Text

Trial Plan.Plan Will Principally Address Questions of Relief.Util Will Show That Util Possesses & Benefits from Market Power in Competition Throughout Peninsular Fl. Certificate of Svc Encl
	ML20039G556
Person / Time
Site:	Saint Lucie
Issue date:	01/14/1982
From:	Jablon R; FLORIDA CITIES (FLORIDA MUNICIPAL UTILITIES ASSOCIATE, SPIEGEL & MCDIARMID
To:	;
Shared Package
ML20039G542	List: ML20039G541; ML20039G546; ML20039G548; ML20039G552; ML20039G554; ML20039G556;
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	ISSUANCES-A, NUDOCS 8201180415
	Download: ML20039G556 (400)
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F1 rida Cities: 1/14/a2 M,YC@7 UNITED STATES OF AMERICA

\ $$,i"3 O NUCLEAR REGULATORY COMMISSION

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In The Matter of )

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Florida Power & Light Company ) Docket No. 50-389A

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(St. Lucie Plant, Unit No. 2) ) Florida Cities:

) 1/14/82 FLORIDA CITIES' TRIAL PLAN The Board found that a situation inconsistent with the antitrust laws will be maintained, if appropriate corrective license conditions are not ordered to the St. Lucie Unit No. 2 operating license. Under Section 105(c)(6) of the Act, relief should (1) " insure the smaller utilities a fair access to nuclear power under conditions which permit them a reasonable opportunity to make effective use of its potential" and (2) to correct dhe situation inconsistent with the antitrust laws under Section 105(c)(4). Consumers Power Co. (Midland, Units 1 and 2), 6 NRC 892, 1100 (1977); Toledo Edison Co. and Cleveland Electric Illuminating Co. (Davis-Besse Units 1, 2 and 3; Perry Units 1&

2), 10 NRC 265, 292-294 (1979). Relief provisions should not be anticompetitive in themselves, should be generally equitable and in the "public interest" and should promote economic and engi-neering efficiency.

Florida Cities' trial plan will principally address questions of relief. In addition, to the extent permitted by the Board's order, Florida Cities will show both that FPL possesses and c0

- \/ benefits from market power in competition throughout Peninsular 0

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Florida and that its use of that power adversely affects both t

O "inside" and "outside" cities. '

In establishing the situation inconsistent with the antitrust laws, Cities have alleged, and the Board has found, that FPL's three operating nuclear units are extremely cost efficient produ-cers of electricity. Summary Disposition, p. 47, finding 8. The Board has also found, Summary Disposition, p. 19, that FPL has monopoly power in retail and bulk power markets within its geographic market or " composite area", that its nuclear and gas-fired generation gives the Company "a significant edge in the production of low cost power for base-load requirements," and that FPL's ownership share of transmission gives it strategic dominance over such transmission. Id. This monopoly power will be enhanced by the addition of St. Lucie Unit No. 2. See Summary Disposition, p. 47, finding 8.

By contrast, the Board finds that for smaller competing municipalities self-generation is becoming less and less attrac-tive. Summary Disposition, p. 47, finding 5. FPL has refused to deal or has been reluctant to deal in various forms of wholesale power supply, including the grant of nuclear access, with smaller municipal systems. E.g., Summary Disposition, p. 47, findings 6, 7, 8. In addition, FPL conspired with Florida Power Corporation to divide Florida into mutually exclus,ive territories. Summary Disposition, p. 47, finding 4.

As a result of the above, the Board finds a " situation 3

inconsistent", based upon (1) the historic t'erritorial division d At trial, Florida in Florida and (2) FPL's refusals to deal.

Cities will not retry the facts underlying the Board's basic fin-dings. However, they intend to present witnesses to explain the practical consequences flowing from these findings as they affect Florida Cities' access to aconomic power supply.

Florida Cities' witnesses will explain the essential factors necessary for the competitive generation and sale of electricity.

They will relate the " situation inconsistent" found by the Board to the limitations on Cities' ability to acquire economic power supply. They will explain the relief necessary to cure the situation inconsistent with the antitrust laws, as found by the Board. Florida Cities' planned evidentiary presentation is outlined below.

I. CONSEQUENCES OF SITUATION INCONSISTENT WITH THE ANTITRUST LAWS A. The Effect Of The Territorial Division.

The effect of the wholesale territorial division is to limit Cities' sources of power supply and markets for their power.

This raises Cities' costs, reduces their availability of power supply alternatives and limits competition over power supply terms. Continuing to permit "territoriality" would continue to prevent Cities from joining together to build alternative econo-mic base load generation and transmission to compete with larger suppliers. For example, the ef fects of the Florida territorial division were such that Cities could not join together to build generation plant to compete with FPL generation, thereby pre-venting development of. alternate power supply resources for Cities or would-be independent electric systems.

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The principal city witnesses who will analyze the

( consequences of the territorial division will be Harold Wein, an economist and market analyst, and Robert E. Bathen, a consulting engineer and power supply expert. 1/ Mr. Bathen's testimony will be supplemented by other witnesses, who are employees of R. W.

Beck and Associates. These include N. Guarriello (professional engineer and power supply analyst), T. Szymankiewicz (rate and i financial analyst), J. Linxwiler (electrical engineer and power supply analyst), and R. Cotte (professional engineer and power supply analyst). All of the witnesses are well qualified. (See Appendix B for witness qualifications.) 2/

Witness Bathen has personal knowledge of the power supply situation in Florida. In the 1960's, Mr. Bathen had pro-posed to his municipal clients that the Cities join together for joint generation and transmission projects in Florida. He has been power supply consultant for many cities. Thus, he is able to explain the practical impediments for obtaining economic power supply created by the territorial division.

B. The Effect Of FPL's Refusals To Deal.

A second series of findings relating to the situation l

inconsistent arises from refusals to deal by FPL. These refu-

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l sals, combined with the territorial division, have limited l

l 1/ Robert E. Bathen is a partner in R. W. Beck and Associates, and manager of the Orlando office. R. W. Beck is an engineering consultant firm. R. W. Beck has advised the following inter-venors with regard to power supply planning at some time during the past 20 years: Alachua, Key West, Mt. Dora, New Smyrna Beach Utilities Commission, Sebring Utilities Commission, Starke, Tallahassee and the Florida Municipal Utilities Assocation.

n s_/ 2/ A brief synopsis of qualifications or a descriptive title is given for each witness in this text. Amplified (but also abbre-viated) statements of qualifications are included in Appendix B.

Cities' power supply alternatives. The consequence has been to

{} largely restrict Cities to the purchase of power or to self-The generation with relatively small oil and gas-fired units.

consequences of these refusals to deal will be explained by wit-nesses Wein and Bathen. In addition, Cities will present witness James Berry of Smith & Gillespie Engineers, an engineering con-sultant firm. 1/ Florida Cities will also present wituasses from representative cities to explain the consequences of the situation inconsistent from a managerial point of view. These are James H. Phillips, General Manager, Sebring (a generating "outside" city); Jack Danforth, Director of Electric Utilities, Kissimmee (a generating "outside" city); B. W. Wait, III, Director of Utilities, New Smyrna Beach (a generating "inside" city); John C. L'Engle, Chief of Engineering and Operations, Lake Worth (a generating "inside" city), and Louise Marquis, Assistant City Manager, Bartow (a non-generating "outside" city). (Due to .

compelling personal matters of Ms. Marquis, Cities may be required to request special scheduling of her testimony or to replace her as a witness, as appropriate.) Florida Cities can make available witnesses from other cities. However, the con-sequences of a situation inconsistent with the antitrust laws affect cities or groups of cities in ways that are more or less alike. It would be cumulative to present additional witnesses unless the need specifically arises.

The Board also found that Florida Power & Light entered into joint planning of coordination generation and transmission.

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1/ Mr. Berry is a partner of Smith & Gillespie, an engineering consultant firm and has advised the following intervenor Cities:

Alachua, Bartow, Ft. Meade, Homestead, Kissimmee, Leesburg, New Smyrna Beach Utilities Commission and St. Cloud.

The coordination between FPL and other larger systems from which

(') smaller systems were excluded is part of the situation inconsistent, which will be analyzed by City witnesses. Relevant evidence and witnesses are discusssed below. .

Florida Cities request that FPL designate at least one witness of its choosing, preferably the Chief Executive Officer, Mr. Marshall Mcdonald, or Vice President, Mr. R. G. Gardner, qualified to state the types of transactions with Cities into which FPL is prepared to enter.

II. REQUIRED POWER SUPPLY NECESSARY TO COMPETE IN THE SALE OF ELECTRICITY.

Cities will present evidence that the sale of electricity at retail is comprised of three broad components: the generation of electricity, the transmission of electricity and the distribution of electricity. The generation component is comprised of " base load" generation, " intermediate" generation, " peaking" generation and reserves. In general, efficient base load units are those designed to operate to meet more or less constantly occurring load levels. Efficient base load units usually have very high associated capital costs, but the cost of fuel per unit of output is relatively small. These units tend to be large in size, so that a system needs to have a relatively large and often growing market and must be able to raise large amounts of capital to install such units.

By contrast, units necessary for " peaking" or reserves tend to be smaller or older, with lower associated capital costs.

However, the unit cost for production of electricity from such units tends to be very high.

As consulting engineers, witnesses Bathen and Berry.will

() testify as to the basic generation structure described above.

Witnesses Bathen and Linxwiler will present the development and use of load duration curves to explain how systems plan and integrate different kinds of generation into their system, and how they economically dispatch such generation to meet the system load. Witness Wein will discuss the above factors from an econcmic standpoint. One or more of the following witnesses from the Cities will discuss the need for separate access to base load, intermediate, peaking gene

ration and reserves, and the need to integrate such power into their systems: Wait, L'Engle, Phillips, Danforth.

Based upon their experience, witnesses Bathen, Linxwiler, Wein, and Berry will explain the way large systems, such as FPL, as well as small onec obtain a generation mix. They will further explain the importance of " reserve sharing" and other forms of

" coordination" to attain an economic generation mix. For example, they will explain that a system is inhibited in putting 1

into operation large base load units and thereby attaining advantages of economies of scale unless it can share reserves with other systems, which avoids placing large amounts of unused capacity on individual systems. In addition, witnesses Phillips and Danforth, who manage systems that are installing new generation, will explain the importance of availability of coordination in their generation planning.

As a practical matter, some fuels such as nuclear are C)'

x_ associated almost exclusively with base load generation; others

- are more likely to be used for intermediate or peaking G generation. Witnesses Bathen and Donkin 1/ will explain the different availability of nuclear and other fuel sources to FPL, the Cities and Florida's other utilities. Witness Wein will analyze the economic impacts of such availability. Since many of the Cities have been mainly dependent upon purchases of natural gas for generation, witnesses Phillips and L'Engle will explain the impacts on their systems of future anticipated natural gas

, price increases. Cities will explain why natural gas has historically been so important to the Cities (one reason has been the lack of access to nuclear generated power) and the history of gas availability. 2/ Witnesses Guarriello, Szymankiewicz and Donkin will testify. Witness Phillips has been Chairman of the Florida Fuels Committee for many years, which consisted of the following intervenor cities: Tallahassee, Kissimmee, Homestee.4, Sebring, Starke and now also Vero Beach. The Fuels Committee has engaged in extensive litigation and negotiations to secure and protect availability of natural gas recources.

Henry C. Peters, manager of the Homestead municipal system, will testify concerning a statement of Robert G. Gardner, Vice 1/ George Donkin is a partner in Exeter Associates. He has for years advised many Florida Cities with regard to the supply and price of natural gas and oil.

2/ Cities contend that FPL's actions to limit Cities' natural gas availability would also constitute a separate situation inconsistent with the antitrust laws. Judge King has ruled that Cities' natural gas claims raise questions of violation of federal law. " Order Denying Motions for Summary Judgment cn

(" Plaintiff's Gas Claim and Granting Defendant's Summary Judgment (s} Motion on Plaintiff's Nuclear Access Claim" (October 9, 1981),

Lake Worth Utilities, et al. v. Florida Power & Light Co., S.D.

Fla. No. 79-5101-CIV-JLK. However, Cities' evidence in this regard will be limited to demonstrating the need for relief.

President of Florida Power & Light Company, about possible

() intervention by FPL at the Federal Energy Regulatory Commission, which would prevent Homestead's obtaining additional natural gas deliveries.

It is Cities' contention that FPL obtained its natural gas advantage in violation of the antitrust laws and that this violation has directly contributed to its base load monopoly.

In addition to economic generation, access to Florida's high voltage transmission grid is necessary to permit Cities or others to purchase off-system power economically, or to construct large economic units on a joint basis. The transmission network in Peninsular Florida permits the integration of power resources from different generating or purchased power sources, the provision of alternative transmission paths in the event of generation or transmission outage and the sale of generation output to other power suppliers or ultimate markets. In addition, transmission and transmission ties are necessary to buy and sell from potential new alternative power suppliers, such as Georgia Power. Witnesses Bathen and Linxwiler will be the prin-cipal witnesses on this subject, although witness Phillips of Sebring, which is installing large base load slow speed diesels, will explain the impact of Florida's double transmission rates on the marketing of Sebring's power. Witness Wein will analyze transmission in terms of markets. Witness Bathen will explain Florida Cities' proposed transmission license conditions, making reference to the Florida Municipal Utilities Association

) transmission proposal and Florida Cities " joint transmission rate" proposals.

As an alternative, or in addition to self-generation, electric CN systems can purchase power to meet base load, intermediate, peaking or reserve needs. Witness Bathen will explain the adverse impact of limiting the availability or kinds of power that can be purchased by the Cities. ,

In short, structural impediments to Cities ' attaining economic access to base load power and other generation, to transmission and to coordination have existed and continue to exist. It is Cities contention that if these impediments are maintained, the situation inconsistent with the antitrust laws will be maintained. Witnesses Bathen and Berry will specifically set forth the consequences of limiting Cities' access to base load power supply that results from limiting their nuclear access, and sill explain the different forms of possible nuclear access. Witnesses Bathen, Cotte, Linxwiler and Wein will refer

! to types of nuclear access and pooling arrangements that exist elsewhere, to place in perspective both Ehe situation in Florida and the reasonable possibilities for relief. Witnesses Bathen and Berry, as well as the municipal management witnesses will testify to the consequences of the deprivation of nuclear access.

III. SPECIFIC JUSTIFICATION FOR RELIEF.

The Cities' witnesses will support each of the proposed license condition changes. The outline of the Cities' trial plan, just described, covers the justification for relief. The principal aspects of relief requested by the Cities that are still in contention include (1) access to FPL's operating l

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nuclear units; (2) the right to purchase base load power 1/; and

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(3) access to Peninsular-wide transmission based on the transmitters' Peninsular-incurred costs (i.e., transmission rate) or based on pro-rata City direct investment in transmission facilities. Florida Cities will explain why the evidence justifies such relief. Cities also seek (4) a general provision for non-discriminatory relief.

As a matter of background, witnesses Bathen and Linxwiler will describe the Federal Energy Regulatory Commission's method of regulating wholesale power and transmission rates. Witnesses Bathen and Wein, as well as Marquis, will analyze the difficulty of a system's relying solely upon purchased wholesale power.

In addition, witnesses Bathen, Cotte and Linxwiler, as stated above, will present examples of joint participation and coor-dination agreements elsewhere to demonstrate the feasibility of Cities' proposals.

A. Nuclear Access.

In support of Cities' contention that they should have direct right of access to FPL's operating plants, witness Bathen or Guarriello will present an analysis of the costs associated with FPL's and Florida Power Corporation's principal generating units l

and an analysis of the generation opportunities available to the I

Cities. Each of the designated Cities' managerial witnesses will i present an analysis of the competitive bars likely to result from i

1/ Full requirements wholesale power is priced based upon costs g of all generation and transmission of the seller; base load power x_) is priced based upon units that provide " base loads" (i.e., load levels that are constantly experienced).

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i failure to grant Cities the requested access, in general, and the O impracticality of substituting other power supply resources for 2 . access to s.uclear generated and base load power.

4 Cities ' will show that municipal systems may be forced to i

4 sell out, if not granted the requested relief. The evidence will show: (1) FPL publicized its nuclear advantage (from its

! operating units) as significant in seeking to acquire smaller systems or to renew franchises; -(2) failure to grant access could, by itself, lead to future large cost disparities between FPL and the Cities; and (3) the Cities are faced with a likely increase in gas and other bulk power supply costs, which could seriously disadvantage them in competition.

Witnesses Bathen, Berry and Wein will support a standard of nuclear parity so that Cities should have the opportunity to have an equivalent load ratio nuclear mix as FPL. -They will explain that power plants are constructed to serve loads for 35 years or i

mere. Lead times between planning and in-service dates of new base load units can be over ten years. In an inflationary eco-nomy, if access to FPL's existing nuclear units and purchased

pcwer rights are not made available, Florida Cities will likely J

be disadvantaged for the life of St. Lucie Unit No. 2. This is especially so in view of the " thin" market presently available

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(Wein, Bathen) and the probability of limited availability to the Cities of future economic gas supply (Donkin).

At Summary Disposition, p. 50, the Board says that it is

" highly skeptical" whether " requiring a sale of interest in other l nuclear power plants" is appropriate. This statement is based upon the conclusion that licenses for these plants "have been L

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issued without such conditions". Counsel will present a legal analysis as to the appropriateness of granting relief from such units. Counsel points out that because of the "research and development" status of such units, there has never been an antitrust hearing in connection with them, but at the time they were built FPL was on notice that it might be forced to divest a portion of l

those plants in the future. Cities of Statesville v. AEC, 441 F.2d 962, 970 (upholding NRC issuance of licenses under {l04(b) and stating that when 104(b) plants are found to be commercially practical, then the terms of $103 may apply) (D.C. Cir. 1969).

See Atomic Energy Act, {105(a). Of course, the action the Commission takes on the referral in Ft. Pierce Utilities Authority v. NRC, CADC Docket No. 80-1099, now before the Commission, may determine the matter. l_/

B. Base Load Power Access.

Witnesses Bathen and Linxwiler, supported by witnesses Wein and Berry as well as City witnesses, will present testimony justifying the requiring of the sale of bace load power by FPL to l Cities. A system should either be able to buy base load power on l

< a basis that includes reserves or to supply its own reserves.

The testimony of Bathen and Linxwiler will refer to the Georgia Power wholesale tariff, which provides for the sale of base load p owe r, and associated transmission pricing.

1/ The Commission argued to the D.C. Court of Appeals (Ft.

! Pierce Utilities Authority v. NRC, No. 80-1099) that this Board has jurisdiction in this proceeding to grant the relief requested in the 105(a) proceeding (i.e., access to FPL's operating units) and that, therefore, a separate 105(a) hearing is unnecessary..

' () Brief for Respondents U.S. Nuclear Regulatory Commission and USA, July 7, 1980, pp. 25-26. Counsels' statements are binding on the Commission.

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In conjunction with this proposal, witness Bathen will present a background of FPL's actions to deny or inhibit alternative base O load power availability in Florida. This will include (1) FPL's actions to deny or inhibit Cities' development of alternative base load supply opportunities in Florida, and (2) reliance on the findings approved by the Board in Summary Disposition.

C. Transmission Access.

Witnesses Bathen and Guarriello will testify about the importance of fair access to transmission and the appropriate basis for transmission pricing, and will address specifically a Florida Municipal Power Agency transmission proposal that has not been accepted by FPL. Witnesses Bathen, Guarriello and Berry will testify concerning fair access by Cities to the Georgia Power ties. Witnesses Bathen, Berry and Wein will testify as to the importance that Cities obtain equal access to coordination arrangements.

D. Impact of Relief on FPL.

One issue may be the impact on FPL of granting relief. In addition to being available to answer questions concerning the relief proposed by the Cities, witness Bathen will testify how FPL can obtain advantages from joint action with the Cities.

IV. MARKETS.

Cities shall attempt to show, in addition to the markets established at Summary Disposition, p. 19, a Peninsular-wide bulk power market. Id. They will attempt to show separately a Peninsular-wide nuclear product market, a firm base load power r- market and a transmission market. Whether or not the Board b} accepts the concept of separate product markets or sub-markets for nuclear powered generation and base load generation, they

will attempt to show that FPL has " strategic dominance" over

() nuclear, base load and transmission facilities. The Board appears to so find with regard to the "inside" cities. Summary Disposition at 19.

Witness Wein will testify generally as to the standards for determining geographic and product markets. He will also testify as to his understanding of the economic factors which create a

" bottleneck" or " strategic dominance". Finally, he will testify as to the standards for determining a factor of production.

He will illustrate the application of these standards both to the electric power industry and to other industries, including an analysis of relevant factors for determining geographic and pro-duct market. Based upon the established standards, witnesses Bathen and Berry will analyze the factual circumstances of nuclear power, base load power and transmission in Florida with regard to factors such as cost, pricing and function. Cities contend that nuclear generation is different from other forms of generation in terms of costs; development of costs I

(disproportionate costs associated with nuclear plants are capital costs -- therefore, purchasing a nuclear unit tends to fix a system's costs for the life of the unit); public acceptance; licensing and governmental supervision; type and degree of potential risk; financing; plant operation; environmental factors; fuel transportation; and operating characteristics. Most importantly, potential owners view purchased nuclear power and nuclear capacity as different from other capacity.

I Messrs. Bathen and Berry will testify why nuclear access is essential throughout Peninsular Florida in terms of competition.

fg They will compare alternatives. They will analyze the part which V

access to nuclear power, base load power and transmission play in municipal decisions whether to sell systems. In addition to the above witnesses, Stanley Livengood, formerly manager of the Gainesville system and chairman of the Nuclear Intervenors Group, will discuss FPL's refusals of nuclear access on a Peninsular-wide basis.

Messrs. Bathen, Guarriello and Linxwiler, and Mr. Wein will analyze the benefits received by Florida Power & Light Company (and Florida Power) from Peninsular-wide coordination or pooling, and other joint activities, including analysis of FPL's power sales and purchases in Florida (e.g., broker transactions and i Tampa power purchases). Such evidence is relevant to establishment of a Peninsular-wide geographic market. They will

) specifically analyze how the existence of such market permits FPL to construct and operate nuclear power plants.

The same witnesses will analyze the probable impact on both "inside" and "outside" systems of deprivations of access to state-wide markets and to nuclear power. This analysis will include the reasons for systems ' consideration of acquisition I offers; the desirability and necessity for smaller systems to 1

have access to coordination (e.g., broker) on equivalent economic terms to that of FPL; and the benefits to FPL and detriments to Cities both inside and outside from denying nuclear access to Cities. Mr. Wein will specifically examine the economic and

{} anticompetitive consequences to the "outside" cities (and bene-He f fits to FPL) of FPL's refusals to deal with those cities.

will testify further that a firm with a secure geographic market

4 (such as where there has been a territorial division) will have

() incentives not to expand that geographic market (e.g., to "outside" cities) contrary to normal economic expectations.

V. FUTURE PROCEEDINGS FPL has already received massive amounts of discovery from the Cities, including having taken depositions. Florida Citiec i have proposed a cessation of discovery, except as specifically i

necessary and justified. For their part, Florida Cities do not request additional discovery except for two items.

. (1) FPL has not supplied documents from its own files, pre-pared for FPL by its consultants, although Cities have requested t

such documents repeatedly and FPL has not opposed this request.

Discovery of these documents would be valuable because they'may j

show the cost factors and policy decisions entailed in FPL's generation and transmission planning (e.g., construction of nuclear units as opposed to other units; transmission facilities; etc.), and relate to the feasibility and reasonableness of relief. Such discovery should be completed within 20 days of the l Board's order.

(2) For the same reason, Florida Cities seek reasonable

! compliance with outstanding subpoenaes (issued in connection with i

the District Court case) addressed to FPL's consultants insofar as they are related to issues of relief set for trial by this

) Board.

i Florida Cities propose that within 60 days after Board order, they be required to file direct prepared testimony and exhibits

( in conformity with their trial plan. FPL could have thirty days to respond, or an appropriate time. Both parties would be required to supply "workpapers" underlying their testimony. The 4

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filing of such prepared direct tactimony avoids the possibility of surprise, focuses parties ' attention on actual issues for

() trial, and saves trial time. This is consistent with procedures used at the Federal Energy Regulatory Commission and other regulatory agencies. If these procedures were adopted, hearings could commence in three to four months. (If necessary, limited data requests could be made before trial directed to testimony; however, prepared testimony limits the need for separate or massive-scale discovery.)

At trial, Florida Cities propose that designated portions of depositions of company officials or former officials be admitted in evidence, a procedure which was used in Midland.

Certain license conditions may involve policy questions and may be able to be ruled upon before hearing, thus further limiting issues. In compliance with the Board's summary disposi-tion order, Florida Cities have indicated some of these.

VI. PROPOSED EXHIBITS As called for by the December 11 Order, Cities here identify documents and types of documents they intend to rely on at trial, in addition to those referenced above in this trial plan.

1. Documents previously presented, including, in par-ticular, those listed in Appendix B.

2. Publicly filed documents containing basic infor-mation on FPL and municipal operations, including FERC Form 1, Form 12, and Form 423 reports; FPL report to stockholders; and SEC 10-K reports. (Cities are not filing copies of these docu-ments here.) .

l 3. The 1964 and 1970 National Power Surveys. (Cities are not filing copies of these reports here.)

4. Rates and power supply contracts of FPL and munici-pal systems. (Cities do not file these items here, but will file

() them with testimony, as appropriate.)

5. Rates and power / fuel supply contracts of FPL and municipal systems. (In general, these items are public record documents and Cities are not filing copies of them here.)

6. Rates and power / fuel supply arrangements which will be used for comparative purposes. As noted in Cities proposed trial plan, these include wholesale rates available in Georgia, and transmission and pooling arrangements elsewhere. (In general, these are items of public record. Cities do not file copies of them now, but will file them with testimony, as appropriate.)

7. Power supply and transmission arrangement proposal prepared on behalf of the Florida Municipal Power Agency.

(Cities do not file these documents here, but will file them with testimony.)

8. Documents showing nuclear power to be a distinct prcduct (sub) market. In addition to documents previously pro-vided, see those attached to Cities objections.

9. Maps of the Florida electric system. (These will be supplied with testimony.)

10. Power supply studies prepared by consulting engi-neers for various cities. (These studies, especially together, are voluminous, and Cities will file examples with testimony, as appropriate.)

11. Testimony of Robert E. Bathen and Joe Linxwiler on behalf of a joint transmission rate, presented before the FERC on behalf of certain cities. (The testimony is voluminous and Cities are not filing copies here.)

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12. Sample load duration curves, and documentation of O their development and use in planning and dispatching. (These !

will be presented with testimony.)

13. Studies showing the cost to Cities of actual and potential loss of gas service. (These will be presented with testimony.)

14. Documents relating to Cities' gas supply, and FPL's role in its diminution. Attached hereto as Appendix C.

15. Documents that may be obtained from, or by, FPL's consultants in discovery, as discussed in Part V, supra.

16. A prospectus of the City of Sebring. Attached hereto as Appendix D.

17. Certain further documents relating to FPL's reliance on nuclear / base load generation in its acquisition efforts. Attached hereto as Appendix E.

18. FPL's basic planning documents, particularly including FPL plans filed pursuant to Florida law. (These docu-ments are voluminous and Cities will file and/or reference them with testimony, as appropriate.)

19. Documents relating to the potential sale of power by Tallahassee and other cities to Daytona Beach. Attached hereto as Appendix F.

Cities note that, to their knowledge, insofar as Cities are not filing the above-referenced documents, they are, in general, currently available to FPL. If the Board should wish copies of certain documents not filed prior to the filing of testimony, 7S V Cities would endeaver to supply them.

i s . ,, ,

l Respectfully submitted, J

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f\udQ Robert A. Jablon N M'

Alan J. Roth

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' Daniel Guttman -

Marta A. Manildi 1

Attorneys for Florida Cities s

January 14, 1981 Law Offices of I Spiegel & McDiarmid

! 2600 Virginia Avenue, N. W.

! Washington, D. C. 20037- -

(202) 333-4500

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i Florida Citiecs 1/14/82 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION

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In The Matter Of )

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Florida Power & Light Company ) Docket No. 50-389A

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(St. Lucie Plant, Unit No. 2) ) Florida Cities:

) 1/14/82 FLORIDA CITIES' TRIAL PLAN INDEX OF APPENDICES APPENDIX A Witness Qualifications APPENDIX B Identification Of Previously Filed Documents Which Will Be Particularly Relied On APPENDIX '

C Documents Relating To Cities ' Gas Supply, And FPL's--' Role Ili Its Diminution

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s APPENDIX'D . Sebring Prospectus, .nber 1, 1978 L ,

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~ APPENDIX E . .Chrtain Documents Relating To FPL's Reliance

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APPENDIX'.F s [DocumentsRelatf.6gToPotentialPowerSalesBy ~

"S :.- ,, , . . 4 Tallahassee And,Other Citie,s To Daytona Beach

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tu 1 APPENDIX A Witness Qualifications

\

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O

APPENDIX A O Surtmary Statement Of Witness Qualifications Cities summarize the qualifications of their witnesses here, but they note that the following descriptions are not exhaustive.

We present cnly the most important aspects of the witnesses' qualifications, in the interest of brevity.

1. City-sponsored witnesses.

Jack Danforth. B.S., Elec. Engin., Univ. of Idaho, 1969; h Registered Professional Engineer, Oregon, 1978; District Manager, Portland Energy Electric, 1972-1978; Conservation Manager, Snohomish County PUD, Washington, 1978-1980; Director of Electric Utilities, Kissimmee, 1980-present.

Henry C. Peters. Assistant Director of Utilities, Homestead, 1962-1970; Acting Director of Utilities, Homestead, 1970-1972; Director of Utilities, Homestead, 1972-present.

President of Florida Municipal Utilities Association, 1975-present; Executive Committee member and Director, Florida Municipal Power Agency; American Public Power Association legislative committee.

James H. Phillips. B.S., Elec. Engin., Auburn University, 1942; Design engineer, Florida Power Corporation, 1947-1949; Field Engineer, Rural Electrification Administration, 1949-1958; Manager, Florida Keys Electric Cooperative, 1959-1964; Industrial Engineer, City of Lakeland Electric and Water Dept., 1964-1966; General Manager, Sebring, 1966-present. Currently serving 6th year on Board of Directors of the American Public Power Association; former president, member of Board of Dir6ctors, Florida Municipal Utilities Association.

John C. L'Engle. B.S., Mech. Engin., Auburn Univ., 1956; Registered Professional Engineer State of Florida; member, American Society of Mechanical Engineers. Current Chief of Engineering and Operations, Lake Worth Utilities Authority; Chairman, Florida Coordinating Group Operating Committee, 1976-1978; member, F.C.G., 1974-present; FCG energy broker subcommittee chairman, 1979-1980; Florida Municipal Utilities Association, Board of Directors, 1979-present; current FMUA vice-president.

Stanley Livengood. B.S., Indus. Engin. Sys.*, Univ. Fla.,

gg 1963; Registered Professional Engineer, State of Florida; ts,) Employed by Gainesville in planning, engineering, and manage-ment in electric utilities, 1963-1977; Manager, Gainesville and Alachua County Regional Utilities, 1977-1980; former chairman, Nuclear Intervenors Group.

Louise Marquis. B.I.S., Univ. Southern Florida, 1977; M.S.,

Management, Urban Section 1980; Employed in Bartow Finance

() Department, including as Clerk-Auditor, 1954-1972;- Bartow Assistant City Manager and Administrative Assistant, 1972-present.

B. W. Wait, III. B.S., Elec. Engin., Univ. Fla., 1957; Registered Professional Engineer in Ala., Fla., N. Carolina, and Va.; Engineer, Florida Power & Light Company, 1960-1966; Engineer in Utility Systems, R.W. Beck and Associates, 1966-1976; General Manager, Utility System Management (Director of Utilities), New Smyrna Beach, 1976-present.

Current president-elect, Florida Municipal Utilities Association, serving 2nd year on Board of Directors; currently serving 3d year as representative of small systems to the Southeastern Reliability Council.

2. Expert Witnesses.

Robert E. Bathen. See Affidavit of Mr. Bathen, filed herewith, and affidavits referenced therein.

James J. Berry. Registered Professional Engineer, State of Florida. B.S., Elec. Engin., Univ. Fla., 1957; Employed by Smith & Gillespie Engineers, Inc., including as Head of the Electrical Department 1957-1972; Executive Vice President, Smith & Gillespie Engineers, 1972-present. Served as project engineer, project manager, and power supply consultant for clients.

Roger M. Cotte. Registered Professional Engineer, Massachusetts, New York and Vermont. B.S., Elec. Power Engin., Northeastern Univ., 1968; M.B.A., Corporate Finance, New York Univ., 1974. Planning engineer and engineer in spe-cial contracts, American Electric Power in New York, 1968-1974; Associate and executive engineer, R. W. Beck and Associates, Inc., Wellesley, MA, 1974-present; current Head of Power Supply Group, R. W. Beck and Associates. Has testified before federal and Massachusetts agencies in uti-lity matters; ha9 advised clients in power supply planning, negotiated and developed power contracts, performed load management analyses and applications, advised regarding power marketing and pooling, performed feasibility and financial analysis for various types of generation plants including nuclear, and prepared engineering feasibility and other reports associated with project financing.

O

George L. Donkin. B.A., Univ. Maryland, 1970; M.A., Econ.,

Univ. Maryland, 1973; current Ph.D. candidate, Univ.

() Maryland. Industry economist, Bureau of Natural Gas & Office of Economics, Fed. Power Comm'n, 1970-1974; Independent eco-nomic consultant, 1974-1975; Director of Petroleum studies, J. W. Wilson & Associates, Inc., 1975-1978; Vice-president of J. W. Wilson & Associates, Inc., 1978-1980; principal in Exeter Associates, 1980-present, specializing in energy ana-lysis, antitrust, and public utility regulation. Has testified on about 40 occasions before courts and agencies on energy, utility and antitrust matters.

Nicholas P. Guarriello. Registered Professional Engineer, State of Florida. B.S., Elec. Engin., Polytechnic Institute of New York; M.B.A., New York University. Engineer with uti-lity company, 1969-1977. Negotiated and administered special-contracts for electric power sales and related services; negotiated and administered contracts associated with jointly owned generation; assisted in preparation of testimony relating to rates and special contracts, bulk power supply planning; analyzed system load; developed long-range fore-casts and optimization of hydro-fossil-nuclear generating capacity data. Associate, R. W. Beck and Associates, Orlando, 1977-present. Prepared and directed preparat2.9.. of power supply studies, rate studies, cost and feasibility assessments of joint participation in nuclear and other generation. Has submitted testimony to the Florida Public Service Commission relating to peak load pricing and declining block rates and in power plant and transmission j line certification hearings. "

Joe N. Linxwiler, Jr. B.S., Elec. Engin., Georgia Institute of Technology. Held graduate research and teaching assistantships in electrical engineering and mathematical systems theory. Employed by consulting engineering firm as ,

staff engineer and coordinator of computer applications and '

software development in rate and power supply planning.

Employed by R. W. Beck and Associates, Orlando, 1976-present, presently an associate and executive engineer in that firm.

Has prepared and supervised preparation of retail and whole-sale rate and cost of service studies, power supply planning and feasibility studies, long-term and short-term load fore- l casts, load research studies, and management systems studies. .

Also responsible for the negotiation and development of who-lesale rates, joint participation agreements, interchange agreements, transmission service agreements, and the asso-ciated costing studies. Has submitted expert witness testi- '

mony concerning these subjects before the Federal Energy Regulatory Commission in various proceedings.

O -

l

\

4-() Thaddeus Szymankiewicz. B.S., Business Administration, Finance, and M.S., Business Administration, Fla.

Technological Univ. Employed by defense contractor in area of planning and cost control. Employed by R. W. Beck and Associates, Orlando, 1975-present. Has prepared and super-vised preparation of financial studies, cost of service studies, rate studies, and periodic utility system reports for municipal utility systems and other clients.

Harold H. Wein. B.S., Philosophy, College of the City of New York; M.A., Economics, Columbia University; Ph.D., Economics, Univ. of Pittsburgh. Currently Professor of Policy Science at the Graduate School of Business Administration, Michigan State University. Served as principal economist of the Antitrust Division, Department of Justice, 1945-1951; also served as Advisor to Attorney General Tom Clark and as Special Assistant to the Solicitor General in United States

v. Columbia Steel Co., 334 U.S. 495 (1947). In 1962, on leave from MSU, served as first Chief Economist of the Federal Power Commission and Head of the newly created Office of Economic's. Working economist for 40 years, including work in the electric power industry, particularly focusing on the interface of regulatory and antitrust issues. Served as eco-nemic expert for the Antitrust Division in Consumers Power (Midland), Alabama Power (Farley) and Toledo Edison &

Cleveland Electric (Davis Besse and Perry) . Has served as economist in other electric industry antitrust cases, focusing on evolution and organization of the industry, operating and facility coordination and power interchange, the nature of product and geographic markets, types of com-petition in relevant markets, the acquisition and maintenance of monopoly power in relevant markets, and the nature of pre-datory actions in the power industry.

4

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l APPENDIX B Identification Of Previously Filed Documents Which Will Be Particularly Relied On l

9 0

(

, APPENDIX B Subject To Which Document Page Number On Which Primarily Relates Document Begins Geographic Market B-1 Geographic Market B-103 Geographic Market' B-166 Geographic Market B-221 Geographic Market B-237 Geographic Market; Pooling B-392 Geographic Market C-184 Geographic Market C-310 Geographic Market Cl-313 Product Market D-12 Product Market D-13 Product Market D-31 (entire report)

Product Market and Geographic Market D-34 Product Market and Geographic Market D-241 Geographic Market D-131 Geographic Market D-151 Geographic Market D-159 Importance of Coordination D-310 Geographic Market I-l Geographic Market I-55 Geographic Market I-56 Geographic Market I-58 Geographic Market I-lli Geographic Market I-155

O APPENDIX C Documents Relating To Cities' Gas Supply, And FPL's Role In Its Diminution O

UNITED STATES DISTRIC COUlt?

,' FOR THE SCUTHERN DIS *RIC CF FIORIDA h

A.

Gainesville Regional Utilities, The lake )

Wor h Utilities Authority, The Utilities )

C=meiseica of New Smyrna Beach. "he Sebring )

U**18. ties C=amaissica, and the cities of

)

I Aladtua, Bartcw, Fort Meade, Homestead, )

Kissinnee, Mount Cora, Newberry, St. Cicud, )

Starke, and Tallahassee, Florida, )

)

PLaistiffs, )

) Civil Action No.

vs. ) 79-5101-CT7-JLK

)

Florida Pcwer in Iight C::npany, )

}

D e f em*2nt. )

)

MEMCRANDUM CF TAILAEASSEE, FLCRIDA Dr SUPPCIt! CF ITS .T!!CN FCR

SUMMARY

wN CF TAILAEASSEZ'S NATURAL GAS CLAIMS INDEC CF APPZ3 DICES

Page a

i Florida das T scs=tissica Cemeanv et al., 43 EA J8456 tangust 28, 1978) Al

?

FPI. samorandum: "Susanary of Gas Transpcr.atica

,F Centract 3/8/65 T3" A2-4

,' F7L se:morandu:s *Housten Gas Merger Proposal and Rato Ctse. Fr m George F* - to

Mr. R.LL Fite, Febr: ary 7, 1961* AS-6 i'

F7L's Answer to Intsrrogatory 5 of Plaintiffs' First Set of Interrogatories A9 Florida Cas Trs smission Cemeanv, FPC Docket No. CP74-192, car.als pages 8- 0:n the transcript of hearings f=r May 13 and 14, 1975 A10-17 Florida Cas T snsmission Cc==any, FPC Docket No. CP7,-192 'Cr::er n a:ec.asg Settiament and Direc.isg Office of Enforcement to Institute Investigatn:n," issued August 21, 1978 A18-33 a

Natural Gas For The Florida Power in Light

{ Company, Report :To. 1, 3echtel Corporatica,

. November 1964* A36-96 Area Rate Preceedine (Texas Culf Crast),

FPC Occxet No. AR64-2, et al., cover and six pages from "IniE~rief of Indicated Respondents

May 29, 1967; cover and first page f.cm -

"3rief of Pan American Petroleum Corporacica, May 29, 1967* A97-106 k

/

A

/

FPL mescranduza

Market Assesacut Firm

, Interchange Peninsular Flc,rtda System 1977-1985. JS3/MCM 7/9/76* A107-118 FPL memorandum "A Proposal For a New Charter "or the Senior Management' P1mmning Council, 8/26/74* A119-122 FPL rate comparison "71orida Residential Electric Bills, December 1976/1,000 KWE*: FPL ads *?PL's rates are still the lowest even with the interiza rate increase" and Since 1947 you've had one of the lower electric rates in FIC:lida*r pamphlet *7:anchise Issues,

, peytona 3each 1976*: and address to

77L Shareholders" by Marshall Mcdonald,

! chief executive officer, January 24, 1977 A123-135 T=1t=h==see memorandum "Oaytona Beach, from TED Division to Mr. Joe 3. Cykes, Jr.,

~

Director, Ziectric Department, July 26, 1976* A136 Tm11mhassee namorandum " Sale of Ziectric Pcwer to other Municipalities, from t Daniel A. Klaman, City Manager, to Joe Cykes, Director, Electric Department, March 8, 1977 A137 g

T=ti=hm=see letter from Joe 3. Cykes, Jr.,

Director Electric Departnent to Mr. A.W.

[ Earrington, Jacksonville Electric

' Authority, Re Availability of Firm

). Capacity, May 4, 1977 A138 '

Tatinhassee nemoranda " Estimated Utility

Service Cost for Prospective Indust.% 1 Customer, from Joe 3. Cykes, Jr.,

Iy Assistant City Manager o Daniel A.

Klanan, City !<anager," May 24, 1979 ansi July 5,1979 A139-144 77L let. ors, ads, and namoranda to at.ract industrial customers A145-139 Excorpt from testimony of John V. Little in Florida Pcwer & Licht Cemeanv, FERC Cocxet No. E-9574, June 29, 1977 A160-162 Florida Pewer & Licht Cemeanv, m .C Occxst sos. ER7a-L9 et al. Opinion

, Nos. 57 issued Augus T3 N 979 and j No. 57-A issued October 4, 1979 A163-209 l Amoco memorandum

Memorandum, File:

EAa-N-1101,

by E. A. Renfro A210-211 Florida Cities and FPL

Memorandum of Understanding" of May 12, 1979 plus extensions A212-218 City of ?t. Pieres et al. v. Florida Gas transmission Cer:many, Unned l States 01stric. Court for the Southern District of Florida, No.

71-1494-C:7-CA, order Approving Setti.. ment Aq;eement and Entering

..I Consent Cecree A219-220

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g I 3etsee= - 71= 1da Gas T:a=s=1ss1== C =pany (71;e11=e) ud j l ric=1da 7cuer t. Light C =pany (?cwer'C =74=y) t l

1. C==ta..platsd da11ve=y data fc gas - Jcly 1, 1967.

.: 11 l'

2. All gever.. antal authori=stic=s, f1=anc1=g and c =t===t:

l - a=ra=geme=ts by *uly 1, 1966.

.. 3. Ca==sC atie= p=cvisiens sd by Jalf 1.1966 (a) If ??C authc=i=atics has =ct been f===, 7cwe: C =pany, 7a= A= c:

eb- 71;e14=a ray c2=cs1 i= acespeable .

by -'-4 -ty (30) days v=itta= =ctics. ~

i (b) if f1=a=ci=g has =ct teen s. ,leted wa ' '- 50 days afts: ~

acceptancs of T7C Cart.ificate cd 7ublic C==vs=ia=cs, Ag:se=e=*

' will au-mmtical.ly es==1:Ats.

i (cf ::

e==st=== tic =. '..as === tes= ==;1stad wi - t.o (2) years

; atta= " -=-~ g has tas == ., lated, either pa_-ty

. =ay ts==i=ats

.idad that 7 ewer

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da*/s == tics, f_

[ ag:se=ent e-- -y we cyc=

thirty -(30)=ce exs==ise right if pips 11=s v11*. ts c==plet withcut undes del =y.

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I

4. I5dective Cats a=d Ta:m - Iffectivs as ed data of siq=i=g.

i" v111 ta fe twestf (20) years f:== first delive- f =f g=s.

5. C==t=act ce=a=ds ICC,CCC Mcf/ day'for gas delivered is 1967

{' 2CO,CCO xcf/ day f== gas delivered in 1968 a.=d ths:satts=.

g .

3. (a) opti== - 3y giv1=g two (2) years =ctics befcza J:171.1969, C = tract :: -=-4 =ay te i===sased by 25, C00 Mef/ day i= two (2)

.@~ i=c= aments c up to a total of 50,CCO Mcf/ day of additic=al gas.

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, 5. =aily 11=1taticast j

'i (a) May schedula as 1=w as 9Cf. and. as '..igh as 11C% of == tract ,

j 4 re=a=d c= a=y day, subject 23 a li=1:ati== cf ICCf. of C = tract i

' 21 ::--2-d c= day folicwing scheduled 11Cf. and LCC% cf scheduled -

j. de=and average for seek.

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(b) ::assitic: Pericd - Thirty (3C) days fell = wing first

$p dellremy and "* -ty (30) days following first delivery of l' . 300, CC0 Mef/ day, C = trac- ='aa- d =ay ha :sd :cs by accust h .squi=ad due to operating p==blems of inittai usa of gas ta==isc boilers a=d t='**' g personnel.

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(c) 3cilar McAd 'd eati== Pflated - Whe: :svly c =vertad units l are found to requirs a:difiestic= to p:=perly bu== gas, C== tract j

l =amand =ay be sduced to amou=t of gas that ca he hu =ed in g other gas 21:34 usits is operatic =.

' 1 ,

5 .(d) Scheduled Maista=a=ca Pe=tods applias t: 7c=t Ive:71adas #4 and Cape Ka==edy 41 usits, during 1967. :* ei.hs ==1: is taks:

- l g cu= cd sorties C== tract Ca=asd =ay ha :sdursd ic a fou: (4)

L week per1=d to 60, CCQ Mcf/ day du 1:g s==h pe:1=d.

l k g (e) If faal raquirs=e=ts d--' g spring er fall 1:w use parted

. s i= the yees 1968,1969 and 197C is 1ssa thas C==t=act a=asd,

i 2cwer C =pa=y =ay: sduca Cc= tract a=asd 4 : a=y ts. {10) days h

m is cais=da: yea =.

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[. , 7. Mahe-up R'ghts - :* 7cwer F---a=y elect:1: da=a=d == as a rurage

! day dur1=g the week cd icwas: da=1=d is lever ' = es.1=ated da:

L , cd 42.1 d ' * += hh i= 1963, 4 6.0 ' * =:. Wh is 19 69 and 5C. 0

' l

- *-- W h is 1970-1972, daficiancf rtli to =a'ca-up gas and ca:

I to =ada up (a) by taki=g up to 11C% of Cc=t: set re=asd whs 11=

' t capacitf is available (b) by applying a=y i=ts___,21 bis gas offe red as sake-up gas (c) by =ake-u; gas.at and of Sc= C =t:act

{ f is IS79.

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8. Depa a s 2::s Scheduled reliveries: 5%i g 9. Cb11gatic= fer Deliveries at Zach ce11ve:f 7c1=t.

(a) To all poi = s coiscidentallyt SV. cf C==t: 1c. *-2-4 is Cne (1) Ecur.

h c-24% of C==t=act =-a m* 1: Tour (4) Ecurs.

.y -

7C% of C==t=act ce=and in Tcurtnes ,(14) Ecurs.

j (b) != all plaats is Cada and 3== ward Ceu= ties, c=iscifcatally:

g g 8C% of Cc= tract :=-and and c= heurly basis as 1: (a) abcve.

3 ft I

h 10. : 2 sycrtat1== Ratas and Chargasa

@ (a) Pipeline .<111 ask f== =ct =cre than 15c/Med ::asspe=tati==

g rata for first five (5) years of c== tract af terwards pipeline

y. =ay :tquest changes is rats but such rates =ust te app cved by N ?2C.

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i (b) Subjec. to app;c;riata f* '

g wid 77C by 71;eli=e, Pcwer "---2-"I is t: pay f== all futura gas gaceri=g taxas c a= equivale== ts:c e= acted after effac ive data c' E.is i ! agreeme== and paid for '_y 21;e11=s.

