, I think I'm trying to coerce 17 through it and say if that pre-existing contract if in 18 fact doesn't exist, somehow it's going to be negated.
19 There exists potential damages against somebody for 20 failure to It.: fill their pre-existing contract at least 21 up to the $7.2 million a year on behalf of the ratepayers 22 of Florida Power & Light. s 23 MR. SEXTON: And the decision on the part'of this 24 Commission as to whether or not this was a qualifying 25 facility if the difference was again to the fact that AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL Qg[ '
U.S. COURT REPORTER k h,l P.O Bos 10045 + Tanahassee. Fbnda 32301 e Telephone (904) 222 37003705
, ,o PAGE' 343 I !
( 3 there were contract questions involved and we weren't 2 trying to adjudicate them we would not be effecting _-- it 3 - might be effecting an individual's ability to operath 4 in the -- under the current circumstances. But the
$ question of the validity of the contract would be subject 6 to a court of competent jurisdiction or an arbitrator 7 or whatever means were otherwise used. And the ultimate 8 result taking cognizanc -af what we've done might have 9 an effect one way or the other but we would not be in 10 any contract threats at this point.
33 MR. HAUCK: On that point, then, Mr. Chairman, I 12 think Mr. Sexton is familiar with FERC opinion number 7 33 and we furnished him with some copies of that. I don't 34 know if the C<>unsel for Petitioners is familiar with 15 it. Could I read a short portion of it?
16 CHAIRMAN CRESSE: Yes, sir, anything that will help 17 the Commission to understand the complexities of this 18 issue.
19 MR. HAUCK: Several comments filed in this rule 20 making this respone? to the Commission's November 19, 1973, 21 interim rule raised questions about the sequentially --
22 about how the sequentially used concept would apply in 23 certain situations. One comment is noted that many 24 industries commonly route steam directly from their boilers 25 to process without expi sion in the turbine. This k
AARON LoVETT PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL Qg[ U.S. COUr.T REPORTER k ,l , P 0. Box 10045. Tanahassee. Ftrca 32301
- Telephone (904) 222-3700"3705 i
I PAGE 242
, l I
1 practice is simply the raising of processed steam. It 2 is not cogeneration. .
3 -
The fact that some other steam from the same boiler 4 is routed to cogeneration equipment does not mean that 5 all the steam from the boiler is used for cogeneration.
6 The coincident raising of the processed steam raises the 7 cogeneration rules in two ways. First, any energy a expanded raising the steam could not be entered into 9 any efficiency calculations. And secondly, natural gas 10 used for raising steam is not rendered exempt from it incremental pricing and so forth.
12 The intent of this,and there's a subsequent part 13 of that decision is that they are not going to by PURPA
(
14 to steam sales. I think that's a fair characterization.
15 That somewhat balances Mr. Sexton's comment, I think.
16 CHAIRMAN CRESSE: I'm not understanding clearly 17 where that leaves us on this issue. That steam sales 18 are not subject to PURPA, that's what you're saying?
19 MR. HAUCK: Yes, sir.
20 CHAIRMAN CRESSE: Okay. Now --
21 MR. HAUCK: It doesn't answer the question.
22 CHAIRMAN CRESSE: PURPA doesn't override any pre-23 existing contracts, either, does it?
24 MR. HAUCK: Well, there's a question -- Mr. Sexton 25 raised the question of what contracts it might override
(('
x l '
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL QQ[ W U.S. COURT REPORTER k ,l , P.O Box 10045
- Tanahasses Funda 32301 + To eptone (904) 222 37043705
.- l PAGE- 143 1
-( 1 by limiting --
2 CHAIRMAN CRESSE: My question is very simple. _I t 3 . doesn't override the contracts you have with Dade Coi:nty 4 entered into in 1977?
5 MR. HAUCK: That's correct, sir.
6 CHAIRMAN CRESSE: And it would not override a 7 contract entered into in 1977 if you had been purchasing 8 electricity?
9 MR. HAUCE: I believe so.
10 CHAIRMAN CRESSE: You are not purchasing electricity 11 under that contract, you are purchasing steam. And as 12 a result of that agreement, if Dade County fulfills it, 13 you will eventually own the generating facility through
{
14 the payment process called a -- what do you call --
o 15 MR. HAUCE: An installment purchase.