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11. 71;411=a acts a.1 7cwer C:=pany age == 1.7 deal 1=g with Pa= A= i=

l :sgards to i=put quantities, measers=asts an ' ----*' y 51111=g quantities.

i 12. Cuality, =easurs=a=t, =easu 1=g equi;=an= a2.1 c==f=== with Sc=

g l , C = trac. and a:s s- W =-.*..

13. Assu=pti==cdRiskWarrantfissta='-dand===f===swithSc=

A C== tract. *-

14. Teret Maj ec:a is sa=e as Sc= C:st:s _ with cs:-* *

addad ' ta=2 such as, *the successful. exartise =d ha ;=wer of a=1=s== A-=-

l by a=y g=vental bcdy, the cu -* * '-- .: : disc:= i=:ance cf

' {- a. pla== c plasts :squirsd by g=vs===a=.21 == judicial ac.ien.

I 15. --= '_ ad relivarias - Apper:1==sd a===g 71:= cas csers afts:

taki=g cara of Pipel1=a.'s =ssale cus.==ars.

t, b 1'6. Favered'Ea_1==s 7:=visicas: .

', (a) If 71;elise cdfars Fi== cas :s:sp== sti:= Rats to others l, F ' at less tha= the Power C.- :,.a=y rats, 71;alina v advise and

=ata is wastad, 71;alise to file with 77C ts -Aa ra.a applies' t= Pcwer C. v gr. 23 rata is =ct a,.r. vad by 77C that: c ==s a,.f . .ii rata fc= Pcwer C =pa=y will re- is af" set.

I,

- (b) d 71; ell =s affars a '*-- direct gas sala to a==the: =us.=

at a 1:we p:1:a tha 2cwe e . y's delivered c=st ca, gas, .

~

such rata is .tm te affarad Pcwer C =pany and if acesptad, Pipe will =ake a= app =priata

g with ??C. .

17 . 71;eli=a to fill new pipall=a with 71;sli=a gas.

~

13. v= v' -- Oay a=d Mar *--- Ecurly use statad is: each 7 cwa: 71 ant I i= -+ 8 %1 "3".

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' Masses. ', J. 3cwan, Lace Payr.a. '4111 ? as =r., Tad

' 3arg=an, and I gf 6 =y offha c= Mc= day Ta6:e.n:/ 6, pri=arily

. :s die,eass .ha ,...rcsal to == 3s Ecu.s = Texas cas and Cil Cc pera * == and ceascal -':2=snissica C==pera-' ~~ -

ha esta

--assa applicaric=s which desa =.e ::cpanias have bef==a :ha .

i

' Tedaral ?:ve C.===1ssi=n vara aise d.tscussed. I a:r givi=g batew the pri==ipal points @.ich vara c=vced. '

I i M e- e ___e-1 .

I had previcesly :sLd W. Iowen ever d a taleph==a i .!zr va a:-e.ld === sign de 1e- -- s-= - # : arded :s yee. en i J2:2::7 2L 1551. 2. P:ssten. epe=ad the =sacing by saybg that -

5 T did n== appreva da Lac.ar a p ta==== as si.b=1 :ad 'cecausa ed .

1:s vacua and Mdafi=i:a we ding as well as becausa cf i:s c=c ent. Es pei= ad cu: h:: a: ;;asen: C ss:aL's whcLassla 22:a := Ecc : n f=r gas delivered at 34:en ?.=ugs is subf ac: :s

, rar ' m ' = by T.?.C. Cur i=* *-- :p ihla gas escata:as un :=d

$ d=i..2 v'..h Ceas :L's :::t but Cess sL ===. sacca T.2.C. app = vat for anf chsscs.

If the arge geas :L cgh, vid.Coas:2.1 as .he n::r.

viving -mf, .hes u=uld ha == 2.P.C. cen=ct eve ** -

esca u:ic Shes inta.._,.:ibla ses scle direc: by a pipelina i d as === c=. a >- da ju=1sdic:ica cf any rare.La:==f e .

st= ,

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c := c=17 p:=.se:1er. wculd be 2:: affer$4d by cc: c= trac:.

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. .t. I- as :n fur har challenged W. 3 :.e= , s shew us h:w l

si =ing a La::a= apascane c- ' ' pessibly banaft: cur ::==any. l g

e

! than expla had =y cbjecri m s := cha la::e.: @.ich I l

i i==Ludad :he T.?.C. aspes: as wall as :he fec: ha I cheugh: !

l l t: w=uld === be p;se:icsl c=ce che : c pipaLine ec=panias wer:

l !

' :: ==:1=a keep 2g separ:co racerds suffician:Ly d:::ibd l s p;% m a c. -

s s. . e= ., , .

_4: n t > -

a

+4

i s~

t .

t

L. cat =A Pcvria & L.:Cci- COMPANY tmvrtet 3:nnt39erecL'ect l -

. ie=a===

Bars 7 f* =

=e. ej =(

l empeus to i

l. *W

"===

sen

..1 '

so 22: da =s s cf the cLd ceas':2L system c=1d c=nci: as :s ha

, dete==i=ad. 5 add'-d n,11 such rac :ds era kape, his .~~ uld

, apparen:Ly et* 4-= a sc== cd the savings clai=ad 20: da _argsr.

6 add * -d - .= ha abcvs I pets ad cus ha f===

exhib*:s is da rata casa de prospective sae_:gs 6 c. ;crata *

,. axes bf .- scLtda _d = c=ld :. cu== to ;cssibly nc cra can 31/*,000 a yes: e.id is negligible i= an a=c= ed $20,CC0,000

' wh1=h is ths : :21 cf ca cpe=a d_ng reve=ue dedu=_iens of the c

- d =s.

I' g it:. 2even had previ=usly sea:ad cha they c:uld sava i =c=cy by c= sot 4 2, d.ng cair enginacing d.rpa===ents in Ecu::=

l and St. Feca:st=...g a=d I askad 1.1 hat c=uld be d=== W.a:har c:

t nce da c=t=panies vara. cargsd.

Mr. 2even .han ::iad :s a:: plain h:7 ::ey wanted the

' _e:gs and liscad :he cerpe=sts si.=pli.fies d_en, dae:sasa b 8

regai=ed repc :s :s 7.2.0., a. .d s'-d '2r reasens. He was a==haci:

- scyt=g ,hs: they had nc *- - . icn of d=ing a fthing insofar as da =arger uns c=== ned W.:.ch w ' inc aasa cu= c=s.2 =

adve::aly affsc= us. Ha said ds: $sy had as-+-' ed cpar::ing savbrs cf 512f,CCO pe: year f==s tha.=arger bu: c=.ld ac: g:.va.

us arf da:sils and ac=1::ad .ha: da f* p:=es -' f.: weLL be high and even if . hey vera c=:reet ha: his was s=sil in rsla:1=

.s chai: ::::L ces:s. Ha said es: da7. hsd n== given :ha '

?.?.C. crpec: any ; ::1=L:: ,.he :gh: bu ha: he baliaved . hay

. c=uld --* up with seca =. ached of h:ndling cur objec:1 n.

Fr. ? as:= ::==a . .td .h:: thars =igh: be sc=a scLu=i = bu: en the c:her '.:nd the p :blam =tsh: be i=scLuble. Mr. 3 wan sa ;e:: d ths: eines F.?.C. racui=cd de:2iled pr per:/ :::: ds

, :h / :::id shesys =ha a cal =la=1cn ed ecs s :o .he nat:n i ?.cu:a ;m b:: en the basi. ef the p;cper:7 := che we.s wt:heu:

difficui:v. !!c su; es cd cha: he join: en==enses such as

tv: and gr.cral could be all=c :ed en the basis of

,j/g.u!OV

. f./* '# ! *~-.gL

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l

. =..=., r..e. v n ,

., - .,t...

- ~~

t > .

N

l i .. ,

I l

^ -

. l l

,1

. y w.=;uu mwz:t a uca- ccun.w l I

u.mmes connes,ee.cci.ca 1 - .

~

019573 3 = .

,=ess

=3 .

~

,,4 .

'Je eg sssed sc=e dcub: as to de feasibilitf c'f 51.s but Mr.f 3cwen .

said ha: day st:uld give da =ar:a= sc=a furcha s==dy a=d perhaps c uld c == up wi:t sc=achi=g at=eptabLa.

Mr. E.. wen severaL ti=es s :sssed da f ac: that he and M . 7ay=e wa=:ad to ce=:1=um :=a have d did nce the fi=es wa==cftorela ic=s do anything st h us, -' *- La. gest cus=====,

== causa a=y fri:.1 = be '4een us i

' Re sa'd da: abcu: 51:-f ed ha Lattar agrae=enes Lika

ce ena se== us had been ss== cu: :s the inca :vptibia ess::=s:s and 22: !== cr fira had bes= re====sd si.gned.

.l '

I Race case . .

k c.a fac .*.a=

. a=y :sta i=:rsssa eb sined by Cess 2L L

'- .hs c= sne han=i .g wculd i=c:aase cu '- ' == rial razas was discussed a sc=a Lang:h. M: . Pres = egressed the epi =i=

[

ths: the sa::La==== cffered so far := set:La .he raca esse apparen:17 was so ene-sidad. th:: we c=uld cc c= sider i:

saricusly. I ... h: up :P.a fac: :P.= when Hous=== Tc=s s ==ds i its c=igt==L ::.a 1. .=22 3 fili =g May 27, L960, i: sestad cha:

to chs=ge was ei=g =ada in de *- m.p:1bla schad..la st=ca the prasen: :sta uns at :ady heart =g i s fai shara of :ha sfs:a=*s ::s:s. .

Mr. Fay =a quicklf pei=:ad cu= th:: this s:2: =en: was

. =ada by Ecus := Tr:ss c=d did net c=ver a=y i=== ease i= its i=:a==up ibla :::ss stich wculd be caused by as 's=sssa f ==

C:ss :L. -

I pei=:cd cu: 22: in hs :s:a inerscsa f3 Lings bef=a E.7.C., C:sse:L csked f= an incesase of $2,312,CCO which wcuLd i=ce:ase M . sten's ces:s by th== s==un: and ye: Meus=== c=Ly f asksd f:: r.: incrasse of Si,2iL,CCO which, if the i=c=ceses were

-*- *nn:.:d, 'c:uld Le:ve H:us: n versa cff dan ten i: se:::ed W*"o:inf ar o%oc6

,, . _:,s.

. r.=...n umw i 'm

_= -e e . ,, ~ ~

A7 P .

f

.e .

I

,k

~ ,

' - . n ..r

. g

- t M.ORIOA NwER & LIOh? COf.tPAMf i i,,m.c,nca c=nassner.co.cz ws.n

=

. .~ Ole,L~2 i

ms I

. ===asure - .4 i i*

l da rats casa.

M: . Icwen tzt'Ind 2: g ea: Lerq h en ^'

subjec. {

+

bu: was u=sbla :s expLsin 1. :

1 p

.t. Seven addad ha: the ra a heressa appLiesti=ns hsi: ces: cf =cnsy was wars =nda :sessse:7 by the fec: cha ec=sideably highar dar. they had c:pectad s=d also 2 theEs

pipalha c=r.st==:i=n cesca uu=a hip.ar ^*. anticipated. ,

and Mr. ? ps e=mLabed ea: they fully cpec:ed th:: haf c; in LL.

l

' bc=tase asked by Cess: L w.Ld.be -=se:ad i= par:

If thi.: hn; pens, cur 1 :a==pcibia :sta sar.:.Ld be i=c:aased 3e s 3e per =cf unkh vill ::isa de :::a aben :ha ces: pf cil a: =cs: L:cs 1:=s. Mr. ?zyne i=dhated tha:, they we:a werkins I

en add *:unal fig::ss :s ha sub=i::ad := de?cssibly ether partiss sc=a-ir. t

{, the sca casa wi:== che ne== three waak.s.

f.:.hc c=nesssh .s wiLL be effcad at: hec 3h ^** e.a net

t. M *-d:aly y --'=ad.

.::. 3cwan ses:ad that eridan=a cf I.=w they wara w

fL:q

=c wc: :d4 wi:5 us and i= cur incarss: they had Tscan 17 a :snged wi h 7brida ? cwa Cc:persti=n := take Lass 6:ct :uptibla gas

[:

.han day s:s c:i: led :s and :stasse 21: : be scLi to hs.

atts 05ere vara sharp differeness of cpinien, :he

=seti=g was cc: dial ch::ughcut and they sca:sd tha: thef had a - -5 cierrer u=.ierstanding of =ur posi:icn and pr:cLacs as a esuh cf da =escing.

~

w. s Cec gs ms.an Vica .% .iden 1

I -

I

sr .4.

f*1 .-asa f,,r5,v a e ct

O 7 un:>-

ggM a,.r. e.sem

- sac =

em e

=

A8

l

4 1 t

?

f I

. .s.

mi .

P.ar-watse va. 9e

14=e1*r all ;erseas vens had any sspeas13111ty

-l relating 23 t'.a saaL=g tegenacoa. agreemmat. appesval, coacanattaa er --d' '* -* cas (proposed, ac ual or potas u al)

, et ce C.assesy's yms t=naspe: .acas ar= mat ==aen ('-" -d**?

Falatad preencar az=nagementsI wiu es=ar Tlarada :aa ==ana.

m an w Campaaf or Aance ProenctLan Cassany (or any ;radecas.

rs suscaseers, af' =tas. aastats or related campansan t s se.e . sa* -? us natzn ei *h

. r==-* " ? ' a y sad *m *a- gestadts3

., dazing weacs 1% was !ald.

j I, Answer as *: tar-wate we.1:

w. Mcf2eges Smiu and treert Tita had cretail 4

._ im' y far tsar gaa : Atisa az=sagemmata and gas

. pasencer as=sagemmats ragaz=ad ta is !=taz=ngatssy No. 5 .

t dazing car pastada.1935 to 1571 and 1335 ta 1349. sspeccvely.

reaears. nd sargmas and Castge r* === assistad 32. F1.a wtta!

t.

respect ta hia'.- _, --*%ilitias dnzing the pesinds 1353 ta 1 1994 aat 1955 1 a 1349 = asper.*.vely. 11=ce 1344. w3. J.Z.

Carssa has had __ --*%i ?

ty fac 77L's

sal proctrement.

i-

~' add y t e p. - - of .acura.L gas. Mr. Carzen was i

i seaject ta t s overs 1L 41.sctisa et M=. Fi*.a until 1349.

L.

Mr. Smita until 1371. Mr. 9menaall McConald sis == 1371. Mr.

' Eamer Alias fmr 1372 1373. :2. Donald a --' p g=ca 1376-1377, i and Mr. Y.Ats4J. Csea !=:s 1377 to t=a premaat.

I ; :n. ta s or sear rr e~ala and le =.

had auf 1=velvemmat. vita respect u TL7* s gas transpez acas .

ac=novemmata and gas producar as=angements are enf.actad is Jg- r ==-===res teing ,roduced .a ;' ai--* 'N. (" e dac=amats

. as sectaas ts *t.er=ogatory se. S. ecar than privileged

! dec=amats, are sacaratalT lameled 1.. 22e matarials heise produced my TyL.)

2 ko

-.e insars. Isary Allen. *.Z. Ca son and Micaal 0:st of T7L are capable of " *-a4-~ toscanny -- i-~ .:a t . Mg(

--n**1 ~ saastance og 21s answer.

t YW l

V.a ~. .

4 I. .?, 3

. . . a-

.*=w*

"Mh

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e. . .I

. v -e e

E"=.sg.f 34 4 =e - A9

-m s .

l

' 3 A

P**==e.s 1 i i 0.T.AT,-

e ~~*~ r.e :

7"1C - T*. P.!-'.*. CAS T2rT3:C35:CN CO C'A !, 00w. 30. C?74-13 2, i 3 I g hisy, 3m7 13, ISM, at WasMarwe, D. C. volm No. U) !

I; f

1l i

,. , g a

C .o. .N. T. .! .!!. ? 3 j

l w: .vrssrs i

3:nca crss 20:ZC" Ercrss fi 176:

- - 2ichar:1 3. :c.11 1760

. t .

t-5i s -

t.

3.

i .

T;t-

e. .

Sf j

., 5, r _r _E _I _3 _r _? _5 a , I I , scust: . : . . u :.a . .: u .~~ 3

.r >

?. ! 41 - itit=ess 2- = ' R:5-1 (for i

I3

=cra ec=:pleta dascriptics

, .*. I i see. vol=s 1 of t s:sc=ipt:' 1761

,r - .} . 1 l.

i; 3.,

j i

41 - Wit =a== Nu.11's 3:2-1 (for -

= ora mi e. easc=iption sent vcim:r : of ::s sc=17:1 1761

. - .' 14 I E ,

i !

r 16 .

i . . .

. 27 -

. 5, .

( 13 j, g-i . Icum - 1759

. ts

[

. NCc3 - 1307 ,,,

20 :

! A..; m CJ-1930 -

f .

. , < j

.**. ,, /-

J

.t

= ..

T

4!

4 25 -

1 y ... . .

~

A10

l I

t k

' l 1736 1 5-i ca pred =ts pi ali=e tm.1d ch==ys. .s a :=:r.rarad een that f ji i 3

i .

I . ha did =c: vast to supply ecse 20: his c== peti :s. So we l

. 3' 1; sugvastad that harh people 1.sy *--d- cards es *he table, and j

i '. .

v. >>- c=t vna: e. raca: :===s =tati:= recria a:3 -- v1=v, I;

a=d eat riorid.1 C.:s pls:s to ch .:;a. cu== set 17 a=d ;:ojects<L i (

. . ~

'==s as da: a:s p=s 1L*.s.

, into -J.s f

.. ' E..

y:

I

! ;s-t. 31=cs :::. "c=sc= is hara,1 4:cl.1 ask h1= vhether tha

p

. sC.I

ansM.atics :=stit:ta cas p: cido ths data f=r the vata:

' $" > =uspe=utic= ; cyls. t

. .msat.; e

. NI; 2:3. TEC;l3C3 3 . I c2= C317 111,'N . Cight 30V 'dl'.at V4

.E: .

l.

viu. e: t:2 ; = vida. e a 4-<- -

.u.. : twa " i=. to e4

. , j.E.,

.- d :. ~--d=-s i=velved. Scys to e . Occa. i=fs=atics. Su

.M - naa as to e - -: ;

'w ! : viu. hm to =etter 2eu la =

[ 'd:

i -:.* M :. cas c: can =ct. 'l L. , a j s'

'-h case, 4 15. ::2. c::CI:DrL: t'a daect 'h: 4.w- * - c tsst to l

> m :. .

. i 6 :'Iv-.

! rM~- *. l .v . ~ ~ en. .

5 ,

u's,.s- t t

..!2"...

p=ssu=a if ~.'..at .

is 7:cvi ..d ricrida Gas veuli alsc.

' 7 @1s , .M ~.'. air 7:cject2d*:atas.

'Qi%

. ~.

gts 32. - - .--: Tes, cir.

c,... ; ,

, 4p . k- "

N, --

. (E3 D M*'A"p $ N[

..:: v. . 5 Y.

.ge'!dwt, :31ati:5 to ea =a:::: es es :.=cco v=

ie

. tf cen-

.MI .s

--i.

' i .t:2c- -

s

~1,e L *l4 vent th %L a Serias of CSC- '

- - '-d -**d '-3 c= the takes "h I

! r%:. =da= ca .==co v_=2:t; e=e. :.=t, whae ear vin. h.. 7.=d i=

g e. pas <=. -, eoz hm <== i= m. - ad t= a:s

$E22kd j

.MD .

i

- y s wc-n__

m m_c%g%5..=.-s-e m

. w- - - -

.m-b AM

.. y .

I 1

l - -

l .

l

'I h b..

i -

i ..s "t..

. l 4

i.

the ;=cf acti:n is 30-t=-35 1::.L=f par '.ay', is 1375-77, 64 P's

,f

, par day. Nj js.

.e

( .

ashad ::: . '" d' 'a7 to ;_..ida a ecpy of the A=cco 4

va:=x=27 cc==:2ct, which he did c 7:1 day. Afta= reading

+

5 th" ** ~--

' =, I sustad en tha :nce d. that suggestad H . . .