16 CHAIRMAN CRESSE: An installment purchase. So, the 17 issue as to whether or not a pre-existing contract 18 seems to me to be relevant to the issue -- the nature of 19 the pre-existing contract seems to be relevant to this 20 issue.
21 MR. SEXTON: It should be considered but it doesn't 22 necessarily drive the whole case.s 23 CHAIRMAN CRESSE: Oh, no. Oh, no. I'm trying -- I 24 wish I could find one issue that would drivethe whole case .
25 And probably the issue that ought to be driving the
(
AARON LOVETT, PRESIDENT / OWNER REFERENOE: MARTINDALE-HUBBELL Q@[@' U S COURT REPORTER k h,l P.O Box 10045
- Tor.aussee. Fbnas 32301 e To ophone (904) 222 37043705
- PAGE. 145 i
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( 1 whole case is what's in the best interest of the people 1 2 in Dade County. And I'm not so sure that that issue,has 3 . not been forgotten. And I'm not sure it has either,.
4 but I'm not sure it hasn't.
5 M P. . SEXTON: Commissioners, if I might add, I might 6 try and raise perhaps a theory for the case in terms of 7 how you might want to resolve it. I think the one point 8 of contention that everybody has recognized is the third 9 qualifying factor for a qualifying facility which is no 10 more than 50 -- 50 percent or less owner of a qualifying 11 facility by an electric utility. And I think there is 12 sufficient evidence in the record to indicate how much the electric generator is -- was purchased for as opposed
( 13 14 to the remaining steam generator portion of the facility.
15 You can treat those as a unit for purposes of calculating 16 your 50-50 rule recognizing that FPL -- if you were to 17 assume that FPL were to receive all its title under its 18 contract you could take the value of FPL's ownership 19 in the steam generator and compare it against the 20 facility and measure that against the 50-50 rule. And 21 that way you' re not doing violence to any contracts 22 because you would be assuming their s validity.
23 Your alternative would be to ignore the contracts 24 and just lool; at the current function of the plant. FPL 25 currently would not be operating the plant so there would n't
(
s.
AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL Q@{ U.S court REPORTER h,l P O Box 10045 e Tatinhassee. Fionda 32301 e Toephone (904) 222-37003705
- i PAGE. 3 4 fs 8 I i t 6
( i be any involvement of a utility in the operation or 2 receipt of the revenues of the plant. _
3 . CHAIRMAN CRESSE: Any further questions, Commissioners?
4 I want to suggest that we take this matter -- we recess 5 and hold further hearings at a later date.
6 COM'!ISSIONER MARKS: You mean any questions of this 7 witness?
8 CHAIRMAN CRESSE: Questions of this witness, yes, sir.
9 Let's go ahead then. Thank you, sir.
10 MR. THOMSON: No redirect.
11 MR. HAUCE: I have a couple questions that were 12 raised in responses to the Commission's questions. ,
13 CHAIR'AN CRESSE: Do you have any questions of
{
34 this witness?
15 MR. HAUCE : Yes, sir. Just a couple.
16 CROSS EXAMINATION 17 BY MR. HAUCK:
1B Q Mr. Boyhan, you testified that the, I believe it's 19 called the tipping fee, the fee the County would pay the 20 facility for the right to dispose of garbage there. Was it 21 relatively an insignificant part of the economics of the project?
22 A I said that the combination gf the by products and 23 the tipping fee were not overly important in the total revenue.
24 I believe that's what I said.
25 Q How many tons per day of garbage is the facility
.(
,t AARON LOVETT. PRESIDENT / OWNER
REFERENCE:
MARTINDALE HUBBELL Q@[ U.S. COURT REPORTER dMM,l( p.o Boi tous . Tanasau . nono. 323ci . T*. pen (904) m 37ocvs70s
, ,, PAGE: 3 -I O j l !
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(- 1 designed to operate at?
2 A Three thousand. _
3 . Q For how many days of the year? ,,
4 A Well, we don't state it in days. We're supposed to 5 process -- design 936,000 tons a year and we theoretically 6 will run 52 weeks a year except for the down time which we 7 need for insurance purposes on the boilers and/or turbine 8 generators.
9 Q What is the contractual price to be paid by the 10 County for a tipping fee?
Si A For a tipping fee?
12 Q Yes.
13 A In the contract it was originally stated at 25c a
(
14 ton to be escalated, but I think you better bear in cind that 15 on top of that I believe the County has a -- for their 16 financing of the facility a cost of $13.75 a ton. So, the 17 total figure is really $13 a ton to be escalated.
18 Q So, if we took the property of 13 and 936,000 19 --
20 A No. No. The portion we receive is only the 250 21 escalated which gets up to -- I don't know what it is currently.
22 I think it's around 70, 800 a ton. T(at's the only part we 23 receive. The rest of it goes to the bondholders, I believe.
24 CHAIPJtAN CRESSE: Let me see, sir, if I can clarify 25 that That's the part that you would receive for I
. AARON LOVETT, PRESCENToevNER REFERENCE MARTINDALE-HUBBELL Qg{ U.S. COURT REPORTER k h,l P o son 10045 e Ta'ta nsee Ficrea 32301
- To epncre 1904) 222-3700c3705
c ll PAGE 3II I: I 6 I l l 4
( -
i operating the facilities under your operating incor$e?
2 WITNESS BOYHAN: That's right. .
3 . CHAIRMAN CRESSE: The theory -- the balance wo p go 4 to pay the construction costs and the bonds which Dade 5 County would somehow fleet to pay you for the construction 6 costs of the plant and the quarter inflated would be the 7 operating portion?
8 WITNESS BOYHAN: That's correct, Mr. Chairman, g CHAIRMAN CRESSE: Okay.
10 MR. HAUCK: That's all I have, Mr. Chairman.
ii CHAIRMAN CRESSE: Thank you, sir. Do you have a 12 witness you want to put on? Do you have any more witnesses?
13 MR. BARDIN: No, we don't.
(
14 MR. HIUCK: Call Mr. John Seelke.
15 CHAIRMAN CRESSE: Counselor, did you want to put in 16 the letter from DER?
17 MR. BARDIN: Yes, sir, we did request that the 18 letter be stipulated in as --
19 CHAIRMAN CRESSE: That would be Exhibit Number 10.
20 Be identified.
21 (The instrument last above-referred to was marked 22 as Exhibit Number 10 for identification.)
23 CHAIRMAN CRESSE: And I assume that you move to enter 24 into the record Exhibits 1 through 10; is-that correct?
25 MR. BARDIN: We so move, Mr. Chairman.
.(
AARON LOVETT PRESIDENT / OWNER REFERENCE. MARTINDALE HUBBELL U.S. COURT REPORTER P.0 Bon 10045 e Tanahassee. Fionda 3230t e Te (904) 222-3700"3705
PAGE ;47 l
I I i 1 CHAIR'IAN CRESSE: All right, sir. Without objection, ,
2 so ordered. ,
3 . (Exhibits 1 throuch10werereceivedintoevidepe.1 4 MR. HAUCK: Shall I proceed?
5 CHAIRMAN CRESSE: Go ahead.
6 WH EREl'PON ,
7 JOHN SEELKE 8 was called to the stand, having been first duly sworn, was 9 examined and testified as follows:
10 DIRECT EXAMINATION 11 BY MR. HAUCK:
12 Q Mr. Seelke,would you please state your name for 13 the record?
(
14 A John L. Seelke .
15 Q And you've been previously sworn?
16 A Yes, sir.
17 Q Your business address and your employment?
18 A I'm employed by Florida Power & Light, 9250 West 19 Flagler, Miami, Florida.
20 Q What is your position with the company?
21 A I am Manager of the Energy Management Research 22 Department. s 23 Q In that capacity, have you been assigned to study' 24 the contractual and economic relationships between the company 25 Florida Power & Light Company and the Resources Recovery AARON LOVETT. PRESIDENT / OWNER REFERENCE MARTINDALE-HUBBELL QQg U.S COURT REPORTER EFCMIN3,lfC. e.o u i = s 1.-- r-. =, 1 .-- ===
- ' PAGE. 149 l l
i
(
1 Facility?
2 A Yes, sir, I have. , .
3 -
Q And you are generally familiar with all theconpact s 4 that pertain to ti.at ?
5 A Yes, sir.
G Q Have you made an analysis of costs that the company 7 would pay in the present period under the existing contract?
8 A Yes, sir, I hLve.
9 Q And have you compared that with the costs that the 10 company would incur under the present conditions under the 11 proposed decremental fuel cost concepts pricing?
12 A Yes, sir, I have.
! 13 Q And have you prepared an exhibit that schedules these 14 differences?
15 A Yes, sir.
16 Q Do you have that before you?
17 A Yes, I do.
] 18 MR. H AljCE : I'd like to have that identified as 19 Respondent's firci exhibit.