(!l

~~~

.: N.

4 SS" ta7 ;=cvida a wLt sss, as. Tct: Ecnn will recall, because l .

7 it appeared to =a a=cco was req = ired to have avadlabla for i!

il

,, daura:7 us va =ene ce ecst=.u:e d===d, c= iso,:co sc:e par ;

3 f

day. ,

} .

' "'* '

past F ' '*7 LI.r. Shibley 1 s-dad =a a. dec=mant w'd ^ l 3 :

L '

. r.

3,

si.11 d.1.: ==ss this =="' 7 Zaf=ra do, I we=dar if he has

-4 f

g A stata=anz a1 **"* ti=a La regard to L vLt: ass. .

'l

m. mm, uar = ei=se x -3 ,ha= the d=c==a== .as, t ,o

' ..ti b .,,g,, E3. E -: : vi'.1 discuss 2at is a =c=anc. 'te::dared 'I

b i: .,

u -a= = u 3a =====ur ~,use. .;

I .

!s n. y e": *f ra, wit' s is da-d ad, we vill sup;17 cra .}

1 to disc =ss the stata ci cur :alatic= ship with Pan A=arics: l j; 37

.~.

{e .* 2**E21'=':. Cc=;crati=n, which is scv a===o P :duc ics F-- a=y.

a

,[ 33 1:4 va cas do that. - 3 = = =ust say, i*. i.3 =ct 731=g t: t i

1 c

f is =ct goi=g to c' 5 ca, the i=st :sses l :3. j =hanga, the tas+' -

l -

t ;. . . . ,,

f- C"at Va hav3 Vinh A=Occ @# ^ Va f - --'-' ^ ad.

p .

t e.

g. . :. . *'-d i

We ara mad at

ti:se, Tcur Hc::ce, r %'.: 22 C::C P *-s l

(* 5 ,,7 i 3 to fils, a=d a:s fd' d g t day a. subpoeca f== tyc pacple a=d i -

..?. 'a 822'ag :== e.s rac2:1 of x=.' s=" a ra=. -

z. 9- ,

,2L ~4e a=3 sub;:a-Pa8 7 Er. W"S' ta, of 71==ida Gas ".--- ' asien 9

i ,. j

- -n I

i A12

5

i.

. : a A

i

t. is ... l.

j I 1 :; (??C - ILC CA CAO Of3CT23IO.! CO":7C", 30. . ic. C774-192, {

. !Tednesday, 227 14, 1:373 :0 '!-* *' --T on, 3. C. , "ol'.:.:.a :*o. 13) .

. .i '

i i

' 2, .

.C. .Q .N. .. . a. . .s.

.~

6 l ' 'l L " U': 3 7 I." T C205:: 2=Ir2" -- Z C".0 0 .

1033 *390 !

' J. 21 chard ::

sil (nas= adi .

, ,.2 32.L. hteN 194:f 1.0::: *

.: ti l

. 4 il .

i

. 7;

.L

' g p' CO3:ZCTI"::!3 TO 2 2 a 7".!::" I C .33 3 '?

, 3 .; i TO TCLO '.* 30. 1 . . . . . .. . . . . . . 2 . s 1:25 3

a sc i 4

h *

""-'IIC v taw

! ! ) I::II3ITS

. I i 13C0 3 .i

42. z=d 40 .

( ,, g: 63 ( ssez md p.1901) 1901

] 1901 1943 t y f 64 - A=oco trs=.sactic: :.cd

' the r. arch 22, 1967, let ar (

t i

x~e -

35 - atta:2:= ant to ths ::tt.c= 1903 194:

gg [ fcr :sut: pee:s I

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e

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I m

r

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e

'* " D.G-11

e l

P lhi

tcc;f - IS35 g . .:

a 11 1- CCC3 - 1973

, a 3

6 I*

k.

IE "

l E'- =,

l, .

b. t h M1 23 i

g 4..

.I E 2 e

A13

--~ - - - - - ~ _ _ _ . _ __ _ _ _ _ . _ _ . _ _ _ _ _ _ _ _ _ - - _ _ . _ _ _ _ _

i

.,g... _ .. _ . .

i

-p .- . ; , ,

i 1 l *

.: 1901 l

3,.4.c

-=

I l '

3.

- 2:tr.3 0 00 .'C C:s Cff 23 racard.

. .t

. t (Oisc: ::si= cif tha :scerd)

L .4 j '

4

' FZ30:.'.'3 .*CC: Cu ths sc=rd.

e 5.,.- 2 d. 1

.; ) :14 vil' ragard as idantified and ad=ittsd dtihit ic. f t

3 hl 33, c=pias fsh tha rac==d and f'er s to he st ;;11ed by :* e

' .j- "-

l

5. i %

sjthitlay.

Jg'

% I ItP S E 3 LIT: Yes. It will be entitlad, 'T:s:squlf

(-=p.- 7 }t

- --- G; ,3 3 ., i 7ipalise Caza C.* That is at tha request of the parti =ipants.

,# 4

,+. =

3j (T:"1 COC:::== A307: w 4_.a "O :*AS *a.w J3 :cC3C -

t ,* e e~ e 3 -

33..{ $3 ."'C:

..r!: =:::I 7.::: O - - .a 3 -, - C: - lC:3::"I = .)-

. I ;y ..

gg,{ P E O C G .~.= G : :*:. "'%1ay, t<e neuld a: pear to be I .. .

, .M . ir, 11 ,it 1 raady for an=thar .rit= ass.

r .

e **

t t g 33}! :O. SII'--- 7: Tcur ;3cnc -

)-

v.s F..w 34 -

7=3",=G .=C: Talass you arant to b sak 'cr 1=ch..

t

, y-,.

l 3 I It is 4:6 t= m and for th's c=n ancs cf ce ; L iss.

R .

=. s==== : Tour ac==r, thars was a dise=.nic:

i

.~ L 33 , -

p. y 37 .estardzy c=ncar .1:q tha,7,meco ==::: set. tie indicsted that

.:r. ::11hite .culd W .is ?tashi:st=a and ,that it vc Ild he

,g

'w c=nveniant !== his to c==a hars if it ras daemed to be useful

- .- . 3 h "-d ad pu:pcsa of discussing t!.e f.=ces trans4=tien .

. . f== the

-3 .1,I.

F i

.,2 a=d the Ita:=h 12, 1367,. lattar. At that t'.=e . : distrihered .

l ,

y g

. ts anybcdy wee es=ad fer cua a c=py cf the st===a:f cf j ,

< . 3 .l ths disset qss p :=hases f =:n A=cco sises the wa== ant 7 c=nt: 1ct

' 1.v.s :!

l i :

M. ,4 g bac.t:a effsetiva in 1265, first dellrerias , and .h: uqa he A

m s

- year 1J74

.j

. @F.:- s.

'g

..J....

';r$. 1 l

l l

} -W. *

' Al f.

w e

1 l

i -

u e

f

.....) . . . _ . . . _ .

! l 32* 17 1902 !

! , 't 1 I a ,,

N, 1$

As.'c that that be sa. dad f= idantifica*d ~ wi d the l .' '

.:I 3 ma== edibia. st: her. t:

1 n . -1) i

3l ' 2 e.Suc :=C::: ha: sill be m"-' h a4 eer idantifies-

t. r .. I i MC.

L. 4! f t, ?. 3 I. 5 (:3Z CCC:- :.*:"' . A3C"E a ; "

t. ":

. "'O '7A3 f.AEC As m;"' -

t t 5

~

.! P ..# .. 2 NO. 54 7C2 C '.u.CATIC3.I E

L1 -

l believe th'e Staff h:c serw d en all-

' U.0 Ld 7! ::2;, "*-"* .

I ic

. ~ . y M partiss to *a p =ceedi=7. a let'.sr datsd ::a.rch 22, 1967,

'I ww a ,

f{

s 2:=n Flc=ida Gas :22ss=issic= Cc=pany tc 7an A=e:1ces

,g(

Lg-

, ;o } Pat =clat= C=porad=n, addressed to I. A. Zen.* - c . I hapeen ,

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,,-, to have a ecpy in =7- ha=d., I don't 'ec:s what are the Staff's

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I gg istantiens wie :sspect to this lettar. 'I supposa I,e veuld I L i 12 he app ==p:iate to have it'sazhad.fer idan****catics. , i b .

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i .i;- sa M2. C::was that is cur istantics, :tr., shibley.

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C,b ta i fat subgcana,

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km { :,;, ta 7CESIDI:G JU:G Tc vculd li.ie that to be Nus .ber 6,37-

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na. O -a. : , rc=r zer.er. .

g% (== =c.c m .uCv: w- :o us !:az= as . -

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m-s, :Ct. m '-** Tcur Ecnce, fer the sweial pu=pese :

w .i n " =stad I w=u.1'd lik.a to asje that tir. :. L. 'Tilhits he called at -3e ti=e. ;

m3 .

2.v ah=G JCG::: 7ery well. -hat .may be dens.

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5 3 iia 2 Moce istez=ed ;cis uhat its es=abilitf of ,1 I !,

daliveri=q g:s is? Cat is , tha -"d - = it c=uld deliver 7 l' ,

D

, 1 3. n e :-=v' ~ . ~ ,Q 1.

4l S 7hysic21 y, to ava1*.df.11t- cf deliversbilitf of ; ,f 0

Y 8.;!g ,; ,

i s ;1 gas. t

, ,.4 c, : den e h 11e= that ce; have givsn us that

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d.. , ij ner have gina us emir s::u.=ata cf what the delinzies ,

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~ 's. 3.1 vill he, which is i= .*t . !.astry* i a:chibit which we discussed { M,.

u .- i e 1 :

! N ggjjgraf.,cusif. N L i 6 "cv, Mcco has c=a c= t.to ::cmadi.gz hafc=s the e -4 =sicr:

ii $ . .;

. $ 11

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,3 j cther 'a:cilities to sup;c=t the ers==a=u7 centracts. 'll. .

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=a abcut a year and a hitif sqc, and the "c- **sice 5.as j i

L i, , act yet decided wha +'..ar ce set hay ca deliver this gas

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y; th = ugh these facilities to 71c: '.d4 Cas -'ra setissics cc: cany.

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g thay had thati rig" :, we cculd ask and they .j y? '

c i cculd advise us, I azz sure, cf h.e -= ' - amcune they could

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o' 23 daliver. But we have 'ect dc=e that.

4 m-m n Inc % ,GEs May I ask cne question? E h.

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I- ~ hai=g delivered =cv en a daily hasts. But : assu=e *:ca the Mr :s i (

E-1374 fig ::s va ara in t a 40-tc-46-thcusandMicf-ger-day .all '[<j c}

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$ayss: .h:rf we:14 as in111.eri:7 ,1,000 to G,000 8

i =;) >=ss=xec. x =. e.-h=.

23 :.s:'s senose a Lars ==:= :han sh<t, .=::n.t.=:= f ==

[ 7 l 7 ] ts !! er 33 on. :p .o 03. Tov.2tandunsveuldthesa .

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= 3 . ::t vculi p- chahir ho - sa lp =bably.'

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vc..1.1 go to ':c=.diract JaL: ind 2 s

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... a a raths= dis s:Te 31* a=d usas . Sc=a a s

.. ' cipal a -. .

j 3 ll .14ctric syntaes whic'2 maha 314w 1='.tr v.'th 7as as a f al.

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I 13 C.:::u, at least cua is, a:==:st.t pla=ts, which 1: a.ve_7 high 5 -

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1 15 !! gg;.2:3 4:n fcr, Oh, c'17':*:=3: I liha cusWrs 'fho filad 1 -

s f 88 ) .ar a. .c ' 7 relisi 1a 7:3?icus pecesadings, Basic

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.- 17:. lj . Mis. It tculd be t " g. lad of 4=ies. '3ut sc=a ts .. .:1g g.3 s a:d use as Scils fes1.

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a, n::s=== :=c: to feu ha o s=7 fes11:7 fc h:.e ,uch a- .

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2 . Q. . . UNI ID STATTS OF AME1*C4

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., N p;1At. CIE3.GT Vl"CLATCRT CC)c".13SION a 34 fess ConsiS41ccerr Charles 3. Cursis, Chai..nant l

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' Con 5. Smithe Cecr71ana Sheldca,

' ' w- Mattnew Holden, Jr., and George A. Hall.

.s r.axa d4 Cas hostissica ) Cockee No. C?74-192

Ocupany )

~ ~ =

. CarEl IZJZCICIC Sr.. N AND OIII C C CTTIC3

_ c - CT crTCRN TD P.r6n...s. Cr77mGATICN l' ,

5, (Issued August 21, 1973)

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' on OcCber 1,1977, pursuant :n de prevt.aisss of l , t aa U#Trc 7ent of Energy Crwanizatica Acn (CC?. Act), Public I ' s.'ar Grder M6. 9 5-9710,12009, Stat. 563 (Augusu Ted. Reg.42 46237 4, 1977) and Executive (Sep ember 13, 1977),

the Federsk Power Cc=missica saadard to exisc and 1:2 L . f. sus-ices and regulator 7 uspectibili:iss were ::ansferred to:Aa Secretary of Energy end.de Tederal Energy Regulato:7

- - Coenlaston (IIRC) which, as an indeper. dent cdssion wid -

w m in %e Deparcant of Energy, was ac=1vated on Oce=ber 1, 1977. 11 -

I' ,

'* Se " savings previsions" of See:1cn 703(b) of the DCE Act preytde that procencir. ;ending before the T?C l "

i cn the dass de DCE Ac tamas a fec: shall cce be affec:ed l 's and r.ha: orders shall be 1.ssued in such proceedings as if the DCE Ac: had not been enacted. All such proceedings

.2 shall be continued and f.n ther acti:ns shall be :aken by

he appropriata cot:ponen of DCE =cw responsible for he

.. f=ctica under :he OCE Act and regula :1:ns ;id dgated thereunder. The fme:1cus which are the subjec of this g

proceeding Sec '. n 402(s.)(1 were _)specifica1l.y er 402(a)(2) of,::ansferred the CCE Act. :s :he TERC by ,

, i 1/ The 'Cc:uissica" when used in :he ecutex: of an action cakan prior to Cc::bar 1.1977. refers :o :he T?C; when g

. uJed othe: vise, the reference is :o .he TI2C.

9

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A18

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I l 2-I :ockee No. CP74-192 -

he 1 cine regulacica adopcod ou Cc =ber 1.1977 by che Secrocary ud :he FT.2C ent:.: led "' ran=fer of ?;oceedi=gs to che Secre:ary of f.sergy and the TT1C." 10 CTR provided :har this pr ceeding would me c=ncinued before the IIZC. ":he TERC cakes acti n is -dis proceeding is accordance with the above nancicned aucheri:1es.

' Presently before the Ccennission is a preposed see:lanenc to resolve all issues and claims relacive es an unfiled amend-

.= ace to a certificated warrancy contrae:. For the reasons see forth below is che body :.d. chis order we find : hat the Sec-clement 1.s not in the public intersec and sw tid .herefore be t' rejected as 1: is presently scrue:ned. In ad:J.: don, beJors cax1=g further ac:1cu en the allegacicus of Natural Gce Ac:

violaciens rela:sd :n this unfiles amend =ene, we scali dwc:

cur office of T.=fo: cement cm irsti:uce an i=vestigacion of dis =at:er.

T

\ J u

F.ACIO2CU!TD 1 On September 12. 1977, che TPC issued an iscarlocutor7 order' daferring a fi:Al decisica on the abandocsont applica-j tien 2/ and convening a, conference for the possible secclemenc t of a17 issues relative to de 1964 varrancy cen::ac: becween L TG and Amoco Produccicu company (knoco) and an unfiled '.ard I 22. 1967, lecter anending chac centract. 3/ Tollowi=g sec-L Clement discussi ns , a secclement agreenen7 was reached. en Teb: ary 6.1978. Wad andstrac1ve was intf,4v cducen Judgeas~41111am E.zhibi: No. 103 into Jansen who i

j de record before convened f=ur days of hearings. On ' erd 15. 19 78, he certi-fied the resul:ing record to the conssission.

l s 2/ ':his dockec deals vid the applicazien of Florida Gas #-

. ~

Transnission Ccepany (TGI) :o abanden 1:s 24 isch gas pipeline so as :o couver: 1: to ligh: pecroleus produe:s pipeline service.

3/ ':his =acter arose during .he heart =g on the abanh en:

f.4csal in :he concax: of an inquiry i= o TG 's en :en:

and fucure gas supply per=1::1=g :he redue:1cn in capa-ci:7 resulmg f cm abandon =ent. ,

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ockee No. C274-192 r I

Follcwing public nocica of de sec:lemen: agreer.en: on March 27.1973 inicial commanca en de sec:lenenc were filed by cu=erous parties. 6/ All but evo c=cnnoncing parties sun-por: ce sec:lement, pEirarily on ce grounds chac 1: eccani:s an addi:1onal 200 3cf of gas to TGT's sysca:4 and cusceners. 5/

i '.d.any of these same parties filed ruply cecznancs challenging -

., Scaff's oppost:1ca to c e sec: lemans. 6,,_/ Scaff also f led l reply comments.

PCf3I:rc 7iu.u ,u.dL MA. 2;.4 L. Cn March 6.1978. TCT moved :o censolidace Cockee No.

C?74-192 relative to the settlemanc agreement wi h cer:ain ap- -

plicacices for fac:.licies certificaciens : elaced to ha sec-I clemenc. 7/ Scaff answered in opposi:1on cc this nocios en

! March 17. D 73. Sisilarly, en March 23. 1978 Amoco =oved

{

&/ FGr. Amoco. Scaff. Gardinier. Inc., Planc C1:7 Natural Gas Ccopeny. Peoples Gas System. Inc.. C1:7 Gas Comoany of I norida. de Ticrida Ci:1es. C1:7 of Leesburg. Tlorida.

' (Southern Gas Ceccany. Gainesville Gas Ccmmany and Gulf

,k Natural Gas Corporacice) . Central Florida Gas Corpora-t tica. Florida Public U:111:ias Ccasany, hdian::wn Gas '

L Cccoany, 3:erscace Cil Transpor: Cc=pany. Por Ever-I pladas Anchority and 'dvide Shipping. Inc. , Lahigh Por -

.sud Cassac Company, and Lake Apopica Natural Gas Cec:pany.

3-

'/ Scaff coposes the secclement, as will be discussad 5elow, h and Leh'i gh Por: land Cament Cczpany objects to :he sec-clemen: provisica resolv1=g all clai=s againic Ar.ccu and TGT.

b- ~~~

6/ Amoco. 7GT. take Apocka Nac.:ral Gas 01 strict. (Sou: horn Gas Cc=pany Gainesville Gas Cocoany. and Gulf Natural Gas Corporacien). Plan: Ci:7 Natural Gas Ccepany. City of Leesburg C1:7 Gas Ccc:pany. Indian: wn Gas Company.

7eeples Gas Syscam. Florida Public Ucili:iss Cecpany.

7/ On Mar h 6.1978. 7GT had applied for car.ificacice of

. two offshore pipeline facill:1es in Cockee Nos. C773-214

and 21.5.

t I

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E .- i. . . . . _ _ _ . _ _ _ _ _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _

-_ ,.__---,.------=------=w-. ----:---- .--;.-- --. .- . .. . .. . ._._. -

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e i . -

Oochec No. CP74-192 I -

to consolidata consideracion of .he settlement in Dockee No.

j CP74-192 vic cer:ain other applications for certification

- of gas sales contracts also relaced to the secclement. J/

Again, en April 5.1973. Scaff answered in epposition to i this =iocion.

. *Je- deny both socions to consolidace. In :he first place.

I expedizious ruling on :he secclement, as ur 9/

i does nec afford .te Co=unission and 1:s Scaf.ged by Amoce.sufficione c 5 l co adequacoly= analyze chose certificace applicaciens. Of grescer .

. i=portance, however, is the fac: that, since we rej ect the sec-

lement, inf a, .he socious are moot.

(2) On April 14. 1973 Scaff moved for oral arrmanc before che Cem=1ssion on the sec:larmne agreement. On April

27. 1978 TC answered Scaff's mocion for oral a.vmenc. H/

as did Accco on May 3.1978. 11/ Scaff can responded :o Amoco ad TC's aforemencioneTanswers on May 13, 1378. 12/

]

6 J/ Ca March 6.1373. Amoco had applied for certificacion of j fise gas sales centrac:s. encerad into with TC. in Dockec

. Nos. C78-512 caru. 516.

t 9/ Amoco sraces **.ac he secclement musc be approved before L July L.1973, for "cperational reasons."

i i ~

10/ 'Jhile TC supper:s de :so ica as oral arr.: ment would to de secclement. 1: opposes oral relaca

a. eatspecifically,f's as :s Sca. ent:=araced policy questions.

I 11/ Amoco echoes TC's response, but 1: adds can any oral

arrmanc shoitid not be perni: :ed to delay a Cec: mission

. ruling on the sec:1raene be7end July 1.1978.

-12/ Scaff's response in fae: is :o :teir reply coments , no:

o chair ansvers to 1:s =ocion for oral arrmanc. !=

-)

cen: ends chac Amoco and FC did not address 1:s opposi-tion .o the sectiement us il their reply ce=cenes. .here-by not affording Scaff an opper:.:sity :o be heard. Scaff alleges chac they have =1sstated its position.

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i

ocket No. C274-191 :-

As would be expected fres de history of pleadings is dis case.

ilI TC and Amoco each respcnded en June 6,1973 in opposition to Scaff's response :o cair answer to i:s =ocica for oral argu-

=anc.

7e decay Scaff's moeten for oral argu=ene. It is = cot is

j light of our dispositien of the case. Further= ore, we rejec:

Scaff's May 23, 1978, requese to respcod :o de reply ccaments of TC and Amoco. h ves afforded an adequate opper:.:si:y :o

, he heard.

(3) on May 5,1973. FC moved for issuance of a final Ccm-missica decisica en che = art:s of he abandessment pr:posal. 2 alleges chac overation of the sec:lement ag:senene, vi.h 1 s is-creased gas del.iseries !... Amoco frem 1978 c n 1983, would noe .

so al:er 1:s everall Zas suoply as :o reduce 1:s excess a1peli=e capaci y and ebviate co- basis for abandecmene. OnMay12,1973,

- h:ersca:e 011.c.ansporr Cc=can7 and Port Everglades An:hori 7

and livide Shipping. Inc. each answered is opposition to *** *

mdm.

7e deny FC's socien. .*Aile che Cemnission vill ac -dis

. junc===a reac:1vate 1 s c=usideracion of de abandcumen: pr:pesal i en .he = art:3, i: is acc scw prepared :o rule. Of ceu=se, ou:

- rej es:1cn of the sec:1ctanc, i=f a, el* 4-mces .he quescien of che effec of de =dd* d ~al A=cen deliveries upon ca deple-i cien of TC's gas supply. -

(4) Cn May 26, 1978 Suoerior 011 C.mpany (Suoerior) pect:icned to i=carvene out of :1== and :o stay Cc:maissica con-I sideracten of .*e See:1emecc. Superior has succeeded to the in-

' terest of Anscral Cil Cc=pany in ' car.ain producing pr pertias in Lcuisiana relatad .o -la 196* varran:y centract. It seeles a stay pending -Aa cppov d =y :o c =::ene of -Aa set laman:, specif-g Leally in reference to 1:s rights relative to the warranry obligacion. FC and Accco each answered in opposition :o be h Superior's ince:vencien and requesc for s:Ay on June 12, 1973.

We shall grant Superior's paci:1cn .o i=:e:vene bus deny 1 s request for a seay of cu deliberacien and riacisten en ce sec-'a - c. Apar: f =s he obvious fact cac Sumerior has

ocally failed to support i:s request for stay pending .he fili =g of emncs, i:s peci:1:n is =coc si=ce va have by

- -*d* order rej ec:ed :he Sect'a-a-t

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I Occket No. CP74-132 f.

3 a c.. . ZMETT ;,

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,, As st==nari:ed below. the settlement presently before the 0.m=nission contains the folicving provisions.

1. Amoco would cen=ni: to yG7 reserves sufficient :o ful-

fill 1: s remaining obligations under de 1964 varrancy contract.J,/

as well as providing 213 Scf of nev reserves noc otherwise unde:

con =ac: :o yGT. 14/ Wile che u=derlying centrac:ual arrange-

=ents 'are contplex7de basic concept is chac Amoco would c.Mc discrece reserves whie.h. both coex.ansive vi-d the remai=ing

, life of the 1964 varrancy contrac: and -dereafter, would pro-vide deliverabilig in addi:ics :o the 30 MMcf/d under che 1964 .

. varrancy centract..,5_/ .

'. n/ Of de original va=anry obligacion of 584.4 Bef.109 3cf ,

2 had been delivered as of Decemoer 31. 197.7 vid another '

175.4 3cf re==4,4ng to be delivered at a daily centrac:

quanc1:7 race of 30 MMcf.

t .

W Acacco recains the righ: :o subsci u:e other sources of gas i for .he speed '4cally idencified :sse:ves in perfo,- d g de i 1964 va=ancy c=ncracr.

L a

g/ The See: lemon: dividas :he :ccal gas rese:ves involved, t some 490 3cf. in:o cree groups, classified as red, blue and green gas:

i Red gas, identified in paragraphs A(1) and A(2) of Artic E I of the Sectlement, censists of nu=erous different

[' biceks in de effshore I.cuisiana area. Of the 130.1 3cf

. cc=mi::ed. 121.7 3cf is :o be produced to sacisfy the 1964 va=an:7 concac: and addi:icnally 3.4 3cf in 1973 and 1979. 7/

' yGT also has a preferencial right to purchase under new con-vencional centracts unce=:nitted red gas af:er :na carnina-tics of the 1964 centrac: (esci=ated :o occur in 1987),

presently projec:ed ac Z.4 Scf.

31ue gas. identified in paragraphs A(3) and A(4) of A :icC of de Sec:lemenc. censis .s of several blocks in de Eugene Island area, offshore Louisiana, and High Island area, offshore Texas. 31:e gas will be used to satisf7 che '

(Tootnoce centinued in naz: pa6e) l.

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t Occhec No. C274-192 - 7-i

2. C= der de five usw cenvencional gas centrac:s for 9

;' hice gas, suora noce 15. M/ FC would conscrue: and coarace r

as its cvn expense nuw pipeli=e facilities 17/ :o =ansport i

such blua ga: f cm A=oco s offshore platforss to :he facil-i:ies of -** :1-par:7 pipelines unich is cc:n are cennec:ed I

J,jf (Tootnoce conc'd f ca previous page)

J 1964 varrancy centrac to che er: enc red gas or subs:1-Outa gas is inadequace. As presently esc 1= aced. 106.5 3cf of blue gas vill be censi::ed :o de 1964 concrac:.

In addi.ica, undar five =sw. conventi=nal gas contrac:s Amoco will develop and produce for FC reserves es.1-

maced, ac 110 Scf .. 1978 .1W 1983 and 30.5 3cf i f ca 1987 2 cush 1992. ':hese row cencracts call for j

, i pricing ac the nacional race. TC also has a preferen--

=1al righ: co -

con ==act the hf.urchase under additional c:nvenc1:nal gasca gas rese

~~'-ed contrac:s expire en 1992, presencly esci= aced ac 5.3 3cf.

t Green gas, as stated is parag rph 3(3) of A :icle I of :se set.lenanc, is chose presently unidentifiable L[ reserves needed to ecmolete perf=rmance of the 1964 g'

varran=7 cencrac:, presently esc 1= aced ac 32.7 3cf. 7C

' also has a preferencial rip: :s purdase green gas re-I serves renaising in 1987 az:e= ccmplacien of de 1964 I

.4 :an=7 c=ncrac: to ce ex:en used duri g :te prior Il monchs, presencly escisaced ac 66.3 3cf, bue this is c=ndi:1cned upon such green gas soc bei=g centrac:ually

!.. bound to Anoco's 1965 varran:7 cen=ac: si:1 Tlorida i

Pcwer and Lighe Campany (77L).

l I~ 16/ Amoco has spplied for certificacion of these sales in Occkac Nos. CP78-511 ch:a 516, as well as hav1=g =cved en '.'.arett 23, L973 :o c=nsolidaca such applica:1ce.s vic ca insesa: 1: qui:7 17/ 7G' voulf ecuse:ue: cvo new fa d 'd =1es on 1:s evn, for which 1: has already sought certift:acien is Occket Nos.

C773-114 and 213. a=d would participate f ois:17 '4 h o.her

. cesd'*anies i= S

.he acus a .d n a=d eperacien of . tree other e :c.si capi:21 cosc for TC's prepor:1:nace

- fa das.

snare of case five fac111:1es is esci= aced at $16.3 =1111cu.

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,ocket No. C271-192 -S-

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to TCT's exiscing pipeline syseen. Caly to de extent cae such third-party pipelines = anspor blue gas iscended to

. satisf7 .he 1964 warrancy contrae: will Amoco rei= burse TGT fbr the related 21 d-party cranspor:acion charges. M/

3. O.e See:lemenc as scaced in A :1 ele III thereof, is iscended to finally resolve any clai=s againsc TGT and Amoco by all direc and indirec TGT cus:caers relative :s pasc deliveries under the 1964 warrancy centrace, ce Max:e 22.

.. 1967, lec:er amending :sae centrac:. g/ and the 1967-1969 i TGT sale of 75 3cf of gas :o Transcon:.sencal Gas Pipe Line

Co:poracion (Transco) in Declec No. 32 68-111. I: is not.

however incanded to affec: the parties' post:icus in the underlying abandoument and creversion case. Moraver. .

A :icla U of the Sec:lement gevides :ha: Comoission acceptance dereof would complately resolve these same =a::ars.

in '"*g a f1=al Cc:mnissica decision non :o refer chose

=ac:ars to che Justice Oepartmenc relative to possible

violaricas of the Nat==al Gas Act. ]

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4. Undar A :icle 17 kha Cecmissics wculd also have to

. vaive vo cendi:1ces in the certificate underlying .he 196A

va=anry .centract. Q/ Speci.fically, u= der che existing ce::1dicate no more ::an SG*. of de deliseries under the -

j 1964 wa.. ~ ry centrac: in any centrac: year may come f:cm offshore scurces, and all deliveries must ecme frem scuress

[ in souch Louisia=a. ~he catensible :eason for these waivers i 1.s hac de red and blue gas reserves c

ted under the g, See:lamen :o meet :he 1964 va=an=7 cen=ac: do not ce= ply p vi:h =hase cendi 1cus bscause they are exclusively offshore.

5. Also under Articia !*/ the C.~. issien vould have to i' gran varicus certifica e applica:1cus related =c the sale and =ansportatica of :he red and blue gas u= der the See:lecane.

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6. ~he Set lemane is arpressly n=n-severable. Any =edi-fication by the C.. * *sien renders 1: i=cperattve. ']

IS/ TGT esc 1=a:ee such rei=bursemen: :o be be:veen 323.4 and

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$25.7 'i'*cu.

19 / Cedar he Se :leme==. .his letter is to have no effec en

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f2:=== deliveries u= der the 1964 centrac:.

Q/ ?an A=erican Pee eleu= Corceracien. 34 T?C 35 (1965).

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j ::ocksc No. C?74-192 9 DISCISSICN As this Seculemenc is presently serue:ured, we find da:

.:' hs acceptance would noc be is .he public intersse. *'h11e . we are coc yee prepared :o rule defi=icively coca che purported

! violacices of de Nac. -al Gas Ac: and our regulaciens, serious

- quescions have been raised which require further investigacion

.1 is light of the several aspec:s of :he Sec:lement unich we fi=d unaccec cable. As vill be exclained below, we direc: our Office of F.nforcemenc :s conduce an investigacion of dis r at:er and to reper back 1:s racc= mended course of ac:ica relacive to possible crd 4-21 or cirtL enforcemen: measures.

', Is de i=certs, we shall enter-*da any revised sec:lemen ,

J preposal which =eecs cur inscanc reserva:icas, which are enumerated belev:

f 1). Waiver of "Cnshoie" Cendi:1:n Whila va have no objecticn to the requescati vaiver of I de c=ndi:ics is che 1964 varran=7 contrac: certificace chac "all of de gas for sale hereunder shall ecue frem sources

[ is south Louisiana " suora ucce 20,34 TFC ac 35 A, va rejec:

-le requested valver os can c=ndi:1:n is the same certifica:e L * "da: no =cre han 30 pertene of de gas sold u= der cis con-I tract in a=7 cencrace year shall cene frem off-shore sources."

i Id. "cdar his lacter ecudi:1cn. Ameco =us: deliver ac leas:

i E. of de 275 3cf rer.aising under de 1964 varran:7 centrac:

.~. . cashore sources or 137.5 3cf. If vs were :o waive de I c ndi:1cs, hcvever, all de red and blue gas ecm1::ed :o

=eec che 1964 varrancy c ncrac: vould c==a ". offshore

, sour:ss, vi h de culy possible onshcre gas :o be cemi::ed being par: of de 7ec unidantifiable 32.e 3cf of green gas.

(,,

v "is =sans dac beeveen 135 and 137.3 3cf of cashore gas c=uld be los: :o FC is particular and to de is:ersca:e - ar-kee is general, h light of de current dual =arket struatics (interstace vs. incrascace) 1: :he nr.*: ural gas incustr7 vid en17 offshore Federar N =4 gas necessarily bei=g sold i:

de in:ersca:e market, it is difficul: cm u=derstand de public i=ceresc beneihs of the proposed waiter.

he purpor:sd justificacien for .his waiver of .he 50*.

cushora condi:1cn is cac Amoco has less han 10 3cf of u=-

cd - ad cushore rese:-res is Ruisiana. Azoco does, hcwever, j have subsca=cial c = sat::ed onshore reserres in sou d Muisiana

. :ocaling 323 Scf as of the end of 1977. (Ixh. 214) . 3eeveen i 1965 anc 197.' Acoco c _ :::ed chase rese:res :o other buyers.

We agree vi d A=oco chac under de 1964 varras:7 centrac:,

u seen not have c :::ed such reserras :o TC veil advance of vnen day would be required f:r eecing the warran=7 daliveg obligacion. :tevertheless, while Amoco does =ce presenc.7 have sufficient castors, scuch Ru1siana

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ocket No. C27I.-192 i I rese:res :o satisfy :he 50~. enshore condi:ics, i: con:inues l ?

to have a legal obligacion to deliver te lease 50". of -la va=sucy gas f:cta ensbore sources, and we have not been i presented wi:h adequace juscificacien for vaiv1=g this condi:icn. In fac:, Acoco =aintains its onshore exploracion

!' and development program, as well 1: sus: under the warrancy

-' cbligacice in order to aintain cushora va=an y deliverability j :s ':GT cn a :1sely basis, and i: presencly exoects to be able

- to continue :n meet chat obligation. (Tr. 6595).

Waiver of the 50% cushore condi:icn is particularly

^

. .. u=accencable in light of -la and-use :o which the red and blue offshore gas would be put if de waiver were granted. 21/

The '"---d esion is =oc inclined to accept a sec lement which-would reduce deliveias of cushore gas to a pipeli=e vi.h a. -

I relacively Icv end-ve profile and conccmi:ancly i= crease I deliveries of offshore Federal h ad gas to this sama pipelina, 8 when such offshore gas by dafi=1.1cn would otherwise have to be ,

i sold in the i=cerstate narkec vbers substancial higher prior-i:7 requirements continue to be cur: ailed.

I Tinally, we fi=d unpersuasive the arguments advanced by

' YGT and Amoco in suppor of the requested waivers (1) :: is I irrelevane chac, f:ca che perspective of entire 1966 var ancy

' cen=ac: deliveries. earlier deliveries f cm cashora sources

)

i= excess of .he 50*. condi:1cn would subs:antially offsec :he

' effect of the vaiser for :he remainder of -de cen::sce. 22/

' (2) Even : hough :he criginal reason for :he 50*. cushereicn-di:ica related to rate consideraticus. That fac: does soc pre-t clude this Ccunnissica f;cm enforcing the condi:ica for a I different though :ocally legi:inace purpose.

3 Q/ Iven based upon TCT's evidence (Izh. 223. Schedule 10 page 1), che 110 3cf of blue gas :o be sold :o ?GT unc'er ce See:lemen .. 1978 cru 1983 would go predcminantly

o lever end-use p:1c 1:7 loads. *o a lesser extent. the same holds ::ue for -le 80 MMcf/d :o be sucplied ;. the offshore sd and blue rese: res :o nese .he 1966 va=an:7 centract. Concerni=g de addi icsal gas to be delivered endar conventic=al cinerac:s !.. 1987 -2:n 1997. we agree vi h Staff that FG7's asser:ed exclusive end-use priori:7 1 usage : hereof (Izh.123. Schedule II p. 2) is predicated upon u=reascuable assu=peicus (exesssive i

priority I load g vth and no fu=: hor TCT a::ach=ent of gas supplias) and cacnot be censidered.

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! g/ :: is i=elevan: because the 50*. condi:ica applies to

" gas sold under this centrac: in any contrac: year ..."

Sens note 23, 34 y?C ac 354.

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1) '" snsecr acien chartes for offshore ens Se Secula:nen: is in par: suppor:ed by 1:s preponents by a ecscessica allegedly = ace by Amoco :o rei= burse FC for

-*a -' 4 -d-parry pipelise charges for =ansporting blue gas related to che 1964 warranc7 contrac: from :he new offsnore facilities :o be conscrated by FC :o i:s pipeli=e system en-

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shore. 'Je agne vid Scaff cha: Amoco is maktsg no concession for under he rarran=7 c=ncract Amoco is already obligated :o

=ansport gas :o FC's cushers system. 2 Under the Seccle-

=ene. TC's racapayers would pay for the_3/::ansportatics of

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blue gas to seec cha 1964 warrancy contrac: frem Amoco's off-

? shore placfo =s in :he Ingene Island and Eigh Island areas :o -

I -**-d-party pipel1=es. -dat is . =ansporta:ics -2 rough de five

! offshore facill:ies whic.h TC is :o solely or join:17 cens::uc l

l / an esc 1= aced, cose :o FC of Sli.3 d111on. Anc yec, under i L .-de 1964 varrancy ccatract. Amoco would have .he obligacien j co pay for such ::ansportacica. 2,h/ In light of our other i

L 23/ The TTC. is cer-d 'dcacing the 1964 warran=7 cen=acc.

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noced chac "/c/he gar is :o be delivered. .o Flcrida is

[ 7e*1* n Parfah or such other points en de buyers line as may be agreed upcn ac a delivery pressure soc is excess of 1.0C0 psig." scera 2cce 10, 34 TTC a: Sf3.

p I 21/ I: is cur incorprecacica of d e 1964 centrac: -da: TC had l.

da righ: :o i=sisc upcn dalivery :s 1:s sainline system or laterals cec =ec:ed dersco. This incorprecaciou is suppor:ed by de fae: chac -arcughout de perfor=ance of

, he centrac . Amoco has always delivered warrancy gas is chac saz=ter. TC arp.es dat undar de centrae: deliv-eries are to be =ade a: =u== ally agreed pois:s en 1:s pipeline facili:iss and -lac si=ce case proposed off-shore facill:iss vould be par: of 1:s pipeline facili:1es and =u: ally agreed unen as de pois of deliver 7. A=oco has no c=ucrac::al cbliga:1:n cm deliver de blue gas :o cushere facili ies. 'Je rej ect .his argu=es:. FC bad

a legal righ: :o :sshora delivery as i:s pipeline facil-1:1es. :: has foragene this ris== under de See:lemen:.

bu: we ca==oc fi=d adequata censideracten f:: dac act.

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! ::ocket No. CP74-192 .

difficul:1es vi h he Seculament, we find hat .his added .

i f*-=a d il i= pac: upon the FC racapayers is unwananced.

2) Pessible viola icns of de Ta:ral Gas Act and cc=mts s1en Amv.:14c:cy-

. h i:s cenz:ents on de Secclement. Scaff decails .he

j cire.=nstances su=ound1=g -le March 22, 1967, let:er f..

. whic.h Staff-has alleged, d:cughou: ce entire abandesmen:

, proceeding, violacious of the Narcal Gas Act arose. 21/

i 21/ h 1965. TGT en:ered ines :he 20 year va=an=y cen-

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=ac with de predacessor of Amoco for 584,6 3cf.

i=e'"dd g 30,000 Mcf daily cen=ac: quan 1:7 100,000 Mcf mmrd - day deliveries (1257. of cally cen=ac: O

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j qcan:1:7), 64,C00 Mcf m* *- - day deliveries (yea:ly

-'d+-a-' of 807,of daily centrac: quan:1:7 .aken for the year vi.h a five year maka-up period), and 43,000 Mcf/d monchly .aka-c -pay obligacion (6C*,

t of daily con =ac: quanti:7 :i=es numoer of days in

he mon:h). Nevertheless by 1974, Amoco was culy i sucplying on de average 47,000 Mef/d, and by ::ecember

1975, c1.s van dcwn :o 15.000 Mcf/d. 3eh1=d -'d = re-i d=ctica i= deliverias to TC are de follev1=g events :

i h 1967, de predecessor of Amoco was cancelling its i, 1965 gas centract vic ??! which underlies TGT's T-3 transper:ation service eartificata applica:1cn. b certificating T-3 service and related facili:1es he

??C (71erida Gas Traos=1ssien Cc=canv. Cp1= ion No. 516, 3 37 F?C""l1 , o- i W oi)) cu ec:en FGT :s first eartif7

[ ca: cis unc'e:171=g gas supply ce==ac: vas s:111 is

. . effac:. 3 cruar :o have Amoco s predecesso; reissta:e m cis ces=ac: vic .he Fr . TG"' had to unilacarally ag:se

o accept delive:14s undar 1:2 cwn varra= 7 cc==:ac: 1.s

)

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I excass of i:s 64,000 Mef/d d '--'e delivery obliga.*.cn as "b =-ka d", ca: is to be censidered in :se fu:=s ==vard satisfying Amoco's 30,000 Mcf averagt day deliva g obli- ,

es:1cn. rGT's agreemen: came 1: :he fo:s of :he .: acch 2*.,

[967. Lee:er, (hs. 63) whica folicved i:s Maren 22, 1367, j :eleg:ss (I.xh. 134) :o Amoco on

g .hase changes, which is r. was a responsa. :o Amoco's Mar h 21, 1967, :alegram :o TGT da-=

3 he delivery =odidica:1cus (Ixh. 183). This unilaceral doc =en: vas not filed vi:5 the Cc-- * = sics, and Amoco deliveries is excess of 64.000 Mcf/d and up :o 125,000 Mef/d allegedly fer:sd

. FGT to sell 73 3cf :o ::ansco :o avoid p; spay en cbliga-l :1cn to Amoco.

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Scaff adds :hac Amoco and TC deliberacaly wi theid dis

! lac:ar f cm he t" = H*sion. I: is his "ba-k'-(* arra= e= enc

! whien Scaff sees as can::al to de possible violacion o de l

' Nacural Gas Act. 26/ Scaff reasons derefren -ha: Ameco 27/ l and FC 23/ have Eolaced .he Natural Gas Ac and the Cen ~

.. 'asicn' T regulacions chereundar.

.. 25,) Csdar de l'. arch 22, 1967, lac:er. FC agreed :o the follev-i ing w ad delivery arrangeman: referred to as "banaing ?"

1. FC would accep: deliveries ac a + ~ ra:e of

[

123 !cied/d for a period of approx 1=acely 23 =on:hs, scar isg vi.h de commancanan: of service to ??E. under 1:s 1965 varranty ccurrac: vi:t Amoco. This period of increased :akes I by TC was :o conti=um u=:11 Amoco e14-*-scad "under.

-d produccics" fr:n car-" of L:s prc^ r* 3 properties. .

I 1. 7al:=:es delivered to TGT in excass of 64 tt'cf/d (on a =on:hly casis), boca duri=g *"** esci= aced 23'= onch l

parted and also !.. da beg'-"* g of service undar de

.964 warrancy cen::ac: :o hac period, voci be con-

! sidered as "ba=kad." 3

23 =ccch pericd (A=mco'7 .his arrangemanis, af:er s underprodue:1cn che el'"*" aced) ,

i FC vculd accepc deliveries a: .he 64 Ecf/ d "4 '--

i race. Amoco could deliver a a raca even less dan 0 64 !cicf/d, so 1:ng as the ace m ts ed deficienc7 under

' 64 'a'ad/d never exceeds..i de p,rior "bankad" delivertas F above 64 2f!'.cf/d.

27/ Staff asserts chac A=oco violcced Sec:1ca 7(c) by per-

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i fo* g ::e aforesaid "beic' g" viccu: car.' . fica:a authoricacion and Sectica 7(b) by abandening vidcur

{ Commissicn accroval 1:s certificace obligacica :o deliver 30 leicf/d whenever it delivered :o FC '.ess chan hat volume. Scaff also asserts .hac Amoco vi.olated Sectica 159.94 of de C 'ssien's Regulaticus by so: fili E :he 1967 h~ centrac: a=end=ent and See:1cn 137.23(b) by provP3 g new service (daliveries under he 1967 centrac: a=end=ent) vi:hou: Cc=nissien appreval.

28/ Accordi=g :o Scaff, TC viclaced See:1cn 7(b) by agreei=g to de reduc =ien is certifica:ed deliveries under se " banking"

a. . .g ame= = , dus abandoning ::ansper:2:icu service vi dcu:

3

,, Ccamissica approval. 2foreover, Scaff con = ends dac TGT violated Cc. issica policy dac pipeli=es enforce delivery

' obligaciens (Crdar No. 559. Ocekac No. Z:'76-8 issued Cc-

=cber 14 1975). and See:1:n 137.5 of Ccanissica Regula-e1cas when in C268-111 1: did soc see fer h all secessary inferr.acien cencer=ing TGT's sale of .hs 73 3cf of A=oco gas :o Transco (TGT's certificace applicacica scaced de l ressas being avoidance of prepay =ene obligacicus vnile Scaff asserts :he :: a reascu was che ccucealed 1967 cen-

se: a=end=en:;. Scaff views -*'= as -isrepresenracien

, :n a Tedaral agenc7 in violacien of 13 U.S.C. I 1001.

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Dockee No. C774-192 Scaff can recenneeds cac he Ccanission, pursuanc :o j Sectica 20 of de Nacural Gas Act. refer the sac Jr to de Capartnant of Justics for possible crd-4*al prosecutics. =

ccueludes by raccamending hat ce Cennissien remedy -le '.n- .

ju=7 inflicted upon 7GT's custemers (loss of he 78 3cf sold es Transco due to de " banking" arrangement) not by accepting t .he proposed secclement. but instead by ordering knoco :s sell 7GT 73 3cf at ca end of the 1964 varrancy contrac:. vi:h Amoco

' and FC equally absorci s :he race difference becveen ce

,i varran 7 concrac: price and the applicable nacional rata.g i

FC 4::emots :s refuse Staff's contenciens. To begin vich, it argues chac ce Mar c 22, 1967 Lee:er was a reesco-able amend =ent of de delivery obligacions when viewed frca l - that point in time.30/ In addition, it cen= ends chac he off. system sale :o "'?ansco of 78 3cf would have occurred, is par: at leasc. even vi:hout the " banking" arrangement.

J.lso. 1: asserts hac 1: did taka reasonsole s eps to assure ^

adequate knoco delivertas under the warrace7 courrace. TC adds cac chere was a "=1scake of law" as to its belief -lac

' c e Mar c 22. 1967 lec:er did not have to be filed and cac

' accordi=gl71: vould not have '"cewingly and willfully" vio-

1 aced -de Natural Gas Act or had .he specific intent s con-coal char letter so as co violate.13 U.S.C. I 1C01.

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-29/ Staff old cen=ac: would have priceAmoco and :hesell $.alf other half of acthece 78going 3cf a:price he g'

bur vid FC culy pass 1=g de old contrac price -drcugh

-a *.s cus cmers. Staff views. cis proposed remedy as

supported be judicial precedant favortsg de scric: an-I for:ement o'f warranc7 centrac obligaciens. Gulf oil L Corserarien v. 7.P.C. 563 7.2d 588 (3d Cir. Liiie car . -

l- ~ cenee. U.a. (1978). Scaff would justi y us remacy of 73 3cf in lieu of ca 215 3cf addi:1:nal gas is q ce See:lement en several grounds: evo ^*-ds of de 100 ,

2cf to be delivered u= der ce See:lement af:ar 1987 is green as and cus unidene* ed and semewhat u= certa 1=

he lib 3cf of blue gas :o be delivered under the Set-

lemenc .. 1978 .hru 1983 would go to icv priert:7 loads; and even vicou: the settlement Ac:cco has an is-can:1ve to sell TGT =cre gas due to n 38 =1111cn sec-

.lement vi.h certain of TGI's cuscenac.

-30/ TC recites previsiens is ce 1964 varras:7 centrac:

giv1=g 1: vida discrecies to vary de 30 w.cf daily contrac: quanti:7 .. 43 .wcf/d :o 100 ' add /d. depend-

i. i=g en the cir:.:: stances. vicou: jeccardici:3 de ul:1-

= ace delivery of ce full 534.4 3cf contract a=ct=::.

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TC goes en de challenge any :sfer:21 cc the Juscice l

Oepa===ent. It firse argues cac prior precedents accepc.

ing sec.lsc:ents is lian of referral ecupel accepcance of 2:.s Secclemenc. 7e rejecc this posicien. Acart frca che a

fact chac dose other cases are disc 1=guishable. TGT's argu-ment of .tiscri:sinaccry enforcement (by only refe=ing this i

case) is tocally ac odds wi h the cencept of prosecuc= rial i discrecicn. -

I FC also contends cac he circ =nscances of the isscan:

saccer would soc satisfy Juscice Ospart=ene guideli=es re-

, Lacive en raferral 'mdae Seccion 10. We likewise rejeca

~ ~ ~ - - dis challenge as frivolous and i= effectual. *he Capar- ent of Juscice can .ska whacaver accien it deems appropriace.

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i= respective of a=y referral f cm his Ccanissien, a=d. as

+ a saccer of policy. we would Jupply thatever files er assis-canca che Depart = enc of Justica vould requesc. .

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b FC concluies hac. at a 'N-a, de Ccannission veuld

" ave en convene f= her hearings before any referral as well a reme

j. as before Agais, we fashicning's rejec: TG arp.=dy suchWe nene. as can chaccake advanced by Scaff.

s. :sferral 31/

to ha-Depar== enc of Justics when we deem it app;cpriaca, widcut accapc-l ing IG 's view of the scaca of the record, o

f Amoco advances =any of de sama or si:nilar a.g.cnents in accen= icing ec reface Scaff, l (

f Scaff has raised serious quesciens concerning the

' conduct of TC and Ameco relative to de March 22, 1967, l' laccer and has doc.=nenced -any of de salien elements which c=uld ulci=acely lead to fd-d* gs that .he Nac=al l'

Cas Act was violated and dat a referral o .he Juscice epar=cene is justified. Never heless, at dis ju=cc.::e we f1=d chac de base course of actica is for che Cc= mis-t sien cc direct our Offica of 7.=forcemenc to i=vestigace de h

( antire =accar and ec report its racceznandations back to de f*mM isica. Si=ca we have already decer=ined dat de Sec-l i ele =ene as set.tecured is noe is the public iscerase. chts l

investigacien by the Cffice of Esforcement, prefatory em any further Cc ission ccion on the alleged Nacural Gas Ace vio-laticas. will noc delay any pending remedial ce=rp;cmise.

4 31/ TGT adds hac de Cesien has so authori:7 ce fashion I" such a remedy.

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Moreover, we shall proceed to deliberate upon the abandotunant i

applicacion vi:hout aval:1ng this investigacien. 31s action f

is consistene vi h our pese acceptance of sec:lemencs in which possible Natural Cas Ac violaricns were finally resolved absent referral o the Juscice Depart:nent. E/

In preparing 1:s reccennendacion to the Commissi:n the Office of T.nforcement should consider, noc only the cuestion of possible crisisal prosecuticus, bu: also che question of civil remedies , such as dat advanced by Scaff. We :cday

-l issue separately an Order of investigation is chis natter.

The Cocunissien orders:

-- (A) 3 e secclement agreemenc dated February 6. 1978, and certified to the Commission on March 16. 1978, as Ex-hibi: No. 203 is hereby rejec:ed.

(3) Superior 011 Cenpany is hereby persi::ed :o inter- ,

! vene ou: of ti=a as requested subjec to che Rr.las of the i

Ccustission provided dac the participacion of such incer-venor shall be l'"d :ed to acters affectics de rights sud r

iscarests specifically see for:h is its paci:1on to intervene, p and dac che admission of such intervenor shall no: he ceu-scrued as recogni:1ce by de Ccaunission. Cha: 1: =1ght be

[, aggrieved because of any order issued by de Cc:snissien is

$1s proceeding. Superior =ust, however, taka .he record o a.s it s: suds.

(C) Superior's May 26. 1978, paci:ica o stay Ccc=:is-I sion c=nsideracion of ::e afarenectioned Sec:lemen: Agraemen; is hereby denied.

i.

(D) T7"s March 6.1978. and Amoco's March 23. 1978.

[ ,

=ociens to consolidate are hereby denied.

(E) Scaff's April 14, 1973. :nocien for ::al arg.=ene i.s hereby denied.

-]

CE) FC:"s May 5,1978 noc1=n for issuance of a fi:21 order on 1:s applicacien for abandensent is hereby denied.

3y .he C e sien. Cc=missioner Smi:3, cencurring. *iled a

( 5 I A I. ) separate snatament appended hereto. .

Kenneth T. Pl=sb.

Secrenary.

32/ exaco. Inc. Sabine ? ice line Cce:an'r. ':ockee Nos. C~.77-347, a5 a,2. , Lasume fear.ury W. Jio.

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Florida Gas Transmission C..n:pany ) Dockan No. C274-192 i (Issued August 21, 1975) t 52C""I. Ccazzissioner, eenv . '.=r:

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conc =r wi h -la major 1:7 dacisien is dis proceeding i= sofar as i: rejects da proposed sec lament :ssolvi=g all issues and clains relative to de un.filad a:nend= enc to .he 1964 warrancy cen=ac between Amoco Productica Ccurpany (A=oco)

. and Florida Gas Transmissien Cecipany (TGT), bu= am ecucerned

".ac in rej ec d=g he proposed sec: lament we =ay be ac.d=g .

against de best iscereses of cha TGT cuscaners who were dis-

advantaged by de " banking arra=gemen: s" between TGT and Amoco.

~

The proposed see:lan:ece f.s objectionable because 1: would

_ require de issuance of a. fi=al Ccuzzission decisien dact' ' g o refer -"** =ac:ar :o -Am Oeparr ent of Justice for crd+ -=1 -

prosecu d.cn. *he ccudi:1cn is =cacceptable. 7'..a Cc=nd.ssica l can=oc accepc such T '* acions en 1-s choice of sanc d.cus when f

{. !.: has not yet ec=pleted 1:s i=vestigacien of de alleged viola-t :1cus or decer:zined whac remedial actics is necessary :s enforce

cenelianca sid the: squirements of cha Nac=ral Gas Acc. Al. hough referral :o the Depar= ant of Justice =ay oc always be -Je =ost

[ affective sane:1cn in a given si :a dcu,1/ 1: 1.s one opcion which

{ .6a Ccumzission =use be fres to ecusider vnen fashioning an appropri-l aca remedy for a given violacion. Cncil we have more fully in-g' vestigaced the circunstances su=c*' g the alleged viola:icus in -'d

case, we ca==oc dataW a that a :sfarral :s Juscice is l inappropriata. Sinca de proposed sec:lec:en is acuseverable, 1:

j =use be rejected in i:s ent.drecy due :n :he presence of this cbj ec_d %1a prevision.

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n rejec *=g che settlement we are, neverdeless, dap:1rt=g

?GT and 1:s cuscc=ars of an addi:ional 215 3cf of sacural gas r wh ' ^ would =cc otherwise be available :s den under the provisicus V of de 19% warran:7 cen=act. Even dough -de TGT syscan has 1/ See, ':'exace, !=e., Sabine ? ice !.i=e Co., Cockac Nos. CI77-329, e.5 a_l,., issued February 10, 1373, vnere 1: was decarmined da:

i

".he public in:erest would be bec:ar se: red by the adopcion and i=plemen=acien of a sec.lemanc producing =ajor angible benefi:s

for gas users in large por: 1cus of de cous::-f' rader -las by refarral .c de Depar... enc of Jusc1ce.

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j - 2-Occhec No. C77t+-192 I

t historically had a relatively low and use profile. .hase additional volumes would be of great benefi: to de pipeline. I:s cascomers l

im=i 4 anualy support de sec:lemen: agreemen:.

I do not share de majority's belief dat dose benefics :o de FC system are ou:veighed by .he requirement :hac the Com-

~4.ssion valve .he 50% onshore condition for .he 1964 varrancy contract. :or by de fae: das T C's customers may pay higher

= anspor: scion charges for delivery of de " blue gas offshore

i volumes. Se new TC facill:1es connecting Amoco offshora plac-I forms :o -%4 :i per:7 trsasmission lines would have to be consc ue:ed in any even: if .he blue gas were :o be sold to /C outside the

,< settlement agreement. Moreover, de more efficient system utiliza-

- - - - cion resul:1ng L the ransportation of enese addi:1ccal offshora volumes d.%. de FC system could resul: in a reduced cha.ge per -

- '.'.cf ersuspor:sd. dereby offset.ing the cos:s at::1bu.able to the new TC offshore facili d.as. .,

i ~

t Se proposed secclement would, on balance, produce major

' cangible benefi:s for de FC system wi:h a ad 4 -= = of undesirable consequences, n e per.ies :o .he seculement, in insisti=g on non-L severabill:7, make 1: 1.mpossible for de Commi.ssion to agree to i s -a, -m .

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A NATURAL CAS SITPPLY l

. FCR THE

,' 7* ORCA PCWER k I:CE"" COliGANT .

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V j A P? ewMARY KIPCRT i.

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' PR.ZPAR_:0 TCR II OROA PCWZR k !.*CH"' COhG ANY s3Y l

4 3ECHTZI CORPCRAT:CN SAN FR.ANC:3CO'- NCvZLGZR 1964 e

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i I TA3LI CF CON"*EN S I

? ACE NC.

{ , Let:a: cf T-ar. smit:al i

1.ist ci Tahlas ar.d 71g ::ss

!==:cdectics L Na:2:= ci assig==e=t

! Tecpe a dis report Cas T.-s- *-4 ssica Costs 3

. Capi:a1 Ceses 3 7:sasporta:ics Costs as various Flow Katas 4

}

i Comnarises cia 30" a=d a 36" System 5 Ihet of Loepi=g on T:sssmissica Costs 6 1

I 1:fec: c4 Load Facter en Transz=ission Costs 6 .

i .

i, *~portasca of Collec:i=g Costs

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' Itald Prices i

9*

l' lacs== Tre=ds in Itald Prices is South Louisis=a. a=d de Texas Culi Cos st 9 .

ne ??C A:ss.Pricas i 11 n o T_nr i-a:8 s Cecisins is the Per-- h a

. 3 asis A sa Rata P cceedings (A161-1) 17 1.ouista=a fevera=ce Tax 20 no Rela:ive Merits of Ic=isdic:iccal versus Non.

Juiisdic:1o=al P cducsrs' S' ales f cm the Poi == cf i Vlaw cf de Ticrida Power k Light Cor=parf 21 l

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. TA3L.I CF COmTS (c=mi=ued)

. Tield. Pricas (co==:.r.usd)

I na Tield Price norid.a. Power k :ight l

W".I

. hva to Psy 24 Federal Pcwer Cem==ission Jurisdic:ica 25 t' M7 sis of 5 3-af e s Crigi=al P cposal.

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I 3ECE!. CCR. CR.GCN _

' c.NGINEERS -CCNSTRtJC CRS wo twc.stw ausa s-=cs? s*u reaucisc= 4 ca v ec = ~ e4 i

Nove=he: 17, Ic64

5. .%r. George F'~ =-= - Vice Preside =:

Mc:ida. Power k Ligh: Cc=r ..y a

,I. - - P. C. 3ax 3100 1

Mia=L 1. norida.

l Sea: Mr. F'---= -

We are tra==-4--d g herewith a, p =-4-s y report & a.-- ycur proposed =a: ural gas supply. lis report was crip-'**y ;: spared Isi-Icwi=g =y =se:i=g w.d ycu i= your effice las: Acr_s: asiwas i=ar.ded:

.s be past of s. c% 1e:s esport givi=g cur ree-- s=ianc=s c==ce.._=g

. you= =a=ral gas supply. ; cwever sisce is ;;:posals s"' '_-tad by j Se=i=cle a=4 Texa.co dated Nove=her 17 a=d Noveche 16, :sspecti ely, will apparer.:17 require as early decision c= your part, we are suh=it-L ti=g cia pra-'-= f sport =cw. I: c==:ai=s basic *.ackg cu=d i=fc =a-

[ :i=a which we ^'-k w-21 he helpful to de ma= age ==== cf nerida Pcwer k F *igh:i= appraist=g all gas supply preposals which you have or expect to

), receive. 1: is cur prese== plas := suh=it := you c=e c = ore addi:ic=al reparts givi=g de :ssul:.s =f cur a. Alyses cf .mecific preposals. Cur I 11:st reper: gives:

l l 1 Sc== hasic gas ::a=sporta.:ics cos: da:a. which sitew de app;cx-ima:a mag =itude cf de i= vest =se= i=velved is a

0" a=d 3 6 "

zyslise: -- ' g f cm scu:h Lcuisiaca to your pcwer -' - s is n erida. 7:assportatie= costs are aisc c==pu:sd for dase two pipelises. ""hase data are usef.:1 for c==r a =g de ::s.=syc: a-tica costs n= der ide=:ical c==di:ic=s != ce ro d* a:e li=es a=d to show how dese ::2.=sporta:ics costs .a:f as te drough.

put varies. le effec: cf Icepi=g o= :a=sper a-d-- c=sts a=d ce effec: ef Icad fac:c: es dose costs is also discussed. W e also r

l poi == ou: de i= porta =ce of collecti=g costs.

2. A discussic= cd rece== ::e=ds i= producers' field prices is scud Louisia=a a=d de Texas Ccif coast. his =a:erial i=cludss a i.

4 A40

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'3 C.M T 1. C C ?.? C F.A T I C N 1

h{r.. Cec ge Kins =as ;

discussica of de rela:ive =arits cf jurisdic=c=al versus non-l jurisdicticazi, educers8 sales f cm de pei== ci vtaw ci de 71ct.

ida Power is Ligh: Compacy.

3. A discussics of ??C ju.isdic:ica. We have asked cue of cu: accr.

=sys who specializes is practice before de 7 PC to give us as epiden regarding 3"3C jurisdictics with specif.c reference to de various plass which you migh: consider for oc"' 3 g a gas supply.

j

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Cur lacer requesting dis i=fom:ica and his reply a:e 1 =12ded la.the a:: ached repcrt.

4 A=alysis of Semi =cle's origi=al pecycsal. ~hi.s ;;;pcsal haa been 4.

superseded by de =ew p:cycsal sub= iced Nove=he: 17, .::per.

which we are =cw wc ki=g. *scwever we heliste =a: de -**erial w*d ^ we develeped rega.-di=g Semiscle s : ig=al y posal, w' ad '-

8 l

is =4-'%-:c de new preposal, is c.J i=:rrest as i: i=dicates is a

! gese:21 way the effect en ecst's --d- de J=~3--i- preycsals ci i . going f cm a 30-y ear :s a 10-yeas ter= . a=d is a.lso shews de

' effect en t:3.=s=issica costs of adding a. aubsta==al increce== cf capaci:y i.s de ICth year of de cpermice.ef de project.

P .

i l 7. are :: dyi=g de ==w S= 3-at e e Texaco preposal a d-eill '.. ave some

' --e=*al cer.carcing dis p cpesal ta submit .c you is de sea: f==:e.

.t .

71:h best regards.

1 I very ::c.ly ycu s, i

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?. A. Ecugh.

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! 1. S"* CF TA3' " AND ECURIS TABLI NC.

1 Ilarida :-das =ial Cus Pipe 16a Capital Ces: Esti=a:ar

, 30 and 36 ?-^ 560 LC.ici pe: Cay Systa=s 1 Ilcr ~da. Sdustrial Cas Pipe 16s T:s.usportades Cost Isti=a:e p 30 and 36 t-^ 560 LC.fcf per Cay Systa=s i

3 'Feighted Prices Paid by Pipelines Isr

~

Na==ral Cas reliveries, 1958-1961 4 C$stracts Rapresenting '--sasus is Eighest hitial 3ase Prices by Ca== cf Cc= =act a=i i Pipeli== Suyer

! 1.4 Lcuisia=a.

I - * ' N da -'s C-m:ica of Ceill=g ?!ald Prices for

[ Permias 3 asis -

(Area. Ra:a Preceedbgs AK61-1)

I: # /Mcf a: 14. 65 y sia.

5 6

3echtal's Ccz=pu:2:ics of Cailbg Prica fer New

. Sou:h Louisia=a. Cas-Well Cas 3ased on l N- 4--:'s Cecision is Per=ssas 3 asis A:ea Rata P:cceedi=g (AR51-1) -

7 Cc=rarisca of 7eighted Average hitial 31se P-.cas u= der Lcr.g-ter=2 Cc=:racts Scush Lc=isia=a a=d Total Scu:hwest 7%a NC.

i 1 . Pipeline Route Map used by 3ech::1 Corpora:ics

. for Pr="-8-= y CIfica Study Z Cc=parativa Crends is Weigh:ad Average hitial 3ase l Prices in Texas Cu.lf Ccast a=d Scu:h Louisia=a Ma-ke:

1953 - 1962 .

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i INT?.COUC' :CN -

Florida Pcwer k I.ight Cc=pa=y (T.P. k 1 ) is cessideri=g de ac:;ui-l sidca ci as add'd-~ ? gas su= ply amca " ; to possibly as =uch as 350 ~'"ica cubic feet per day. A .sw pipeli=a f c= scu:h I.cuisia=1 :=

~

f, T.P. k 1 gs=arad=g pla=s will be = squired. -P:se--ty T. P. k *

-l will have de choice of several :fpes of fuel ec #.s '--? d' g:

1- .N= chase of gas f:c= T.crida. Cas T.-*- 3

sic Cc=pa=y.

i a esgula:ed i=:s ::a:e pipelise buy.=g its gas supply at field 1

[ prices W^ are sgulated by de Federzl Power Ccz=-

t

=isaica.

I

1. Purchase by I.P.k I cf gas is scu:.E I zeisia=a f c= a p c-

[

, t d=cer, wideut ??C reguiaden. a=d ::a=sportatics of dis l

i ,

j . gas := its power pla=ts 6:cugh a. =sw pipeli=e to be ow=ed i

a=d.cpe=&:ed by T.orida Cas Tra.=dssic=.

3. Sa=e as (2) abcve except =ew pipeli=a wc1 be cw=ed and ep-era:=d by a. =ew cc:=pf === =cw i=velved is -='*: regula-tad sales for resals. 7:assporcatc= -% ges wC1 be based l .

on a cost-of-service to.

A.

E

4. Purchase of gas at 1 ilxed price delivertd to its power pla=:s l by a g; cup cf pecducers. P:cducers will have gas =s:s-ported to de T.orida s: Ate 11=a by a= e=sti=g i=terstate pipe-l 11=a cor:pa=y. "l"r.e preducers wul cwn a=d cpera:e de re-t t

qui =d pipe 11=a system i= P.crida.

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T.cnda Power k I.igh: Ccz=pa=y has asked 3echsel C4 poramics to srady j its nar::al gas supply sit =a:ics and advise 1: regarding:

i 1. na :ype of gas-fuel contrac: T. P. k L. should seek.

, 2. What price rasge is obtai=able ?

3. Each:al's best esti= ate of the average price of a saw supply i

6 delivned to i:s pla=:s over a. 20-year parted.

'~ -

4. Could 3*. P. k * 's c --4:=es: f:: a =ew ga.s supply he re-duced f. 350 -4"'on c= hic feet per day := 103 ""':=

c=h'ic fee: par day widour seriously sifa-- is ==s: ef ta l

o .

. r.sw supply?

I .

5. ne relative =srits ci vari =us p :pasals. s*--d ad to 7. P. k I t'

L hy p;cducers a=d. pipe 11=ic==pa=fes.

I f

,L ne p :posals (referred to is (5) ) have all =ct yet been suh =i::ad, con-

e i sequen: 1yo ' r.: study cac=ct be cm,1stad at dis .d.=a.

l

'"*is

.: is a p:=H-d-* 7 report which prese=:s he resul:s to da:e of our 1 .

s=dy of de basic engineeri=g asi regulatory aspec:s of de p::pesed projec: a:d givea r.= a=alysis of de ::end ci field y=i==s fo: =a=ral gas is the scuc 1.cuisia=a area.

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CAS T?.ANSMI!!ICN COS S I

' he basic engineert=g fae:c s dat have as i=,.ortas: e!.fect c= de c=st cf gas deuveret to T. P. Is L. are prese=:ed is mis secti =.

,'I

l

.'. Capi:al Casts -

4

7. have prepa:ed as cifica esti=a:e ci de cost of es=st=*.c:i=; a 30" dia.

=et er a=d a 3 6 " 'es eter =a=.-al gas pipeli== syria = f := Lenista:a :s power pla=:s L= norida. he : u:e =ap. Tle == 1. s==ws de a.sst==ed

} Icca:iss f de -*' "-- a=d of de racerd.=g a=d dise.he.:= late.%.

6

!. he capi:a1 ess:s of te 30" a=d 36" --" e systems desig=ed a=d ;cw-f ered s ::assyc:- 560, CC0 Mcf yer day a:e:

30" 36"

), .

h?d e (900 =siles) $130. 500,000 5169,131.000 c-ressor sta: css 22,OCO,000 8,700.000 I ! Laterals Is other facili:ies 30,000.CCO 30,100,000 i I=direc: =msts 25.500.C00 30.01c.C00

$209,000.C00 $138.C00.CCC I:etails =f mese esti=ates are give= is able 1.

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hese esti=a:es shcw da: $e preI'"-$ ry est==ste s supplied := T. 7. *s L.

by Le-i-at e PipeE== Cc=pa=y a=d 71erida Cas Trass=issi== a:e of te

, =d.gha da :f mag =i:=de. A =cre detailed st=dy wC1 he =eeded whe: de i- ,

l time c a:es to carefully check cost of service esti=a:es suh=i:.ed wi2 e

assyc :a:1:= preyasals.

- 3-

. A45

m. we *m emo

t i

. kk i

T assportatica C. sts at 'tarious Tlew Kates -

i To c'a tais a yardstick for pr.t!-i-=ry cEacks of the cost af transports-tica as varicu.s dallvery rates, esti=atas have been prepared of the cap-1:a1 costs and 2--* st esses fer a 30" and a 36" pipeli=a systen. f:: dssig:

. capacities betwees 300 and 900 M.Mcfi i /

capi:a1 costs:

3 0 " P.iu o li c e

d.

cesigs rata Ccc: pres or Sta ':ss .

. .s M.McfL No. '= stalled E. P.

. 02 -=a1 C:sts I

17.500 5132,CCo,CCO

. 300 5 3

188.CCO.CC,0 t' 3eo J A 27.500 _

192 CCC,000

~ 425- 5 37.500 -

I :

. . 500 ; . 7 60.C00 101.CCO.CCO

[,

. 560 -

9 -

77.500 109, CCC,000 (a).

. - 615 11 108.000 21?,0C0,0C0

?

,L -750 Y 190. CCC 149.CCC.300

' 900 I 1+

321,CCO 193,CCO,000 l '

} . .

. 3 6 " Pi s ell se f .

, '. Design ra:e <* 7 essor Sta:icas.

f.s 3,C,fe!d. No. Installed E.P. Cari:21 Co ats 300 1 5,000 $2.12. 0C 0, 000 350' 1 7.500 224.0C0.000 425 2 15. CCO 229.CCO, COO S CO. 3 25,000 235,CCC,C00 E 560 3 30,0C0 238,000 CCO 615 4 42.500 243,000,000 750 7 82.500 250,000.0C0

' 900 10 140,000 253,OCO,000 I,

l (a) For details of this es'..'=2:a, see Table 1.

i f

4 I A46 M* 6 a eg.m-.. eg.

.m I

6 i., .. .__ .. .

s :

I I,

Cc=,.a.-isen of's 30" a=d a 3 6" System -

A 30" systa= is =o deuht de most econcz=ic for 6:cugspu:s is de issge of 350 MM;:4 to 500 MMcf ;e day. *iewev== c for highe: .h: ughputs, a .

la.ger li=e is /=F-Haly advas:ageous, I -

i la =ag=L: ds ci dese differs =ces is cost is show . is da es--=tas s- --=-ized helew:

_ . - . - Co sts is U" ~= cf Of "' f _. . ..

~

Ca= ital ==sts 3 0" 11== 3 6 " *.1:a Oiffar .:= = - .

1 i

-- -- - .300 v' w 13 1 2. ,. u3 ,_,.

! 350 - Isa 124 +! 5 i 425 19 1 229 +! T I -

SCO 201 235 +I4 I 560 -

209 123 +29 615 .

219 . 2 43 -24 L 750

24f ' 260 11

' 193 233 -10 9CO .

t, 1

[ A --= ? co sts I.

3C0 MMcfd - 21. 9 26. 0 +4. 1 i -- -- - - --

350 22.9 16.3 -3. 4 . .. .. __

42.5 23. 8 17. 1 -3. 4 500 25. 7 23. 1 + 2. 5 560 2*.3 23. 7 ..

1. 4 _

6 15 29.5' 29. 3 -0.3 l

. 750 36.7 33.3 -3. 0 900 46, 6 33. 1 -4. 4 T=it-:: z= sports:ica costs are as felicws:

Costs is $/ Mci Tra.sseer sti== ==s:s 30" lire ' 3 6 " 11:a 3C0 MMcfd 10. 0 23. 7

!' 350

18. O 10.6

( ! 415 15. + 17. 5 500 14.1 15 . 5 560 13. 4 (a) - 14.1 (a)

~615 13 . 2 13 , 3 l 750 13.3 12. 2 900 14.2 11.6 (a) Ic details of dese esti .a:es, see Table 2.

A47 P

I I

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I

. Iffec: ei

cepi=g en Trass=ission Costs -

i := ce preced1=g discussics, we have refarred to i=creasi=g de caps-

, ci: 7 ci a tru Wasion systa= above its cyti=u= 6:cughpu: by addug I

addi:ic=al horsepcwer. Terlarge i= creases is capacirt abcve de opti ,

! =u= capacier for a gives d'=~eter, it is = ore pnctical to !== sase

-l- -

de capaci:7 by instaEisg sipelise !ceps.

t Tor :=an 8-- eases thove ep*'...u= flew rate, da pipel..=a 1 =p =ay

---he =cre cepensive 22= added horsepcwer. bc for the '-- s===:1.ada:

I j, .

dam ic hec ==es less expensive. Ive== ally, if de ;ipeliss is c =-

, placaly Iccped de u=it ccat et trassycr:atice. is de d==hle systa= w.11 i he apprexi=ataly de sa=se as the origi 21 systez=.

i _.

b s

j, A 30" 11== c =pistely 1=cped with a sec==d 30" 11== wculi give a u=it trasspc -I:ies cost of 46% at de origi=al systez=. if =o co- --= '-a i

is gives to escala:1cs c4 costs or ds "-4g rate base.

T.J. fact cf Lead Tac:cr os Trans=issics Costs -

I. cad fac:ce has a di ec: effec: os de cost of ::assper:a:i==. To shew me =ag=itu.de of this effect, we have esti=ated de cost =f a 30" li=a 1

8 designed to :: anspor 560 MMcfd on,de, average day wid heth a 91%

and a. ICC". Icad fac: r.

l .

A48 9

w, i

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100". Icad factor 81". Icad fac:cr i

Maar.=u= day ability 560 MMcf 615 MMcf A.:.=nal daliveries 104,400 MMcf 204. 400 mmc 4 Capi:2.1 costs $209,000,000 $219.000,000 A==v.a.1::s spor:aden costa S 27,334.000 5 Z?,194. 000

..I -

U=1::ransper:sden cosv 13. 4(/Mcf 14. 3 $ /" '

i

'l"he : 2.=sper:ades costs were esti=ated for de ta=d yes: =f pers-1 =.

Epor:2=ce cf CcHec:i=g' Costs - .

CcIleed:g costs referred s is cis report a:s de tra=.syce:sdes c=s:s

i vcived is bri=g:sg gas f:cm a ced pei== in de fiald is which it is t

, p cd=ced, to de -" t:2-* ei n sics lisa.

t i .

p Cc11ecti=g costs cz= have z =ajor effec: on de delivered car: of gas.

t.

I,speciz:.ly -=hes the cenecd=g is bel =g dc=a is de swa=ps of I.cuista=z I

er eff-shore.

1

. s j

Fer de ps.posa ci car ofEco seraiy, we have ass ==ed 21: de gss

, t i

werrld be received for : 2=sportati=n at dree ce==rsi pei=s. as indi. l ca:ed is Tig=re 1. := *.*.is sv d7 de cost of ecEacti=g is ' d ar li per Mcf. E= wever, char s = dies me have =ade sh=w ca: ccuse=g costs cas easily : = =p :s 34 :s $$ per Mcf if de gas has :o be conected at

-= y pei=:s i= =eladvely scan velu==s.

l l

4 i.

Also cf grsa:!= porta =ce is de pressure at which Se gas is delivered I

l to ce c:Hect=g system by de p cducer. Ccepressic= costs eis :c.s 7

~ ~~

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. A49 e

e

_ _ _ _ . . . _ _ . _ . _ _ ---- _ _- -__ -_c.. - - - - -

I

, .s ..

i.

f: m l' to 5p per MciII de !!ald pres sure is icw. 5 I auisia=2 =est t

i fields have high isi 21 pressures, and delivery a:lir.a ressure is so t

, p;chlaz= is de early years ci prodcenc=.

f

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L 0

I.

l 3

MO

- - - - . _ _ .. _ - _ - _ . _ . . _ _ . _ _ _ _ _ . . _m ___..__m__-__ __ .._.-______-__ __________ __ ___________ _

I

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e i.

i .

s:- N PRICIS I

? Kecent Trends is Field Prices is '

Soct I cuisia.=a a=d the Texas Cdf Ceut -

Kaces: t s=ds in 2:1d p -;cas is de usas of interest as petacnal scurces a

'l - of supply ci cat =ral pa for Ilarida are shows b Fig == 2. S.is fig ==

shcws de i=itial base price is ccatrace sagetiated is each year. :

dereferei=dicates de gei=g =arket price reached by sellers and buyers W c:n=ac: segetiaticas is each year. "*he average price paid to f ; cducers f== all gas p cduced dcring each year wculd be less thas de i prices shown is Figure 1 because of Icwor pricas received fe: gas sold I ,- =de ces. zets =egettatedis pric: years. 'The pricse actually paid w.11 b

t also diffs: f:cm icse shown is Fig == 1 is some cases because ci adjust.

L -

! ===ts to prices made by de Federal Pcwer Cc--*ssics as s. :s sult of 3

rata cases c: rate sectiemesis.

l 71gure I shows dat th=cughput the ten year period covered by de chart

. . s 6ere has been a fairly consista== difference *cetwees de field M ss '.=

scud I.cuisia=a and icse is de Texu Culf ceas- Se cur r== s.=cu==

el cia difference is app cxi=ately 44/Mcf. ners are pechably :xc

=ajor ressess for this diffe sace is price:

1. Se scud I cuisiaca gas is sc=e 3C0 =iles c: =cre tisser to i de la:ge easters =arkets chas is de Texas Cdf coast gas.

2. Cenarally spea:dsg, 6e scud I cuisia=a fields are 14:3er cas 4

9-l k AS1 m

9 3 =

l 1

t I

the Texas Ccif cess: Helds and gss is avsilable is la:ger pack-i ages. Sis tends es -" 3-4-= de pu chaser's cost cf eccect-t ing a substa.=dal su= ply of gss != scud 1.cuisia a.

.. T!gs s I shows 21: de -id = ' hase pr; tees for scud 1.cuisia=a gas have 3

i

l

=cc i--sased appreciahly sines 1959 a=d sisca $s da:a Texas Cul.f

. cesst gas yrices have gene down. Sese chas;es ad:er 195.? i= de =;:-

~

ward : rend of Seld prices are $cught to be te rssuL: of.:

1.

A *emper y over-supply cf gas 11both s

c=iJii-1 a:d me Ten., cif cease.

I'

'. 2. A racec"-- is sama degree of the effac: cf T?C regula:1ca of 1

Seld prices. a=d ..

t ,

3. Ter- d-=dcu ci the postwar pericd of rapid i=carics

[ *

( -

I

- Cur disc =ssics of Sald prices up to :.6is poi:::has been focused c= de

(

-

3"=' pricas is r.sw c=z:=2ces negotistad etc.h year. S eto a:e de bes: 4-d'~~~r of de ::e=d is ce =a:ks: ;; ice of gss. Sa weightsd avs:sge ; ice ace =any prid du=t=g tau year for ce pase sn yes: peried l

hy :najc ;ipelines ;=chasi=g gss is de scud Louisia=2 area is give:

is Tahle 3. A=y =ccies ccHected by producers subject to rsfu=ds pe d.

ist E=al hspositics cf 7:oduce rste esses by ce Tederzl Power C =-

i

! .issies a.re i=cluded L= de prices shewn i= Tahle 3.

l T.ach of the pecposed projects for delivering additional gas to Ticrida

- 10 A52 4

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em

- - - . - --- __ .--_6. . __ . _ _ _ _ _ . - . . . . . .

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i=velves such a la:Ze velu=e of gas ca: a =ew pipelha rs11 be requised.

r .

i Cc=seque=tly, a '.arge supply of gas available at a si=gle pei== -ns11 have special valus for de Pic .dz p;cject because de =ew pipe 11:e can be j .

buil: to ".a: pei== a=d the ec11'ec:i=g ccs:s isvelved w.11 be rela:ively i

~

- :=all. la is to be expec:ed.derefore da: a=y ;;Wer or g cup si pec-j ducers ca: can sWy the Ilcrida, p;cject vid a la.:ge st=;: ply a: a s1=gle

' ~

poizz cas successfs.13 -d=-m-d a price sQsen--1y higher da= de ec=

ed $s ~4" prod =4e- sales c==== sets because ci de IA:ger vel ==e b- .

volved 1:is cii= ares:. therefore, to take s, lock a:te highest prices paid by pipeli=a ~7Mes purchasi=g gas La scud * -=isiaca, i= ring is h

1

- pas: tan c=-twelve years, ne eccess i=velvt=g de highes prices are i .

l listed I.s Table 4. C&~~ (e) gives the e-mat base price s_ rived at by L.

=egetia:ica between the parties. CM-* (f) givee de price ec:re=:17 i bei=g paid in each case. The prices c== er.tly bei=g paid are 1:wer dar.

I

' de =egotiated prices is =a. y cases. This is because cf decisic=s ci the Federal Pcwer Ga--4ssica != producer ste cases c: rate se=le===:s.

The TPC Area Prices . .

51=ce h== 1984. Se Federal Pews: Cc=:=ission has clea:17 bes= :e-rpcasible'for de regula:ica ed =a =ral gas p cducers' prices ic: gas scId for resale i= i=terstate c---m erce. h the Co -4 ssic='s Stateme==

f'

' cf Cese:21 Policy Mc. 61-1, crigi= ally issued is 5dytember 1860, de Cassic estabilshed area price levels for jurisdictic=al =ar :21 ga s AS3

l l

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)

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. e.

I sales by i=dependan: p;cducers is esen:y-three picducing areas. The

. n re a a=:e=ded State =e== cf Cener21 Policy No. 61-1 g.ves area pricss for new ce=. trac:s is de arsas which =ight supply gas for 71orida as t

isliswe:

~. A:ss Price I

A:ss. . & /Mcf a: 14.*3 ests J Texas Distric No. 7. 15. 1 Texas Oistric:No. 3 17. 1

. Tesa.s Oistric: No. 4 16. 1 Sou:h Lc"3 *f =-= wi-* the .

stata :tzing jurisdd "~- 13. 31 '- ' d' ; L.cis.h I

"'~~

eve-asea :a.xss SouA Lauisiam e-"- *h

'. Tedaral > = ='* 19.11 ~

Nahs Louisia=a 16. I s i ,

MLssissippi 21.05 i .

i y

The exac: =easi=g a=d. sig '"~-ce of these tres prices is so: clear as

~yet to de ? r'-s wtry. *s de words of the C--4ssica'is its policy sta:e-i

=amt. "These price levels are for de purpose of g-ed*- e a=d !=itial ac: icn by de N='ssion and deir use will act deprive a=7 par:7 s f substantive rights or f.x de "'"--te just=ess a=d =sasemahle=es s of a=y rate level. Se prices wil.1 he adjusted f:=m .3=e :s ti== as sud. facts as =sy c==e before us cc=pel such adjust =ents. For de p;sse== a:d In de absence of co=pe111=g evidence calling for other acti== hy us.

preposed !=itial sales of na =.ral gas by isdepe=de= p =ducers whi..h is.

i cimie rates higher "- dose i=dicated is dis stata=e=: of area ;; ices shall he denied a es :ificate or certificated only upon de condit.on da: .

. 12 m

e e e e m ee

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i 1:wer rates he ined a=d an ra:e cha=ges filed u= der existi=; cc=:: acts I which can for a ra:e exceedhg es 6 dica:ed pben level 5 de a:: ached appe= dix te cis stata==== shan he suspended. "

t

is evide== f:cm the foreges=g statemen: can ce area prices are .cz 1 .

I =ecessarily =Exi===s prices. They a:e de --* - prices ** the

' C--ssics win app cve is carticcate cases h== day =tgh: he exceeded

hrough rate case proceedi=gs providi=g de p;;ducar 's :=cassf L is

-a e' t a, case for higher prices. Ecwever, de C- '

sic = has c== as j

t yet estahushed prac:1ces c= =ade k=cwn to the i=d:s==7 pclicies *ich

! saem- c de i=dustry the c~ **** cas == der wh'eh higher ^=- area prices t

j wi:1he app cved. 2ts =ct cles.: as te whether a producer cas Ns:1f7 a.

i .

i higher than aies, price because cf u=nsual value to ma purchaser er

whether Mst1Ecstica =sse he en the g;cu=ds of u= usual ecsts: the p c-i i

ducre, t

There are a.==mher ci si:=aticus da =ight justify fec=2 de pu: chaser'r pei= ci view a. higher than ares price. Ares prices vers - J-2:edly fixed origi= ally by a considart:ica ci prev ="' g prices is =ew ce== acts

for subsa --'s ? volu=: es of gas. If i a gives case a, sale i=vcLve s vel-

==es can a:e several ==es $s typical ce= tract vel'u=se, a. higher *W-area pries =igh: he warrs=:ed because of de reduced ccHecti=g cests i'

dat the purchaser would have as a result cf ge :i=g a large vel =e of gas as c=e pcia:. *f != a. given area it '..as been the ge=eral practice 1 13 A55 .

k b

e me n w

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l de past to sell gas at de e-11 head, thus !=posi=g upes de purciaser the cost of gade:.=g the gas to a central pei== is de field. $s area price l

I rafisces dis practice. arefore. if is that same area f.s a speciEc case 1

l I de producer proposes to sell his gas to de buyer, ccilectad a: a central

{

point is the field, then the gas has a. higi.e: value ts de purchaser tha de vahe represadted by de a.res price. If is a. gives casa de peducer enmm4-= himself ta deliver a. gas having a subsa-=**y hit . tr hea:ing val == than de average heati=g value cide gas scidJ.s de a:ea des a e ,

[ ' price higher das de area. price would he warrs=ed.

Ca de ether ha=d. if de Commissica censiders i: =ecessary for de pro-I- ...

[, , ducer es show higher thas c:3'-= 7 costs 6 order to Jcstify a. higher dan L arev price i= a gives case, it is al= cst i .possihie at dis.;ci= to pre-i dic:vsen if ever, a price h. her ig than area. prices.".11 he approved. 6 I, -

fac=, de Cc ==issica's basic plas of using ares, p !:ss is i=c:=sistent wit.'s the idea of basi =g field pices en individ .a.1 p-educers' c=sts. It appears to be agrsed by all parties'who have carehdi, studied ts Cc=-

~issica's proble=s i=velved in regulati=g field prices dat de 2.se of established u.tility rate regulatica practices based as cost of ser rice, f :

.eg*'f *d 5, rates 6 producers' sale s is !... practical. . Cs de eder '..a=d, some. if =ct all.~. pred=cers take de position dat a=y price r'eg:.iatics en i

de part of de Tederal Pcwer Co Wasics dat dcas set ret _rs to de

, producers dair f=11 cost of service is illegal. Turder=cre, state ccm-14 6

A56 F

f..

C N 8 esee ..g

>l 3

{ } > -

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=:issicas have taken de posinen that any prica set by de TPC which.is

, a j set based es ecst of service is illegal.

na Cammissica is currently taki=g two lisas cf aeden which =av de-velop evenre. illy a clear a=d acceptahle patters fe taa :sgr.la:ics of

~

! prod = cars' f'.ald pricas. nase a e:

? 1. A ea rate proceedings, a=4

2. Producer rate cases which i=velve a sisgia pr-d --ar c: a group of producers bu: do act '-+4e a et da p:=d:cers is I a. given a:ea.

1 In de arsa rate proceedings, an of the prod .cers is a pricing a:sa. and b

al:, of the purchase:s of gas is that area, asd etha: i=:asested pa :1es b

t, pe.-4 ad to i=:arvene- presser evidence to guide de C---'ssics in reaching a, decision as to what de a:sa price c: prices shcr.id he.

t C== such heart =g has been ec =pletad. nis is de Per 3 asis hes:-

l

[

ing. Css such hear.sg d is =ow is progress fo: de scud T.ouisia:a area.

Aldcugh the Per. .ias Basin heari=gs thecrselves have been c:=,,1sted.

l so epi =ics haa heen anscu=ced by the Co --issics. Le a:sa rata hes:-

ings have served to show alzeady da: de establishmen: cf eeni:able and legallt valid area prices is a tremendously eseplax =at:ar a=d da: it

. is alscst certais J.ag a..y deciiics of de rederal Power Co--+ ssics i

! based en dese area rate hea:ings will be taken to court. 3ecans s of 1 l l e l all of dose unca.-ta.i=:ies as to de form which Tederal Power 1

I s

' s A57 l h I -

l ee

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f g= .

1 C--- ssics regdatica of field prices =tn :ake.1: is d' "8 cult to predic:

t what effect Tederal Power C---+ ssien regulation win have en de gen-I erallevel of 214 prices and is turn os de adeqcacy cf die supply of

. =ac=ral ps.

l Prod:cers hav"o presented evidence is de :wo area rate hearisgs to shew daz Eeld prices =ust go up ts insure a.a adaqua:a .y,_ly of gas s = set

- de rapidly incesasing d-~= -d for =1:::al gas. ~*- ' case e=piasi:ss

! cas da cost of a-d* r and pr-d' d g gas is ge ; =;r a.s :i=s gens c=.

t

i hath as the result of the general iscrsase is prices d = to isEA:ica and because new =ajor supplias are being feu=d at g ea.ar depths " =- =est cf de prase== suppues a. = fo--d '"he cost of drd"' ; to dese greazar ,

{

i dapths is a major fac:ceis 4--easing the producers' costs.

s 1 . . .

1 C== highly repu:ahle e-----4st who has served as as exper: ws=ess fer L

' a group of producsrs i=volvesiis ce Sou:h Luisia=a. Ares. F.a:s Case has preposed a. pla.= for the reg :la:ics of field prices by de Todaral Pews: C+-~4ssice His preposal is effect suggsses 11: de Tederal Power C--~4 ssics st = ply watch de reserve producte= (7./~3} ra:io.

. ""has is, de :-tal proves reserves is de *,*=i:sd States at the end of a 1 year divided by de p;cductos duri=g de year, a=d adjust de field.

prices frs= ti== to ti== to hdd de reserve producten ra:io a as t

accep:ahle valce. :: . McKie, is =aki=g this proposal, is is effec:

suggesr.=g te de Tederal Pewer C-~~4 ssica tha: it si= ply les ce laws 16 A53 4

m a ee.

i A> .- .

4 1

ci supply a=d demd cperate and limit the C*--issica's practices to adjusti=g prices se dat day wsil be just high e=cugh to prmda as ad-equa:a supply cf gas.

AP..la we ha.ve en way, of course, of da:ar 3-3 g da reacdes of de I

s eders.1 Pewei C---4 asica :s Or. McKie's suggesti =. we believe that i is de Icsg . de Federal Pcwer C---4ssics will have ts, fr==r. ti=e

s :f=e, 4--sase Held prices above prese=c lavels is ords :s --*3-** 5 adeqcata gs.s ceserves. As is de =aa: f e, hewevs=, a. Par cas

?

happes i=sefar as redarsi Pcwer Cc==issics rag-: lade = cf 214 pricas I'

is conca =ed.

i b .

i

),

The-"a-4 a 8 a cecision i=. de Per=tia= .

3 asis A ss. RA:s Proceedi=gs (AR61 ~

l The IPC N --'"er 54y= cur *Ve=ser issued his decisics in de Per=ia=

3 asis Arsa, ra:a proceedings os Septa =ber 17, 1964. ~his decisicais s

subject :o de review of de C---4ssics a=d =:igh: ci c=urse tsa: " 's res--M*~a :s de LL:al actics taken by de Cc -'ssic=. Ecwever, de Pa 'aer's dacisics is the best f.= dica:1cs we have at mis ti=e as :s de pr=hable di:eetics FPC field prics regula:ics will take is de = mar h=u o i ar. dis darsfore cf i=per 2.=ca is dis st-dr.

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~he 7a-4 ar preposes :s set caill g pricas for 2:se :rpes cf gas which l

l l

l . . 17 1

N 6. - . SM . 64s s._

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I he defi=es as icilews: (a) i Cas-well ns is gas fec= gas reservcirs. It esvers _cs.associa:ed gas, gas fec= d.y gss reservoirs a=d gas fec= ce=ds:sa:e 1

reserveirs, a=4 gas fec= gss cap wells.

i Casi=thead rss or eil.well ras is nw gss prodr=ad fr.= .11 1

reserves. ,

l Residue rss is casi=ghead gas after it is 7:ccessed i= cah gas-4112* 71 A:18- .

.s,

' Zach type cd gss wiIlhave :wo ceilisi prices - c== fr cid cec =sc:a and I

' can for =ew. Se da:e dividi=g cid esats frs= :sw is ce hte ce

}.

Pa---e 3 asis Arsa, p;cceedi=g was bati=:ed. Oecammer 13, 1960.

i .

5 .

',t The ceiling, prices set by the ?~- d-=r are i=:e=ded :c be caill=g prices, 8

I i f I ..

. In fac:. The prices apply :: wha: the "~~4--r calls " gold standard" l t j gas. This is gss of good quall.*y a=d available at high pres sure =d is sufEcie=: q-= ^r :s c---* *d de highest prics. A=y gas of lasser val == will prest == ably sell for a Icwer price " + - :le cs"' ;. .Se icwer price is :s be arrived at by negocA:1cas between buye:- a=d seller.

I Cc=:rset previsicas tha: result in de periedic an:-r-m:ic i=cesase in

' field prices are =ct pe.=i::ed c become effective is cid e n:: sets if de 1 i

{

'"-sase ca. ries de ;rica above de I"2C ceili=g price for :%: specific t

i (a) ?--4-ar8 s decisic=. page 44.

A60 l

f .

dh I

t i ,

cemet. Periodi= an:cmatic i==: esses are per- d ed is =ew c == 3 cts l provsdad de !=crea.ses do =ct carry de prsce above de .7C a:ea ceilbg prica. _

ne six cailbg axes p;scas p:cposed is: de Pe:--4=- 3 asis are given

! 6 Tahle 5. Sc== ci de N d er's cale . lade =s i= cived is c .- d.=g dese prices are gives 6 dat table.

t l

ne - -'---t reverne sta=da.-d shews en

he 1 ci Tahia i ia - - 8ad :s a .

l :=presac= da =adc=al average cost of predr.ci=g gas. *- '-- " ; he p;c-d=2cers' explora:ics and develep==== cmsts a=d a. re:::s of IIT e de I

j ,

p;cd=cers' i=ves===== b fas " *das a.c= ally i=velved is *.*.a p::d=cdc=.

L t

ne Per--d=- 3aris geeg sphical adfist=act is i=.s=ded :s reflec: de fac: that Pe-d=- 3 asis gas has les s value das de =2:ic=a.1 average be-f, .

l . csuse cf i:s re=cte loca:ica f:=m =est =ajor =a ke:s. Ois figure was I

a ::ved at by ccz== art =g i=idal hase c=ntract pricas is Ps.- d=- 3 asis e.:h *.ha =ad==al ave = age fer &e := cst toe === 6:ee years fc eich data is availahle.

1.1== 3 gives de revenue sta=dard !== de Per--4= = 3 asis. S e average 1

reve=ue per Mcf f== all :-e jurisdictic=al sale s is de Per- d = - 3 asis i

j is i=:e=ded :s equal dis figure.

1, 1.1== 5 gives de "g:Id s:asdard" incre=e==. nis i=cre=ac:is added :s

. /

.- .e> ee u. . e .e e

1

^ 1 t

l . . -

i e

eCec. de .reater vaha ci de higher g.ali

y. ..igher pres sure, higher a

f __ _

volu=e gas. :: is exnected than ce cage izted ; tes fer less dest-shle i

4 l

purchases =sy he u =uch u 3-1/:c /Mcf les s **- 5e ceilbg ;; ices.

,i- na ced.bg ;: ices gives is Table 5 a:e ister.ded :s ay;!y =f c=c:se ==1y .

l

= Pe - sasi= sal... Ecwever, by whee- : . ;; yer basic da:s. we cas airI ve as as ap;;+-s**cc. a: lesr:. of de esili=g ; ices da: "*a ~3ser ~Xe==ar would a. rive ar. if he applied ce sa=e ;.hi1=sc;hy ts de scud. :::H em-m area. .

t' I

Ns = ale:h:ics fer de scud huisiass gas-well gas is gives 6 Table 6.

t .

I L

i : .uuta=a sewers =ce Tax -

t, Cas yc chs.sedi=

cuis:a=a is subjact to a severa ce ta.x a=c"--' : to r

! 2. 2.64/Mef a: 14. 73 psia (2.3 Ct/Mcf. a: 15. 015 p sia). Cas ;;cduced off.

I e,re hey.cd ee uesu=s. :== furucc:ica u == mh3ec. := au m.

Se :yf ical gas purchase e-.c: for gas ;; d=ced +-- te * =isia=a tax j=risdic:ica provides tha: de pu:clase pay de basic ;; ice :sted is I the ec===act ;1=s 1. 5 :s 1.75 $ /Mcf for par *.'.al :si=husse=est cf pro.

I ducer for ,severa=ce tax paid.

e

. 20 l As:

e e e-e e .

~l h

s. _ . . . __. .

j . . .

t.

na Rela:ive 11erits =f Jurisdic:ic=al versus Nc=.

j .

Jurisdictic=al Prcducers' Sales I:c= de Poi == ci view of the F1..rida. Fewer k *.ight Cc. pany -

na sta:ed purpose =f de reg '="en ci field prices by de Federal Pcw-

~! _

er C4--4 ssics is c p;ctact de censu=ers' i=arest. Si=ce de 71crida i

Pcwer is 1.!ght Cc=pa=y is a.12:ge censu=er cf =a:= 31 gas, decreticany its i=:erests win he pectac:ed by de regula:icas cf ds Federal Pewer Cc=:=issic=. I: is - d elv n s tible ha- " ^ e 7* e-th --- ' *4c: .'

s e . .

l Cc

_=pa=y e=:ers i=:s a _-on-lurisdictic=al ces=ac: f:: ce ;urchase ef _

j t

=a=ral gas fre= a producer da: I'.o ida. Power Ic 1.igh: will - ' is de ,

g

j. . 1cng : =r.it is payi=g higher prices das it would he payi=g if it were huv. ' j a

s }

ing gas fic= a, cc =pistely regulat d p;cject. Ecwevar, this is =cthing l t<

l l =cru can a possibcity a=d de cesverse is prebsbly erany pesetble.

^^

.A l .

I ler_la:ed field prices =ay bec=== highe: *.*.as de prices that cas he l' .J t

chshad at dis time for a =en-regulated sale. Sc== ci de ::asc=s for

(

dis possibility are:

1. Ecc=ar er later :sgula:ed field prices ==s: ba se: a: a high enough level to i=sure as adequate supply cf gas for de grew-i=g. gas =arket, nose could be subs"-*My higher ^*-

' prices .=w effered T. P. k 1 for a =cs-jurisdicticeal sale.

i

2. Se #--=-4 for =a:::31 gas in de en: ire eas:ars a=d ==rd-l l

easters portic=s of de C=ited Sta:es will affect de regulated

.. field price ths: =ust be paid by T. P. Is ' na: area p:cvides 11 j k

. p A63 I

O .

.m .*

_ i l

I t

as s=ormous market. Lecl"* g =any Large ind'W.al centers where de accoritzes a:s becoming Lac sasi= gly c==scicus of i

the i= porta =ce ci ai: polluden. 3 is c=1y :sascushis to ex-l ,

pec: dat dar--mad = for =at.. a1 gas for 3 d-atrial fuel is all cf

~j de big me ;repolitas ares,s will i= crease as de seed fc ai:

i

cilunca c=nceol hec ==es inc=easi=;Ly app.ars==. In: dar=cre.

I de --ease is the use of gas for space '- =-'" is c=sa 'ag a 8

.. serious load fac:ce Pre' e lem ic: dist:.hu:==s i . ds =2:ir.sc .

, j .azess served !=cm soud M sia=a. Ot.is is causi g distrihu.

l

', ters is de Middle P'*--'c s .uss to advoca:e chz=ges i= de

( ' - --- --

i form of the city gate stes ts: will per=it dem. to soll largs l .

[ volu=es ad L=e.. dle industrial gas as s. =sa=s of equati=g ~

their ".: == icad. -*he I;:C is :2ki=g steps is dac di:scues by l

=cdifying the Seaboard method of allocati=g costs so da: de i

i ci:7 gate rates will haveicwer c-- odity charges and higher d=-=-d charge s. None of de cur:s== projecdons si de f=r.::e ,

d=---d for =are. a1 gas nilect dis ;cssible -" te is de trend 1

i ci d-- 8 = fs: =ae.::a1 gas for !=dustrial use. ""r.e fcescasts l

produced by the American Cas Associatics a.=d de != scasts

' ;:cduced by Sta= ford .~tesearch Institu:e ist de p;cd cers is f de Ps: .ias Basis and is the Scud I.cuisia=a Area F.ats hea:-

e l

' isgs do =ct reflec: cha=ges in de past E. ends != de use of

=a:=ral gas as an i=dustrial fuel.

22 l

l i ' A64 l

l 2 1

i I

3ecause of all ei dese uncertai=::ss as to wha :egula:ed 11:1d prices

. will ha is de f=re. e. it veuld ' 3-- s sible for de 71srida 7 ewer k _

1.ight w

Cc=pa=y to k=_cw d -' aly what i:s h=c:a fuel c=sts would be if 1::alles en.purchasi=g gas item a p = ject which pays resc. late <L field t ricas. m Flo'rida Pcwer k I.igh:~Cc=,A.y p chah17 cc=sidars, as l

l .

=o st '- -* a s do, . at a. k=cws f.. .:= grise is prefa.shle to as ==cer:ai:

' 6:=re prica sven though the t=certai= h:::s prics :=ca effsse pcsai.

~

M'i das f = prices is de .'. == ~

tha: are las a *'-+- .'_e 's: .:ws prias s. .

, 2 would appea:-hat dis is a. rad _er -

_- faverable ' _a to negotiate a ses--

I 4

jurisdic-d m1 tur.hase of gas direc '- f :m pre.'" e:s who have it. ge

z. _

[ packages :s sell. 'Fe have several :=ase..u for *' 3-u g this:

L .1. Sere appea:s to be a ta=pors=y oversupply cf gas in scud- /

r out m - . .

{ Z. h ex=ece u= car-1'- des a: dis :i: .e as to w-d: J gci=.g s

, happan to prod =cer prices == der F7C regula:1 = igh: =ake t

some p;cd:cers w d"8 g to werk out a ::=-jumd.s* -'--*1 con-

ac:dar is quita favorable to de purchaser.

3. 3 is highly probable that de Federal Pews: Cc -sai:n wsil.

is de sear bre.re, reduce de reserve /producti = ra:io which

! 1 requires pipelica ec=pa=ies to -$4--*'-- 3 :cw requires j a. racia: et 20. It w.11 ;re'e ably reduce dis :o 17. 5. Sia

=eans da: for a while pipelise cor=pa=ies will be ahla to

. Is .

A65 r

i.

1

( .. . .

c'a tais cs :ifica:es for a idi:icnal sales wiscu: p cvsding addi.

t

' w annt reserves. .

4. ha rata of 3 cwth ci da-=-d fc =at :a1 gas has decreased from 10". pe * -- - is de 1946-51 pericd :: 1. 9# p e r a--"-

~i' is the 196142 period.

"'he Field Price norida. Pcwer k :.ight TC'. *' ave is Pay - ,

= censidari=g de ;;ica da: narida. Pcwer k I.igte vt:1 ha re : pay fc

- - - - gss".=, scu:h :.cuisia=a !=. a non-re gulated sala. the =ost sig 3""- guida-we believe is the price c= :s=:17bei=g ;sid ic, sc=d I.cuisia=a is reces:

s

',L i res:Iatad sales where me rederal Powe= C---issien, af:s s. hear =g, t

has se::ha prics. Scme cf de prices is Tahle 4. Cel--- (f) are i=. dis I ca: age:7

[.

s Cpi =ics.436 issued July 23, 1964, which i=volves *:sms 13,15 and 17 s

is Cahle 4. de Cecmissics estah11shed as '".= lisa" 7:ica fc es-shere gaa is : cud, *.suisia=a ef.13.1)/Mcf at 14.73 ysia plus saveras e :ac.

rei=hbsame=c cf 1. 47t/ mci at 14.73 psia, ~s g a tc:a1 cf 19.371/Mcf.

Tacad Mi dis = cst rece== actics en de par: cf de TPC, a p;cd: ce I .

! wid gas for sale is scud :.cuista=s. carrently has so assura=ce da: ce t

TPC will approve as i=i:izi base cu::ac: price of = ore w- 13. I? /Mcf.

- 14 A66

{ }

p.

e i i

l.h ..

i .

e i

' e ne volume of sales involved is each case is eic.h de 15.1$/Mca 7::ce

decisics was :=ade is s=all ec=pa:ed to the vc1=== :o be pu: chased by t

l ,

nerid.a Pews: k 1.ight. , If T. P. k I ' cz= curchase i:s en: ire reesire-

nents at_- .e eei.-e.1: would save cellec ec sts a=d cculd cessequently s ._

. a.fferd to pay a pdce higher das 13.14/Mef. C . de ether ha=d. de l

y cducer would have so assurs=ce da: if he scid ._' e la gs vc1=== ta a.

si=pa purchaser is a :sgula:ad sale, he wculd be 111cwed *.* '-arge a -

i ;; ice dac ref.ac:s the added value crea:ed by '_an=; a *.azge vel === at .

l c== p *-*

s

*e - gu:a:1:n we havs =ade of the TPC ceili.; price is scu:.h 1.cuisi -'

t' .

~

s.=a based.cn h '- *Vec:.e:ss decisics has a=y sig-d ^ ~- a, it i=di.-

} -

}<

caces that a.f:ar de Scu:h 1.auisia=s Ares. Kate heari=gs a:s ce=pleted de t"a--4 ssics =ight spyrm a price cf 10.35?/Mcf a: 14.72 pais, bu:

i . .

I would se: par . it f--- e escala da' ci dis price.

. Te c-- 'ude f c= this review *ba: de pricas pr: posed by ""emacc. I=c.

I '

is its lat:er ts norids. ?cws: k I.igh: ?- -- a_7 da:ed ~uly 14, 1964. !c

a. =ca-regulated sale are abou: right.

I e=

h ._

TEOE.uL PCWER CCMMISSICN JURISOtC~CN

! Some oa' de proposals that have been made to Tiorida Fewer & Light Company for a !cag. term gas supply. . asd others that might be con.

sidered by T.P.kL. . Involve situaticas for which there is no clearly c,

estanushed rege.iatory precedent. Legal problems are isvolved so 3echtal requested an opinio= frem its actor =cy. Mr. R. C!yde Eargrove.

i who syecialises in T' C practice. egardisg the efu1&:or 43P**:8 of r

de various projects usder consideratics. Cur let:ar to Mr. Ea.rgrove dared September 25. 1964, a=d his reply dated Norder 2+.1964, fonow.

Mr. Eargrove's letter makes it clea: that in an =f the cases suh=itted .

[ to him. ,with the possible exception of Case 4. the Tedersl Power Ccm-l I

, =issien win have jurisdictica over the transportatics rates regardless

of whether they be hased en a. cost ci servics for==la er en a fixedprice.

,? 'Ke thi=Je it la probable that any pipe 16e certificate .a ssed by TPC for 8

L an i=dustrial pipel!== ts I".orida will be cenditioned on s trs=sportation i*

i rata satisfactory to that Cor= mission.

I Case 4 win be free frors ??C regulatics only if the I".orida Co==ission has and exercises jurisdiction. ners appea:s to be =o dat= that != Cas e 4 there win be regulation of the cost of gas ers=smissica to T.P.LL. Se only questian is whether regulation win be by the federal or the stata e

Co-l e sien. -

. 3 Since th'ere win be regulation of tra=sportatica is 'an cases. 't seems im.

f .rrobable es s that 7. P. kL. ens reall== a erice or a schedule =f -ri:es i

l f1xed in advance for the term of the transportation centract.

l

~

26 -

t

i n

(y p - - . .

3EC*-iTEL CCR. CRAUCN -

CNCIN EERS - CCNS7UCTC RS we ws n aus . s?=cc- saa reaacisco + wrcam*

Septa =h er 13. 1964

?

.. Mr. R. Cyda Earg ces rest Cffice Sex 138 .

Shreveport. 1.cuistasa.

Suhjec= Cas supply fc Florif.a ?cwer is I.lgh C===a.7 Cear Cyda: ,

:=.Hmm wi:h === recess c~c= versa:is=s, we wer.141Cr.a = have ycc advise i us as :s ce jurisdi+ cf de Federsi ?:wer C- 'ssic= is each of

, " e five cases described hel=w. Te a = par"-- '= -17 =:a:a i s:sd i=. Lif-t farences he:wees de five cases wse. respect :o ??C p::iscie:ic .7e .

are also i=:amestad is cypor-""as de T?C =igh: have is ear.h ci de 3

f }-

fivs cases to exercise -* ecr c_ L d== ugh applyi=; pres sure c hy i i=po si=g c--*"-=s is areas Aere it d=es ha.ve jurisdi " =.

t .

k

. I. A =ew pipel!== ---- a. y p posea :a ::s=syc : gas f::= ::a sta:a

s several cust==ers is asessar stata. la g:.s ::assyc :=d w.11

{ hshaught di ee:17 f c= da pred:cers by de 1"-= a v.sers cf

',, de gas. Cas used for fnalby de pipeli=a e- arf is pu= chased

! by that em=~y direc:1y f := de ;;9 -ers, nere is == sale f= :esale i=velved. Se pipeli== c z=pa. y does se: :ws cce

. #=*" des th:cugh, which it is maki=g sales f== resals. r"- = g e s f : de tra=sporta.:ics are :s he based == cost ci sar-r.=a ec=putsd as specified is ::assyc::aties cc .::act.

2. Sa:ne as (1 ) above vid the excepti== ca: de pipelisa :-- pa=y is as existi=g ecz=pany which cw=s a=d epera:as as exista=g pipe-11== systa= servi =g de sa.me tres to be served by de p:= posed sw li=a. nis existi=g c=r:pa..y =cw =akes jurisdic: :=al sales a=d =c=-jurisdictic=al sale s f=c= its exist.=g systa=.. -"he =ou.

jurisdic:ic=al sales are made is part, a: leas:, :c is sa=e users as will he btrf:=g gas f:c= de prepose<i =ew liss. ~he ecz=pa=f

- - - - -- preposes := opers:e ce =sw systa= as as eneffely separa:a' syste?='- -

! s O

6

- 17 M3 he

.5

*.e . l l

i l I .. .

- Mr. R. Cyde Hargrove 1 i

and keep cost rees ds seyantely !=r ce saw system. Charges

' will be =ade es a c=s:.cf-service basis c =;=ed as prese:. bad -

I in cec:.

3. Sa=e as (2.) excepti=g ca: ce=pa=y ;;cycses is c;erate 1:s new and cid systa=s a.s a s=gle systa=, and w2 ::E ::gedor de costs of cw=i=g a=d e;en*.'.sg to two systa=s.

!' 4. Cas cwr.ad by a ;;cducer win be :n=sycrtad := to 71=rida stata

.l 11== f=: he-;;:cucar by a la:ge enst: g i=arsuta pipelina ===-

< pa=y. A: '..a.:;ci==it win be :=caived by a y =d a: a=d :nss-

- portad :c a. g:cc; ci cust===:s is y'.crida by a pipaliza ===ya_y

' owr.ed by de pred=cs . 1: will be :cid by de 77 d= s= to de

~

u.tdmste users for a. ;;ica f.zad fc: a pe. =4 =i 13 yes.rs by c._.=:.

)!- ne'i=:a:sute pipeli== in dis s.se =igh: b a: - -' aly 8e7-a.-a:e pipeline !c dis se rica, c: =igi:;a. '="y locy 1:a ea. sting 87sta =.

1-

5. . An esis '.=g i=:arsta:a pi; ell:a c-sa. y w-r yacha.sa **--*1

,k gas is de 11:14 a=d.::assyc : it !=:arsu:a :s ;cwer pla=s a 4 sen L it to de;cwer pla.=:s as (! as sv=e) a =cr. ,8uxisdic:.:=al sals. ,

t F I expec to-te in ~#a shingt=n i==.=g Se early par ef sax: weok aciic;e l

s have as cy;c ==.:7 a: da: ti== :s discusa cis =a::a: w.th yeu. ; ,

will be stay.'=g at ' he Madisen.

Yery :::1y yeu=s,

[ .

"O 7". A. E==gi F.unawe I

I I.

9 6

. 23

' f .

g . I

. ._ . j i

l dI-R. C1.YC E H A RG R QVE l

i mm vae sas. essa f

Ictu=ter- 24, * *g*

l' ..h:st ew-

. ?:st " e 3cx 33cf~

< sa:L ?.s=cisco, Calif--- *

FL19

i . . Attut** t .fL . F. A. Er..g: , C:ist Oa.s *-* -e:-

~="'==*: .

i lll:L res;=se to g r~t:sst af Seyss=.%. :- if,1*S, :7 =7* -* .

I with respect to tha *:risdi:tice. c: tha isda.nl ?=== -

=s1= (m)

17. each of tis ..*.* rs esses inscribed by 7c4 is set f:r.t. tal=:r. Ice trevi T, thi.s c,.*.:1= ites === restata .te fire esses, t= is % yed t:

2azr descri;-*-a et each case, a=t. tun.s =st te :sv i= c=,'.._c~ ~ -c.tt.

! aw. lattar *:s =e cf Septar.her 27 8

L i 3e53re i==silar*M ..he f* re es.ses says:staly, cartai. basi:

[

ec..silarati=s e to all *M te -'- s cd to g:ali.*.7 thz 7.1=s l mssed hers1=s.itar. ?i:st, ~. tis : *-* ~ a=^. a " c==se.ts a=4 newss.

~ ~

are based c= e Nah Gas Act (Cie A:t) as ;rsse=tly acacted a=f.

effec **.ve, asi c=, ._. c ,* '* -* = ' i ta. sta-* ~ ef .ha 1 0, = sy f:r

'.'e so es11sd I.vaca case (L::.Wes Catte-i=g Oc. r. ??*. 323 7. 24 13C, I 50 ?C2 3d W), v"- -- is ==w ; --- car:rs .=a S:;rs=a C.- . (a.. =

' "- '-'=4 2cventar '.S,

. 1"g+) . . cac=== " '-- :aks .c ;redi:t the c4t==a of inst case taf:re tam SW C.~ ., asi as tin tax: cf tin cy-* ~

v'J.L *--*te, t.':a. decisi = ::m7 asi pr: bat 17 # *'. ista::::=:.=s .tz W-21="--=' ansvar is cartais cf tis five casas ;csed. 3riaC r s:stad, the '.:vaca case i=relves ., sed sales :y Lc.7acs. Oa.asri c 0=:;s=7

('mf a=d 3 ::.st== ?ipe ti=a C:=;acy (2:=s~) to. E ?s.so Ca 4. Gas C::Pe 7 (C ?sao). *e i=vses sala is cf gss to to = sed s ' a'r as ==.

resser s a. 1 = f: a1 57 i._ .ssac, r.th tua rssala cf rc a gas t7 L ?sso f:= ul"-= e 7M*ww ti = ;rch".titad. *e 3::sst= sais is of gs.s is te used a:d c=s=ad vt:'.17 ritti: tis Stata =f Osmas (i= vtica s.ata it is also to te r:4=ced and gatterne), ty n ?sse. sr.d ?*" *;s ?* ::=.

lac =C e f (?""';s) is certa 1= gssc11=s ;1asts. -l. each i=s..==s,

,' icswar, it was f:. .d that tte gas vi;*. tec=a c

. - 'ad i= C 7sse's l

i;slises v*.th citar gs.s te1=g: s:sycr.ad s=4 scle 57 I' ?sso f:7 resals ,

t l

I A71 -

g

/

%d m .

- . , a-- --__ _ - - . _ _ -

i l

1 I

I s =

f.

. f:r ul .*=ste ;-M *- :=su=;** =. L.vaca a .1 t tzt= ' **- that thstr a

,..,ued sales v.1'. =ct to rJ4ect to ??C y.:risdi:.d . =,

vaca tocause it ices =t ,..,.se a sais f= rssals a=1 Ecu.st= teca se *: dces =.

? ;r:;csa a sale ir *starsta.e

. === ares. "he ??C, t=rever,*- tat tacanse s==h gs.s vedi tec=a itax=d -^'_7 e _ - 'ei v.c gas tei g scli f= resale 1 i=tarstate e==arte, :s.- s*= a=:r.:=.s == .=1sc=les i

cf tus 1. m sca asi I:ust . gas =f :ecessity a.s a ;27sd *' fiet . W to scli i= istarstate ===ar== f r nsala (72C *eci.31= at 26 ??C 3C6, M "313& 257). ~dar s=h c1.u taccas, Ota ??C tali that te sales

. ;;;;csed 17 *.=vaca

. a=1 &c.st:n ve=11 to s.5 *ec- to its !=1.sc .* . =.

i' C= sp;eal, the 5th Oir: it n ursed (vita =e dissa=t), as tei=q P.c

vaca a=d 3:c.st:n. "*-*

c;* -* ~ v.1* -** ' == t.is a.1 s=ati a ; casa.

' **

ties of a su;n=s C:urt decisic: *' **- s=P. salas t= to 7:ris.

Li: * = al c= ?.e = a S c=?, er ==.f:risdi:tt-*' = tz : tar, t= se:P.

specu:.a.*.:n in the alta=a**.re sh::uld te tnated .~. i --

s1= s :

" stataan=t cf reascc.s 17 the C:urt !=r either c~ '-* it =L7 rusch 1.s svailahle. "* s. this c~sidara** ~ cf alta=a.*ve : . '-** - a st:.u..

te regarded as ;r=1 *-*-* 7, asi st.hject 23 na;;niza'.1: P cf tia sugrune C.t:ri c-*-* ~ -t.an it bec=es availahle. ,

. Sec=d, =7 =71=1=a ass ==e that c= tracts v". .*. to trafted a:d

tysical a.wscent cf deliruries ace =glished i= =.a "- ar as v*1L .

effect=sta tuar c~~'-=1=c.s reached ~, Ota tar,ix cf .te fa:ta stated t7 -

. ycu.is eset, case. 3

s ;cssilla- to w m . =any =.f:ri:ditta=al I sales ts J=1sdi=.*:=aL c=es. by the i= tar;csiti== cf

. "'----r' -= * *s

[ . as tuyer er sellar, or by a%.u=e=ts of facilities to :::rrert gat.ter.

iag ist3 M 31:3 c; i W.tata i=*C i=tarstata ** * * ' * **.es . *ars- .,,.

L

~

f l e, if a=7 cf the five- (42e3 1.s' selected as as C;e:s** -*'_ f. .,csal ycur clie=t =sy vish to e,,1a=a=. thi.s : *-* -" vi.*. a. fi al ;1:1=

based = ac*...a.L 0=t.-aC*3 a=1 speed **

fs4111t7 7:";c341s.

i ca.s. 1

- s case as stated by yes is idar.t" . 2.1 t= the Ct.lf .%

? ;eli== c=;s=7 (c??) ;.., sal =v tei=g teard .y ta ??C 1: .cetst ses. c?63.sc4, et al. (c77 .cetat *.s c?63 223). ~=== sri =s , u srs 1= tas aty rieli, a=d 9-*'- i= the 71 edger 71 11, ,..,ese di.rset sa .as j to electri: ;crer :=;s=ies 1: Scutta= cal.if-*

f= .se '.7 .t=se

==;mmies scla 17 f:r the gn= ara *.* = cf elac=ic ;c:rer, vith ssala cf the gas pretititad. To gas vtich =ay be said fer ssais is is te ==.

=1 clad with thi.s gas at a=7 *.*.=e, asi ths ;urtasser talas ._t'.a a=4 delivery is the pr~'- * ; fiali after gatter1=g by .as ; ret::s:s t:t

" ' tef=re tes=.s:aiss1= c =es.* ,.! daliter7 vere =ada at the voll isad i taf=re gattart=g, the ==.;.risdic-* mi :tanctar cf ha sais ". gut is i s=u q.taned sc=mv:st by w=g a=7 arpt that tm *gattart=g'

{ ::ali te *nated as *msi=". 11==s a 100f, direct use ;i;s1*=s is t

e 2 .

l 30 -

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. . , eneem e.- e m_._ __ _ _ _ - -__ _ _ _ . . __ _ __ _

r l

l

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i l i 1

, ,..,. sed P..h =c ;=ssit111 7 cf t.irect sala ps tei. g c-- ' 2d vi.3 nsale gss, es *.:vacs :sse seems :isarly Lis-*--* **C

s a .i its : S .

==a s==uli == a.: ar this ;*.st=. E: vent, evs= *.s cis *. s :a=s l ttat f..-::=- ; ;* * - st=uld te read with can t: istar=1=s v:staar

. ca :ssac-4 e=;1:yed by the fr..t ec41.1 te a;;1ied is a=7 va7 to itsse

, f1 cts.

l I ,

oh the :-*-*= sta .ad aucts, it f=117.s .ta: -2s r

, d:::ars

(

vc=11 ::: rag 1.;* as IM cartift:ata, ar.1 to sa's :_ - v: .*.i ::: to

l sut *ect ts M %d". ta=. C dar ;rtse== :.a:r, it is =7 -'v-'*--

txt

. :s es:-*'* -*-> cr s*-* * *- 11:==se er ;e-_* t *.s reg:t:si 57 a=7 ;r:-

l r

' '--** : state :---- y necessidf.a ts r .-:!.a 1: == ar = =stis -2s

,.h= to =akr su=t a sals, but f.c =ct "' ::7: elf == .: is a =ss.

ber cf a=7 mte tar ex=w;; that =f *. :1sisu, a=1 tis st * ' te ===

sidered as u 2r:s-=*'* r a=1 === a legal c *-* - (w as to a

i -

I~* ** * -= ) . I tan sc - '-- aka a c us=si s :ssaa-.a =f ts

,, 1=rr*y*=-= stat =ss to st=dy ^is p:ss** , si=:s I descad ca: tey=1 that mye -f th'a ; resent aar* p-., but talian 22 7:1:::: is s:ffi.

=1 r 17 cles: : cr relizzes to te ;1 aced ca:v.. s.s = gas We? '. ,

I-***-=. C e f.~ har estest is :acssaa:7; if ti.s ps is ;r " sd ft*=a c* st=re aress ==dar feca.s.1 atter cas sta.a ;;;;*.sd.1:-* - a=1

~

~ 1, I talieve it v"O rn;rsse== e. ca.se of ff s '-- ess.:= f: s==h I a.*.*;sc: sala of gas ; red =..ad.

. '=~ Toda s.1 Wf.1 ti=; --'a ;rssect laar, tevent, I feel to FM vculi .~. cbtain *u.r*_ sdi:-*~ 17 ressc. cf I ,- tat fact, but tae epar a= cf .Marier =sy have sc:a a::t==*_t7 is this

[ arsa, e12ar -'-- tha ta=s =f' *ts lease er geca s' :sg:11:t=s . I have s scs sseareted 21s qsesta=s, but ansa = a..7,... 21= := the lassa it.

[

self, I 'c.=:s =f :s ganars1 reg:lati= v'-* ^ vc=11 i=;ede ta rigt: et a.

,. 1 tr =f sc:a gas,ts =ake suce. a. sala tiersof. P-*"_7, i:sefa: as j the ;:st:ar is c==s=ad, na prad~* stata =ay to atie is ta f .::=

l t: enact lagisla *=n res=lat*.=q such a sais, ,.... dad s :t repla.*= .

vna ; spec.*.ve =17 ** : ;cssit:1.it7 venli =t seem := ;resa= a.

I, se::i=cs ; bles :. lass such lagisla:i== vas e=actad bef= s ts ;:T; sal was effect::stad, ass -

the , .tase a=1 sale c=trs= is ,..,arly d=atted to ;; :act agniss: f.::::re *.s: saaes i ; 1:e : ts: -%- .2:se

~

s=Lt.ed by tia c===sc: itself.

i *Jr ,1;eli=a %di= 1=:. =f *As TM vi* ". te that . -117 l ezer.* sed by it: a es=.*.fi:ste v*O te msg:1:sd a:: ._. -* ; ==s === .* =

cf .acilities, a=f. ta :s=s;c= a** - rata v*C to sch 'sc- . :=-*-*--

res:la** regarilass cf to f::= cf rsta stated (i.e., vtat=s: ::: :f survies er stated es=ts per Mef). *s- ._ turias =f ,. . f vO to = . s 3 ;i;elise a; ' * -= i= s==h as .*.fi:sta ; :ceed.* =g ts ;re re its ;- ' ' * -

c=vu=ie==s a=1 =ecessity regzirss such sa: ries, a=1 teth .ta ;r:t.:sr.

s=11er a=1 :~su=ar.*cuper :f the gas sh:uli ;rsvars is r ;;cr: .22-a; "- . actively i . tia ,. Aee 8* r.

l f

31 -

AN

. ?

e-

./

i

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t.

l.

I i A r -= *

f 2.res Of nola-* " lies is ts c=s--*- suta.

31.:r. a stata :~ =sreise a gn=erni a=1 *-'* set ==tr:1. *." ce =.

se-m- is itself an elsctri ..111e/ (su h as ycc.: clis:-) su.b'sct ta

a p la-*-- tr -2at su t.. .s s: :.ief n gte.4_ f . -ni=> tav. .

.s=ana a=1 ;1ca.y ;cver :s pass 27= tas == *---%'s:sss cf ex;enses t :=. W. t7 .tilities sub *ect to tatt it.risdist=. 'iare, . as tare, the 1 csi - esi = is =ct t==i ty f*-d*--s of a=7 Tedsrel :: State l ager .7 har.=g i' roc ;:risdicti= cver its sale that ta ;;1:s is

-==-=*'a, s==h 1: cal squ==7 : ula ::uiar sts .s =aks a=. :. '.s;e=da=t

h-* -- cf that fact. *! it * *~ ' 4 fi: 1, = -As tasis =f as ads.

-, q=ste has:1=g, rse=ri, stat such prise was ::: ns.s-*s, it -M te

! . ~de ake *.s diss11:w sc=a ;srt =f tat ;ri:s a.s a :se: snais ex;ense i.as. 3:vever, = cst Stata age =1es ap; ear a.s ;a:-iss . *= ts E car.d..

fi ste ;rcesed1=g seed.=q a:: t==*_:sta= cf .sv salas er servi:s cf gas,

~

~ a=1 ta ;osi-*

take= by te State ager.c7 is ta ,_ se**=; s.s a

. ;rac.* . cal :sttar ; cha 17 .mli set ta ;srs=s sr ='. z=7 :::::s acta =

! this casa is a# fact =stai,

~ it c:uli *2ke successfc.117 is t. tis arsa. *-'~3 .

earta1=17 eve:7 ef*:r. sh:uld te =adsr to .ts S a.a s.3s=:7 t: ,

antar a f==x1 a;; ears =ca tefers tha E ::1 take a ;-=d-- = the i .h f:r cr aga1=st the ,..,csal. 1.=7 rist c c.1' to evs1 a.si 1:

! tus ** -- cf tha . f ' ;csiti=. --

?

Ca.se 2 .

I are is == differe:e i=.=r e;1= = as to -A= tasi: :=1s- -

i L '.".=-* ' " set.s tetwee= .ti.s case a=1 Case 1. 3rturer, carta1= aspects I cf t.'ar ;1;eli=a *=risdicti = v'O cr =ay te '* *'ars=t. ~= each case I ta ;1;eli:s =st chtais as E :er-* **-*ta, asi 23 m also vi'.i e=ar.

cise rsta .*=* _ sdi -* ~ cvtr the pipelize. :. this Case 2,1:vever, ta i e

f tee =f rata replatic= vill be sc=evta == s c- ' * -atai -

I I than 1: Case 1. *= Case 2, ec====7 veuli seen .m nytire tat te 70 l-s7staes te cyerstad by ta ss== ;ersc==e1 to *As exta= ; ssitis, 2:1 perhaps handars al.so to use c=:x (cr cvurmasi = rig l:ts-of.vayh, s=sys:s1=s,' river a=1su~

i.! :=7 ces=r s=se=~ :::s**.=g s* as, gecaml ,. .,,. ..^ es, t=z=syc .a:1:=. egi;=a=0 a=1.in itis. ** * * * -17,

ar:7 .e=a:s1 cffica a=1 ctuar evertasi f :

ss ;rss"- '

7 vr-11 ta

e=f: =ad b7 ce sa=ar ;s:sd s=.1 egi--" != each systa= (;arti.

'= '? exac= tires, : set 1== recer?s, f*-- s a=1 a: .h =g} . h:1 c;s==** * ;;chs 17 rill regirs st a11 ca d ~s tatvec the r: s7sta=s, a=1 it is es: ai:17 veil ric1= te iss1= cf ;cssittlity en T;f v:J.11 regire a c=;1sta "rm- *=" cf all ::s:s;=u-* ~ : sts , *- ' '* --

espitai tests, "= :sta , ,cses. *- " alleca**-* tetves: :o syste=s ars =evur, s1=ple, a=1 seli=1 1.s a=7 c=a "" ca-* ~ =rici aittested 57 all affects=1 i= tar sts; this Oculi ; red :s ==-*-- *-- d."z;:.as tetwee:

. veri:=s ==st==ars asi Stata a=1 Tedarsi : splat::7 staffs. : ::.st:te

' ;cssitla ts m the ;;t w hsc=evtst by =sd.:.g . seye:sta ==;::?.t1=a l

l as evners of the two sys.scs, t.: 1: =7 : *-*

it veuli ::: to ; ssible I

.T.b e 3 7. .

. A74

.* a I

1

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I l

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I 1

l i

l .

gg -. .._ ..

t i

I I

to el*- .ata 23 ;rthle= si==a the tvo :::;=st1=a ;rts--"' 'y vcult te aff* * *

tad. P r-iar,