20 CHAIRMAN CRESSE: All right, sir. We'll identify jlt O.
2 21 a two-sheet report called Calculated Avoided Fuel Costs.
l Second sheet entitled Existing Cqntract with FPkL and
- i 22 4 *
!. . 23 - County as Exhibit 11.
q j 24 (The instrument last above-referred to was marked
(;
6' 75 as Exhibit Number 11 for identification. )
5 ..
I*g AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL l.
[] Q@ U S. COURT REPORTER
,l P O Box 10045 e Tanahassee. nonda 32301 e Twphone (904) 222 37003705
. . PAGE- 3fU s
I d
tl 1 : BY MR. HAUCK:
2 Q Kould you please explain the basis -- the bases 3 -
upon which you prepared this and in summary its conclusi p ?
4 A Yes, sir.
5 MR. THO:.!SOM: May I object to this and simply --
6 Members of the Commission, it was -- as the Staff said 7 earlier, it was not our understanding that the issue of 8 fuel -- pardon me, the costs that might be paid after 9 interconnection was before the Commission at this time.
10 I don't believe we raised it in our petition. It was not 11 our understanding that it was on. And if in fact an 12 interconnection order must contemplate a charge which is 13 the Florida Power & Light's position, not ours, then I 14 would submit that that issue should be deferred to a 15 I'.ter hearing when we can conceivably be prepared for 16 an issue that we had no intention or knowledge was going 17 to be brought up.
18 MR. H AUCK: As we mentioned, we think the pricing 1
l 19 is the foremost issue in this proceeding. And I think as f
20 Mr. Bardin indicated in his colliquy with Commission
- 21 Leisner that it is the expectation of the Petitioners 22 that they would realize that PURPA s avoided cost revenues 4
,'. 23 _
from the project once they were interconnected.
24 CHAIRMAN CRESSE: Let me observe that in the answer
}
25 of Florida Power L Light dated the 23rd day of July, 1981, AARON LOVETT, PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL QQ U.S. COURT REPORTER I d ,l P.O. Bos 10045
- TaffaSassee. Fionda 32301
- Teiophone. (904) 222-370GT05 J
- e
- PAGE 251 1
I !
t 1 Page 9, said RRD's petition would quote an unfair burden :
2 on FPLL's customers. It seems to me their answer raised ,
3 - that issue. And if you're not prepared to discuss i .orko 4 review it, it seems to me that you've had since the 23rd 5 ! day of July to become prepared. Am I out of bounds on !
I '
6 that, Counselor? l
- i 7 MS. DAIRE: Commissioner, I think that's a rather l
l 8 broad assertion and undue burden on one's ratepayers 9 is broad -- I don't know that the issue of pricing is 10 correct'Sefore the Commission. My initial inclination 11 is to say it is not. That the only issue before the 12 l Commission was whether or not RRD is a qualifying facility.
13 And I believe the answer of FPLL's was -- even as the 14 undue burden answer had to do with if the Commission 15 decides that RRD is a qualifying facility that the 16 Commission will impose an undue burden upon the ratepayers 17 of FPLL.
18 CHAIRMAN CRESSE: Well, that may be a legal d
19 technicality because I have difficulty comprehending and 20 ! understanding because I don't think we can separate the 21 issues. Obviously it seems to me that the issues are 22 so closely intertwined that it's -- the Commission would
?
23 . be not as attentive to its' duties as not to be if we-
, 24 didn't in their response to that petition pursue that r
4 25 issue.
? AARoN LovETT, PRESCENTK1NNER
REFERENCE:
Mt RT1ND ALE-HUFBELL h@[ U S COUAT REPORTER k
k k j ,! , P O Bos 10045 e Tar.a'.assee. Fbnca 32301 + To ephone (904) 222 3700 3705, ! j
,. .* PAGE 152 i
(
1 MR. THOMSON: Mr. Chairman, if in fact that is the 2 Commission's position as a whole, we would suggest that 3 --
this issue -- that this issue be deferred until a laher 4 hearing. And if the Commission feels that an intercon-5 nection order cannot be entered without disposition of 6 this issue, which we disagree with, but if that is the 7 thing, it would seem to me it would be -- it should be 8 handled in a separate hearing.