d=utt that : .,-J.ata segregati: ty 0.se of

a=.*rs17 f*.f*ers=t 37s.a=s a=1 ;ersc= a?. v =11 to fassi 1s tees =.se of 1 the tarsat =f tei. g ths.gst vith =ressc=ahls ex;e= tit =res. It is i siss site ;: ssitis that sc=a expec.se =" ca-* ~ ;r:$'- ==7 te ;rsse=t

1. Ca.se 1 if -as =er :=;a=7 is a= af*** * =te =f an e.1.; a=rs.1 ss.:

1 i .w , t=t it is di.f.*.* :lt to ristal* a it a.s is*=g of ta sa=a = spi.

I t=fa s.s ca.se 2.

e l -

case ? .

k "- e :" ---=* '-- it lika17 cs. ::sts **1*. . te ::11st t:gethar i

i=, Case 2, the diffz= secs in -21.s case 1.s ths ta as 1- 1.s enr~'-

. 1: stand cf =ars17 ;;ttahle.

set 1.s a .^_ : ::a*= dis .*.=.r-* - if the

, c;erati= as a si=gla systa= ==tsc;.latas 1:r;.*=g te r: ;i;s11:ss t=.

. getbar, either the- '*== cr 1: ; set, so as = ;r:'::s z=7 ; ssilla ==.

+

!'* ; cf ps betreer. the t:ro systa=s. *f hi.s . = -# -*" r can a. *= :yers.*.=, ta . =. %di:-* . -= ' stat =s : .is ;r:d==.

sala v11* 'W == the '.rvaca case. 1* tha sales i= hat :s.se are

, .r.asdi..-* -*' , ce ,-.-d- ar sales f.= Ca.se 3 r*.'* . ts; if cay a.n ==

.'--**d*"-=' i= 1r sca, thar. .he ; red ==tr sales i= fase 3 sh::.'.i te f *rse cf I?! *=1sd:st.= if esrsfe.117 han.iled *o ; red =. e sue.1 a resu!.

g *4 3 eg .2 ,*, w, p ....

f

?

'L - E .Wdi=-* ~ :.re: the ;r:4==srs cf c==sa .c::li req:are I ~ ta= t:r ch '* a. es .*fi:sta, a=d venli r = *ect their sala t: = = - * ~ * - -

[ m rata rug h-=. 2 r=1 case, it is =7 c;1=i= .hs.: a ;;r-'"* f r :.*.1*a 7 tha= vc=11 have _ _ '-ta ;retac~ ~ ass 1=s chargus f ---*= =~C ' +

l ez;end.iw 57 its stata replat..7 agacey, s1===

t vc.-11 to ,.. .ected by t a M ** -' * ! cf r== = ~=' ' = cost.

I' 3 %- the desirsh".J.it7 cf a replated pred= ar sala rersta a= wlated =ar it st te tc=..e is - -d tha

, rec : lated. ta'e af*ers ad 7.=*s--* - a 50. . f _t f:r s.=a . - eses a =.

- nv '-e *.= crnfe%

j ,

at w* a- L-ga s wir:.La ed sale./ ** s a;;es.rs . la .r.a vis.r :: =a eisc':ri:

l u 1107 :uyers *: ::s G77 :sse. *tather . .this v li '-' ' '= .s != - =

clisc depu:is c= its *-'*;* '- =' ft.a1,. .. - - t ;rthis=s, a=1

s te7=1

- .e scr;e cf this e-*~ ~.

l 4

Case L.

. s esse ;tese= s .ts =st m' * -**ad cf tt:se ; sed fr= a

,?:risdi.-ti=al s-*-^--* 1. It 1.s clear ::a tas i=tsrstate pi; '_* s is _

! suh* set t: E . % 11:01=, as.1 . hat 23 ,. - d===.rs, _- 1 the turer, =at l ;sy vtztaver .sta =r7 he fi::sd f= its rs s;= sti= sa: ries. ! a=

l 33

A75 h

w .

e-

./

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l

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.l h - - -

t ent*. . sly seyants ;1;sli== is used f:r tiir sorri=s, -2= it *.s =7 c,.* 1= the Z vi:.1 have :o y=ist.1:ti= ve- ts ;r:t=sr8 s 'stra-

. state ;i;el*. s is -as : . s=ar * * -6, Pate ,= -ist:-- s-t hs _

t frisit:-1 cve- de * =t 1 state li e t-d exs-i se, 1 . "s 11:a ines e

::sycrt .as :.:. =ters ata c==sr.3, but is exa=;- fr= m .splati=

1 ty Sec-* -

1(c ) of te Act (so-called "-C-*v =-= '---t) t' -'a 1-- s.

_s :n.e lire is setlated tv ta State cend . *-'== s::= :: ._s t .:ss, s 7: _sc :== :: ca 4 ata ' -- 's =n :::14 (sai 1. : st :- - -- -

, statas =cv tes) ex.and to tcta trs=s;c= s** asi vains ratas =f ca is-trasta.a 11:e. -l: s==a states t es:-* ** -=to also is ngared. A til a;;raisal =f the exta=t a=4 iagte af te stata rep.lati= v: li req 21. sr as c-*** .*' = s= att:r..s7 qe* * * ** ed.1. cat stata, t t *.* ta yrc. .

, t=ar's sale is =t .=v subject ts rep.la- -'== e=.g sta.a lav

the m e w-~.4 eg: ::::, pg:s .g u g, .- .. e. s' =ars:*@- ,

t i

- - te s sta ices =t hve * :::-i s d* --* - t- ---, _- 'v -

v== e dse it. and * ' a s e a..s a * .ars ate '.:.:s

s -=-1: ed. -

-As W vc=1d '1 m - - sci--t-- ve:: en 1 - ss a a J :.:n - -- ---- - , ts's, is =P c:* - * --- ?- as an ;:.c:.=sr v./ ::... .:a * = s== sail at a fazac n.a, .he *--* 'a- se =f ra a regulat1= cf tia * *-* vctli seen t= te -

l 8

=f little -mmrt. to total a=cm sceired v='.11 is 23 sa==, with ==17 .

. t.'.:a ;srt gttg is "e yi;el* e c;erati:n va:71=g, eth tis . *-'*-

[ ted:s alleca.ad to .ha sale. Sc=e diffsrsece is .a= *--- s :::11 : .~.

suit, t=vevu: . 2.e ;rodu:sr also verli have to a;;17 ::: s:1 :htaan as i m cur * * ** --te f:r ta ,.d;alise. ..

,! 2 a= exis**.:g pipelise is 1=:;ed a=1 e=;1:Ted f:r tis istar.

I sta*.a ::=s;creau n and this gas is :--f ed vith ;nse== a:1 f::::.s b , resala gs.s, than to : segas:ss rs= mis *2a sa=st as " se sta.ad f:: tas sogarste istarstate ;i;eline *f the Mvaca case is daci'ad is fav=r =f 23

' ; red ==srs. ; the *rraes. :2.sIgces ,.se staar .77 a=1 ? + -2e risv cf 3 *2e C---* "d - vith res,ect to e - ' ad gas, it vi". te _acassa::7 to l' st:47 the decisi= tet:rs epssi=g a. daf1=ita :-d-* =. **- s thi.s sale

! actually vill te cade to an 1**.=a e : s==ar at tat :--__e=-8 s -' *-ti 1*: Sc.11 a;; ear est such a sala sh=uli te just a.s

se cf n. lat= as c=a by a.;1;elise, vt:se iirset sales ars . . sci sch set = m rsg.la .

3:vwvsr, the dalirury : gas at ta sta.e t=:-is: ts .as

atata

td

:cs: 11:a v11*. to cf c--*- ' ad gas, a=1 --'- 's altar:1-1 s of uvaca 1* == 11 a=1 ;r= hah 17 vc=11 to s.rgesd that s :t redelivs.7 t= -2e

,.h c: stitstad a .::rist.itti a1 **- s af gas (tzus .17 ress.-ist -

t7 m a.s legal.17 egivala=t *.c a sale), tt=s sub 'ec.1=.g tat is1*;s..- to c ="* d.g rap.lati::n. U- s the trsssacti= i *-' + * *- vc=11 ie a " gas

, f== gas" excha=ge vita sc -. sy i=?cived, it s;; ears s*--f

c= tas sur.

. *act earsa =c*.ar that view. ** d_s 1.s ==t -Aa

. case, h::vever; tisrs is a viis s=ge of rate ac-*-'-= staff :::11 sd:te:sta with at leastac== ;;:s;er: f sucessa. A study cf *:vacs vta= incidad is esse =.ial .= .^ _s: == . .sidan-

-* ~ ef tis reg: late:7 . -* ** e -* cf this case if as exista=g ;i; * *-a is t

l

.G.

. 34

' A76

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l

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l.

. 1::;sd asi c=;:lered. :. s=7 avs=t, here aga = Os * * '*- s . ;rtsa=

er ;; tit:sted im . :f sta.s reguia i= v=u11 hs- s .o be : stieret.,

,1* cs a is f:=1 =t to ts.ve ,* :isdicta= crer -2 sais.

e*- e =ac:.:.a- =f =a sau at == ==s -- -u=- . . =11 =

all te exar:1se1 by either .:.a E cr as Stata is 2* s Case i, -as sa.sm **ss Of te price as a s.a. .tle er;asse .3 ths ;:r--s ** ;

111:7 st=11 =t te sc *ect .= -*"

317 te Stata :-ility res:.'.a-e ague..7, t=.s *' *- * -= ~ ::q a. y sw.-h ;:--' - !=r a ;:::..asi=;

..; ." 11 7 case 1 5

p .

~

Ca.se J ;rese=ts ha s* ' ast cf tese ;: sed, 3". :s *: ,..,;ses

+' .. te- sama yers** -a as has tes :=u.*se is es *-' . f= % 7 ears.

".*.e sde tr ce ;. . :sr is sub 'ect ts P.f. . m :s; .la *.=, *-' -** ty

-%-**'_*-- -~

s e . a- least useft: as ?.:ss are e-- e---d._ _

. .5e ;1;elics =sy, a:A ; ss=s 17 v .'L f=r a sa.s ::: r.:.:s-r - * ' - ' -- -s , ~~

req.d.:s a, es:-* ** -*ta f=r ce faci 1* *.* as sacessary =

. ,.. 2:se val =es. : tha - ' era?7 eve =t so :sv "<-* * *

as ars sedad, it =ight

. te ;cssatis *:= =ake ce sale vicent s. cs:.*. fica.s. la ;1;s11:a and

its s--^' 'iers =st asst =a ce risk af ch-* *-*- a ;;ise at lasst est.a.L

s ce. csst ce m vi"1 aliscate- to te sale f r as , ,ese =f datar.

i -*-*-- ce ;1;eliss's ,*=rist.1: 1=al ecs ef service t: *.s c.har ::s - s.s.

i Se ;i;s.L :e is s. Lac sum *ec- ts state rer.lat"== . cf te sale if the stats f rer.la g tecy has sta 2- au"--*t7 _- so to is ar.1 exer =ises . hat

( s=.h::it7 I ham at.ac:; tad ts et::11:n .hs ,.: tahle ,*: ist.1=-* ~*' : sa.

q=acess of te five es.ses f:==s esca ;ar 7 8 s ,,.z*. d.=, b : reali:s that specifi ques.*. =s =ay ec=== ts a ; respect *. ve ;ar.*41,s=t v' -*' -- have _-..

II h.1 = se vtile visv1=g tese :sses .*.- .hs :: siis, so ts speak.

1 vill to tz;;y to ~'a-tau to s=;;.is=act this -*-* = = c=siis: a=7 specif*,: q es-* - v'*-' -* -*: te ;csed with sspect t: a..7 g173 :sse.

> i have visved re:= repast sa :. s. far a gs:s:s'. :-*-*- t= assist is tas I selec-* ~ ef ;cssible s.1:a=a.d

_ . ve =steds r= ^*-1:.; isrvias, sai b s tase ==t "-** aks: to de . this c;1:1= e.ts:.s .*ve.17 . vit:: cita.*.::.s.

As I have *-'*:ated, ce : *-* sh::ali te :: sated as ;.- ' *-*-+ 7, := te s=;;1e=a=ted by a ===;;*%-**ve c;1:1= arts: Os =s r:.1 ahls =s .h:1 :f se: ri:s has teen ch sen, =rs daff.:itive -* *_ asi ,-h;T*-*' a:27: e. _

_ = ants ; ? eted, a=4 te

va:s case deciied by tus Sc;;s=s O. .. ?:.1.s

, ; chahl/ tac.h ;ar y t= a=7 a: 3.:;n=e: f*-* "y et=trs.ctsd v*.11 vist s:

1: days =1a=1 :p*-* - adi.esset t: the 72es*.*.=s ;er-= * -*- ;;1::::. 7 t= tis

, cva ;csi-* ~ is the ::s:sacti=::, asi =17 i==* .s.117 := the ;;:ble=s v "-- =*@ ~ * =t the ce ar -ar-ies. s*" te bz;77 t= :=;;1- -t ,

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! = his *-'* r* ^-=' requi.--.a fr=:. ::u:. sal ec:;1.W. .*7 r4- ;a.- g

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A:1;reposals f :=. pote::ial gas suppliers cat we have seen are c=1r l yr.u 3-* y, c=nsequac:1y a detailed c_ rara:ive a:alysis ~-- 't he

( =r.ada as yet. Te have, hcwever, deter iead te e! fact ci several I

. 1 j' possihle ch:=ges is de S- 3-nle preposal (July 17, 1964). S ec dar

' of m.ag i:=da of dese is of istarest is c.==ac:1:= -esc a=y sd- -

t preposal.

Le changes c-- , cad a:e as fellcws: .

f .

Ca4 de-g livered Cc st I

ise No. St.000 .NO.iM:f dlitef I

b 5 1. Cest of. sarvice a s c-- pu:ed L by 5 ~4 ate for 30. year i

period.witeu; escala:ic=. 760,995 6. 07 5 12.53 i .

', 2. 712 escala ics ei opera:isg

! costs 516,3Z5 12. 45

. J'. I fect of escala:1ca .91

4. L1=a 2 adjusted for i= vest.

==am: :2.x credi: 502,159 13 . 1 0

5. IIfact eii= rest:=e== :a.x credi: . 25

6. I.Ls= 4 adjusted to a 13. year l

cwac:

557,953 4,017 13. 3 5

7. Zifact of chasge :s ZO.y.ea:

l ccetract +.65 l

Iscalation raile'c:ed in I.i=a Z above adj :sts epers.d.=T costs cther das

- feel at ce rate of 2 1/Zf. per year, and fuel costs is accc:dar.ee wf 3 l 17 -

, i . . _

A73 6

I II I.

t I

I'I 2e price ach=dule is de 7exaco pr=pasal. slace all e==s::- :: ion - --

: :==s is the near fure.re, no escalati:n of c:n:::u: :. == s:s is included.

l

ns tves==ecs 8: ax c edi: adjus =am: is small becaus e !=-- =le will se .

I have a la re encugh inc==e *2x is de firs: five years ci =uerati:n i use

j. -

a. all of de a railable i= vest =e== :ax credi:.

.1

,' . h the 20-yes: case it wat asss=ed da: 2e sa=s ci:== cf ps would he delivered a's would be delivered in de firs :we==y wears =f de ,

3C-year project as pecposed.hy Semisele, a:d de sa=e.ra:a of build-ep

[

edlcad h the ea:1 7 ye.ars was assumed. A 581 ;e: ysa: deprecia:Los

e. _ _ _ _ . .

Ta:= we,s used. Se same re:urs, es equi:7 as used by 5= 4-ale was l .

a f used is de 10-year case.

L.

3 case shews a. higher cost per Mcf das the 30-year case. *!=weve r,

I

a. c::=pariscs of de cost =f de ps deliverad d :M=r de first twe==r years of de 30-yea case, which is 14. 004 /V '- wi h de 20-vee- -s se shews ta the 23-year case is ac:: ally cheape; hv .134/M:d At de :e.-'":ica of de 20-y=.ar ::=::ac: 2e pipelise cc ..pa.= f w'.'.I have a u.seable pipelise which has been vi.tually ce=ulately depreciated

, a=d'i: E11 have fully recove:ed i:s investme== 6 equi:y.

l (a) 5- '- a fe has reflec:ed de Texaco field price schedule is i:s eco-scr=ic feasibill:f ::=dy sub=it:ed wi:h its Nove=ber 17, 1964 l '

p;cposal.

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=Lgh: he possible f:: T.P. k I :s obtai= a:. octi = a: da =e ths I 13-year c===1c: is =sgotistad whie.h. if T.P.h ! wishss :s es d- a ts trs=spart ga.s through de pipell=a afts: the 20-eeas ce riod.. will_sb-11gare de eimell=e ===sa=v :s trs=seert the gas for 1:r =;s.s:1_g e=rts -

- p1=s a :- ::are=er.: fae. T-s:spc :a:ia= costs -J: this ar s=gez====

1 . .

L =ight be Icw escugh to per=i: ecersd=g ds ripall=s a: a !== 1:sd _ .

{' fa if by that ti== ether trees of f=al have :a.hm= over tis T.P.kI base load.

A=other case wsz st:uited which i=volves, a""--* :s is Se-4-a's pipe-I '

a

. 11== :s serve er.st==e:s other tha= T.P.is! asi $=s ; sys=:s the rs:s ha.se fraca dee" ' ; as assu=ed != e* -

i--fe's ces: ci servi s =z.1c=la-

,f d- h this case it wa.s assu=ed dat is de **- ' yes: of c;ert*'- a.

~

L L pars 1:a130" j:ipe11== ts placad 6 suvies a=d de c2;i:s.1 a=d =p.: " :

1.

costs of thiz lhe are cIled i= wid the ces: cf the orig 4- hs:=11a:1 =-

":*:.= esti=r:ad ces: ciis =sw li=s is ths cost =f de c fgi=silba

- escala:ad 3-1/7.". per year fer tas yea:s. Sys:s.= opres1:g-cest:r .La. - - - -

das !=al were ass..=ed to t--sase 1/3 whe= p.s re --> *.hs 3:34.'----

1

--- opers:ic=. ':hs secced 11== was 4.ssu=ed := have t. 3C-wez: . .. eper.:i=g. . . . . . -

l life r.=d es he "-e-e=d is de same way as $s cW- ' li=s.

i These a:= de ssult=:

A82.

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I

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t .a %-

l . -

Total esat of Tetsi volume j

. servsee charged delivered to. .

! tot.P.kJ tt - T.P.kL. 6.=- T.P.k!

?

8.=g 3 0 v a ar s 8.=r 3 0 years esse

- !.C.iMef t /Mcf-51.000 Ie. =i cle erigi=al 3 0-yes: -

l

' preposal adjustad for es-

, ca.Lat;ca =f cparati=g costs 816. 8?.5 6.073 13. 43

- -- . . . 5 ce.=d. r rali i .a geee i=s ... . . . .

14.74

. epers:1:s is 10t.1 year 895.L7L 6. CM. . -

-- .a . t. . s. c s 34 0 1.29 f

l ' - * * ^ ^

3----*~-'-"---"**

s

,N , --M-8-J_leita s ths: it~ 8s t

tra= suer a:1 = cc:=ract a. ;;cweien that -:-hiMts *h. erma-si-- -# ^a -

svstam fe: a ^'- 8 a r =la ss the ex=1= sic = :ssults 8.= *

vi- e r 6

o .

L reduesd costs for T. ?. k

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? Ticrit.a hdustrial Cas Pipe 11:a

. Capital Cost Ian=sa

, 30 and 36 ?--* _

560 M3.Laf per Oay Systems t

l

.. I*a= C2 : ital Cest l - 30-tsc= 3 6 -=es i

i u*:-t*- - 900 =ile s a s l

(

31ghts of way 4,500,000 4,300,000 '

Pipe =atarial 53,361,000 34, 178,000 i *

,1 Swa=p weight =atarial 3,480,000 10,340,000 e Cther =atarial 6,743,000 3,705,000

=stallatica % 141,000 32,323,000 -

l River drosst=g ec=st etica 5,330,000 5,935,000

Cthat costs 2,700.000 2,700.000 i'

p Total V 8-"-- $130, 305,000 5169, 131,000 i Ccc: presses stations S 21,938,000 $ 5,700,000

[t Cathart=g latarsis - 100 =iles 10,986,000 10,986,000 CLstrihudenlaterals - 175 =iles 14,359,000 14,359,000

[

I Cther facilitias 4.755,000 4.755.000 ctal di se: Costs $132, 543,000 3:07,981,000

}

l' Isdirec: Ceses .5 3 Est i:*ering, purchasi=g a=d ,9

' i=specien 9,100,000 4 10,400,000 Corporate ergn=izatic: 1,300,000 /ft 1.100,000 Cc=1=ge=cy 9.757,000 J~ e 11,319,000 Ictarsst duri=g ec=st :ction 4,300,000 1 "r '/8 5,200,000 "Fo 3cing capitzi 1.000.000 1.000.000 l .

' Total ?-d3 ec: Ce ses $ 26,457,000 3 30,019,000 Tetzi Capitzi Costs $209,000,C00 $225,000,000 4

1 t O

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' Ticrida hdustrial Cas Pipalha T.asspa.-ta:ica Ccst Isti=ata 30 and 36-1sch 560 MMcf per Cay Systems i

- Picalise

~

Units _ 30.r..- 3 e .t=c3,

i. =.s4 = =m

2. Neer ci s:2tions No. ) 3

3. Cperati=g horsepewer H. P. 74.643 26,781

4. Cperating Icad fae:ce % 100 1C0

5. Cacital Costs l 6. m +- n e $M 13 0, 3C5 169,181

7.' Ccz=preaser sta: ic=s SM 11,933 8,700 g 8. La:arals is other fad"-das SM 30,100 30.100

9. '-dd ect costs SM Z4. 457 30.019

! 10. Tctal capital cost. SM 209.G00 123,CCO

{

i 11. A=sual Costs . Teeth Year j ). 12. Cpera:.cas expe=se SM 4.762 3,C42 l

11 Ceceraltaxes (1. C% x I.1== 10) $M 2, 090 2,380 I 14. Osprecia:ic:

I (3.3% x L1=a 10) $M 6,397 7,354

15. 3.e. . c= =at plaar (4.3% x Liss ICIll)- SM 3,987 10,234 i 16. I:ccme taxea (2.1% x I.1== 10(M) s SM 4.545 5. 13 6

17. Tctal ad costs SM 17, 33 + 13, e l 13. U=it Tn=seertatica Cos:

l 19. U==ccat (/Mcf 13 . 4 14.1 N C T IS:

(1) (Ini:izi *.svsst=e=:) - Oepreciatics :c Oate) x 6. 3% = 4. 3% x 4- L1== 10 is de 10th year.

l (2) 3C5 cf Taxahle hec =a = (3.em = cu Net Plas:) - (Cc :e== M--ui l-

!=:erest Ixpe=se, . (Scc == Taxes) x 5C% = 1.1% x 1.i=a 11.

l 3. ate is based es a 4% 5:sta Ince=e Tax a:d 48% Tederal 1 :c=e Tax for a= effec:ive ec=bi=ad -a:a of 5C%.

e A85 h

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. Weighted Prtces Paid by Ptyeussa far l .%rurni Cas Cauverses. 1954 1961 Seus.h 1.auistaaa Pricas !schte reimbursee eas far 1 as.sta=a.

gssharsag and seversace taa 1998 tege te64 te6t te42 (G per h as 14.0"issaJ Amerisaa L.suisiana Ptye I.;as ca. a/ 13. 16 - Za. 40 ::. 38 13. 33 22. 73

Can.smL Transmisstas cary. 5/ .. 19.4Z :.17 *:.73 13. 32 f*at==ahia Call Traasmissies Ca. .. 19.11 3.*,. 04 13.CS 13. 23 l ,

Noye Nasaral Caa ca. .- 42.21 23. 03 21. Il 21.73 C11a cas Transmissima Cary.3 / f/ 14.27 L3. 37 13.3% ::.11 13. 57 Seuskera Naturni cas ca. 16.11 13. 12 Z1. 01 20. 9 L 21.05 .

3 Tammessee cas Transmissian Co. 13. 30 19.79 11. 7*. .23 11.74 Tamas T. asters Transmiastaa

. Carp. .. 22.16 : .16 14. 71 16. 10.-

[ Texas cas Transmiasten Carp. 18.71 19.71 19.71 13.47 19.36

Y#****""

t 19.72 11.13 23. 80

Ptpe 1.: .ao Carp. L7. 33 13. 95

[ ,

Truaallas cas Ca. 11.31 12.11 10. 30 11. 18 22. 11 Casted Tual Cas ca. al 18.93 19.44 19,7* 13.03 23.31 .

1 Taited Cas Ptpe !.:aa ca. d/ 14.21 16. :"" te.49 !!. 3 to. 56

[

. Total 16.23 13.33 20. 27 : . 97 ::. 54 I g Prices as reportad adjusted to trede resmauriemsas far 1.aussia=a gathering j and severance taxes.

5/ Marged with Tiarida Cas Traasdstaa ca. 'u of Septer=.her 1.1962. h

~~

1963 data are for Tiertda Cas Trzase:tsstaa ca. and reJ:ect the canaised operastems for the wticle year.

=

g Name changed to Ezahle Cas Transmis sien C:s. J 13. 1962.

d/ C11a's persian of joins purukases wtth ITsited Cas 75pe 1.1:a Ca. La cz=1=ded frona Umtad's total and tacinded ta Cun's total.

w.= A.m.:maa reporta e4 p;em cor=paatas ta the Tedersi Power C4- stos (Torna 11. Includea wei . head. field 11ae ar.d gasell=a pla=r. ociat pur.

chases: traarm.tssics use purchs.ses a.re aos isclased. Oa:a ,,Jad by 1 Calls Star Cody. Tester Associates. Iss.

TA 4331 I

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1 ^- - _ . . - ___ . . . , _ . _ . . . . _ __[ , _ _ . . , _ _ , _ , ; ,_

a Tfill.E 4 Centraste Stepresesillag lasraeoge in lIlgt.astlnillet Beoe l*sises py Date of Centress and 3*lpellak Bluyer Soutta 1.oulelene , g 1

inittet Cu r s e s.

Este liete of pese Pelse Pelse Sc heJale Conlap st ((/ Mal at (/Mai at Blu.nba r imd Liam

i. unissa ruel G.e Co. I',s. 4.ne p. Pol,eia ... Corr. m 8/21152 85.&s 28.18 9)

2. u lieJ ruel Ge. Co. T.s e e. l... & sitotS2 ls. 61 2a. O vel

( , .. 3. united ruel Gas Ca. u..nue 06: 1. St.sining Ca. 23 silliS2 is.&l 2o. Siirl Tidew,ter Oil Co. 26 19.68 20 51(g)

]; 4. united ruel Gee Co. * ' ,

illtf51 20.8118.)

a q ,

5. Tennessee Gas Treneerilesien Co. Atlantle itefista.g Co., Ti.e ISS 8/80/56 20.18 t e. lifil

6. Tennesene Gas Tgamesniselon Ca. Cllles Seawise Pre 4 ssilea Co. & 8/l4/56 20.18 8 8. 14111

1. Te neesee Gao Tsensenteelen ca. Tide..la r Oil Co. 12 8/84/56 20.18 8 8. 8 4ll1

..* 8. Tennessee Gas Tsensiniesten Co. Contiment41 Oil Co. 158 alli/56 24.98 88 Silk) 1 Seuil.e rn llaturel' Gas Co. Seulleensless Pulell. Sorylse Co. (g) J 5/l&/51 2 8. e s 22.1988)

10. Ts enecentinesisel Gas l'1.e 3 1.Ine Corp. Contimes.tel Oil Co. 158 9/50/51 21.51 8 8. 6 lin.)

I1. Traaecan Inas.:el G4 a 3*lg.a B.lue Ce:g.. liewesuant Osi Ca. 3 9/Ie/Si 2 B. 51 18. & 3(sul 1/85/11 28.51 18. & lln.) t

42. Tranesentinental Gee l'ipe 8.Ine Casp. suceny Mad.Il Oil Co., lua. 316 I I. Bings.J Ge e Pipe 1.Ine Co. Gulf oil Cas p. 284 82/22/51 22.0L 81.&llal 84, tinised Gas l'ipe SJa. Co. T14. .lar Oil Co. les 12/28151 22. a& lt.) 41.&llnl

15. Tennessee Gee Treuespeleoloss Co. M. Coalsroll. J r. A s/24f62 2 3. 2 5 ft.) 19. 681al

16. Tennessee Gao Trene,ulselen Cse. 2. Ila y Mslierri.oll est4 Co. , Inc. 31 4/211&2 23 28 (L) 8 9. & l(=l 11 Tennesese Gee Tseness.lestos Co. Plast 4 084 Co. It s/24/62 2 3. Il (L) 19. &l{al See meet page for laut males.

Seussa Canti a*te for ll.'s sale ai nal. oral see le pipeline seinpenlee for e lessas el 20 yease er lunger, filed with Federal lanwar Cei.unteelen as sale est.edules and filsned ley Tl.e C. D.14thwood Cese.peny through Massh 416 3 amJ 4J.llaluual sentraste filed la contailsate appincealene algeugli July ll, 3363. Dele ceseipelad 4.y Calla Saar Gody.

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-s TA111X. 5 Esasniper's Cornpulalloni of Colling Field Pricos for,

. , l'a rsula n 11a els

( Area { tate. Proceedings All6 8-l)

(/ Mci al 14.65 pela Ilow Gas Old Gas Life . C351Df 7 348 L,4 5111g

. I.Ina flo. Wall Gas lla ntdua Ilead Well Gas itesidum lland g,

i I. Italtunal revenue standard 16. psi *I II'I bI 13.32 I*I '32.32I*I 2 l'armian 114 41:1geograplilcal g readjuelinent -1.25 - 1. 2 S I'II - 1. 2 5, (d)

3 Ilevenue standard 15.6) 11.57 48.51 4 Itound to 32.00 12.00 I*I

5. Gold stasadard lucrainson 1.00 1.50 I'I 1.50

6. 16.63 g

1. Calling price 86.75 l5.00 ll. 00 13.50 83.50 10.00 lII 8.

9.

13. Escatalian liono parapitted alaove ceiling Ilona persnitted al. ova ceiling pricas mal ley line Comintpelost pricas pet 1.y Cunnuission for forslio area, each contract.

(4) Ew. docialan Alt 68-I - pagne 13) as.d 170 (la) Ew. electalon AltLI-l - page 169 (c) Ex. doclslun Alt 6 8 P85e 160 .

(d) Ex. decialon Alt 6l-l - page 155

{c) Ex. dos.lalun Alt 6 8-l - leagos 156 and 133 (f ) Ex. alectalon Alt 61 page 171 5

l (q. . . - . . . . ._. __

l

T.u:.I 5 i .

,$ Sech:el's'Co...pu:a:ics of Caill=g Price for New Sou:11.auizza=a Cas-Well Cas 3ased on

. '"v= d-ard s Oecistca is Per=r.as 3 asis Area Rata Proceeding (A.161 1) l c y/ Mci t/Mcf 14.65 14. 3

. I.i=e No. ,sia. ;sia.

1. F=-d a==t revenue standard 15.88 17.00 r

l l

7 . South :.ouisia=a. geogra,hical g

', premin=s 2. 3 Z Z.34(,)

l i c

3. Zeven:se sta=da$d , 19.70 19.1+

i .

I 4. Cold standard 1-m en: . 1. CO 1.01 ~..

I 5. Cesli=g price .

10.70 ZO. 85 M l

l l 6. I.cuisia=a severasce tax l

=ce 4--'uded is aheve

calcula: ica -1.19 1. 3 O_

7. Caill=g price 11 purchaser , 21.99 12. 1.5

=ust pay de I.cuisia=a severance :1xin excess cf average tax used is e m.

u=a: ic s (a) See Table 7.

(b) This price as cwted i=cimies a. 0. 95p /Mcf pecduc.ien tax which is presu= ably de weighted average tz.x for de seven Scudwesters state s. The Louisia=a severasce: ax is 2.24$/Mcf at 14.73 psia.

Ecwever. == der de hmi ar's decry, the producer would pecb-ably have :s absorb the addi:icr.al tax.

I ! - .

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i .

k - - . .. .

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ts

Cec =parisca of 7eighted Average 1: :i:ial Ease Prices cader 1.cag.tarm Cos:: sets l ,

Scush Louisiar.a and Total Scudwes:(&I t

' $/ Mci a 15.C15 ysia 4

1 1

+

l

-. Tc:al Scu2 Tea =- Seu6. Leuista=a. west Ma ket Ciffer s== a

!' '959 - 21.3 13. 0 J. 0 l

, 1960 11.3 13. 1 Z. 5

'1961 11.L LT. + 3. 7 i

1961 Z1. L 17.5 3. 6.

{ ,

t s, 1963 13. 1 13. 6 1. 6 l

l 14.4 1

Average 2. 9

{ __.

2. 9 x = Z.31 $ /Mcf a 14.65 psia.

1

2. 9 x I4 73 = 1. 84 p /Mcf a: 14.73 psia.

LS.3LS (a) Oa'ta f :m AK 61-Z, Noi: 57, Schedule 10' i

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COMPARATIVE TRENDS IN WEIGHTED AVERAGE INITIAL BASE

! PRICES IN TEXAS GULF COAST AND 1

SOUTri LOUISIANA MARKET 1953 -1962 s i s-I

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l !=:portant rapply area !:n:nediate sedan by de C,m-= inn. Is re-

qmrod to arress it.

The In: pacs of me Issrsstase n rket ~

is na Texas Gulf Coass 2. css.

The Tazas Gulf Coast .Lres is ==ique is an of de Usitad Statas,

~! is dat it servee de !arpet ir.trastate marirat in de councy. This mazzat is the larpet consumer of gas is the United States, and. by s.

(' good:nars:n.28 (T.8409)

[

Some i -h*'- of $a ~PA= of $s Texas Golf Coast i=ms.

state market for :stural gss is provided by a comparison with =sior

?

gas - "! states, as fol!aws: (7.3.15 2, p. $) ,

- !' N'* Ca*

f '

oom - o

*40 i

(

g Tazas 3ailroad I:istricts 16 Sta:e of Tazas '3.314

! 1,554 State of CaEformis.

Stateof PW, da 535

( I SOT State of New York

{ The market for:stur:1 gus is Tazas is :ot only !arp but !s con-t=:mng to grow. It dersfore provides a strong =arist for usw gss

) suppdes fou:d and developed is Tazas Saarcad Districts *. 3 and 4.

f

! l Iseis ar the i=crase is marketed prea- was from :.s:s.:.

I 6

bi!:!an cubic feet is 1956 to

379.3 bEIles euhis feet !s 360 and to 3,3 :1.3 hellos c:his fat is 1963. (7.a.1%, p. 4)

This growth is ;;od:cdos has been 1.rgsI7 ahoorbed by de htrs-state :narkat, the vol=no of mazzated prod:c:fon =ov::g Sto 6:ar-state eart== ares having subst=m'aily M ad si ce 1S60. (T.6dC8)

Specidemur, de gas prod:cces sold is !=terstate commerce increased ,

from 1*.5*4 biIlion cubis feet is 1S58, Screasi=g to 1,374 tii.'. Ion euhio I

t 8"a hizrtssage ::arket fsr :st=al gas on the Tazas Gaif Coast is dadnad l

as the consazzymoa of =amrst gas :s Tazza 340..ond 0--- :: Iss=es

, Nos. I " N' 4. S.is arus was ei:cean beesome the inersstata :sarzes har

=aser:1 gas on t!.e Tazas Gal: Coass and az:endi=g tp !=so the Dal:as a ors Worth area 3 "ad is vitt supplias of gas prod cod and --4trsasported by Dist= from cts 1 Di.er sen 1 thrysga A Itsa, a ~dr of the area ----.

throess 5 provicas as is:arrainted supply and demand pas:ars. (74M

)

A99 ee a 4

i

.k I . _ ._.

! k i

i 30 feet h71960, but M+r to L370 billion cubic feet in D63. In con.

' t sst, =ariated procserion absorbed by the isesstata mar.kat i= creased frca 2.404 hClan euhis feet is IS56 to 1.506 biIhon enhio feet h 1960 i and LS$1 hC!an enhia feet in IS63. (Ir.15-2, p. 4) .t.s a result of thsee trends, ths *w= marirnt absorbed 59 per ent of the produc.

tion in 1963, sp from 53 percent in 1956. (T-6:508-CS)

I The above vehmas of =arketed ph of :ar=ral gss is b.

L . tarstate -- refer to the sala of gas adar sa cons scas, old a=d

=ew, between hdspendant producers and interstate pipaibaa .t. study of the veInmes of gas aca -4+*=d to interstate pipelines udar furis.

' ' Ar*3m'=1 Iong.taz=t gas sale contracts by 7 eat of contrset from Tazas r 3ailreed Dis =icts a 3 and 4. show sa even sharper decli=a-suggest-

!sg that fstters i.*.erstata deliveries udar au con = sets frra Texas -

! 3ailroad Dist=et 13 a=d 4 will fotow the trends estahiished si:ce

! 1960, i.e., a conv3 T ad absoluta and reIndre d c!=a i= marketed prod:e-tion dailvered hto issarstate -aw h t The shar, d ar 6 i=tarmte - 6 re nt na,s b

the Tsxas Gulf Coast redents isIszgu part the shift of supplies ts the 1 ;=&. azzar. The Ndb= 'a== are that after 1960, rhan the vol.

L 33 ._ _ . - "4 uder r.sw N*= -+-+- conesets were sman, thars re o

!args gas con ==it . ann to the incastata mazzat. This large coneses.

[ !se of r.sw su;;1ies at gas for the !=== stat ma: sat congsnes.=

[

. =1 On Jane L 1265. tha ??C suthartsad 31se Dolphin ?!pe I.Ima Company 8 s consurass a prpedne f:tia sus rueress is 'adarat wasars to hisport, l

Tazas to be tand by Dow Nia=I Compaar. 31sa Doinkin ?!pe I.h:s

! Consgesy, Ooeses No. C?554lll3. ortier issued June 1.19M.

2. On Jane 11 1364 the IPC authermed 31aais Mari's Pipeilna Company to osassrust a ytpeilne *: ora federal waters to a pours nact Tazas City, Tazas far we at gus by Un. ion Cart:ida Compaar and othars.

31 asis Mariin Pipedna Co., Doskus No. CPS 64 3, ordar issnad June 1&

1968.

3. Shan 03 centrustad to seu one hundred mCIan cubie fast of nat=rsi gas daily to Coastal Statas Gas hedneng conspany f:va oh prod:enon.

van stress Jonznai. Septarnbar is.136a.

4. ne Eary '. aid van =ove ista inz:sstata ennunaree "[na] Iaty *.ald is ready to sandits 64 t=Hian cu ft af gas to n===t-

"a Tazas gsamt, largus angle wawwwntted gss rearvotr in tha

U=itad Stasas, will distt: bute ita 51 binian worth of reemrves to soeur:1 prpeline campamas with.ts the stase." no 02 and Gas Jouz=al. Feercary a,1967, as p. 54 nis 2s onw.h of the total amaas shown by Stad Tit-

. naus Braam:ar aamunced to in:arstata cominante (Ir.1*4, Sea. 3. Shams 1) i

-ym . " . 'w ,,w . 1om * \%. *%" .p l

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l The Tana Gulf Coast =arkat for :st=si gss Is domi:stad by

, indust =al w% Con-ek=m -=1 plants, potrelacm red: aries, eleo-t:ia ufIity gemarsting ;Ia=2s, and ;Ia=ts of other - - '**"; a=d i

niserali= dust =as. (T4409) S.is indurmal :nariat accouted for oT percent of the consu=; tion of :st:rsi gss on the Tans Gulf Coast in 1963, while in the U=ited Statas, i:dusmal cons tn; tion is only 49

[i pereens of 6 total,if I4u:.nana and Tazas are azmuded. (T4410)

P.ald =se of :stural gas was, of course, also important on the Tazza M Gnif Coast. InIS63 fald use of. starsi gas accon=ted for 25 pereens of total consu=r; tion on the Tazas Gulf Coast, compued with seven peresnt of e-,,Conin the U=ited States, exclusive of Tazas and LW -- (T4:50s.10) In cont s dist=ction, the resuiential a:d com.

= smalconsu=r;tica of utsral gas on the Tans Guif Coast acconted -

for only eight percent of that marker, compared sith M pereens of de --/Jon in the United Statas, ex insive of Tans a=d I.ouisi-g a=a. (T4409)

TirtunH7 an ataarm generstica on the Tazas Gnif Coast is ex-i '

poeted to be provided by at=si gas. Nat=si gas reqmr===n+= as a boiIsr f=al are praiseted to != crease as an a=nnal rate of 6.7 percent

' [: i per year to 1775, cozzpared with a 7.9 ;er ent growth ste frera 1956 l lt, to 1963 and 10.8 percent from 136Q to 1963. (T4419; I.r.15 3, p.15)

, The :nore !=portant 44 ****1 gas -

i=d st: ies on the h Tazas Gnif Coast are the channemi (*,e'm",r petr $ s~1) !=d:s-

. I try and the petroleum redri g 4%. (T4 DIS.00) Other !=por-1

, -!' tant gss consu=ing -d st:ias 1:uQ:da ei -

8 and alm::isa process.

l ', Y. isg, ce=snt and niated1: dust:iss, prednotion of s&,.hur by the Frasch i; ; process, and Iren a:d steel. (T44:5) l 5.e ar=n=Hm7 ef f:al, c :de oil, petro!a=n rs :ar-M a:d :st-l =s1 gas is one of seversi nasons for the rapid growth and importa=ce l^~

f '

"of the pet:~kW~1 i:d::stry on da Tens Guif Coast. (T42::1)

Petr~ h dal prod:ction on de Tans Golf Coast should inensse

' j '

. = ore rapidly in the f:::=re dan.the gsneral isenase expected in othar

, t- parts of the T:itad States. (74d"4 25) Nat=st gss consu=; tion by pet:~ksr.1 and #-er=1 plants on the Ta=ss Gulf Coast is ez;ected

~

, to i:ansse at a rate of about seven ;ereent ;er year over the formesst

[ period. (T4 d:5) l

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Gas consu:nption by ;ea~h iH and e5=mWI plants, pecoleum rnhar me and othar i=d: sui:1 ;1an:s in forecast to i= crease at an an.

nal-sta of 5.1 ;ercent per year to 13% compared with 5.A pereant rata of growth from 1956 to IS63 and SJ ;er ent from 1960 to IS63.

(In 15 3, p.17) j In sunmarr, h consumption of gss produced from Se Tasma Golf Coastis forecast to increase from m.3 hinion eshio fe.c h 1963 to 3.373.3 hinion cubic feet by 1275, a composite an=nal growth ruta of 4.7 pereunt. This compares with an annual w+= growth rate of 16 percens from 1956 to 1363, and an annnal composita growth rate of 5.6 peresst from IS60 to 1963. (T.d:5:3; Zr.15-2, p.13)

Tha .*~ pact of M dsg h~sstata Aarrande for gas suppdse on -

the Tasma Gulf Coast enn be ee++h%had in relacon to supply and pro.

l dnation trenda "" h-i_ from 1956 to 1963. On the basis of dose g l ,

trends, the reservee.preanction rado for the Tazas Gdf Coast .trea N l ,

' wul decii=a fr:nn ::.1 in 1963 to 15.3 by 13% if interstata deliveries f:va this prod:c:=g area remaza relativeir constant at about 2 ciHion i

enhia feet ananaH 7 to de year 1975. (T.4:523 30) To azplaa dis in

[ r.: ore detail-total ***-*=4 prodnecon on the Texas Gulf Coast .Les, hasi= creased at an an=nal rate of 3.3 perosat since 1956. If produccan j of matural gas on the Texas Gulf Coast rantnas to 8- at an an. .

=nalrate of three percent the intrastate arist is expected to absorb

nost of the increase of - m*ated prod:ch to 1975, because de intrs.

i state marrat is the preferrsd - a*at and it is projected to I: crease

['

~

at an anzmal rate of if percent per year. (T.6:530 31) This vould aHow the inte. state arkets to increase only by 1.2 percent per year to I!rts. This is considershly less dan the composita growth rate of' i::terstata /ame-A on de Tazas Gulf Coast tres a=ow g to 4.1 i

' percent ammaH7 to 1975, assu=ing that the Tazas Gcif Coast area -rG1 cont =x== to serve !=tarstata =arkets is the same proportion as in 1363.

(T4:53'J.')

- Since the i=trastata =arzsts wiIl absorb vir.-417 all of de avail.

' shle supply at e=rrent ' # 7 rates, larger ser s ppUms of :st::r21 gas reserres st he fon=d and d:Cled in thi.s areanc saet the in.

9 l . .

.I

. I

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33 1

i creashg interstata =arkat requirements for gas cons 1=n; tion in the

,am.s 4 S.are is :o question of de si== asd az;1osive growth of da is. '

trastasa marht is de Tazza Gulf Coast Area. S.e C w= =sst ped de !=tarstate ;ipelissa to ;st pricas dich are comparshIs to

.I thoes in the is:rnstata arkat,if the istarstata =arist is to recorre its

!- fair share of nearir developed supplies. Fro:n da viewpoint of de

' seiler, tha =acket for gsa is an en:itr, and he will seu *4 the purchs.ser do is ahla to ofer the =ost attract:re :na=ket for his gas, cons:dso ing not anir initial price but ail oder fae: ors. Becansa of de =cer.

-- tainty of the istarstata arkat, a=d the uresolved question whether his contract will be par 4*ad to opersta as writtan, or :::odidad by g '

car"cate conrHWa or rate rednecions be da Con--=n- tha pro-ducer will always prefer the ist:wtata marr=c (15:.ftll0), even to the ar* ant of accepti=g a lower i=itial; rice. S.e competition of da i=t.s.

j h stata markt is so great as this tt:ns, however, da:i=trastata sales are bei=g =ada at prices which are hig=er dan those per=it'ad to be col. .

Isoted by the C-aean. The '.ast lage ~~e4 reserve is this I

area, da Istr Field, was sold is hcrastata co==erce is the lattar par;

[r of 1966 at sa i=itial price of 124 per Md.58 % compares w'th de .

i

[ W prica ;-***4 by the C"* of 174. _

Ji'r=n de standpoi:: of da consu=ar of ass. it !s tha price os N l i 5w mer tiy,:ot at the w=IIhnad or pains of delivery to de P pelins.

l l -

which is i=portant. (lS:466648) 3ecansa of dair prom'r to the f prainc=gdaids, the i d:strial consu=ers ca.the Tazas Gulf Coast are ahla to sare the ,tre:nandoca transporta: ion and dist:Enztton costs vi:ich

- Ww suppuas of ces addadis the Texas Gau coass is Use. U65 and U66 were lawur is enaa yur than :he snrnge reserm =AA!"ana our the U54 to U62 per:od, wtf.a ;ndse.'an ennnsued to ::se. As a remit total runerne as reme end nure lower is 1964 and U65 thss is U63 and anir uWfy hignar as 7mme ed U66 corr;arsd with 1363. (Zz.1-2, Sch.12: 7.r.13.J, p.12:

AGA raianse dated March 23,13f7 an =arurni gss rssema) 58 Sa CE

Dear,

.Tannary 30,1367,;;.1. 4: Se On and Gas Jom ut Fei:r=ary 6,1367,pp.5 M 5.

i 885x:h 2 - h to Swaa-ae of Gemarsi ?:!Lrr No. 61-1. *3 7?C 589 (U63): Hawe=ss & Hawnina. 06 7?C !s7 (U65): rmrsad '.rr the C. S.

Cours of Appensa. D.C. Cir=a::. ? .hua 3ervice h" of Sw Tars v.

7.?.C., ?.*i Case No.U,736, dansdad Fearuar7 1 ,1367 (appucanaa br endareri ;endicg).

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34 I :: met be paid by n:::ilar consumers on de Zast Coast. In de New York I =etropol.tas area. de producer sales ;cce is only 6-1:: pereens and in de aior Norders and Iaetern =etropolitan anas, only 20 pereens of de burner dp pries. (10:1541; Z:. 3.J, Chan Og Sch.11. p. 3::)

Sieis one of de =oes i=portans nasons whylarp gsa consu=i= gin.

dnstries han cone-ntrated in de Tazas Gulf Coast A.sa.

.l , Some i= nstate consu=ars, emtm, han haa, ==d we conc:m.

to have,"2:st call" on new reserves disconredis the Texas Gulf Coast Area. To ;ivrons de WM of de hterstate pipelisse i dis area, with s. consequent increase is pipeline =zit ceats (10:15C.43:

~

166086) and an ever.iscressmg danpr of a dortage is t:e oversa supply of gas in the United States, !=centive prices =r.st be sIIowed wizich are sm*e -e to elicit enough ez;1orstion to ru;;1 7 bod de -

i exploanwy av---di-- :==sstata =arist asd de Ta:aa Gdf Coast

.L eefs per. ion of de interstaza =arist.

p .

17 i

. TIE A2P1071:A':212JUI.A 01T lC:'E03 5

1. T=d:stry ^*W.sti.s Drter=fr.e

(' the Appropriate legulatory Lthod.

A haeia nqui,. ment of .; w::cer nrdati;s is to devise a ng Irs.

I tory =eded which its de charactens.'cs . sf the produci=gi=d:st 7.

In regulat'# dependent prod =ces the C# W is faced *.th an l Ind=st:7 comyzised of h dnds of seIIers wEs prod =ce s agulated

-~!*+7, =at=rst gsa, is ec@ don with egulated M.

See, hydrocarbon liq'"da Sese Wd eds of prod =cen compete in s.

-annt is which there are relatively very few pipeline buyers.

Se Supreme Cour:fs dee:.non is the PEsps case is 1954, PM.

ipe Petroleum Co. v. Ti'Iscomrm, 347 U.S. 672, ruddenly put befon the C--- ' *h de =rpacedensed proble: n of reg.la:ist ^eee pro .

d.murs u= der a sta = tory scheme elenrir designed to di de problen:I i _

sr7b".ps 7etzelaam Co.. "4 ??C 507, %8 (560): r Anars edensed. "4 ??C 1:08 (U60): sf'd.134 wwi. Masonsn v. F.?.C 303 ?.*f 350 (D.C. Cir.

D61); 3*3 IT.S. 234 (1963). (10:1550 51)

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L 7sn Ameri=an Petr= leu:n Cor;crati:n (7an American) ince: 7cntes i

of ::dicated Respondents I

l i . hereis as if f=117 set forth the Initial 3rief

. ' a'ed by Fi *"*;s ?strelatan C:spany, gi d. , in Occhets Yo. APSa-1. gli. ,

~

l and by hwie Ci; t Zafi=1=g Capany, gy,, g. , in Occhets No. APS*-2. E &.. *

,e azcept as arg==ents r.ade therois sar =ct reflect arg'=r.ents ar.1 analyses of Precedi:g its arg=sests respect-the recert her 4- a ter r.ade by ?an A : ericas. *

'i=g W :,st=ent of rstes to 5ri=g ;r' er reva m t is line M*A fi:di:48 of N. .

A

~

ind::stry tisancial me.1,ws is the heariss ares, ?ns American has b

=castrsted defi:iencies is the reecrd respecti:s use cf tra =cdified 3tu ,

l ,

l l - and relative ecs: allsestica :scheds. ,

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!- - xu a: Ass:ss=== _ ...._____..p 4 r=tx =r acnac:

Pzs:ssc:a r..::a:=A s:s =:s s

1977 - 7985

. 220470

h syss== n - ' , : sea ===== has =dar_ nan to app =atsa en petansta sa=xas f== - h s: ha=,e pcwer ta n.v. _d.

~j.. ,

duri=g the period 2:=a U77 t 1385. *:he systams c==sidered l

as peta =tial buyars we: : -

t 5- T'a * 7cwer Corporatic= CI?c1 T Fc:t Pia:=ar ** tias Antherity (7:2)

.flP Caisesvilla/11achua. C.,u=ty (G7:3 ,

& Jackscav111a lect =i: Authority (.;za) -

CitT of *a.ksla=d. CLAI*,

',,' . de ver h " ' tias Au-'--ity ( wc1 -

M =- u ;-3'#tias c..==iss1== (c; )

I '

. . city of T= ? ' a 'a = =se (:x.)

f Tamps :ac i: C.. pa=7 (Ts :)

~

[

I city of var = 3aach (VII) f _

, It the Fruparati== cf the a=alysis, the f=1.;cwi=, guidall=as

[ g a=d as. r 1==s wars used: .

1 A rass=ve of 15% was ce=sida=ed 3 # u= a=d a base

' *, :squira==== f== all systams. (sc :e s= aller systa=s

. ha n dat= ' ed 147 =eed m idarably =ces.)

l .

I- scheduled ge= ara-'-a additic=s and Icad f=:ecasts

! . wees as reycread h "TC3 :=ad and Ca=srati==

l 7. ape:." dated I/ 5/75 (ex= apt fe ths icad

f= recast ei the ric ^32 7cwar Cc poratic= wt.'ich was updated aits: the aheve :spers was iss=ed).

2. ---ac=ies wars =ct a miderati== h casas whara gn= ara:1 = additi=ns vers assu=ed't= he defe==s.5.-

! , 4. "he a=cu=t of pcwer shew as available frun TT*. .

l g- 1.s hased c= cu. p sses: off1=ial !=ad ferscast a=d gn=erati== schedu.la. si=ca h cas ha ass ==ed, l

l l I uc7

- , ~.

sr l .

l l

i

'I k

)

,' .c f~

t -

-4 f-r7-t

} kh is ganara'., that cha=ges is the T7L f= acr.s 3 y' wd have cor:sspendisg effects en the ethers, an inc=sase i= supply potential f:::s 77L vd

p = bah 17 he c=upled with a dec sasa is tha I .

eth.= sp a=>s de.and. 280472,

! 3ased es our a=alysis, we feel that the mest pechahia

-= = um ameu== cf pcuer that emuld. he =arketed c= as a:s=al

-d'8 basis with as without etha: tias daterri=T f M gn= ara *'--

{, .' additirar is as felicws:

.y l

. 5d.

Tsar 1377 1371 1979. 1980 1981* 1982 1953 1384

, ? chable Markat -

. Wi*' e Ccit ,

f.

, Oefarrais CDr)~ ~ ~ -

f t' SO: 326 640 828 wi*.m e=i= - -

i :$E

sfarrals Ost)~ ~ ~ -

79L 754 ac5C 1572 j _

[. Available se==1v-

??L (. m I , I l p (i= ex= ass ed 151

. Xase=ve) .

1

.a 3ased en 7:ue==

I

- eges .-* = ' Lead

l. [ f==mcas and ge=-

era-d** _ ' - *-la 15c4 1215, 1383 L130 279 936 15 157

.. 3ased en Gr=w E

. 3ata of 6.4% vith -

ravised gemers**-- .

_**'a 1935 2:51 15c3 312 14K 72 4s (75)

. s.

, 721C'21c5 5 ctnd:s:cus i . 1.. Whila the sa kat for pcuer to satisfy paak :%sr: ants i.s very weak th:=syh 1973, it dcas shcw ,. = d+= baeve--

. 138C a=d 19 85.

(.- <= .

G. ,

s.. Attach =a=2 :. -

l 2

3ae Attach =ests.2 & 3 A1':S I **

l I

I i

I

. II

- . - im - -

- (

4::X. 2 (~l ~/ f.5 i

l

-^ -

280472 #F r

gi :.. Without ques *'-*, T7c tspessants tha =est p:=misisy c=st=ma: f==- la=ge power sales. A co= tac at ce fa= ara ~d -- pla==1=g levs1 has #-d'ented st===g istarsst is i=vastigati=g a pu==hase f == s afta: 1373.

??C has t===ed d=wn an eff ar f:== w, hu we have the j !

i poss ' 27 cf offa=i=g a ==ch =sd =ad da=asd cha:ge. .

l 3- 2::3 '..as =os yet e=mait_ad t= sir 3==d. H. we e=c14

he ce=petitive with he y=ics at wh1=h they off arad Power := 77C.

. 4. ""*a City of Gai=esvilla is =ct ista==stad. -

. f. S e city of .ak.t==8 has exp=sssad ista:sst (i=ci d' r

-7' -

--the possibility cf defa=ri=g their 1381 coal u=it) is

. 'V i=vastigati=g a fi=m c== trac = with us. acksonvilla' is. ists:ss ed. i=. the ea 17 eigh ins. - - -

.b- ~

. by t. I:hdar p:ssa=t e-me '* schedslas a=d 1=ad forecast:s, l-14 ,,-

five systa=a appear tz. de capabla of effar =y sig=' -=-= d -

t competitics t= s d=ri=f the 138C-43 pe=i=d

' ~

a) ""ZC2

. (21 - 31 E -

i -

h) ccc (174 - ::3 5 .

L c) IAr (37'- 233 E i

( . t) G7; (135 - 237 E i e) "m (15C* - 248 5 Assu=ist ==1t.defa=rala, c=1r CCC, G7.*, a=d *AL l .

e.s W-= i=. a _;etitivs pcsiti==.

~

g .

a) CCC' ('" - 2:33 .

! h) C7: (133 - 137) f '* . e) am ( 06 - 24E)

N 3ecause tha = sed exists a=d we '.. ave dc=e '

tfpe of

.! hus1=ess w1.th them is the past, tia Cities of It. 71a==s a=d. 7aro seach offs: good =a: hats f== emi'- c== tracts.

tre .P.rt:A r mis l

1. 3afora u= ses= sable decisi==a a:s =ada t= a!. tar is-l sa=vica datss of cec =1stad =its, ce= tacts at the 1 -

~

highest app ==priata wjerata level shculd me =ada ,

l I s, with 77c, l'I::0, m., r.,AZ, I-'? , a=d 7I2. (7:31'-3 2:7 --

~

p=d ' g i=f==:=ati== is availAhla is tha Systa:= i l

- 71==*' g copa_-t= ant.) *

2. Casa c== tacts should ha =ada i= ediacal r (especially I i= the essa of I'I:3) . l Ik A1C9 w,

\ o l

l I

1 l

l l .

l

k

. . .3 '

22in Er. f /-/)?.f _p n/m 7 i

- A=== h : 1 230473 .

F=m 5T3 2215 -

, SO7EN4 Pcwn ww <.:_-It s -'c MAnt Art 13) M9r b u ,v .

f (AS3MG sc Qi~. 3ZZ7 LW) j .

C- =* 13-* 1973 1577 1980 1981 198: 1987- 1384 y 1

i 22C==p - - - 250 301 333 344 537 e 1

i. ,

e - - - - - - - , - .

,W =2. - - - .

- - - - 7s :

y .

- .;J*

a I .

.u. - - -- - - - - - .

i.

p . . cvs _ - - - - -

_i

{j' - - _

g' . ,

i

_m - - - - - se a 3r

}

, =ac- - - -: - - - - - -

em J u- - - - E 22. 33 38 74 o

7CW4:*

. 2equirama= z - - - 25K 5:1 33S G4C 233 2 77% . .

Av==%'=

Pcwe=* 1504 131.5 - 1135 1130 179 928

li 157 .

2 4 .

h 7 2854At Load "CTSC13% A33 d . ..

6 .

e t>- A110

.s :

O 8 -

l

l 1>

3 ,

esam iQ -

En i .

x=- - --: ft- 7)p.rrnss.p i 280474

, r. F* ** -"A STS-"'

g SW".Z3*A* ?cvr2 ArOU-t_m.cr-S -c .cr*A N 13% MW Rrst tvr U_ Fw -';G RC OE.IWG J -

i

, C=msamt 197- 1371 1379 1990 1981 1912 1982 1984 .

250 651 957 1337 2"PC. -

p.* - - - 483 l

! - - - - - 113 2:3 - 44 1

l . %

i .

g.. m - - - - _

73

-q -

cc:: _ _ - - _

\ - & .

l l ru- :2x 2 .

.3 4a i '. . . _ .

m - -

.l . .

j. ,

m - - - _ _ _ ~

L. .

2""2 10 *4 33 i:

i

,. ;;g- - _ _ - - - -

.ni - - - s =. 3r . sr 74 I

a 7cwe=. =

~

a ~ ieg. 2 ha===t.z~ : - - 258 731 754 TC50 ~!571 :

o- '

.* ZT.'.

Ayn f ' ah' a

.- Jewe=* 15C4 1315 1383 1130 173 .938 15 157 A

~

1. Oefe==s.1 of 7CC m of peaki.=q ==its hayc=d 1335 -

isc .W i= 1381, 25C .5 6 1383, and 300 .W i. 1384.

2.: afa==si of 4:3 N 5ase i= 1321 t: 1983 a=d

- ca= cal 63 .Y# peaka: 1: 1384 and delay 4:35

{ - c=al 1: 1385 by c== year.

j

2. Oefa==al of 236 .W in 1381 t= herc=d 1333.

9- . .

. 4 m.

i C.

O

, A111 em .

_-___l -

1 1

l I

g.,

m 3, ,

s=s

, ,, ,. . . . - . - - a

, a . n . a. - . ~ u

,=., , . .- . ~ ,, m - n. n .

C - . = . . .o

+ ~ n - n ,.

?

. u .

Q C

= .

280475 iEn (q-7 7 pA i I

c c

9f M.

E u . .

= .

E. u s - - -

. 2

.8 .

v -

=

-e

==

=

, 1

d. -

m m =* m==.

4*

i

- '#. =U C

=h me M

=

etee'

.4M

~

ar :nc.

c.a 6

-~

s* - N m2

.o .:*.

l CC S C M C l , Gk M

m3 K =

z =s a.

et ll> . eg *

~'#

- M *= ek C " . " 4 85*

! . =se- e M e

. .i.a C c ce s' w a.

b b'

.. g w= T be 1

c 3

$* 4 t 4= =l

, . n S G e

u-

[

= u e= < W c.~ ce

,1

a ggg u = r~ ~ n eg aas e M g'

a a ==

MHm Qe w . .

,gg m =. et t C c. F

. W2 CM I' ". a= C z 'nc'

= m 3 T~ O *'*

g

C , ,, qa C .,,,. .

- ,=$ev ]

D 6*= w%

am a O C .

= 4 3 O.

. .4 M

U M "

. : . m

. .m-

3

. c

. . O c9 f* M ==

C 0=* CC Q ., f* Q l".

M .

Q w F eW .s. = d 2 e

n ne re ce ".

, m w

es

. . O. 3 c

. :> =

MS= M S W ~

M N O UC.

=&

C = =

Q f* O C= Suc

. cn e o ce C .

u u o" =a

=

n. c a

. .m.

.nc . e. e a e, o, a .= .:

w - w c. m 'e er 2 2

<. ooo I . ~ . ,-

C uoa:

~

CU C C g =U = = =2 '% 2 I t 3

,. m .. . . -- . . ou.

r= . r= r= r= . *

O O:

c.

r= wa r= t= t* . ** **

, , a.s ese M . m M M W M, -

. - M .C M. . . T. .

Oy m m m,

=n.4 .M. .e. . .M. . CI.'.t

. O.

- - O. . - - . .

A112 inum.>e ,

- - - _ _ _ _ - _ - - -

_ _ _ _ _ - _ _ _ _ _ _ - _ _ -- --w--- - +- ---e-- -

m-

i i l -

- . .m a m =<

. f '

i 7/5/76 c,- r. g ./

f y p:

- r =x: x vewes c:arenx.. ,

. -q. - - - -

480QS

".'.'a 1 cad f=racast v*d -* vs have used harm is as %"'-d =1* -

i

ravd d -~ fust c=mpletad by'dai: Sys. mis 7' 2--%g capart====. . :t *

=aprese=tz a. mera.ep '* - d.= (highs ). .,..ir h rata than .nts repe= tad l i= their 1375 ',,c Isa: sits Pla=. The planni=y f.:=c-5=u at FPc is ".

. - .- (had=y charitabla) c=ad=_ sad.a=d there is a goed chasca Mr. Zi'=as "'

ve " 1=w== 23. ==acan_. ( :he last ti== ther pes === tad a forecast

. g . _. d ~ c=n = ' ad six sc=- = - - he. selected M s= s' avan).

'p == 13 o, ch. p=3.ctad r?C ganarati=y capahility fans hal=w hr- "

l _g....._

the 15L rasarve level a=d ramal =s halow + level .ast 13.85.

} -

Chara exists as cypert==itT te sell T2C 230 M of capacity 2

i t

I ... f== I rea:s (3C-82) and 1.53 N 1. 1384 tz 1333 wi'h==t the

!1 defa==al e f a=r plas=ad TPC gn=arati=g ==its. ,

l t . ,2313EK, p ssant r7C plans call '== *3% c" thei.= systant.

I , capa.hility t= he is c==Lhus'-4-~ E' a eq=ip. ant a=d a=cths: 34, _ , ,

1

, a is c=mbi=ad cycle. They vd have added 700 W si=ce 1380.

p 3 22C's largest unit is 1385 vd" he itz 74 55T :: clear unit at

. W

..-.. y umsy, . - ~ ~ -

, .o.

"'AMPA IL.:.. .Lu C::GA.TT'

_y*

r

1

- has s=dfarad a. g= mat masr shifts i= their persc==si 1 .-

ssycasibilities ==centir. At p:ssa=t, it appears that =c si=gla

- ;-- - r~8tvil._4 == 3..v has direct rasrcus*t7 '== icad fo=~ad sti.ig.~~

~

"'.sy arm prasa=tir 3- si=g at : =va? 31, a=d hacsusa they ara 1 -

v=1= a:251a. to the s!=w 1 css c' phesphata Icad = var the = ext 'sw l O A113 . .

1 f

y .

l l l _. .

. 7,

&- 97=7 7 1 2 s- a s. ~/ ~t I Tea =z (a=d sta=d the chance of hei=g suhrta=*3 y hu=. by ~6'*),

. Q,. .-

v. - <-> e at: f=.cas i, 3 ohahty c,-< <

u.

~

i t

7:sse== genera-d - plans =al=ta4=" sserre narri=s aheve ce. -

5

13% 1avel pas *. 1333. Oefa$::a1 =f a 4:3 5 c=al ==it h 1331 = *

. 1383 would craa.a a =eed f== 100 W f == 1381 t= 133* a=d 2CC s 1381 t: 1323.

(We assu=ed defa al cf the coal ---J'

- == lata = tha= 1983 hecause da *:2::3 :sq=iramast h tha$ yea =

. ~

ex=seded the si== cf tha ==it) .

*y plass th 4h 1985 call f=r ISO 5 cf base icad a=d

[ p ' II N cf peaki=y ==its. na largest =i: is 13'85 wd he a

-h.e-

~~-

, - 4:3 ceal :..it. We d= =ct fas2. ther :sy sse== a vs 7 ;:=misi=g I =a=kat pcta=-#='.

l ..

3 ..: ,

2cxse m ..2 ~

. - x m ..-

f .

I . Jacksc=v111s/ r f==ecasti=g eff=== is p =hably batta t.hu t -

[ ,, its ct"Jari appea.rasca vc 'd is c=e t= helieve. 7.".114 ca

! ;:=d=ct is peut 7 g=cd, ther havs a.c==sidarshla ; =blam is se r i sia t

t

= :peard. Os p=use== f=acas, cf 51 .<th is pr=bahir the upper 3.

u

'-'t and the g==w h :sta c= **

he as icw as 31. '"he ;:ica cf

. er elec--3 't7 is a varr '~~ar a== eleme== i: :acks ,i'.la's f= 3 cast.

, .. 1===- re'=amgi=s a:s p =dected to be aheve 13% th:= ugh 1383.

l ..

l - 1384, thers exists the pess#ty of s=111=5 022,130 s ,.

i .'i=c====' g't= 130 5 i= 1383. 022, is at prsse== =ct ;' =--~' g t=

' t i=stzil a=y gn=sra*d " d=ri=g the pedc4 ed 1373 th== ugh 1353.

l 023','s largest ==i th:= ugh 1383 wi*1 ha a 513 5 f=ssil l

staa= haavy cil 12 at Nc=thside t= he i=s-=ed is 1377.

.(o_.

l t 5 .

g 3314 . . -

I

l j h _

c)

.m v

6 . __

"f .o i (=

i.

cit:xr:c c-~~.:,:- zs ct.w:ss ::s 04- ~t'&

e

- a assass===t cf the p ss==t Icat f=recas ' at % is

, diffic=1s and t= sc== des se falls ist= the "==k:=v= q=a=tity" classifi=ati.= C== fasl'.=7 is ths.: f= acas i=g decis'~~ are

"---- ' = tad and decided =pc= at the esec= ive level. c== va..1d i ;-- '=y =ct g= t=c far w_ g by assu=i=g that the p=sse==-

. f=:acas: L1 :sasc=ahla. **

11th :ssarre =a=gi=s wi1*. he experianced thmuth 1.385 (ah=ve

- jh-

40%) . . -l:ha c=1y T==arati== additi== ===sidered defs==shla is a

~

,4 -

Me'- _ t_:hi=e".i=s al14 tic = (133 5-) sched= led f== the ==na: .

s j ,,[ peak of 1382. P a== cf ~6 3

addi-#~ vil'. he offset hr =sti s=ess -

i cd 30 N of heacr cil geners-#- . CC:: d=es =ce appear t= he- a

- pu =hase: of ; cue: 1= the fut===.

'J The largest u=it is a. 326~ s haary cil ==lt as: =dia: Riveh i=s-= " ~' is ' 137 4.

-. + n,-

_ :2 1 f., .

j

e 2 ".Lakaland's f= ecasti=t =athed, i.s st sight-t s=d f=racasti=g.

1

. WhiIn t.he y=esa== f=racast is esasc=ahla, is c== viaw, tha er

~ ,~ y==hi k #'T is g:satar f== the ac==al = c a is i=ver =-

f==acastad as opposed t= highar.

t .

2esa=ves are vel.1 aheve the 154 =sserve =ary's th:= ugh 1335.

1 225 N c=al ==1= pla==M f== the s===e: peak i 1381 ca: he

="= ad. -(ta. kala =d has exp sssed a desi:n t: " t=: sis'-

i

! . ==sa=c . .

t

'O - .

5

{ l A115

1 (w) .d p'/c,atf #

& -- (y(~/~] 2'8047e V

! . efa==ma,c' ~63 ==.it veuld =c .sq=i=s ,w.i=y fi==

i

4. Pcwe= ==til 1383, at whi=h ti=s tha us==ve =a=gh veuld fa.'.2.

hal=w 15%. "'a a=must of pu==hased. pcwa= wec'id =amgs f=== 12 !ct j i= 13 83 t: 52 ter 6 13 85.

=M =-d's la= gest 12 is at ;=asect a 113 .Tf heavy ci:.

12 i= stalled h 1.37g. -

l

, cL w - -

, .,; . "'e c't? cf c'al=asvilla's f==scastd=r eff=== is well ahces q

averzg= d=a. t:s two p=d=a=y =sasci:.s: '

1) the ' "'=enes cf the staff cf the C=ive=sity

f..r ,

I s. c:t r* -' * =

1 ..

l

! 1) .'.'a heavy =sa cf c=nsulta= z.

I L ..

- -*** "-=mcast is y=.. hah 17 ac===2 a and we veuld g..asz

~

[ ===vative1r stated.

s Zigh rase =ves vd 'ha expe=ia= cad d==ist the lata 1.370's I #

l ,

(SC%) i=c=sazi=r 2: over lcc4 in the aarir 1380'r a=d levell=g 1

l ,. '..ack t: 5C1 is 1385.

=

t =,

cal = i.la <- - t.s tha= c==: i._ et c= .se ::: a ei:. ==it o schedula f== servica i=. : 5 80 a== "*- a=d tha=sf==s dafa==21 cf

# + ==it at ;=aseet is =ct ;cs'sihla.

. ::.da= this c=nditics, we d= =ct saa ca4=esvil.la as a.

petan-#=' =a=kat y #--

t= 1385. .

e O. . .

d e

l .

l t

.e.

4

' I Q, _((-T~7)f.ll 9g

-x:.uxssu 280480

. "'*a.

- city of 22.11ahassee p ha .317 :::acas s 'eith si=pla t===d.bg =a cces. :tal: a:sa has ve=r uw emp1=y===t right .=v i .

l and 1.s experienci=g c=nsiderzbla =aw s- irth i= cffi== 5 ' gs.

sugge= s==ricas whi=h will h evita.h17 f=11:w c=nst eti

a'~ keep d ='--ses g==vi=g f== sc== peri =d 6 the :. _.. -

- It, is cu= c;* '- dat they v3 at least = set thel: had i

, id =CE 2Caed bt. ,

,Q 3asa=ve =a:Ti =s wall aheve the 151 level th== ugh 1385.

.O 50 N cf. c==ir..s~' has d== t= ha i=stallad h 1.384 a n-1r dafa==shla het w- ' " === c= sata a. = sed f== =u==hased ;cwar.

j ,,,

I ;

l 8

.. LAZZ WCrf C" L "* Is AC""ECR:""*

. 2asarm =argi=s wd ha =al=~' ad :=hsta:r..2117 aheve 15%

[

' th A 1385 -d=- t. hair.; ssent ge=erati== pla:z. :sfa==als a==

.- ;casible h 1377 a=d 1334 cf 30 m a=4 54 W's of c= '-3 ad cycle

[

i

, . -* ~ zaspec~.17=1r. With these defe==als, ==== 7* =*:71== d= ===

1

l, j- .

s fall hel=w the 131 laval. -

g

, Laka Wert'..'s la: Test it is~a 2: W f=ssil staa= =at=..al

.' gas '~ '~~~~ ' ed 11 1371.

... ~

Fce 7:22cI Cm:-* Is Ac".icR:n No pla=s havs hasa =ada f== additic=al gn= ara _i=g c=pability '

hy Ic t 71s==a f:=m 1375 th== ugh 1385. = the s===ar ed ISE , tha essa.-rw gis will-hegi= t= fall haltv the 151 level p:=caedi=g t=

a-211 $y 1325. cats exists the pcssibility t= sell Tor: 21a=== . . .

l k

. A117

1 l

1 I

e

~

(l s~x CWtg 280jef i ..

power es -= tai = them at a 11) :ssa: re =ari_= d starti=y = 1383 1

l ' ' at 12 s proceedi=g to 33 .T 57 1383-Y Tc== 71a==a's la= gest u=it is a 57 m heavy oil t:2 he i i= stalled is 1375.

c:=T cr vr2C 3IACI l

Prese=t go.=arati== pla=s call f== :o addi*'-r=' generati=7 137 g t= 13 37 = 1330, :ssa=vss fall bel =v 134 l ca-="# ' ' 27 "

a=d c==ti==a ts a.-3:1 hti 1385. 2*** exist 8 7C *2'#"' 28

'3

' ~

sell re=3 3aach S. .T5 sta i:7 i 1380 is==sasi 7 tm 33 m by-

.b ~

tw 1385.

, "7ggug M d'g i

% "" t. b I. !k *EsI I

~~~--

g . u=is i= stalled.1 1375. ,

-~

g .*

i L

i 6

ll N

- ~

\ 2 .

I a .

-Q l .._". ._. ..

s t

5, -

. -e a. es= . een 4 > -

t A113

l

_ 1

.-'.. )

A PROPO$AL ICR A NIWhAR"'!R_?CR THE [" j d "

' IOR MANACDLCIT PLANNOTG COU'ICC:.

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i Masshs:shiit': . .

?e O= '-=" of de 3 card . .

P e 7:ssident and Chief Executive Cfficar

':"J.e Ixacetive vics 7:ssidants I

Tha Senic: 71:a 7:ssidents Sec=sts y- and vica 7:ssid. ant-strategic 2ia- ' g Staff Assistanca:

Masting Ti=es: Eve:7 oths: Friday, 9:00 a.s. -

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- To davelep 10 to 20 =ajc= p chien areas of Task.:

j , st:stagic i=perta=ca.

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- To assig: =a=agement :sspensibility.cr spenscr-I .- ~

ship for each of the p :blem areas.

! ; - To develcp p =g sms for anaging, ea.ch of the .

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[. p =blan assas.

1:7 cut the

- - Oc allecata rascuress for ca_.4 1

prog:3ms.

- To :sceive status sycets and review tha I

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p cy sss cf the pregrams.

- To ravise the list of p:=blem arsas and i

r g.. cts by add' 9 ns, delstiens, and : sass gn-

'= ant of pricrities.

A creblem_ a_ma - hasc_f_a.=ajor stestseic_

i= pact eni=ecr 2=ce is c=a the Ccepa=y's fut: ewhich develep= ant.

- wi.1.1 seed the ccordinated e# forts of seversi c pani sticnally saparses'g: cups.

- has technics 1, ec=ncei=, a=d legal-pelitical I'

i aspects.

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- zust he anaged f s a total C.=p4=y :sther than a depart = ental peint of view.

(See the at'tsched List of pr: posed =ajor p;chles areas.)

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I A -:* Cr3.5 is a statame=t of I

-C:2pa=y cbjectives.

- p:0g:23 Scals.

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- :sspc=sibilitias, by depart =e=

t

- schedules.

- costs, by depart = acts. .

- c=smu=1casic=s.

- s~r" as and i=f =ati:n =seded.

. - action plass to be developed.

("No pages cught to suffica.)

Chjectives of the Se=1 Ma Macent PTi- ' g Cec =cil:

i - To b=isg a tal C:=canv poist. of viev := hea I

i= sa=agi=y ==jc p : lems.

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- To issu=s cecedinatsd_ effert is a=agl=g =ajer p blems.

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.To ins = a a e==elete eff::t is sasagi=g sajo: .

[ - . ; :blems.

! - To aliccata f==ds and pecple tm =ajc p= ble=s

. . is an accu == c===assurata with the rslative I

1 i=ocrea=es of the proble= to the "C:mpa=y's L

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( f=+a a.

l ) - 70 insure that all =ajc: pr:blems a=:1 preg:s=s t

scalve ce= sideration.

i .To i=c=sase c ga=1:ati==al a=d individ..a1 ,

l, etfective=ess by

c=sati=7 a sgular way fer all problems

and p grass to receive censideratics.

' setting up a esquia: vay f': u_ a 3=ati==s and sideways en i=portsn

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to =cvs up, d v=,

f ,

p =blems. __

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defi=i=q and ce==unicating chjectives, f==

goals, sspe=sibilities , and schedules get ing cecedi=ated efferts en =ajc Campany p :bleas. .

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A PRC7CSZ3 :,I5* CF MA.*0R ?#C3*Z:t ART.A5 t I

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j. Ma=aga - a=d Persc==e1 Rescurces C Tasi:atic:

Ma= age =ar.t P:setices

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Repc:.i=g

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5. Systa= I:cpassic and Cperstic:

P cject :d.a= age =e=t Generati==

New Ga=aratics Tech =clegy .

I sites l l l , ta=s=ission System C;erati = .

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9. ::alivering Cast ==ar Sa=vi=a Cfficas

[ Servi =a Cantars

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New Business

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UT!UTY SYT 7.M37 .

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. s. a . , . ,,s,,a. . = = .,,

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_ an. ir ,p c.cs u et.rtt. il-it . wit l .

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s;7 enWys is. agricurica 8Y' '"". ,,.,, e,m

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O r k'* In h IINGT ?tCM THE FAc- HAT 17 !! NC*'

.12Ct.;i320 TC 8A.t.N A pgCny; in it, then the . =i,'y.,,,

"'"*' **rnings in e%,

- ( **- - t. .,88 7'*****n.r.,.,. , m ., ,,

W *l'" ud slese ettentiente ,,.:,,n,;

i

'elettenships er, b. ;. 3 3, ;,,,,, n,

. ,. "'i3I?Y. A s=varranenteily-, caret.d y,rgg,y'

. . * 88har hand, can enneal,41y n,g,,,,,

l **

selfings Hewevge, ev.,y th, naasleisel go ,,,,, n, ,,, ,,,g ,,, ,,,,,,

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,,- .,:s, . ,,.

r ,a** Ine===

Tl it is to c=nerike, n.,,,,

f , ..- * , " , *

. s .. . . twveruse to the Cry te make va far Se Qiigi

. . *- - I*'s d frenchis. end tax r, rio., -.,,,;,,,

' '. .- el the r sen .;ry ggg,., ,,,,,gg gg y

.. pI

1- : r.nr ~. : si. .. .. , ,s.,,

ie *=steners ulo , es p?.'s.n. g enterprism syst ,, in h;,;, ;,,,,,,,, ,,,,ng,,

. . .. . P *s the creens to err end, has p,,,gg,g I -

- - d* *ad Weas and ,eks f te heig e.k.

^*'*d** the sr tes netten in ;$, ,,,4g, l' . . -

\ CC CCNST,: Mas stNmyps,cy .

!.CWER WHct !!/.l.2. TAT-I ce.Aacgn y'."""*? 'h*# * *""id "I **fli 8:vas 4

'Y'" *"* "Io '*5 i8 ==r* h =aat 57 L rc MuNic?At.Ununas s -

the cesta et mainte;ning eng ,,,, ,7,gg,,

II58'i*' **dTen systars, slang with the le.:.!i 4g

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",' casta e7 edmings;;,,g ,,,. ,;;g7,9 g

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- - .r. hi,h. ,,,,.n ,,,

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, ergenizction c=rs guia gr,,,,, ,,,:.,,,,, , ;,, g

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In all /ccats et it: eo.,geren ,

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gaf,,,,,,.

. . . ~. sailetian and the .worid ht,; ans;, :.,.,, p;,,,

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- *l*do t':*as in Ftariis and enraan th, ,,;,,

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r Wi!.I. ??L'T .tETAli. ?.A73r sg .

' #~' C *t*"Y '8. 8:Vdyir T tha ;= sri".-ia ea.d f:

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future este r 7.;, ws,3 79, 7;,,f,, 7.j g;,

l : .

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C--luieriei[ew.d ppt g1c ,,;;g;,,.

j L . ; * */ t reliaI in 197!, it w !42: h 9. ,

j IM =illierrel ruf f4/ 6,'c.,,...,nv g ,.,.

cu'5 *d ;It **rs th. : ==:.g g3n y ,. ., ;,,_

i [' C'*3* Gr=ntad to ?2'. In &a .;tili,*f g W,..

l {

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hestar. ?=t - =i. m - ;r.ai , s,i;,m

, L Io ci: =v- ta erfic!.ntiy, sa e3 3. .,j g ofy .. .

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', [ '8 7882'C'* 't.7y furtnarrteus3: ice :n in:: ,.:.:

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- . V W

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. 9 0w .$. v 4 y Wtt.L 7:'.'5 WHC' !IALI %.ATZI ,

in late IFI 7:r. perittened rh F,dersi ;

12 INC12A320 7 . . C sweinden f=r e 17.*. millien increase in ,,

. cimersed to whinele cu::= mars ter ruela, s l ,

s proieured I774 rest y cr. The inernese -.

see to hee.nm. eliessive in Acril IRA, suhi. -

~

,te passi~ ele esiund peneing the firmal ruling a

. tM pernten. - -

. - t .

l, WHAT.Au ! CME CF 21 ACVANTAG21 The are e few er*6. e/Tuc:a the 7:L's CF !CALS W.AT *NA51.1 A CCMPANY , ,eennemies el sosie hve with regard to ILT.'.4 : As FP'. TC Act!!VE G!AT2K se!.esi elec:r!e swears (T) The.C:areeny J . !PirICINCY TMAN A IMAt.L t.fT!!'TY scriv0 fee in researci cr.d develeoenent enes i

CCt.:.0 (N 21 C7*:.ATICN CF AN - n ta tdse fuit edweengal c/ newest cast-e

!!-CTRIC Cts!I:st.'TICN SYSTI.M7

tedesiegies es thy became cwitchie. G)

!!!Tc!aney is strengthnee thesash c=meurne

. . !=ettori el wrfeus elec: Heal cistri*cs.tidn, hi!!!ng, cons.uner wrics, crd persoca si i

edmeinistraffen funcefens. G) !sfety er wel l .

es asse carstel ':enellt fris .:?'.'s c=sr r'en l . . .. .. ,': -

. . . .nz orn dasign, tour, stancar!=stian <=~s eny

. , 3 facilities. (4) Cversil ersts cr= minia: ir.au

. l t.W theweir 4.:7t's cathecs, syJemi, L

1. insurene' cad picening giev; s. (!) 77 rev-v

?

.; the C:nroer-l,'s centr =f passennel der . ar r l

[;

repifight engineering at:d ether telent is recruited fisas scr=:s the ne: Ten, enchling l . F?t to sein !cng-+erm arrings the rsault

. . free e weil-mn esarerferr. (4) FTL's cr.=::-

l.,, -

purchesing dapsr*- ent estui. s icwer pricas

.. by

vying =11 ypas si aculprzent in rile:ive Isrge volu :=.. , ,

. 9 MCW Mt.*Ci WCCI.O IT CCIT '.'.X/TCNA An ezhouartv., de =f ted trudy ==uid be ass l

1*Aci TC P':tCu!Z THE '.C'.".Ai. to make e presire c=lculetten 'cl how .- ach 87 !CT11C Clin:1UTICN SY!Ti.M7

eieefe distri"=ution spram in Ocytene Ie::

. wertir. Haw =ver, e pr={imince evelustien

. maggears camerweileely ther D e=y *- a c.t l feest !!O cri!!!an. If sne ::wnes ther Se elec:He fc=!!I2!as Ee werr r . et ===a.-r,

i sc=visitten =ruid r$=rstent = 71*5 iner:t:e

:b tarei casat.: af :ks C.~,o (: 1ed n - ani=

. 4 ~~~

~

gover rnent ==412 cf !!.7.-iilIcn c ci is:::

! ~ IUI). (.:=had er en=::.ar wey, =craisi :-

!!O . nill *cn siec:.-f a r : m wcuid in s=ive :

, et ene rfere, :l==s: .=vics es .- ach == th: :=

.2=effcIIurts cC"f ed:{3! d in [*e CI/* ! prI IW4-!C :::i:=! :=ee Te , %. :! SII.I

\

r

. = * -

A130 1

r>

.. e

k . . . . .

. . 3, ,

t i .

hc .t.C" dS, I .

. Finsily, e 12C.1diliart :==lutdtlen would

. , . ecuni le mere then rPree times the C.*y's j searctics budgst of $14.9 mittien (=r the

. . Tisesi year eneing in !aptemmer 17*4. A eespdailfen el this . isgnirves would

e ur

, ; _ Med far Ccyterne leech, es wou i i

. .. he en asenneus sus ter er.7 municieelity

, te eensider dwing a time when ety sevei

.. , . . mens every-here ere apuienefog inere.

.. tinenelei p euxuren.

, , . WCty : CAYTCNA !EACf HAV'E .

. Yur. i* ee Cry would : eve te reise loczi

TC INC11AIZ THE P't:CE CF

eleserie hills by z. ore then 12 mittien in

!LICTTdCTf !? TMF.CTf it af! order te pay far ;:urchered .=e-er (utimer THE 7CWS ::17111tJTICN SYST!M er $'.2 mit!Ian), servie.e e 530' mit!ien.l.

. _ . FCA, !AY, 320 Ml! CCN ? - -

eiedria Uti!Dy deot (esmuning e di*' ben l .

- interest rete), meet depresierfen a=ense l ,

($1.E millisn), ,ey c=esmntf an and meinte cases ($1.E ..tillion), ed cameensete In-

5

. . . .

Hie ! ear et lees! taar er.d f.sachir.a twecu

',*** *' '* ($T7millien). Tae ligwes . ewe er ho

. arr canairwrive estimates Anclyds ind.

(;

r .

thar 64.C2y would not be cose es redus:

t , ,

electric kills unias cr.e were te pui.a:e -

[ . .

. It cauid purchese the ef ec;f e utility evst.

i ,

. far a4stentially !.a tha : cit =( the !!Q l mittien preiferinary utimere. -

t s WCtJ .0 THE'.E !! ANY Cle.-- s !NCE Iery pend'aiy. Whn e rete unsre ;=- T

. IN INE CEJ!NCA.11UTf C.* !L~C:C FP.c=a turn quicfdy to its ecui,= ment i. v

. 1.:r.ytCE 17 THE CTf TAX 11 CVS A single municf;oi eeeretten c=vid n=t c THE ctSTI:3tJTICN SY177.M7 . . ,'eise an inwntary c/ ell the :=cre !? ms t

. might he ne oed, but FP. ==n. Also, we specsi pc'= lear requires e very s=acial h essertise, F*A c=a ic: mediately utili s it

. talents el T2s ewn ear =are : =$, whici: Tac.

l

. a wiciar crr=y cf :=ecicii ad !=lents th=t

. . . utility <=uld r.stnin. Finally, in the aves as{er, d==egieg st. -t =r hur-ic=rie, 7:'.

tartd as ec=y ar =ievens es ausdne 'e- ==

i to the stricisen tec=ii!!u to resters :se r;

~m. . rsuiely es ;=xxi'aie. .%e.:: :! F='.* s ;;, .**.

emeicyees we=.ar;-: :: r r ?-ticies every f

, :e th=t $47 cm ree::iy *n the event el en n .n.y.