9 CHAIRMAN CRESSE: Tiell, would you want to handle it 10 in a continuation of this hearing?
11 MR. THOMSON: If that is the Commission's will, 12 we would certainly do something.
13 CHAIRMAN CRESSE: I think the Commission always trie s 14 to be abundantly fair to all parties before it. And if 15 you want to have some adequate time to be prepared, 16 we can schedule another hearing -- continue this hearing 17 to a subsequent date and ask that Counsel -- and give p 18 you adequate time to reply. Does that mean he should 19 wait to present his witness on this subject or do you k
20 want him to present him and allow us cross examination?
21 Now, what do you want to do, Mr. Hauck? Give him time lj
!P 22 to reply? Do you want to go ahea,d and present this 1 23 - now and give him time to reply later?
+
}
ij 24 MR. HAUCK: I think to be most fair about it, Mr.
I.
U 25 Chairman, they should be allowed time to prepare cross s,
t.
Y k AARON LOVETT, PRESIDENT / OWNER REFERENCE. MARTINDALE HUBBELL Qg U.S. COURT REPORTER dG$,l(, p.o aca soo45. Ten.w.u . reno s2m . T% ison marcaros
g
= '
l PAGE 153 ,
i I
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(.
[ i examination.
~
1.
2 COMMISS.ICI4ER MARKS: Do you want to continue? . ,
1 3 -
MR. HAUCK: We'rewillingtodothat,11that'spe 4 Commission's --
5 COMMISSIONER MARKS: Do you want to continue your ,
I 6 questions of your witness now and just let him cross 7 examine at a later date? That's the question now.
8 That's the only question.
9 MR. HAUCK: I think we'd prefer to have both events to occur on the same day.
11 COMMISSIONER NICHOLS: So, you're saying you're willing 12 to hold off putting your witness on now until such time 13 as everybody is prepared to go on that?
14 MR. II AUCK : Yes, Commissioner.
15 CHAIRMAN CRESSE: They can be better prepared if 16 they knew what he was going to say.
17 MR. HAUCK: They've already got a peek at his l 18 exhibit.
19 CHAIRMAN CRESSE: Let me get something square.
p
(
s 20 We're kind of quasi-judicial, we're quasi-legislative 21 and we're quasi-executive. As you can tell, we're not
- 22 judicial. Quasi I think I commert,ted one day that it pl 5 23 - means about half anc' '<t s the reason odr retirement 24 benefits are ha'1 r -
at of judges.
w 3
, 25 COMMISSIONId GUNTLE , A little less than half, Mr.
^7
' AARoN LOVETT, PRESIDENT / OWNER RLi(RENCE: MARTINDALE-HUBBELL QQ U.S. COURT REPORTER REKR&G,ltC. o u. - s w.s. .r-. = ,.r - m m n= =s
- I PAGE. I I, i i
1 6
I 1 Chairman.
2 CHAIRMAN CRESSE: But the purpose of these hearings, 3 -
I think, is to get the Commission to understaad what i 4
4 the issues are. You attorneys are supposed to be assisti ng 5 us in understanding what the issues are and it's .
6 troublesome to me that they be adequately prepared because 7 they are not supposed to be playing slight of hand in 8 attempting to confuse and obviscate the issues. They 9 are supposed to be assisting us in understanding what 10 the issues are. So, I guess that's the reason I'm a 11 little troubled.
12 COMMISSIONER MARKS: I understand what Mr. Hauck is 13 saying is that -- and you can correct me, obviously 14 Mr. Hauck, is that you don't want to give up the right 15 to present some additiona) evidence by presenting this 16 witness today and subjecting him to cross examination t- at a later hearing without the opportunity of presenting 18 some additional evidence that you might have at a later 19 date?
l 20 MR. H AUCK : That's precisely correct, Commissioner 1 21 Marks. And furthermore, I expect that the other party, J
cj 22 Metropclitan Dade County, would bp represented at a i
23 . subsequent hearing and perhaps entirely different issues j 24 or perhaps more probably stipulated agreement could be 25 reached to refine these things down to some manageable il f;
3 yt AARON LOVETT, PRESIDENTOWNER
REFERENCE:
MARTINDALE-HUBBELL f;i Q@ U S COURT REPORTER f k hh,l P 0. Box 10045 e Tanasauee. Fbnca 32301
- Te.ephone (904) 224 37003705
.' =* PAGE- 305 fi i
, i i
i ;
I 3 dimension.