C' v .

l

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i.

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I rs= sunuc : ras :-

[ Af. dress p=a.santed by Ma:shall Mecenald

'I President a=d chief T.xecutire offleur, *j

[ 71erida 7cwer & .Lght c. pany 1.

x

. . _ . . . . . . . -. . . 3 m

{. Caytona 3each, 71crida .

7 e,

(. Januzzy 24, 1977 *

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h A132

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. 261353

( ,

W CAN SHCW THAT GING TdE C I.

EUSINES yttL gpigc ,ta,c GROSS DST FS Pnecy ra ~ .

F?ESBT FtGURE CE AECUT suqs Tb.AN ASTRC

?

f ,

$ W 0s '

FOR EACH AND elERY DAYTCNA CE '

, ; ,l ;;

o .

I ~~ ~~

l

_ E CAN SHOW ET is AVOST INEllTM w ~~h -

\

/ *s i SECinic - ~*.

l .

(

E HIGHS THAN UNDS FFL OFSATICH E/SY OTHE ?UNICIPAL SYSTS IN MRID U"3 kESID5TIAL RATo ~idAji r~rL.'AVOST E/SY

- . =

l .

l ]g

, 4

.?

1 .

. . 5

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- 261364

I hE IT CC?'ES TO THE COST CF CAPITAL...THE FACT r,

i TEAT FPL BAS A SCLID REFUTATICtf CF LCNG STAfGING IN

[ ,

1 CE38T CC"P.UtlITE . s HHILE FMf IYcSTCRS AFi LCCKING

." AT

{ '

. . 1"tICIPAL ISS1JES WITd A VERY SUS?ICICUS EfE. TdE NE4 F. , -

CITY EGERISCE DIDN'T E(ACILY REASSUFi THEi! ' ' '

y . ..

. j-y AND HHE{ IT CCPES TO EECTRIC BILLS','..IH.E ELE IS THAI *

! u E

r bi ' ??L FATES HAVE CCNSISTETLY SED Al'.ONG THE

~

N LChE s

i '

~-

'1 L

E193 THCCGH THE STATE HAS CUITE A FEN'ITNICIPAL SYSTES, ')I w-2, l y4 gE PART CF A F.UNICIPAL Shetl'S CPERATIONS ARE

\ T.'$i .~ - -

f N.?13Y IEE TAXPAYERS.

C3M .

W.e M .

9..-E Y .

1,Yu~?W 3 1.- .

w a.L m 4t.

Fw;-

1 .

^

+;-_

A.134 (fh .

I A .

MCNTH ihd P.ONTH! U ca 18 OR SO 0F THE MUtlICIP .

[

261363 '

4 4 GOVETdFST-0FERATE AND* C00FEATIVE ElCTRIC SY

- FLORIDA $50RT HIGHS RESIDETIAL RATES THAN FFL ~ -

l-EESPITE THEIR Ib SUBSIDIES. A10 IT ISN'T UNUSUAL TO SEE b

- . .s .

.A MCifiH LIKE DECE'SER OF 1976 - JUST LAST MCNT . -

' i -

[

. 11 FLORIDA ELECTRIC UTILITI IN THE.REGJLAR

~

r . , .

! i

. REF0iuriA.LUh5 RESIDEITIAL PaTE D'An F:L, l !, _ _ _

i

~ ,

t .-

o g, g1 YOU FAY HAVE SEEl GUR A0VERTISE'EiT IN TliE r

. e. .

[

f .'..y s. :- ?-4 FOINTING CUT THIS FACT. HE'VE t -

a

, g - - -

s . -

, 9.hE1.L

.n.m..

GIVE YOU TdIS EVEiING. . . - -

j t-

' 3-y . -

[ 'M,

e --r.e-- WHY WOULD AtlY0}iE ASSU!ITHAT TdE CITI 0F DAY -

.5 ,

CAN ACHIEVE WHAT NONE OF TdESE order SYES C

E

aces @, EVE THOUGH S0?E OF THE[ HAVE BEEi I!! THE ELECT

~

, 7 M r: .

~

D~

v m;2 3EST FCP, YEARS? e xw .-- _ s. . . pgn.g,- - , 3 s E R :. wa.= . .

                                                                                                                                                        .                         J A135

1 i i k 3

                                                                                                     . y , ' ~ .. - . . s 4"         .

i . i e'

                                                                                                           .se EEE0113 UM

\ *

                                 ?J:         Mr. Joe 3. Dytas, Jr., Director. Cactric Departmant 73 2 :      T5D Oiviatca
                                 ".CZ:
                                 .           July *5,  . 1976 t
       !                         SCL*ZCT: :aytona 3each ca July *3,1976
                                                           .            Mr. Normer More of Tord, 3acca & Davis                      .

M-1*da! Fica f=tum New Tort met wit!L ma for the purpose of obtaining ganaral type infor==Mm is regard to our Cactric Systan.

        .                                    m         --t

r **ra

                                                                         . is conducting a f ===4%4'* 7 study for the City of :aytons uttich is .anaideriss krying out the electric l

syntas from T757. instead of renewing the 30-year f.anchise. Mr. More

      +                          vas directed by the Daytona C1.y Council to contract us and asit some i

specif*c quescicas about car systam. Ze also ask.ed se about the City's generati=g remarves and the saeunta vttich any be availabla for I sala "a. the naar future. I inferend Mr. Here r. hat 60-100 W of 6 capacity viIl be avallaala for sale besinning;the s - e of 1977 unt:1 thhr spring of 1380 and approximataly 50 W in 1380/81. He was also i f infacued about the ava12Jb111ty of the Flex 1ta Power Corporation's i 0 h ida! s-2 " 1*=.

                                             " air feasibility study is **hadnT ad for complation is Yevember of 1376.

i , t

                                   #                                        h Peta T. Lau.co                  /

f e a* W ant INBIE l l i m i. m i I

l 1 dI . - . . _ _ . . . . . . . . . .

                        - ~
                                                                                                    . u.1-f i

i 1 if ! M o 2 A r 3 7_M To: Joe Dylres Direct =r, Z1 ectr 1= Ce; art =ent j 7:ce: Caniel A. Canas, City Hansger Cate: March 8, 1777 .

Subject:

Sale of Electric Pcwor to other Mu.sici;slities I have recently been centsc:ed by the City Manager .-

    '                       of the City et Jachacev111e Beach ress:/.ist the ;ossib111:7

[. ef ths Cit 7 cf T "'hassee selling power Oc Jackscav111e 3esch. i . I Please ca.11717:e 3ceers there ::d date.%e e.stier it woulti be 1: 72.11sha.saee's i=:a.est to sell sc=n

r. coces on line

(

    !'                      of oz.: z:coes espacity e.en "r.uapkiss Uni
    ',i                     this W .

t CAZ/vs e t 1

    .i 6
                                                                                           .M   6      memp 9

4 l o - I . t . a OOg *e

un i

I.- -. -. -

I e I

        ,i                    .           -
                                                                                 . e.     . . .   . -           ..               .
                  % w .m.                                                                                         Gassen. A. 4.aasase .

eneae.a. Sam

McNEEurP J= """'*""

{ 4,

                                  =                                    ..                  .
     }              aasses a. m                                                            f                 . aavass w. seenew
                                                                       ,                  y                           - *-

seeknese E. mee nsease *.* 2 m=p. .i. De&J. e.. ===i-=. ename . ic=- ==== . T. . .

    !                                                                       c w m.a.
     .                                                                        samme My 4m                                                       ..

l Mr. A. M. Harri.vn Jacksonville Elec--ic Authority P.O. Box 52015

     ,'                         Jacksenv11Te,rT. ".

[ RE: Availability cf Firs capacity 1930-1385

     ,                          Cear .w.r. Harri,ngt:n:

j .

r In res; case to yeur lettar- of April 5,1377 'the City of Ta11ahassee; ( , presently expectr the follcwing firm steas capacity to be available for l ; sale thrcugh 1583: - 100 W [ ( 1980

     .                                                         1981                  'so N l                                                         198Z                   50 W 1983                   30 W                                                            -

t i C.:nsidering the c:st of installed capacity t= day and the uneartain

    !                           ec:ncurfc c:nditions of the future, a firm capacity agreement between cu*

i tw systars c=uld benefit the cust=ers of both. If you fast that this j possibility is, favorable for your systas, we would be glad ts discuss

this with you further.

    .                                    I would also like ts-=ention at this time, that the City is presently expecting additicnal capacity require =ents in the 1984-1986 period and would he intarsstad in diseassing the pcssibilities of foint participatien in your :: ext unit, er having the J.E.A. jointly participate in the City's i                                nex: unit. We feel the ec:ncarles of scale and operating efficiencies of l                                larger units alerg with the decreased financial burdens of feint partici-pation will ? 3 even =ra incertant in the sid 1980's than 10 is t: day.

Should you desire additional infer =arien, please* feel free ts c=ntact

                               ;:e at (2C4)575-1171.                                               .
    ;                                           -                                     " neertly,                             -             .

I l l , re C?. !' (- Joe 3. Dykes, Jr. v ... . Direct:r

    .                                                                                  Electric Cepart=ent                                           -

a*iC r/GTidto

                                                '7LCRCA~i C.U'EyAL CD-~~5LtVI:lC alt. FLCitiCA
                                                       ~~                                              ~*     ---

t

 '.                                                                                 A138

i. 41 - ll P .:s l * - M E M o R A 't 3 U :t 73: .,anial A. Ilaman, City .**.anager F: mas Jce 3. Cynsa, Assista= City Manager Oates May 14,1979 4 Suojec.: Estimated C*'ty Service C st f=r Prospect.d.vs C= muter-' * ' C:st::;rner Please ~' attached susmaarias of expenses to a potaatial commercial customer based on requisentants of the customer f=r electric, water and sat =ral gas service. .

i service, the Ascalindicated on

                                                                                                  ==1ations     he sheet related to elect =1c a== based on tacee cc=di-d-s as ini-d ly existing in Tehr=atf, shovi-Jp costs 1=c===ad I                                                                    both inside and cutside the City -d .s and the c: adit for ftel adjust:nent t.".at existed. at that ize.               have alac indicated   the ecss for name service f== hills rendered aitar 8

May 17,1373 '~-se a larger fuel sd;ustment crudit. L tuerafers, a ==inced u " the the cust a and th.at thculd the c=st:zner elect to take pri=a=f service, the credits that will be raceived f=r those ed'*'- - l .

have also indi=ated those cessa ia .ed fsr wetar based on estima as of requiranacts given a=d

                                                                               .a c=azges stat would ssult f=r a cust::e:er *ccated *-='de

{ and cutas.de tse City i d=* *J ca a= m-maal %s4 3 We have on the cat =ral gas data e=' ' =ted costs fCr Mh exis'"* 7 as Cf 7thruary,1373 far a eN located both insies a=d cutside the City ? '** _s u= der conditiens of ,. ==d 7 fi=:s gas and :=dar the cc=diticas

                                                                           =f par-'=='       ? is w d Y a ras. These costs are su.bject to acathly adjustments to pur-ha =* 7 c=sts of gas ::s .he City.
      '                                                                                  ?=r sever service we ha re =ct at a=:; tad to p....de any estimated costs f=r operatien s1=ca we at -"'* 1:e have
                                                                           'so x* =cwledge of-d what the requirissants =sy he, but have suppliad data s-             =
                                                                                                              . hat tas cus - -'s engiseer can i

deemm* e t.te cperawd 7 ccats c=ca the ficw c==diticas have w ee -- ee. i J20* /p11 Attach ===ts 1 m 9 l l

c.--.. -- - . _ - - - _ _ _ .._ . . . - . _ i t L' . l I t : ""?O l l t

~~

7.sti:aated cost for electric e4ma rice to ecumercial customer with a :nonthly demand of 550 KW an.1 a :scushly usage of 275,000 DL

            !                                                            The fo11cwi=q calculations arw based en ecMiticas existisq as of Yearnary, 1979 for a custcmar located w1*2in l                                         2. ciev limits and baserl en that customar takin7 serv:.ce as ag-            ----   a Voltage of 177/480 volts ar.d below.

Total cost reflecting ener77, danand cha=ges mad iht Stata C*' ' ' ty Tax $ 11,939.94 10t C** ' ' 27 Tax 725.28 44, State Sales Tax 477 8

Total per :xanti 3 13,144.93 I Csudit'cas for the above cussenter f=r sa:ce lead I and voltage u** -=tica, but located eusside the a tt-r ' ' ' ts I are as ic11cwas i

Total cost of energy, n'==M, [ lhe State Utiliry Tax and ( ,

                                                                                                                  $ 13,054.25 i

ist sc:;-aarge I g

           ;                                                              44 3*.sta Sales Tax                            522.57 i

S 13,586.33 I =JotaL mth I , i m ~t-1 =-h for -la above cendi"cns for i outaide *2e City 1 '-4 ts a::d i:'. side City' ' '-4ts is based en

                                                      *h custcmar receivi:.g safuel adjust::ent charge of 50.0008/3 4
           '                                          as a credit.              ,

3== =4M the same conditions as stated above, but reviewi=q costs under present day ecnditicas fce b4a rundared aftse May 17, 1979 are as fa1iawsafer cust=mers Sc. side -Je Citv 11:its. Total cost of enargr, da==*A

                                                                                                                   $ 5,5:5.62

1h4 Stata C** *
27 "'ax 721*41 ict Ceility "*ax 1 4s stat. sala. :ax 345 so l

l To*.a1 per :::csth 3 9,6 6.53 i h e e A140 t

           .i 1

O . eM q

i - ;

i l I Jh l l - 1 . i .

                                                      "saditions for the above customer for the same load

and voltage :*d *=tica but located outside the cie r 11:.1_s are as followe.

I ! Total cost of energy, demand 146 State U*d ty Tax and

104 Surcharge s 3,770.33 44 Salee Tax .

390.72 Total pa - ath $10,161.13 I . For all of the above dondi. ions, i.^he cust=mer l elects to take primary ser rice at 2400/4150 volta er 7200/12,470 volts, he will receive a monthly credit of

                   .                    397.50 far the above demand condi-dons.
                                                      *a -T      '=ticas f=r 'the above c=nditicas for $" *

l renderei afts: May 17, 1979 reflect a fuel adre.stment < *=7e .

          ,                             of 30.0126/osa as a c= edit.

! l l b i l' t: 1 G g wesp e e. *# *

t 8

I f - t 4, .

A141 er 9

e e, .* me

i t l. M P M C R A ?T D 7 M

5' Tc "a=iel A. Zie=an, Citf Ma=ager I !. ?:=m

Oca 3. Oykes, Jr., Assistant citf Manag(M Oite: July 5, 1379 j S W ect: Ist1=ated C**ty 3arri=a C:sts f== a Prospec ive :=dustrial Cast =mer Pleasa -d attached su:=naries of expense tc a

                     ;cta=tial cust=mer based c= reg:i=ame=ts of that cust==er r                i== elect =i=, vatar a=d sewer service.

As 8-dd m tad on the attacted sheet relati=g to

    !                electric se:rica, the calculati==s are hased c= cc=ditic=s l                existi=q as of 31'I 3, 1373 a=d have bes: calculated fer a cust me:

Citf i'-'tz and1ccated i= side with that the Citftaki=g cust==a= liMts andse: outside rice at the I u** :atics voltage and aise at pri=ary volta (1227) t wi:2. tha disceu=ts that cecur based on pr* .a ge I sa:rica. i a=d sewerI.tava alsobased

                                               '- '-ded== thesa    ecsts icai====:ed of 20 -d fer   water I

L ser71=a galle=s of va.ar m--=' the cc=~, ' an L

                    -- the sewe systsm.
                                                   '.y wi.b. he sa=a a=cu .: tai =g ret ==ned t.

6 - I C= the 21=al sheet, :- have listed the =ecessa_-f p wear and sewer tap fees required fc= tha =acessa f =eter I to =eet the lead a=d the r.ssociated systems charges that will

    .               ac.47 the si:a sa=71:a reg:1:ed.

e . 3C r/pli - ( Attach =asts 1 \ -

.\,

9 6 y . A142 v A w og ae w n

hh -

                  .g         /                                                                               7/ %.i-i
                                                                                             *s .
                                                                                             '. M July 5, 1379 l

l * , Mr. Ja=es W. 3 cwn, 7:ssident . Tallahassee & = *

cf ':==ar=a i Pest Cffica 3cx 1539 8

                                = " * '-= =s se , 71c=1da 3:30:
                               *ea= Jir.:

[ At**e'=> fe: yet _ infe ..atica is a re;c:* propstod by ca Assistant Cit 7 Manage: .egardi=g the ;;cvisica cf L C1'ef u-* ties to eta 'i=d:strial ;;capact with wa=:n we have { hee wc= king. Os at-'+="t ;;=vidas indutics regardi=q t< elact-icity, wata: and sanitary sewer services. As :

     !                         irdd-'t.M to ycu previcusly, ths City wecid he in a ;csition j                               to provide anc= 21 gas fe heating purposes as as istar= ;-

6 tihla custeser. If tha ; espect desires nat=:21 gas fc use l p is a -=-""*-:::1:q ; ccess, service could be pre rided on a p '*- hasis depaMT upon the qc.astity required. Sa calculaticus ir the attsched re;c t i=clude two sets of fi., ss t, those based en service inside the City lirdts j as well as service cutside the Citf of N'ah==see. Whila we a:s =ct =ecessarily encouraging a==azatica of the ,..ecsed sita, .tts ;:cavect :say wish to =aks the "d-= cial , arisen.

= =d tics to the City u**ty charges, the ; respect wculd be required to pay ad valcrem taxas of 3.5 ills (53.50 per 31,000 of assessed valuatics.

I have had several discusicas with representati'res of the U. 5. Terest Service regardisq the acquisitica e' the 32-ac=a parcal desired by the ;;cspect. Se Terest Service has * '* -=ted a st c=g w- gnass to dispose of hat p cpertf e 6 9 l l . . -- k A143 p . e

h i l . = i

i I '

     .               Mr. James W. 3rewn                                         .,
     !               July 5,1979                                             .

i Page : 1. a=d si=ce they have indicated their preference for werking

    !                with a geve=- mantal agency rather can a private entity,
                      .he Citf of Tallahassee would be w4 i g to assist is the acquisition of that parcs1 is whatever way possible. The
 -                   Terest Service has also '-d**=tcd that they would agree to Isase that parcel, pending final apprevel of the land sw.p is Washi=v.ca, so that the prospect's ccnstr=ctica i                time schedula could be a    .      4ated.
    ;                           If you' desire addi-*rnat i=for=atica, please lac       . ,

se k=cw. Si=cerely, . t

     .                                                   Da 4at A. Klaman

[ t City Manager I CAI/hf At*= * =at t . l [ f; l' I

l l t l l 1 i l (' A144 l 8 l \

d [ em. som s::rios, u Ams, at, =1s2

           ]           g l           s' er'---'

g, I ' EL Y'* g6*?- Q'm ' rs='**** J ymse l G

pLCluCA PCteO & L Gif COWT

j .

                                .c=e       11, 19*3 I                                                                                        .

3s. 7amela 17:.3 Ta=sa: s., i 137-C Ecli=wced Apts. *

           !                     300 = stead 0 ive chapel 1111. 3C 27314                                    _

ea= Ms. 7a=ars

           .                     .g m leased to lear cd yet=- beerast in ecencmi= develcP-m a=$ e m 7:cq:3=s we have == such a . the 71erida sewer &                           *                                   .
          ;                      Light t - in Y.

we do active 17 solicie new industry c89I T t# 7'**~questic=s04, a-d .- 4s isedf=== is handled h7 the Ic::ctic l ;

                                  ?*#**#

Q ,2 m=:ssa

                               * :-81cv===

a.ve:7 small depa - est 'ehich

                                                              . 4 eat c, e. ede__ _s of ce.= desa===.ats i= es g

depends.a 5:tg -articula= cur Divisics and lDist=ict ida Stata Cfdica Cep4= - i al we Ch-=also wc h cicsely wi-A the ? ors and the 1cesi a c=u=ty an S' * , i i

         },
                                . eg7tg y** .42"ahani
                                            ~

c stic=s that also pursus ec-&% devcrass { activities. l hq**izies ;ehich a== di =cted to cur ( l .a additics- o answeriste also help the stata a=d Iccal agencias a=swa: ('

                                    --Nj. '   3 w.,"      . are directed to the:n. All the varicus state 9,                                              ;,'7,.=m f                                    g*                                                ;;cvidi=y p :spects with inds==atics g is cicsa ha=:::cuy i:       4 s additics to seeing Mk.       ~ yh,; jgg, f;.,q;ently s to4estien
                                                                    'anding            =aka existing         decisicas c=es.

at scheduled by talastena-meetings, we about also locatisy a l ,,,t= esce. l

                                     ,,               -laa em c=ma dcwn this way fc                      a=7 reasen, please st=p 13and[eeus. ~a::k. you fc yeur i=*.arast.

l

l l 6 3138*#817' .

l - i

                                           #se
                                      ==.=
                                              . u4    = }.~Ytt$.m

{* Paul 7. McGavis l

                                        ===cmie :evele;=ent 77M211 If'!7-* his-       .., .7.             I
                                                           =
                      /.                           -                     -.         -

t 6 1

        *i                                                                                    A145 f.l

\ i

   ~<
                                                     *

Mee

i l i l i I i t

   '                           9L                              .
                          /i                                     b g\C <

June 4.1979 { =4ar sir or v** 6

   .                                                  l'an a student at the Osiar:1.7 of North Caroitsa at Chapel ?.111
                                            , merkist wi:1 the Ositad 5tscas :epar=anc of 0.:mmerca is : heir summer Y-M ""- DevelopusEc' .'starz Program. I vroca you this
                                                                                                           .                   eSU 7tograma yee sponsor *.s encourage unafn1 --"?                  2r=vth is your easviaa arsh

i h l

t ' ( a *."- T-- 3 33 your 1377 AnrTAL Saport). A scarammert is. ;his - i repor camshe my ac:wa=

                                                                                       " The annuinezuzius sector provided i

12 of tha'saw employuans apper ~**'- in 71arida due :o a enent=act.a r l of saw h==d -=== m ving is:a the stata and thm

                                                                                                               =< ,a of azist:lms
   !                                         's"'--

L *a staca's ====31 ando=amecs are - , j . 1-- c.4 by I the economic dave 1apaan: efforts of stata and local of*fcials and i br yriv.za e::=,ani.e a a norua. rme and :.ie .- . i M M 7 app M n m 7o52 S W 3a . M.ar i=f=Tration ,

on ther dawwlopusec eL'or:s of your esapany. ::o you acti M y { l. O L 21 etC*31 M davt1CpheSCdEpart3ER*% CI* 3Cma oCiar branch that h=naas such verk? In what ==73 do you work vish the staza and incal a'** -" *' = is your. service armat ( t,

   *                                             "- ' J              f== your cooperatism. I        ~ 17 awai: your reply.                           .

4 . 2arpec.fu117, g im 6hC)

                                                                                                              %12 % r._r
                   '                                                                                          Tni o= %sa      .a . . .
                                                                                -                                   .6 A146 k

i

l t lh _.-. . -- . - - -

            -                y                             ,. 9A m'      m rt. W..ke           . s                  . . -
                        .           2           }a '~ q QF
                                    ~ ~.- -

amumcac=nnssrencoca - ! i i ,

           '                                                                                                    unnrie.    ,h , 7* a -d ' =

21?isi=n " M 3a=aears tw i . 3 ru Agt:1.:. *3, 1377 nun. W. 2. Elain

                                                                                                                ,,,,,,,,   .tr.            c. shtar m               TT:. A3 =          ..w      .nm _ .:.                                  Mr. 2. I. "*2.11=n                  *

, l, ' I l . 1**w" ar' is a c=pr of an adver.d sama== faa-W is l.e

                    ,                              AptJd. edi d=n of F*.crida h d.

l would a d-extasane=ppracta-* rear alar rrse xanagers cf itz -

          !                                                            as we have al aadr =c=17ed. W~as vacara ad.
                                                  . hr ** - ahamen                                                                    .
          \. '

As d-d'-= d by the c=pr, La " d-=-d ; these leadse.= ==le of the 01.z _-d =v. Ma=ager

j. vi *.' hi.a raspec 17e .;2.

agencias 1.s ar==aaralT i=gc==:an

L V s.E { M'il l . Attac! ant I t j i I b 6 t i l - [

,f.

M o ..; .

l C:UA*Z:Y 1rfMT 7t!DC: no sq.amaa ms vous c:aaam res veur eggee ee a. g eeee e e m -

j . - g A147 k i 1 l . -

I

    \-                                   .
       .                                                             Afct!stW fa41Y                       merimemassia. He*ue fMum Zaser'inita. "eas seemes used i1M ame the 7ses Essue j                                             sus Oamm Cy wees :d taas se=ar test Ca. :assa savug aus 4.ees trams is Las
                                                               .                                          .umaa sem e-neum. ma en taas erumma                      ==us ;mn ei Las asumy w.e .a.as.

j ,' aus.ier tum..as tusme a agmmes ammmen . gem, a tar pum. Essere Amly amend p.,,,,,,,,,,,,g,,,,,,,g juseumgan Ja asst as amenam estvesmas as amb M eImme Sus Wem UbsSm M ass, p w ered Ww % met

       ,                                                   aus ammans .s 7mm. wwas ua ws. y se =suse tan peas.                                                     ,,,,,,,p,,,,,,                                         ,
       .                                                  ,w is Las to runs ame Kasy =en as                   .a                4mir s mary. tan am"                                                                   d                     ,

amma russe sum. m se ad amnes ta saa ary e( Psame C.namy's grouse a tarus et . Oase Qv. T.e ramsgh tas g,,, g ., g 3 ,g,,, pg,, a .

                                                          ==mme can name wee Sama is mia esmas            pomma 4as ;               creveme asseum.                                   g,,,g,,,,,,,,, ,,,,                 ,
                                                          "um.                                                7be amar *es wumas a W sus                                    %,
                                                                                                                                                                   .,,,,,,,,,,,,,,,,,;93g3,,,,,,,,

Lass ?temmamur ICaly =em aus asumme een amuses far *assest Pinen. cos .,.,,,, ,,,,,p,,, f aus er a assimune 43 ;lI marca, a og somme at :aslauses House. San Paums -

_ a=w su it.l44 =e sa affe. mover saw tas samme for ee'ous from Jef. Cao e('.as Wend War II =amums ta rh _ . mens tema ==es ass an. $mmme C.ammy sur N=- !a tamme emme emms :ad ass se a 'mo . semansu ==e amis as aseurums as (.as tais waarms as,s yemomms enray tomrus cas."%ssa Eczare Astr. a danse saa t.~arvousy 2mr s auque :ae - ei pesame tous Penna ==ammen.* er Flemas Jun ynemass.

umt her ma nas esEau aos W is *ssuytensa. Emys Samumsee. aus Kairs rumirs :s Pame was a :rman. far m7e,

                                                                *3m rummmmma suissus wnmr

avid -

3rumur amuseus tem if76 .amme ass

    .-                                                    Summa :nm =immes ammsaos t774 buse.

i b' W3.Taly's big 17 5 win m wa M e e

                                                                                                                                                                                      . ag m(

G

                                             ,-                   Is 3 =he he m.7 te most we

_iI

                                                                                                                                                      ./                                                                       . - . .

as was =sesusvammtv . i e ,.mm.ms . m .es .uses wummus - o

                                                                                                                                                            .b
                                                          =mi.                                                                                                                                                          .

t * , : . sw menoms ans ene .ums me _. . 8 aremer was raserums eury & Oame.1 . I. , mas summe sury. He dest zamous .A i,

       ,                                      .            T& Essart Emi? wee resurums                                        ,' M          m,--                                 a8 b                 ==C t

i ; r, m,. m -. seseum etesvuus. Amir=uswumusg:

r. .e.

J -

                                                                                                                                                                                        ._2                                                  j

[ l i 9 6; sm. msr.eaa. 61 S.W =a ears. x.ar, - e [ seau was em=Imir arms ses etCamuni .- *g ,";5,qg

                                                                                                                     ""g;gy                      ggh                                        m               w.,,Q t                                                             8N         =8E4EE E                                                                                         .*

e f *eo somd amr tems =a mas 'aresma

g!3"3. W YCIA WI'*.*. s.il ".'"A - i * *'"'*M I [: { am.3 a mesuma ? enge mumed aus ! ass. g;g JCC2 E 7Ct::" . "T il*. d'.2 $tI:E5C p.,d 1:Ill2 h . Sie sus of *:s Tdy *gs in IFTG is d'A d A. d. '.".*E g2.".".W27 "3 "#. I N .AA j

        !                                                  amurums La dammenew sense evema.

ama in :.575 aat Lisc far a= gf, _ ; g w.3:A, J fg

e = r= sesocc:s. - r, '

"'n"s"an"se's

-z:

amt cramme a c==ma -um cm. 2. se rm r in

                                                                                                                                             =ms                                            f-t               e.3y LSC -me.s ammmtseaseket3.la. h amens - ==-d be varmt               a;x=r = :=n.                                                             m g gfg Ag .'g Ear :== en- a :- == or m. .u=                                                      ,                                     .
                                                                                                                               - , WM ,:3"7C11 = r -**

i in tag smumans. y l g g;;,, g., g;.;;,c. cf g., , I l==cratramsxmm-mam

                                                                 . re,3 =mus eumme ein as
                                                                                                                                                                                                             \

fc: mi c_.:2:=s.

                                                 ! :=ammm. 1== are .amenma-

.e.ammans:=- nmmi - e

                                                                              - -            m emmmes
                                                                                          =n===m                         c w;;;M. G::                                                    L -\             Q ::,,

I cce m.r.mm. m mau l laseque 7sta Seus.at Crumsecum. 2:=r:s:

5HAI'.9. Ac. . .v.2

=ss:--::=2

                                                                                                                      **g""+'"*   f : :..

s

                                                  ! as Sum Pumrvivuus. ;::;ame. Mass.

m eusass.w-:em .
EC.:cs CU'IC..V--i aM ..

g" ./

                                                   .            Fw Kale. Rasesimumssa*

sus as { Say asume eTes SF I4NIIIS Punimemi 2r'impt. *a P:ame Casury. Ommeur Is ,% 4 l' '=w as raimt === - :a= som:m==6 pp:= m r9.@7 2

                                                   -       dWE. 33 ganages %sm s guin.      a                                                     ._                     pgg,.,

summe.as ps,s e.aes ase :roumanus , , ms { '4B emmeasus the *4 MILS el 2e tuumfy *

        .                                                                                                                                   susumb atsums at.saar C:asseev er hug gag gnseigsg ;emy, Fmme emmekame Kady *ts cm sum.
                                                                                                                                          *                                                      ,t Jmune seat / Jeuf f$77                         TM e

e e e e- e em 4' * - = 6 , . gwg g e. A143 l , 1

l i 4

      *.                                                                                                                                          g t                  .

r. ..

I l, C. a mwasaer us - l 1 I - - : Lay 6,1377

                                ~~                               .:. .              .. . *.                            ...
                                                                                                              -                                *      . .s

_. -Jchn. 3. McC ::.147, .*T. - - - i . 2=wn=:1 ~~* = :oveLw.t C:"-**' .

    -                                            2573 m                   C===.        ar         7*-' ,rr                                                      .
                                                 **--:Lt. Isi . d, I * --' ' = 3:350 Oes" Oh                                           ..
                                          . Zars 1.s' tha 1: qui..r w*d -* resultad f=::c. etc Ad. is ?'.erida                                                                                                          ,
                                                    ; sed. Tec vd 1.1.scall : =an-* -ed, ei.s 1.n :.aw C=14 ass.

71aase =cta =7 rapiT t: ::: . A=dar=ca i=di=at' =g tha . I hs re . t asked Tad '* ',"at , s coc=".*isata cur eff =t. . T.x ri. .1 =ces i=' l i.s Lactar that he 1.s asti. g for ass'st==ce.

       ;                                    : Za has al sad 7 heen. is cen.r.c= with. as G2 Tsan tus a; gars =tir -
        ..                                       s-d ' i.s seek.1=y =c=s halp.

s . . ch=, :l: iltsh Ten'vec14, call M - -tell h.iz ef cur eenenesat1==, t

                                            . h : plassa g ::.a                                              g 9a                                ** dan d al.

L * -

       .L                        .
                                                .SL=cara17e.                    -

i . ,

7. :t. C.mi I'

                                                .710m 7:ssida== -                                                                                                                        .            .

7 - -

                                                                 ,.         .c

\ l 1

                                          . ~W17 -                .

s, ..

ci.s. .

                                                          .                         0
                              +
                                                       .      ,s*-'   " '    ' 1 .* [ , *             .E;g             'a,-              , ,1 . ,           * . -

0

s e

998

s ^

e -_ 3 49 h 6 N.

f.:qi,

                               .'       r . .,1! ':.;.hp.*

se

                                                            % )/.N                                                                      /3 ..'P.-[. e .)  4

i * -).W

            !                * ' . . . _g  . s jus-o w=****

l nota ceries cennurcNCmca-

                                          *** #* 7* PSO                                                    Losa.'aa Miami ric-dda i

i oart Septa $ber53I1375

                           ,             Occaid E. Adses                               ,

m ,, . sansen cc=c 21 Cs..clusicas - Indust =tal .

'~

CL'rets Litcation

       *i                                : an attach' g a sunnarf of what : fs1: were cu general -                                                              -

cencluzicas is cur c=nversa*3-a :sgar-A'g seject. You <*--=-et', cc.=ac- 4 -- , a=d critique would be appreciated. O

           ,                                                      e                                                               .                           .
           !                             CZlash                                    .

l .

           ,                            an.- --ne                                          ,

l . . i g r .

          ,\                                                                   -
                                                                                                                                                        .              -l F                                                                                                                           ,

s . f . I l I . t l .

                     *)                                                    .                                                    .

C:NE3Y-WNS-M!ctc! res n.om.u soa rous c:w' ant.. fos mn l , rowes team sisN. mt f"" f e O e em

3::A 9/12/7*, 4 .-

                                 ;.-dustrial DiW:sifiestion csaversa**-a with ?::.Fec111o                           ,

Oene s1 canelmiens

1. 7Pr. cas, improve lead fset=: through industrial i

31*==sification.

2. We shot 114 have Scod smrt with state, local and i=dividual devel. p.t people.

3. Isdepth wrpewer, f*-* =1 supper. and other department support should he c=mmitted.

4. 2eceive allgets. Ccamerce prospects the state of *Fic=1da. 0 epa: ment of - , ; 5. l St= dies should he made to show econcaic advantages cur service area effars to specific i= dust:1es. 7. St= dies make st must mag offs he made

to toatshow w

which 1 dust =1ek we shchid i . k 8. Scme backg cu=d advertisisg (ma:ket condia'ca* g) should he done in selected publicacicas. ! l j l 9. At least a f21121==. person should handle 2. D.. - { = - i 13. T=m feels that I. D. is a marketing '.^:nction. l

11. Ne shculd agressively go after the indust:f to whom we offer advantages and who will he p sfitable *J ca.

12. He should explore the pess(M_tr of 1ccating industry or making i=dustrial parks in conjunc ica with power plant sites. l l . 0 . 9 0 4 1 I r 61

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                                                        ** 3CE N                                  mm Gans:nL CffL:n oars      Tat:rua:f 27, 1376
                                  %         2. Z.11. yd                                                ,

I - mamet. .* .dustetal evale men l du"h, as p .ag.astad, is a c=77 of the :2:d st=121

                                           -Nt le7c== recan.1f ;::s94=% hy :2. E. Adams.                                               -
                                                                                                                            ~

h

                                           ** ma 7cucock,'re ha other suggesti 32 we Plan to =ute **d-                                       -
                                            .                          2. J. Ga '=ar, a=d 2. E. :*211cn f== - m ccaments and s gyes.1cus.                                                                     ,

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    ,                                        Prespects a:s ganaratad 1.s f: u wayst 1.
           .                                                F ca Fic=1da Statt : epa ==nns of C==marca

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2. F ca T71 *ist=1== a=d *.1risica pecyla a=d C un:f/

Citf Cavel=pment G.ssups.

3. Oi.;ect c=ntac L.. cc=perati ns i=q ti. .d =g about .

av=4'=h4tf of power a=d ratas.

4. ?::a ether privata develcyment intas:ssts.

                                             *ese p:=sper: tit a a har.dled as fcliews:

1. Oirect :sfer=al ts ha civisi=n ' M Managar c:

    !                                                         his desi m .'

s

                                                              - litszk th a 1ccal *=d:strial Raelts: and Mcal
    >j
                                            .                     :evele, ant C. ,.

1. Oevalepsent af data 1.s reqtastad by p=cspect er g= cup :spresenti=y, a=d data develcpmans which we i feel the y==spect saculd have.

V i

2. Fullow =p en scathly basis c: =cra frequentlf as

   !                                                           -d'cated by sit =atica.

1 . 1 . l *4e =aintain close c=ntac. vi h the Stats epa: = ant of C= man =te, ce Zan=asey, 01:se : of ~~~ic Cevel.w.t ar.d l ' I I hi.s staff. Also we =ain~=d- cn=.act with the Sta,ta cepa==:mer.: of W= 1 ==a a=d C:=st=:a: Services, he 3stitute of Teod and Agri==1 :s1 Sciencts, Universitf cf Fl=rida, .he Florida \ l 2du.strial Oevel=pment C:uscia, and with devel pnant depart =en s ed ..= * ' = ads and other u-d '

tias. A ve*' g. relati=nship wi 1 these v. wys a=d 8-d4 vid=als is vital t= i=d:strial devolep= ant.

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                     .                                .            1 I             -

i 2. I. '.1:yd spoka ::s sta samti-annual :sesti=g of Florida

       '               :=dustrial evel=pment C ~' ' . en Tehrua.:7 12 en *1:= ara .

Aspects of *.=dush OeveIL..pment.*> Pri: a:f ; cists made is the-

I 1 speech i=cludada , .

1. F77. believes i= dust:f and quality envi.- m i can 4Xist. -

2. Ochs :sust he c= sated t5.==cgh isdus1- ' =' develcpment.

    . s                                                                                     .                      ..

3. Most r' a ' "a -m - dn. . isg is =ct anar,y istansive.

l

        .                     4.   *e prica cf eled citf is Florida is favorabia F        -

campared' :n :sost popu1=us statas. .

5. *=t * =h* ' ' tf of elec--'- service is': sere impcrtant tt:an. prica. .

        .                     6. Ilact=1= U-' ' ' tf I' - =~ ' = ' s tah111tf.

I, - .. . . . . 4 Dezens of people at -~ ; c=ay11 massed *2a centant and dallvvery of ~2e talk. ' '.".*e c=u=c:.1 asksd pe==iss1=n. to pu211sh f . 6 and, ci.. late the tazs *- '-d' cy a e..py

                                                                                .         te t.he gev=r-n .                (A I              c=py of .ha s eech is. a=tached.)

\ t . - . C nsumer Sa= rices is wczk.isg with ths Land Capar ant :2 deemicy a plan f== wn= king t=gether en i=dustrial dsvelcymant I a w* ' +' .nculd 8 - ' ~'= use of cur land rescur e a=d land depart =ent persen=al. Irish C:mputar Systems a d Pr=gra: misg, we have :svised the e detailed Sta=da=d I.=d:strial C de Rayc t ( ,000 3:0 cust==ars)

show UE c==:en 1:s:sth, .UE 7 ear at: , IN c==s== and year agc. Also Ois=ict a=d civision =nis hy index ( fpe indust:7) .

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         '             "'.is ravisi=n will alicw each Oistriet es iden.lfy sales and Icad facts: = m's easily. Aisc we :an quantify effectiveness.

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l , we have received cocperstian f:=a tvi =nmascal Affairs, Stra.tagic P1 Inning, Systas 71 anni =g, Power Plant Cgisee:1 iy , i Project Manageret, and risance is :ssponding to data .equases f *rar indsstria.1 p =spects, as well as tha ? and :epartment,' and l

      ,                                       Nuciaar Affai=s.
                                                  =
    *l                                               We.a== workisy en th se a= mas of ==ncaza., as ' d a                            d.ma s t
                     .   .                               1. 1 Gutt shouLi ve do to ge'nerata scre p cspects?
      .'                 :                                ~

( i Altaz=atives: . .

(a)' Sivertisi=g with Wall Street cu==,,ti , .

                                                   .                           Society of. :=dustrial asalt==s, es .
                                                   , -                         covel..pi=g a n=== ti=a i= tensive pr:-
                       ~

(b) l 1 - . gram of activities wi '3- 77L ega-disy , 4 .

                                                                 -             Isa rdal Develcymant, resul-3 c is i
                       .)

i

                                                  -          .                 :xn== develcyment c gn=isa.icas kru:rv1=g L                                            .      .                    of,our ista:est.
                                                                -       -             .                 -          4     .                      .
                                                   ~
      !..                                                2. Ecw do we- id=               '.*7    and specify e.tpanding i=d stries                           1 tn wttes rI+ '= cffers occ=cmic advsneages, and wisc would benefit T7L's system lead faa?
     ,b                                                            Altaz=ativess -                . .       :.     .     .

6 ~~ . - (al Mail cut to many i=d:strias geners.11.:ed 3 econcaic and damcgraphic dat.a. l (3) .C*d'* e a p cf assional plast lecatian censultant such as rant =s to i&m:13v

                           ;                              -                    the spe * ** - + -d~tries and the specific'-
                            ;                             *:                   Iccat1cas is cur serv 1== area whici would
                                                                         ,- -prove sn* M-y advantageous.

r r (c) Csdar a.ke specid1= sa- ** y of indust:7 and, site Iccatiens wi-"*" thel CCEpanya I

                             -                            2. Should rrn in ansify 1 s p =g:3= ce :=d:st:ial
                            ,                                  covelopment .th== ugh ecper ise development A:d doing more cencant=atad and detailed werk with a pr: spec.1:

Pe at ached a:s viable p==spects with . tem varices c==pany t perscanal are werking at this ti=e. l l l l 1 i

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                                 .u:me.se==a w.me caw =e                                                                                    1 I                         ustzn.cntescennaspescancs '-                                        ,

uns a an. Miami, Fiorida i vo' Mr. J. G. !;encar e March 1, 1975 .

       !                                       R. L Tallca                                                    easiasm Mr. F. L. Autrey Mr. L J. Garener
       ,                          % 17:'!q5MGATit"t OF C'MT*2L.! qC'!C*1IC UIES                                         Mr. D. L. N.ams CF AGR FL4ni 5iTE AE5E/0IA5 AGD XCPE u to                                Mr. Michael Ccok                           I Mr. L L Lloyd./

l . Cn semrst ec:asiens Land Management ha.s discussed with you sema of the

             .                                 work it is dsing in investigating cpport::nities ts :aximi:a the                                  .

j utilizaden of tas C=npany's =adce preparty resources. . i

                     --                        t.ast year a preliminary analysis and a mastar plan of the Panatae plant Sita                                  .

highligntad t::a faasibility and potential ec=ncaic tenefits whics FFL could* possibly rea11:a frsa attracdeg industry n the Panatae preparty. I

       ;                                       As I caderstand it, you and your Lead Management C=nsittee u. late i                                       dealing with issues such as balancing the load factsr by =cre af*1cient r                                       utiliutica of the C=:cany's generating ca:acity. '4culd it ta ;cssible f:r j

ycur Csz=ittaa ts idandfy cartain types of tr.dustry which =ay be teneficial in achieving balancad energy demand? If identifiable. is it in the C=ucany's s' .- test interest for us ts attamct ts atersc: such industrief ts rT 's systas similar s hcw railr: ads aterset industry te their rail systans? Fcr years

l. cartain rtfir: ads have been develeping ind:strial tracts and of'ering 6

       $                                       preparties ts preferred c=st.cmars at at:rtetive pricas and tar:s in crder ts get tenir tusiness.

[ I C=n Adams acrisas us tnat pericdically he is in'* with inkst:-tal fir =s { and service organtutiens which are intarsstad in 1ccating plants and

        .                                       factittias in Florida. He is anxious ts assist such industry in locating sitas en FFL's systas, and we are anxicus es assist his in that effert.
                          ~

l My pur;cra in writing this =ese is ts datarmine whether in your coinica I , tsare is sufficient fu:tificad.:t and =st=ality of interest and ;ur;:se to warrant a ecc, orsdve effort fcr investigating add developing a pregran t2 attract selectad industrial usars ts FFL's systas and pre;er:tes. l If there is, t.and Managemnt is. anxious ts c:c;ersta with and assist ycu and Ccn Adams in such a progrsm. Fort:nataly. F;L accesrs to have lands whien c=uld su ;cr c=ccatible in:2:strial uses. If r"7L elected ts aw.c: such i . industry ts its precer:ias, it is suggestad that the following questiens and issues te c:nsidered: -

1. What ty;a af indus::y wchd be asst beneficial ts r~7L.

A. Fnergy Intansivel l

3. Heavy Industry? - (Ac::s; table Pollutsat lavels)

c. Industrics which c:n ut111 2 succist peuar plant rescurc=s such as stess or c:oting rescerairs! ,

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   !                          l'c: J. G. !"gencar' -
   ,                          4/1/75

Subject:

I.westigstien of C:mcatihte de:nenric uses of .aj:r Plant 5!ta

        .                                                            Reser reirs and 8- eerdes                                        .
   .                                                                       tc:ntmusej Q.        Industries which can limit energy n'eeds es off.seak hcun?
   .                               2. 'T.at
                                          .          are the incentives, inde===rits and amenities that esa he offered to attnc. incustry t= cur Systas.
 ~i I

A. By FPt. -

   *                                    ~                                                                                                      *
          .                                        (1)' Ratas - i.e., nuclear base load, special' indust:.r er '

off. peak rntest , (11) Attnctive land ;i-icas and '.avele; ment costs 2 , 6 (iii) Which pre arties esa provida c:moleta servicas such as i rail, water, reliable scur:a of enerT/, aasta dis;csal L . and; approved industrial envirennent2

    ;-                                    E.       By the Stata -

(f) 3cmL financin7 of cartain indust-f 41 deveicpmentsT [ (ii)

A somewhat fer=ved ;clitical attit da :: wards industrial i

deveicpment - taxed en need far jobsZ

   !.                                          (iii) Weather and life style as an inducament?

l (iv) !atstantial assicyment base fer skilled er semi. skilled a wort! - . I ..J'- .ic.esswee. u. . *f. . s , ' g.. .,. . g ,, r i

                                             . . v .. t

3. What are the datnet:rs.

A, g,,t. kap /

9. m. A .

A. . Mcstility fr:nr envirennentalists and nc.gr:wth adycestas?

5. C:scetitien fr=z ether h:111 ties and areas saeking industrial l

escansient l

                                          . . y,.... r..               a fu%.' An $.s 'f Ps *.* .e ~ .'w. of :.'.m.:u.b. '"~a '~

l

4. 'T.at

                                           .         is the      ;cssihte     rangs of ec:ncaic benefits es FFt. i'n pursuing such a pr:gr s.

l A. Sale of energy? l

                          .                3.       Grestar efficiency in ;cwer plant c;eraticas?                                   .

C. Cer;crata exsansien; f.a., rescurca develc; ment and land aggreciatica? Q. 7tr:141 recovery of invest =ent in plant sitss and reser reirs? "

   .                                       . . .a. ... . . . . . :. . . . s.:. .
                                                                                                   .' ...g__.........                              ...

5. Additicn.21 C:nsidaratiens.

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                                        '.AI=preved ;ubtfc imarje?

I * ., t 3. PSC endersament? . . . - ,. t C. Hew will ottr=c c::npayers ten,, fit? l AIS8 I 1

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   's                            ,                     _                                                                         ..              _

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                                   ,=     .                                                        .*

l To: .I. G. Sancar-l 4/1/75 i McC

Ifr7esdS3tica Cf M. DIS ". M Tf .%Y Marr M*.a

R m M er and precemies t . .. . . . - ( ., ;

0. 10 sat will ha the i==:ac: =n s=arurnIdars!