_ i 2 CHAIRMAN CRESSE: Whatever you would like to dq, sir.1 3 -
Do you want to hold off presenting your witness subsg uen't 4 or do you want to go ahead with him now?
5 MR. HAUCE: I'd just as soon postpone it, Mr.
6 Chairman. But we'll be happy to --
7 CHAIRMAN CRESSE: All right. We'll do that. We'II 8 go ahead.
9 MR. HAUCK: May we withdraw the exhibit, Mr. Chairmab?
10 CHAIRMAN CRESSE: Certainly. It hasn't been 33 entered yet.
12 MR. HAUCK: Thank you.
13 MR. SENTON: Mr. Chairman, the Staff is currently i4 reviewing what future dates are available for hearing.
15 CHAIRMAN CRESSE: Well, when you -- I will announce --
16 excuse me, is there anything e..se you want to present 17 this afternoon?
18 MR. H AUCK: No, sir.
19 COMMISSIONER MARKS: I think, Mr. Chairman, this i 20 is probably the correct thing to do because there's one l
21 question -- I don't understand -- I don't understand 22 and I hope we get this question answered the next time f 23 . we meet and I think -- I hope We get it understood why 24 Dade County,if they backed out the contract,why did they N 25 d do it, And I'm at a loss to understand that right now.
4 E
B
'i (a AARON LOVETT PRESIDENT / OWNER
REFERENCE:
MARTINDALE-HUBBELL lJ: Q@ U.S COURT REPORTER g EFCEmbG,IbC. eo=ios.1.e.,.- ~.=i.r _ m mum.
PAGE. 2 LC i l
i I
I I
i
( i And I figure that Dade County is the only one that can '
2 answer that question. And I think that's why we -.
3 - I hope that's why we're having another hearing. Behse 4 I'm going to ask that question because I'm at a loss.
5 CHAIEAN CRESSE: There is some legal research.
6 There is some legal research which needs to be done. I 7 was doing a little bit during the lunch period and I 8 don't mean to imply by that my legal research is definitive.
g But I was reading another case in there on my desk and it to had, as a matter of fact, the same appearances as this 11 one started out to be which is the question of -- I can 12 go get it and read it to ya'll. But it's another law-13 suit filed in another case. And one of the substantive 14 issues in it was the rules of civil procedure, what the 15 courts do.
16 And the issue was when you file in a Federal court 17 and simultaneously file in State court and attempt to j 18 get relief from both places. And the custom, according 13 to what I was reading, is that the court with which you i 20 first file in, it s customary that the second court holds 21 in abeyance any decision until the first court files --
E 22 acts. So, it's not required undqr the rules of civil a 23 - procedure, but it's an' efficiency measure which courts k
24 use. Quite interesting. They had a whole bunch of 25 stuff come in on that subject. But it was just interest ing
( AARON LoVETT, PRESIDENT / OWNER REFERENCE MARTINDALE-HUBBELL QQ{ U S. court REPORTER k ,
P.O Bon 10045. Tahaussee. Flonds 32301
- Te4 phone (904) 222 37:n3705
l PAGE 357 l; I
i i
( ) reading.
2 COM.'"ISSIONER MARKS: I suggest in a situation you 3 -
try to resolve obviously jurisdictionally what courth I 4 has jurisdictionally.
5 CHAIR"AN CRESSE: No, it wasn't that. The lawyers 6 are developing a technique now and I guess it's not a 7I new technique, one that has been in existence for many 8 years because this was a 1927 case where they would run g and seek relief in a Federal court and go file in a 10 State court simultaneously on the same subject.
11 CO:"dISSIONER MARKS: You said those circumstances.
12 A normal course of action is for the State court to l
t 13 defer to Federal justice because the Federal jurisdiction --
14 if in fact there is some question about simultaneous --
15 some question about jurisdiction. You're -- that's 16 an easily, legally researchable question because that's 17 a textbook law school question, as a matter of fact.
18 CHAIRMAN CRESSE: Well, anyway, it was just what l
19 I was reading over lunch.
20 COM'd1SS10NER MARKS: You are reading basic jurisdic-21 tion.
l 1
3 22 CHAIRMAN CRESSE: Let me says-- any more business 2
) 23 . to come before the Commission this afternoon? I think we
=
24 can tender the Commission to continue this hearing to f 25 a date which the Chairman will announce when he finds
$i Qg[@' AARON LoVETT. PRESIDENT /OWNEA U.S. COURT REPORTER REFEAENCE: MARTINDALE HUBBELL
- k h,l P o Bon 10045 e Tana*.assee. Fones 32301 e Te4 phone (904) 222 37003705
PAGE: 155 -
.- b l
! i
( i I time on the Commissioners' calendar to further pursue 1
2 the matter. And it would be our intent to request .
3 -. the presence of some of the folks from Dade County tj. p 4 appear before the Commission to have -- so we can under-1 5 stand the issues.
6 MS. DAIRE: Mr. Chairman, I was just speaking with 7 Nanette and overheard all the comments that were made 8 about my absence. Would you like to know about the days 9 available?
10 CHAIRMAN CRESSE: No, ma'am, I don't want to know I
ti about it this afternoon. I want to know about it later 12 on so I can pursue that against the other time demands 13 of the Commission. At that point in time we will decide.
4 14 I don't care to know this afternoon what days are available.
15 In fact, I don't care for these people to know this 16 afternoon what days are available. I would much rather 17 them be in the dark about that issue. And the reason 18 l'd rather them be in the dark is simply this: I want to
- 19 commend to all of you, including the people of Dade e
i 20 County, that you're setting down there on a very, very 21 serious problem. And that it's inconceivable to me that 22 people of good will and good spirit s and that are trying 23 .
to do the right thing can't get this issue resolved 24 among themselves. If the resolution to this issue and 3 25 what is a f air equitable manner requires the participation 1
AARON LOVETT, PRESIDENTOWNER REFERENCE.- MARTINDALE-HUSSELL U.S COURT REPORTER
,l P O Bor 10045 e TaWssee. Fonda 32301 e Teiephone (904) 222-37043705
PAGE: J5f:
e i o l l l
l !
l 1
1 or approval or whatever something that we need to be 2 involved in, I think this Commission is willing to .
3 - address any issues that is brought before it, h i l
4 And it seems to me that we are -- you are involved in a 5 situation where daily, according to the DER, there's 6 a very serious problem. Obviously that problem is not 7 getting any better because there's still continuing to 8 dump on a side of 58th Street not far from this facility.
j 9 And I just, for the life of me, can't understand why you 10 People can't conscientiously work together to bring a 11 solution to this problem as opposed to -- even if we 12 acted, it doesn't appear to me to be a solution to the 13 problem.
I 14 COMMISSIONER MARKS: Mr. Chairman, as they used to 15 say in Miami and the ghettos where I grew up in, somebody 16 down there is shucking and jiving. Is shucking and 17 jiving down there. Believe me, I can't see it no other 18 way.
19 CHAIRMAN CRESSE: My request of ya'll is to go back 20 and go to work and we'13 announce when the next hearing 21 will be when we clear the schedule of the Commissioners.
22 Thank you very much. s 23 .
(Whereupon, the hearing was concluded.)
24 25 1
AARoN LOVETT, PRESIDENT / OWNER REFERENCE. MART!NDALE.HUBBELL U.S. COURT REPORTER h,l P.O Box 10045 e Tattamassee. nonce 32301
- Tempnone (9Cd) 222-3700/3705
- - ~
cot r 'th e
'1 CERTIFICATE OF REPORTER s
- - STATE OF FLORIDA
'I '
3 COUNTY OF LEON:
( 4 I, CHERYL L. NORRIS, Shorthand Reporter and Notary -
3 ' Publit in and for the State of Florida at Large: Y 6 DO HEREBY CERTIFY that the foregoing proceedings were taken before me at the time and place therein designated; e, that my shorthand notes were thereafter reduced'to i
g h typewriting under my supervision; and the foregoing pages 4
,o , numbered 1 through /$ are a true and correct record of 3, the aforesaid proceedings.
,; I FURTHER CERTIFY that I am not a relative, employee,
.,- attorney or counsel of any of the parties, nor relative or i g 3 employee of such attorney or counsel, or financially 4
5 interested in the foregoing action.
lt. WITNESS MY HAND AND SEAL THIS, THE 87 DAY OF
~, [f_ b/J L, , A.D., 198 , IN THE CITY OF TALLAHASSEE,
, c, COUNTY OF LEON, STATE OF FLORIDA.
MY COMMISSION EXPIRES APRIL 30, 1982.
. ;,s l 2 Zie. [ _
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El AARON LOVETT. PAESCEr.7 O.?iER
. REff:S'.CE I.'.t.;;TWOALE HUE EELL
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