The f=alementa:1cm of f.ani &*s .'Irategt: .t!an "cr MW carufs land rescur:es a =ajor pla== st*.as is 6e==f=wt is lar ;a ::ar. === =a

                                               ;:ctantial fer f~klal daveic;:mus ae'ie ::: a=r ::=ner ;Ian=s                              Oca l      l M. ass and I would a .rtefata hav-4 :::a - _..f                         s riorsa d sc=fas ar-as yeur-disc =ss t::ase isr=es ami 2 w sa wf 2 Jan ant / r 2c:=

I earliest c=nvenienca.

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I j - (FPC - F.".CROA PCWE2 & L 2 COMPANY, CCCZET 30. Z~9574 (7EASZ3

t. =) ,

i 3) M=sday, - Jtase 29, 1977 at Washi=quen, D. C., volume

  )                                               2 i                                                                                                                                                                                             .

3 E0Y?EY*S

4. WT"5E33ES DMEC"'

. CRcSS "tcrd; MrcCSS j i John 7. Little i 0' 365 384 5 5 y T mas L. J nas .

t 5 . 476 510 513 l \ 523 i' I i 529 545

-                                            73                                                                                                        554
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                          $. 13                                          7ers Beach 1                                                        366 a                                                                                                                                                                    Y E

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                     .1                                               :*.am 3 - Form 12 filed by the City of                                                                             g          ]

6 ;g vers Beach foz 1976 390 p] in st [I ! f:

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I , 2 C1:7's m:hcrized se rice :s :i:::7 is completa17 sur- }d j.p l reunded and.t'-d sd in fu urs icng :s:s g veh po sucial jtdj by de adori:sd se: ries :erritory of Tierida ?cwer & 11gh: , j

             !.             C=spany.                               -

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             'k, 3: Ars yeu. **= vid the ag: semen: :s purchase and sale                                                                          (L.i
                                                                                                                                                    .1

( l dated Ma =h 19, 1977, be:veen 71crida ?cwer &.11ghe Ccmpany

     .                                                                                       .                                                      ?         of
                                                                                                                                              ~

and de Ci:7 of vero 3each, wh'^ agran=an: is attached :s - j a8 I N ( y 71=- Jd Pcwer & Li;h C:=pany's amandad applicacica to de .,

                                                                                                                                                           ,1 i

3 j g radaral ?cwer ?~' *sien (Zzhibi: 1) ? .. ; .e

                                                                                                                                                         '1 .      1 ib                               .

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q. {q. 2: Ars ycu ** "

s vich the segname of, events chac Isad .tg.... ._. _..7

             ), .._ . :s     Y.d=f.fa ?cwer & Light C==pany's effar :e purchase tha -

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      ;                    Ci:7. 's elaca--'m syscam7,                                                                                                 N

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     )        tQ.IG: Wcul:1 yeu, su=mari a briadly these events,                                                                                               i r        3                                                                                                                                ..           .o e        a.                                                                                           ..
                                                                                                                                              .:                 o.

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             'h            In Hoveder 1973,' the C':-/ s sys:sm began :s face two sericus                                                        b, '!l 3

[ A - -.. .

                                                                                                   ~. . _ . .            .                              y
                    ~                                                                                                                                       1 t

(, y.

1. Rapidly escalz*-'.=g oil pricas I'

I l f 2 A >~?'-a,. presenc ==d forecascad i= the ava11abili:7 o# k,. h na:.:=21 gas .as a boiler faal. c .

                                                                                                                                                     .d s-                                                                                                               ,                    :-

4

                          *asa :no events c gundi=g, alceg vid wea:ha :214:ad                                                 -
                                                                                                                                                   'I 3.'

w . .. E. . C:nst p:1:n, :ssul:sd in higher dan =c:=al elce::ic bills S & 11

     }1 i

g-

               &-          in the enrly vin::: cf 1974 The resul: was censiderable                                               . g. 4 t                                                                                                                                             ;VA j          -
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     ,                                                                      A161.

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l'sgc h 7l i 373

                   *}                                               -

cusc=mai conce:n :sgn=di=g the mag =icuda of their elec:ric I. i bills. In Februs:7 1974, the C1:7 began es show'da fuel 4 1. e adjus a== c=pene== cf da elach bill as a separats i:2u, ..e l . i.e., the basa bill, the h1 adjust =iant bill and ths cocal T-- 1 b alac:=i= bill as sepa=ata bill encrias. Tha reasoning beh1=d h.I. I

                                                                        ~.'..#.s ac '.cn was s i=dicata :o che, cuse: mar ea =arked affae:                                                                .;. I
                       !                                               of f=si pa=a==s ed c2s 3 Tha'c s=d of risi=g oil c=sts                                                                                *
                    -t                                                                                                                                                                                              y I                                               and da<-1'a#-'s gas supply cen~# und.                                  "'ha Jt:na 1974 b'? T' gs y
                       ,                                               :sflac:ad fast ces: effacts p1=r hoe weaths' (air ecedi:1:ni=g)                                                                       I"b d
                                                     ,.                cc su=p:1:n. Members of the puhtic began es registar ces-                                                                               2
                                                                                                                                                                                                               .x
                                                .                      pla1= s :s da C1:7 C '*' and i=daad cc appear bef=:s that                                                                            !!fI.

l y, bcd7 semicing rata :sliaf. *

                                                                                                                                                                          *                                  .;t-I'                                                                                          .

g. . :ij' 41--

Ia *t2171974, de C17 Ccu=cil asked =a if I !i,cught ha raras t i ce be tc.ame. I ms.am e a=,ha=1= m y ea e a basa ft [

                                                                      =a as c=nid =e: ha ic arad ==d ea= if een pr se== =,=ds,                                                                           .g-f:al ces=s, #
                                                                      ?'"'
                                                                                            #'=~' u, ac=. : = "= cad base ratas and escal veuld 112a17 rise. Iwasthanaskadifapoess:145.

[! N { t ll { buyer 'f : em system c=uld 'be feu=d. I answered [o the affae: b-- b th sa - ChaO cCa C.W caly 'scicw b7 Cyr*#'*g OSgCtiations wid any ,'A.p k:-N.:ad pur hasar. . *li ;?

                                                                                                                                                                                       -                       i:2 1!M
                                                     . .The C1.7 Ceu=cil han f =ad a ew =sa'censisc1=g;og e.

y

                                                      .               C1.7 M2= agar, ea &=# -=" o f the U'-' ' '  a

C :=tissics and 1:b sa
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                                               .                      a = amber of Co            e5 :s <<-,e and negociacs sie any 12:2:ssesd                                                          -

n N

                                                                                                                                                                                                              . .e-:_

3a #'g th2

Clicipal electric syst m Oc 2ny such buyer, N

5 subseque== :o che fe- ,-4,., og said ec:mii=ec, mI, was

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                                                 =.                              .                                                                                                                       _

p un r me .ee e-m

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l e j . I 3 :Z:2 $~ m' Ol' JLuc:L i

     ;                              r = n =sar s                   A. car c: m :ss a l                                          CPITL3 30. 37 i

i Fimrida 7cwer & Ligte ) ::cetat Ncs. T 3-13

     .                    " N 'T                              )            (Phase :) and H2*S-41 t                          cs:s:s2:n:,Asm a= ; emeza nary .mma      m - n m:s=n; m=s l.
                                               'M".33 AsD NCCC3 l

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       .i (k         h              - -                             . . . .

t t i. I i C:CTZ:2 STATIS CF .Le*C1 i TE N CIE2c KIGCI.A 03% 00. m s:03 71s=1da 2cwer & LJ.qht ) ::cc. tat Nos. E373-13 Many ) (7hase :) and E373-81 i ! l . i l

       ,                                                     CPCCON NO. 37 l       !             .                                s
        ;                                                     APPZ12ANC 3 i

32:=v A 7eth, Jr. , 3cher- 7. Tall *TI, Ja=ms K. .3. w -2 ell and 71 ve L. .ic. _== '7 sh 4 ;;:.as .J i== !. .-ta icwer & Light 61 Y Wit'da:2 3. Cha=dlar, W' ' = C. Wise a=d 'r+=~_ Weishan f== c - 1. u .__= C=c era m Rchert A. *ablen,0aniel J. Cit _ an and Sandra J. St stel f,~

                                                                                                           ~
                                   .se G *-  =c.as N 'asa n of. New W 3eacs, Ec . her a O*d *ias A=c. crit 7, Cities of Sta=ka and Ec:nes sad, Fic=1?.a l

l Rcher- 7. Shacire and Ha.w L. Raiter f== -h Staff =f de f, Eeca:aa E.:ar;y .~ @ ==Lr ' ~ '<saca l s Ii b t l

I I i 1 C l l e l , .e l e l t> A164 t

l i t

         .!           .     =

uRCLISAI.: ELIC"3:C I SINVIC:s A7AILABII.!"T: ANT *TECST

CN'TZ3 STATIS CF AMr3:CA l FI:UtAf. c!I2GT RE00.ATC3Y CMI53:03 Before Cc=aissioners: Charias 3. C::: 1s, N -=*:

         '                                                    Georgia:A M*,
                        ,                                                            and Matthew Zoldan, ,7 .

i riorida Power & Tight ) :ocket Nos. !378-13

     .                                Campany                        )       (Phase :) and E378-41 CPINION 30. 57                     --           --

I l C7:NICN AND CREE 2 Ar.'.r win INITIAf. OEC 32 Cit -- (,- - - - A33 RZ.TZCTING TARI?? AVAILA3:LITT

         .                                            T.*M*"ATICH3 ANO NCT*CZ                                        -

CF C1NC**.LATION ,

                                                                                               -      -- - - ~ -
                             .                           (Issued, Aucas1- 2,1373) t'
  '      I
                                                                                            . . . _ _ . . ..     .       .l   i 3efore .the C::caission is a consolidated pecceeding to                              l 0

r determine weather certais limitations en the availabilitf J of fix:: waclesale requi ements service, alony wit!r notices ,

          ,                        ed cancellatictr of sucts ser-rice to specific wholesale                                  I customers, are unjust, unreasonaale or unduly discrisisatory, and particularly weetter stey are antic =mpetitive is effect.
       )l t

4tta one esceptacn, we fi=d : tat the pecrosed Limitations on requi ements service availability have not been justified. Ac=cedingly, we reject :tese tariff previsicas. Moreover, k sisce the notices of cancellation are fcunded upon one of l tese rejected lisi:ations on availabill:7, sey =ust il likewise he rejected. To set the sesse for cc: discussian, we wish to state

       !                           at t3e cutset our view that, waere a deilitf possessing sarket ;cwer is a relevant sacket seeks to amend a genersi tariff .c impose conditicas which foreciose supply opticas er increase .=e costs of competitors, or vnica ocuervise i                                   contribute s the acquisition or caistenance of monopoly I
                                   ;ower, its applicatica fac amendment must be rejected and fcund unjust and unreasona=le under iecticas 2C5 and 206 of

e Tederal Power Act - unless te utility can snow that

                                   ;re111:q pu=lic interes s justify ef e servica 'conditicas.

9 I> -

 %8
    .w-A165 i

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I t I ; f, Occhet Ncs. I273-13, oc _al. _ l- Foreover, even waere everridisq puclic ;clicy ocjectives are sacwn to justify scue restrie.ica en wnolesale service, such l a utility sust te calle . ( e

1 I I

; e i ! ~ . Occxat Nos. K2*3-13, et al. --
l I
; ty order issued June 1,1975, the C asission stated ; its isconti:n to issue a final decisien is Phase I as soon as ;cas, ige and urged F76L :s refrais fr:a isplementing e tar... availamility restricticas a=d cancellatica Of, equirements service to Ecsestead, pending a final
"1-.39 on these issues. 37 letter dated June 9, 1975 TPsf. informed the C:ssismica that, vitacut waiving its legal

-Tats, it would provide PR service s Ecaestead and also
, e C1:7 of Ft. Pierce, Florida, pendi:9 final C::maission under F?sL "Se seseculo Irace Chance 52- 2,vececsals Fir s- waclesale service ! - niec on Cctcaer 14, 1977, would -
( i te available :n seet the total capacity and energy require. seats of puremasi=g utilities ever t3e indefinita future. lt is c=mprised of a two-part demand and energy rate, based P f. w on F7sL's average systes costs weich includes the ;ceduction costs of its nuclear, gas and oil-fi:ed generati=q plants.
its predecessor, secedule 52-1, was made available i
{ to all waelesale purchasers witais T7sL's service [ I' territsc7 Icwever, t2e C:mpany now preposes no lini: t 2:11 requirements service to siz rural electric c= operatives j voich ;tesently take this service. A potential puretaser
. esquesting full requi ements service f::a 77tL ta the future
[ could act anticipats receiving this service and would not i receive the 31-1 rate for any service it was aale es arrange. y L While there will be no amatament of retail sales :s new f cust mers, F7sL has stated that it is not willing to c:= sit
}
i.sel* to serve any new wholesale cust:sers but would be willing- te discuss ete possibility when the situation arises. y T7st wholesale schedule 7R, also filed on Cet=eer 14, g ,377, is a modification of schedule 52-1 designed ec =ee-l
l. %. ,ar .a1 ;cwer and energy requirements, c mplemenging ..e' l uretaser's own generation or otter firs ;cwer puretases~
l ke sc:edule 52-1, it is cesposed o' a two-part demand
! and energy rate based on average system c=stst
the rate levels are different and : e demand cesponenthowever' s i i
stratified ts reflect differing prices for peak and cash - ..
,.u.ster =ediate denand. Eaca tariff Mas two energ7 rate blocks, e 32-1. wer bicc* is at*.aised aftse pure 4se of I y 775L brief opposing excepticas at 10. . U 1.$=
l I I Als9 h
-J .\
l
.. 4 . _...___.a. - - . _ _ -
i I
. ?
i l i Ocetat Ncs. I273-13, et al. , l 175 kWh per Uf of billing demand, versus 400 kWh under sc edule FR. .9 reover, schedule PR requires the cust: feer
= specify 1:s *centract decand* ca nsi !=r succeeding I
I l* tenst ;erteds. Os cust=ser's scataly billing demand is never less stan 90% of its c=ntract demand plus 75% of its nazi =u= recorded peaje demand. C:nversely, :te demand l c:arge f:e pu::sases acove 113% of centract demand is tigter and ::e cust==er iay not increase its cont:act demand for succeedisq 12 = cast periods by more than 1 f t wittout :te
.; c=nsent of n&1. the Company asserts : tat these design
[ differences toeveen scaedules PR and $2-2 enceumage partial requ ements cust=mers s increase steir lead fac. ors. Partial requi.rements cust:mers, including the cities of Icmestead and New say :a 3each, previously t=ok service u= der schedule 52-1 wnica, as noted earlier, was availatie { :s all cust==ars is nsi's service terri:=ry. With the filing of setedule PH, however, n&1 pr=;oses to li=it etis ser rice *
; :n stree cust:mers, te rays Ilectric Cooperative and the Cities of New *m a !ases and starxe. Ecmestead weich, like Fort i Pier e, has sufficient generating espacity to meet its lead, i would te excluded i := this serv:ce. y I
A1:touqd. not di:ectly at issue is stis pecceeding, it (' would sid ::e clari:7 of tis decisica to descrite :te f=u:
i= erchange ;cwer and energy services vnica nsi and several
!-' utilities reci;rccally provider under bilateral agreements.
er ::ansac.icas under tese agreements are voluntary and (t. of relatively stort duration. Rates are determised a: the ti=e of sale, tased on isc emental i= stead of average system c=s:s.
I, E=ergency interstarge service, dancminated Schedule A, ;tevides
te tuyer with capacity and energy in the event of a for:ed
! cutage, f:e a ;erted lasting so icnger stan 72 hours. Per pricing l pu:7cses, $ctedule A service is deemed to be- provided by the seller's designated fossil-fixed steam or c mmustica turtine generators and recovers only out-of-;ccket energy costs, y -6/ As will te discussed later, Ter Pierce began puretasing under schedcle PR on Mar:3 23, 1973. Ecmestead also cen.isues :s receive service by agreement of Darl. However, TPal asserts that it will ter=isate ser rice to bott, if .te C:m=issica approves its rate ctanges. -- -- -- - . .- y ender car.ain ci:==mstances, :te tuyer say al:eenatively return espacity and energy is kind wt: min ete cur:sa:
tilling period. - 1 l A170 i 6 l l
=! ,
1 1 1 l s - - - -. , . -
I II I I I
, Occket Nos. Irt-iS, et al. , --
t I > Scheduled inter:tange service, Schedule 3, pr:vides capaci:7 and energy f:e periods of less : tan 12 =catts, wnen the buyer La sucet of capaci f primarily due to forced ce screduled plant cutages. Os tuyer zust meet ste reserre recuirement associated wt:a $ctadule 3 service. Celivery of Schedule 5 power and energy cc=urs wnen is the seller's discretion no ispaissent l cf fuel stocks ce service to ceter custcmers would result.
- Capaci:f and energy rates are based en the production ecsts , of units.
ta seller's fossil-fixed and combustica tu:tise generating Ze== cay ister=tange service, Schedule C, provides f=r non-fi.z energy esetanges of sucet duration, pri=ed
' to spli: the savings between the seller's incremental casu cf generation and tre buyer's decremental cost.
firs 1 ster =tange power, Schedule 3, provides cap.3/ aci:f Finally, and
-, (- energy for peri =ds of 11 to 36 =cnths. Calike firs service %. under Senedule 52-1 and PR, this service is c.:tailatie -
durisg- est=eme cold weather and emergency conditions, is weics case ute demand charge say be adjusted. 54tedule 3 service is apparently pri=ed at the seseduled cutage rate, i
' Schedule L for foss2.1-fueled and c=stustica curaise capacity and energy (Extiti: IS). With istermittant usage Schedule l' s saf te et aver than et. sa cater tevever, t: apparanely a
bec=ses sore expensive taan $ctedule PR as the cust:mer's [ icad factor increases (7 . 254) . r7st. proposes to provite t .izz service es Ionestead and Fort Pierce- only under Schedule
,F 3, and has offered tres 240 m of Scaedule O capaci:f tarough 1380.
L, f. S o Initisi Oecisi m The basic issue of : tis ;taceeding as I (
} character:.:e4 sy ::e Presiding Judge is vaatter TPar. can l justi.'y a reclassificati:n of wncionale services based on the g % elationship of customer Icad to cust=mer generating capacity. .s heari g tais case, :te Jcdge imposed the b :; ten of pr=cf en T75. :s desenstrate that its proposed tariff medidicaticas and - restrictions were just and reasonable. Ee largely refraised f ca considering : e evidence presanted by' Staff and the Florida ~
Ci: es intended to descastrate that the preposed rest:i=:icas jff
=e price of isearchange ener;7 is characteristically deter 21 W. by T7st.'s generatisq units wi:2 higt ..
cperating c=sts, not ny base-Leaded nuclear er
; natu:a1 gas-fired unitz, i
l l l A171 \ .
,.4 + -ar 6
es.o. .m s.su- *_
z - l l l l l f (w. . .. . _ . . .- .. . I ; It i
Ccckes :Tos. Z373-13, et al . l i
, _ i
[ were part of an anticcupetitive pattern of activities l l ty ce C:spany, laadisq t: ward sonopolization of ete
; the retail ,cwer sacket.
Se Presiding Jur:ge concluded that 77si's proposed restrictions on eligibility for wholesale services were , l . fustified on the basis of differences is cost of service. l Ze agreed with the Campany that the Icad patterns of cust=sers with capacity equal to their peak demands I could he so eratic as en make T7sL system plannisg unduly I l difficult, warranting the cceplete exclusien of such I
~
cust=sers fr m waolesale service at averag6+ cost rates. l Se decided that incrementally-priced. interchange services, ' i described above, were acceptable alternatives for j cust=mers such as Ecmestead and Fort Pierce. Se Judge j
~
found that, interesange power could he used to meet their < hase Icad requirements. *at a icwer rate than under the i partial requirements senedule,' :sitial Cecision at 14,
, and suggested that these self-sufficient utilities c=uld )
pur=hase bulk ;cwer freie other sources because ??ti has agreed to wheel. He deferred to civil c=urts the ) allegaticas of these two cust mers that 77sL had breached I czatractual cbligaticas to serve them under schedule 52. I; Se Judge also fsund that the bifurcation of schedule l 52-L ists separate- 52-2 and 77 schedules was just and 1 f' reasonable. Moreover, he concluded that the C:mpany could change the availability ;rovision of its tariff to limit F wnclesale services to cust:mers named is schedules 52-2 and 7R. Sis was based en his assessment of certais fisancial, l operational a=d capacitf plannisg problems asserted by i ear notice of I_
". T7sL and his terminatica determination previzica that the two-{d is the schedules d. not assure that j !' the C:mpany would recever all capacity costs.
Se *udge dismissed the allegaticas that F75L's proposals .
. would have an anticcupatitive effect, based on a C:mpany -
l represen.ation cat i= had no interest is acquirisq sew ' retail francaises because of fuel probleas. Finallz,..he ~ sought to sitigate concars that r7sL would strictly ccustrue j its tariff limitations by reciting several of the C:spany's Laterpretations sade during the course of the proceedings, l but not added to the proposed .ariffs.
*= sum, the Presiding Judge approved each of the Crmpany* s proposed esasses to its weclesale tariff. aased en this, he also '
appe:ved tse pr posal that Ic=estead (and Fort Pierce) teceme 1 l ' isoligible for servics under r7sL's average-priced vnelesale ) races and allowed to take firm intercharge service only. J l l
)
l I
, A172 h
r
i l . . . 1 I. l
=ccket Nos. E273-13, e_t, M,. ,
Positions of .me Parties The ;csition of the applicant. T7&l, sas seen swamacazac as ce two proceeding sections of tis epision. It further states stat putlic utility obligations under the Federal Power Act are limited. However, we are tasically concerned here wie .te coligations undertaxen by F7sL itself is its schedule 32-1 tariff, which makes l waolesale service genera 117 available throuquent the Company's service territory, is contrast to the propcsed l limitaticas on availatilit-* of schedules 52-2 and PR. 9/ Finally, F7sL denies tat it has engaged is anticcupati.ive l activities, states that Staff's and Florida Cities' I allegaticas are largely irrelevant and questicas tei: application of the antatrust laws. L, -
'. r-Exceptions en the Initial cecisica raised by Flcrida
( . Cities are pecliz. Howevec, they say be simplified, triefly. t Florida Citias contend that the pe= posed tariff is ~ as attempt .o atandon service to the City of Ecmestead because acmestead is currently receiving full interchange j service and under te terms cf the proposed rate schedule
p could no longer receive partial requizements service althougt L it desizes to do so. Cities clais stat restrictions is the proposed twil and partial requirements tariffs are tana-mount to refusals- to deal is etther total or partial requizements servica. F7sL's partial requirements tariff.
t m they assert, 12- designed ts limit the sale of wholesale power. "is is ac==mplished by restructuring the sala of p partial requirements service en crtly stase systems whict r require such service to complement the issufficiant genera-g ting capacity or firs power purchases to meet thei: native I (* Icads and .teref=re does not apply to systems which nemisally I tave generation sufficient to meet etei: icads regardless { of the age or efficiency cf such generatiert. Bott Yemestead and Fort Pierce would be served only at interchange rates, i creating a price squee=e. l
]f To the extent the 7 residing Judge say suqqast that schedule 52-1 does not saxe wealesale ser rice generally availacle because service cent: acts may still te required, Initial Cecision at 8, this is not reflected 4 is the provisica itself. :uring c:=ss examisatica r7sL's j
rate desiqu w1: ness acknowledged that utilities wittis t ne C:mpany's service territsey, such as Ptt Pierce,
Jacksonville and Criando, were eligible for firm service
= der ce :erms of Schedule 32-L. See, inf i at 30.
Af ter all, :te purpose of :tas proceecing aas been s 1121 cat ; revision := certais named and existing l cust mers. Moreever, r75L tas is the past filed enezecuted service
agreements

weerr cust=mers have c =menced service.
A173 l ' t C> . . l 1 l
I, l l I :ocket :Tes. I278-13, el g. -10 f Cities contend eta: r7sa is attempting to deny l' ce sake L: more difficul: for uses to estaclima econcaic alternatives. Apart from the tariff proposals at issue, i this is ac==mplisaed by denying joint participatica is new auciaar generation, o7;osisy suai=1;any supported legislati:n, g and refusal s file or estaclisa a general rate for :: ass-stasion. Oey also state that F7sL has refused to su;;crt i a general integrated power pool is riorida. l . Oe C: operatives asseet is theiz' trief on escepticas i that the Isitial :ecision ignored thei.e position and
' relied escassively on F74L testimony. Os C:cperatives, i
which througa Seminole are planning base load generating i
, units, wi.E requi e partia.L requirements service is the future instead of scuedule $2-2 service. 3ecause . hey are I -; (- . =ct named in the PR tariff they are not assured of this w service, so cat these limitations deny them the necessary supply flezihility :n account for changi=q situations.
l Staff anegas several acts of sonopolization by F7sL. ' 1
' Staff states taac F7sL has refused ts sell wholesale power
s ce sunicipal utilities, thereby constituting a refusal
, l to deal pecscribed by United States v. Ctter "' ail Power Co. , I,' 331 F. Supp*. 54 (D. dian. 1371), aff'd, 410 c.S. Joe GJ 73) . i
this regard, it points :s an h.accric r7EL policy not .:n serve musicipal systems at wholesale, an F7sL refusal ts j serve Fort Pierce under the $2-L cariff, and the 11:sica icas I on ce availability ei the $2-1 and, 7N tariffs presently at .
issue. Staff views F7sL's demisance over ::ansmissicrt l r facilities and its corresponding refusals s wceel as bottlenecx { sonopolizati=n yrcscrihed is Cnited States v. Cttee "sil ?over i Co. susra. Staff citas esamples at (76L's refua: q :s wneel g (.* E:,d party bulk ;cwer s the Cities of Jacksonvine, Ecmestead, and lake Worth, and it asserts c at, while FPEL has very recently an cu=ced is :ceket so. E277-173 a new policy es
, ;ermit wheell=g, that policy is far t=o restrictive in terms of
rates and terns. Staff sees another example of monopoli:stica is T7sL's restri=tions en access to its nuclear -generating- units.-- -
Specifically, Staff asserts that saaner utilities do no: have ce individua.1 1 cads justify a nuclear usi: but, due is the ec=nemies of suca units, utilities say necese uncompetitive without access. Staff also anages ::ac TPsL has unreasonably
, restricted c=cedisatics, toch is ter:ss of ec=nemy excaanges , and power ;coling.
taen centends ::at TPsL has estan11shed barriers es entry is t3e fars of restricticas in its francaise agreements wi h susicipalities,.particularly tae standard tair:7 year ter:s. Ois is sc=urring, aceceding to Staff, vnile 775L I
l i saistains t';olicy of acquiring susicipal systeest acwever, l' T75L has not acquired anotrer utility is recent years. Oe Staff c ncludes ::a 77sL's proposed :sriff restrictions would I fursuer its sonopoly ;cwer is the relevant sackets, as defised by its econczi: wi sess, f
- A174 A>
f v e _m __ _ __.
i k l ._ __ _ . . . - - . j . l
ccxet :ros. EX*S-L9, ec, af,. '
-** " s rre! cr c Myr-- cM ute ecPct? Pcwct i
n o Relevant Marvees we begis our discussics of T7st's cared pecycsais cy definisg .he relevant carkets, wnich peceide a f:ameworn for determining t3e possible l existence of monopoly power, .he opportusities for com-yetitica and : e requimed creadth of any remedial action i ve say ceder, n o Staff econcaic witness t identified two broadly-defined product sackets as role-j vant =c :te investigation of use anticcupetitive ef fect
- of T7sL's pec;osed tariff restricticas. mis analysis was not c2allenged ty any ; arty and reflects FPsL's own con-a captuali:ation et its business. }0/ ne re.all sacket
involves sales of capacity and energy to ultimate consumers I( hy ver-ically integrated utilities such as r7sL and by
distributica utilities, ne bulk ;cwor 22rket isvolves sales of vaclesale ;cwor and energy to retail distributors
~ p (i=cluding the captive retail distribution centers of vertically-g integrated systems) by bulk power producers and suppliers.
nose product =arket definiticus are amply supporte<i t by .ae :ecced, and we adcyt them is our analysis. 1 ne bulk power product market was furster disaggrega ed by j ter Staff wt =ess ists five summarkets essentially consisting of l [f !=11 requi:ements ;cver, partial requi ements and coordinatica services, cc:sponent bulk services, sales at transmissica vol-q[ tages ec ultimate consumers and transmission services. 6 m so dci=g he attempted to demonst: ate the inter-f caangeacility of fiz:s full requirements power with 'u=tundled* hulk power services vnich may se purcaased f ca several [! sources to seer the requirements of a retail distributor, is l conjunc.ica wi.h generacica owned by tmat dizeributor. mrile we do not dispute the validity of cis sutdivision (
/*
of the wholesale sacket, a : ore practical cathed of analyzing that sacket for purposer of this pecceeding is :n separate bulk power transactions into discrete firm requirements and ccordisatica su= markets. Essentially, this parallels I tae distinction between r?sL's scuedule 32-2 and PR firs
' services on the one hand and its isterchange services en --
the etaer. TPEL's firm services are aca-isterruptibler priced on the basis of average system costar designed to meet a l l 10f m a 1975 presentatica :s the Company's fenice Management g Cou=cil, T7sL's vics president for strategic plannisq su=- divided ::e iczpany's activities into dise:ece bulk power I and electric service tusuesses ( E::ibit G:*-3, at 3). l l . A175 l l
}
s - I v e
~
l i l i , l fj
\_ l . --
l t
ocket Nos. Z371-L3, og _al._ 12 custcmer's base, isteemediate and/or peak inad requi ements:
and consisuously avallanie over une isdefisite future. Can-
; , versely, interesange services are isterrup*N es isc ementally priced on the bases of oil-fired generation ecsts: ancillary I ts tulk power supply and not practicable sources of base I ' cad ;cwer; and of 11mitad duration. Cepending on the feasibili*y to ce custsaar of self-generatica or supplementary firm-power l pu:: ases, partial requi ements service is reasona=1y ister-caangeanie wi 1 full requi ements power to meet a retail load.
I Such istarchangeacility is a requisite for grouping
.I products is a ccamon sazzet. See, United States v. du Pont &
Co., 351 7.3. 377, 393 (1356). 7 4 course, f76L did not :seli l EItisguisa between these two firm services is its 52-1
; schedule price to this case. However, interchange services i cannot be used to sustain load recuiremen a and say only T he used tz augment other primary sources of bulk supply.
s particular, F75L's wholesala cust:mers do not regard
',- Schedule O fi:2 power as interchangeanle with SR or 71 fi:n i e power and the C:spany desc=imes taea as different services. .
i . F7&L sells electric power and energy to sost of the I heavily populated areas ale =g the aastern and lower western I coasts of penissular Ficcida and porticas of central and [ p seeth-central Florida. Aithis or adjacent to this. service
, terri.ory are 22 smaller areas served by municipal and coop-j erative utilities. ne Staff wi =ess identified cis composite area, . c=mprised of scue 35 Florida counties, as the relevant gecgraphic
[ sarxet for tota retail and wholesale pe= duct markets. nis
< was primarily determised f:=m isformation in FPEL's 1373 L assual report. Se service- territories of larger borderiss ; utilities 11/ vere escluded from the retail geogravnic sacket because of de unavailamility of waeoling service l is.c ce F75L service territory and the esistence of retail I territorial allocatics agreesents with 77tL weich prohibit
(~ I - retail c=mpeticica (Izhihit GT-4, at 8-9) . 12/ Sia is [ not ts saY that cespetiti=n does not esist E the relevant retail sarxet. As we discuss later, there is significant I c=mpetition, primari1Y francaise and yardstick c=mpetition, 11/ Ficrida Power Cor;crati=a and Tampa Electric C:mpany. 1;/ nose retail tarritorial agreements are net at-issue in this- - -- a pe=ceeding and we espress no episica as to thei: = erit.
hey requize. approval by the Florida 7ublic Service Ccamissica and have teen :pheld ca fudicial review. Starsv v. wave.
217 so. 2d 334 ( Fla. 1363 ) , eset. den., 335 J.J. 909 l (1369). Is 1974 this autaces:7 wa M zpressly given t: se a Florida C:maission. S e,e,, Florida Statutes Annotatec I $356.04. .
.' A176 4
C>
.. w i.
kj l , . _ . . . _ -. . I i t f' Occfret Nos. Z378-19, et, g. 'U' and F7st itself has recogni=ed tsat its neighborise utilities are tota cust=mers and competitors ( Exaibit C-6, at 11. ru.r termore, even territorial alaccation agreements are sunj ect to modification under limited ci:c=sstances is pec-caedings tefore the Florida Puelic Service .C:msission. Peoeies cas system v. wason, 137 So.2d 335 ( Fla.1366) .
._e weelesale bulk power geographic sacket was similarly ;- constraised because relatively few wnolesale transactions are ; sade ac:cas its boundaries. 731s geographic limitation applies - - as well to the bulk ;cwer submarkets, particularly the fi:s -l -
requirements submarket, described suura, because of wholesale j territmetal agreements and the assence of fitz power transmission
; services. Altacugh there is a pocantial for ecupetition is the l
wnolesale market, actual c=apet. tion has been ishibited by F7sL, ( , as we discuss below. We are not requi ed to remedy that situati=n

now. Inis episica reflects cur concern that vbolesale sonopoly
( ' power not be used. to zaistais or enhance- a utility's retail . sacket position. i
*snocolv Power Monopoly power has been defised *as the asility to cont:mi prices or exclude competition f:ca a
relevant sacket. Cnited States v Al= sinus Co. of America,
! 148 T.2d 415 (2d. CA:. 1345). It say ce rescair apparent is cases waere prices have been cont:o11ec ce c=mpetition 1[ demonstra31T excicded; however, such showings are not essen-l tial. Amertean "ebacco Co. v. Cnited States, 323 U.S. 781, j 811 (1946s. 3,j/ isstsea, :te enaractaczat:c test is based i en a firm's saare of the market, and a predcaisant share
[ warrants le isfarence of monopoly power. Cnited Sesens v. L Crinnell C:r-r. , 384 U.S. 563, 571 (1366). Is cn :sc sestes v. c c er -'a u 7 eve r Cs . , 331 F. Supp. 5 4 ( 3. .w.isa. 13 71) , att'd, 410 U.5. Jie (1373), an isference of monopoly power was =ased (. cn a findist that the defendant utility possessed a 75.54 saare of the relevant =arket. We find taat F7sL has sonopoly ;cwer is these relevant sackets, as determised by
,' Or. *.aylor is unrebutted testimony. !ased on 1976 data, TPSL has been shown ts possess a 764 share of the retail sacket is tarms of cust mers served.
Its clesest rivals are the eight sunicipal-ctilities-1.w..d vitais T7sL's service terri.ory wnica generate a portica of tasi: ;cwer requiremen.s.11/ Callectively, these eight.
~ . . .
I . 13/ .* enopoly power can be esercised as well th:= ugh suttle [ . _ _ . . effse.s s prevent c mpeti.icn f s developing. Onited Statss v. criffi .3 A. ruse rent Co., 324 0.3. 100 (1344). 1,1/ he eight utilities are Florida Putlic Ctilities is l Fernandiso, fort Pierce Ctilities Authority, t e City of Icaestead, Jacxsonville Ziec.ric Authority, City of' Zay ,*e st , lake Worta Ctilities, the City of New Smy na 3eecs and tae City of Starke (Exhibit GT-5) .
; A177 Y
D - I
i ( j .
ocjces 3cs. I273-13, et al.' 14
systems have a lit share of retaib cust:sers served (Exsi-i 21: GT-3). In 1975 F7st.'s share of total kilevattacurs
; sold at retail was 75%, cespared to the collective 131 sold
by the eignt generatisq susacipals. y
~
he statisti=al =easurement of monopoly ;ower adopted in Cnited Statse v. Ctter "sil Power Co. , suera, was *he
;ercentage of. =cwns ser rec at retaaj. ws: sin use relevant ! sacket. FPst. provides retail ser rice to approximately 904 of the ccsmunities is the relevant sa ket with ;cpulations ! of ever 1300 people (Tr. 1567). W
, L The isf acence of FPst.'s sonopoly power is the retail i market is strengthened by several additional censiderations.
-a ri:se, the existence of territ= rial aliccations obviously ,. p provides a very effective barrier to new retail c=apetitica y 1::a existing utili ies. Second, the substantial cost of acqui:ing utility property at the expi ation of an existing supplier's frascaise could be a barrier to ecupetitica for existing firsz and new entrants as well (Exaltic . ,< ST-4 ) . a:31::1, the absence of wheeling services that would L allow a utility en provide retail service to a noncentigucus ! area would st=p any retail c=:rgetition which ever=ame the first two barriers. W :s sum, these high sacket entry 1: barriers c=nfiz:r. tae taference of sonopoly power based on L
i 1
-! y F7s!.'r share og the relevant market has grown seme-t vaat between 1366 and 1375 fr n 73% to 75% of estal i retail cust:mers and frez 74% to 731r of retail sales
("":.1364 ) . 15/
~~
Cf. frewn shee Co. v. Cnited Statss, 370 U.S. 294, TJ7,(Well, a case crougns uncer 57 of tue Clayton Act
-, where sonopoly power was seasured en the basis of cities is the relevant market wi.a populati=ns exceeding 13,000. Is Cit r of Mishawaka v. American tieetrie Power Co., 465 7. Supp. 123, 1315 (N.C. ac. M79), .se cour t found sonopoly ;cwer wnere the defendant served at retail 89% of tse municipalities is tae relevant sacket. ; y Q, Sosten I:!isen Co. , ocket 'ros. E-4137 and EtU.002 creer aevers ag La Part and Affir=ing is part Isttial , .
ecision, si=eo at 3 (Oecastee 7,197E), weere tae
; C:smiazion dealt with a transmissian rate for retail service es a accc=ntiqueus territ=ry. , , , , , , , _
l l .
/ A178 s
1 l
l f t ' l
~
j Occke soa. I273-13, el M,. nsL's zarket stare. Censumees 7ever Cemeanv, 6 NEC 392, 1313 (1977). meeever, en:ry carriers ensance the opports-l,
sities for explai.ati=n of tais ;cwer.
. Alcougs ce record does not contain precise statistical i
indicia of USL's saare of the wholesale power market, it is clear taat the C:apany has scampoly power over hulk power
*l transac.icas as well. OsL's saare of the retail sarket is a l
suitaale base on wnich to assess its saare of the waelesale sacket, because the bulk power vnich the C apany prcduces en
, serve its cwn captive retail service tscritory sust he included , as part of the wholesale sarket. Cnited states v. Alu:minem Co.
, c of Ameries, sucra, 148 T. d at 424. ::.us, f7tiL possesses ac
-( least a 75 4 scare of the wholesale market, to watch must he l '
l
. added ce C mAny's eclesde sdes u suicipal and cooperative utilities wit in the relevant market. Se caly other supplier -
of wcolosale requirements service vitais tte relevant market l is the Jacksonville Electric Autacrity whica supplies its
;. cwn distributics system, plus the distribution utilities ; is Jacksonv111e 3each and Green Cove Springs.
I I Moreover, i=cluded is nsL's hulk power resources are j j' virtually all of the nuclear generati=g capacity and sub-
, stantially all of the gas-fired generacica availanie wi.hi=
[ the relevant sarket, each of wnica give- the Ccapany a signi-i ficant edge is the prcductica of low-cost power for base- - icad requirmnents. Oree of -he . fou operatis; nuclear , b plants is 22e State of Florida are solely owned by DsL i ( n . 338, 1515). W Culy New Sayr:a Beach and the Cooperatives, ac.isp througa ces: generation and transmissi=n subsidiary, have gaised direct access to nuclear generation, through C~ small cwneessi; istarests is Florida Power Corporation's l } . nuclear plant. Ce C=spany does not disputa - -- - - - that its Icag-ters, =encurtailamle supply of natural gas l gives it an advantage crer musi=ipal generati=g systenst 19/ ~
;' .. . however, it asserts that it should be alicwed to retais . this bargained-for advantage for sales to esisting custeners - - -
(2. 235) . 27 ct:sparisen, municipal generating units are-small-capacity, ci'-fired steam or isternal ecm=ustica machises 4 y h, Mr- Pieces Otilities Authert--r v. Nuclear Recula L.. . C:mmissten, f.;c , 3.C. Car. Nos. 77-i3;J anc 7-2131 L.tarcs 4.2, 137 7I. 19/ Tee ener:11 r, feert-e !?ilities 00-mission v. mC ,
~ F.2c_,,,,,,, $t: C;r. dos. 7 7-231 anc 77-2371 (. tare 23, 137')).
l A179 4> . C 9 e
i i i I
! =ceket ses. I273-13, et_ _al. . is .
walza characteristi= ally have high operatisq costs and are ill-suited to provide haseload requizements.10, / Finally, we note that FPST. owns Sin of the transmission lines wicia the relevant market with operatiss voltages
- of $9 k7 or above. The Jacksonville Electric Authoritf owns the nest-largest share, St ( Exhibit GT-5 ) . tese are ce facilities over which hulk power is transported withis the i relevant sarket and FPET.'s ownership share gives it . *st ategic dcaisance" over t ansmission. United Semens v.
Ctter Tail 7ower Co., suora, 331 F. Supp. as 60. As noted above,' F7tL did not undertaxe to define relevant sackets and did not challenge the analysis of Staff's econcalc witness. Isstead, its economic policy wit =ess challenged the ( hasic relevance of st:uctural analysis to regulated punlic utilities. The C:spany's thesis is that regulation preven s a utility having sonopoly power f:ca ccatro111:g prices and escluding cwtition f:cm the sarket, i.e., ce i=dicia of sonopolisatica under Section 1 of the Shecsan Act:. 21/ Eevever, this is act really a rebuttal to Staff's po sitEIn. Isstead, it simply confirms ce role of ee Commissica is elMbatisq ce modifying rate provisions,
,I desier:ed be a utility, voich would otherwise facilitate pr:ce c=nt:si. or esclusica of competitses. 22/ We helieve the h idea cat regulated utilities are lasune f:ca charges based on
( the- esercise of monopoly power has teen thoroughly discre-p dited bT Cnited States v. Ctter Tail 7 ewer Cs. , scera. AC""ONS CF COMPT""*NC w c. !""!3 ~4T'"YT?T "T! 1252'mN"' wA.752-3 f, :
!stredue-ien :s case: store the anticcapetitive I
effects et wnolesaAe rate sch edcles are at issue, we anti-cipata f=cusi g primarily on saset=:a1 analysis to sessure [c the esistance of sonopoly peur, and on the suspect rate previsions thesselves ts deters 1:e their effects on the 10/ Fl=rida Cities' brief on esceptions at 76-77. See, Estihits 13 (2Z3-C) and 41 (JW-1, at 3-4).
*d/ .F75T. brief cyposisq esceptions at 43.
2,2,/ Clearly, regulation does not insulate electric utilities.
~ ' ' ~ ~
f:ca cperation of the antitrust laws. Canter v. caerst" Idison Cs., 4:3 7.3. $73 (1376) see . C n st==ei Pever_ powee ces=ar:v, scura, 5 NRC ac 13 D 11. ace a uas C.;= mass 1:n prec1w:ec *:02 consifering antitrust law
~
and policy. Calf States Ctilities Co., Occ.tet No. . .. . E276-416, C:fer Approvug sec.lemen su=tect t: ._ i Canditice (Cct=cer 23, 1373). A180 k .
b
.-a. .,se - eo g
I i h _. . . - - - ,
. \
i . I
! =cchet sos. I273-13, et. d. 17 ! I enhancement or saistanance of monopoly power. II, f=r l ' example, a rate provisics would weaken a competitor j I or raise the entry barriers to a market where competi- 1 tica can exist, esat will likely be sufficient evidence +
of anticcupacitive effect to warrant its elizisatica or modificatica - assent a weigatier snowing stat t2e provisica serves scoe countervailing public interest. Citr o* '3"a-d-ebure v. F7C , 498 F.*d 778 (3.C. Cir. 1 i 1374); sor . een Nae: alTs Co. v. _QC, 399 F.2d 953, 971 ;
. .. (3.C. C.:. 1364). p Calike presentaticas is civil and crisisal actions i to enforce he antitrust laws, it is not necessary is our i deliberations to have- an estansive record on- the past conduct of a utility towards its cust=mers, or its intent is establisni=g or maistaisi=g a restrictive rate provi-sian. See, Missouri Power s tieet Cemeanv, Cpision No.
31,3127 at 3-ia (Cc:ccer 27, 1374). h Everr rate ~ i case is which anticompetitive eff ects are alleged need not tec=me a full-blown antit=u.at proceeding. { I
.I *y Is rate change preceedings such as this one, heard undec Sectics *33 of the Federal Power Act, the appli-l, cant hears te u.Leimate burden of coupersuasion.
[ However, Staff and intervenors say be required to i come forward vita scue evidence to focus thei: ( allegations of anticempetitive effect, and to ( }' relate that evidence to t2e targeted rate pr. 71-1 i sica. See, Northern California 7ower &cenc-r v. l E , 51 U .14 134,tc.C. C.:. 1375). (_ f:- W Eowever, store say be situaticas is which tha rate proponent say demonstrate the isaccuity of a q=estioned prevision because, for example, the utility has a general vueell q .ariff, - --
.' or undertaken other actions vnich weaken i or eliminate its sonopoly power. See, New t= eland Power Pool, Cpinion No. 775, sizeo""at 33 l
, (Septan er 13, 1375), aff'd sub. nes., !*unici=alities l of Greten , g d. v. FUC , 3 7 7.T5~1296 (D.C. C. . 1373). i 5. 1 9
Alst l
J> - ( _ e-oee - -=
l
\ 1> .. .. . _. . . . .. _. ,
I . i
! Oceket : fos. I173-L3, et al . - 13 Iowever, as noted sutra, at 2, c=nduct say to . A relevant to our assessment of the fustification for and' ! purpose of a service limitation. 2 the case before as a full record has been cespiled and we are !== ter aided by a recent decision of the Court of Appeals for the Tifth Ci uit E/ is !=117 understandisq the l antic =mpetitive effects of T74L's rats preposals. 25/ ~ ?.oceover, the documentary evidence of Staff and the Cities, largely catained 2:=s C:spany files, is frequently inc=ngruous with : e testimony of Campany witnesses.17/ Iy and large the - ; testimony of witnesses presented by staff and the Cities is a l
~
summary recapiculation of hundreds of pages of correspondence
' and inter:a1 c=mpany documents c=ntained is =ver 200 extitits.
l
( nis evidence has been of significant assistance is prooi=g the effec.s of FPsL's alleged need to restrict the availability
. of service under schedules S1-1 and PR.
C Se Campany's reacti=n to the volumi=cus evidence - of the Cities and the staff relati=y to anti ==mpeti.ive c=nduct is essentially a. demurrer. r74L asserts stat this evidence is i relevant ts its pr posed tariff
.- :odificaticas and that issues of anticcapetitive conduct- - ~~~
e should be raised is other f= rums. While we agreT tat f the C =missi=n has no authority to enfor:e he antit ust laws, this d:ec cat sake the evidence irrelevant to tme [ formulati:n of :emedies well, wi:.hl= cu: authority. 13/ i l [ , .h . {. g Cainesville ~~d ' '* des tecer==ent 7 Florida 7 ewer s
en: Co. 473 F.2 IS L ( 3 :s CA: . 1978), cert. c e n i ed ,
(- - _,_ G.4. , 99- 5. Ch. 434 (1373). n as opinion { N was issuec after Judge Wagner wrote his :sitial Z:eci-sien.
,i,ff Sis evidence c=nfirms our c=nclusi=n that ??sL has , =enopoly ;over i= the relevant markets. Judge Wagner was also c=ncerned by what he caaracterized as 'disturt--
ing episodes of riorida Power a *igt: Campany's past conduct wei=h raise serious antitrust questions.* Sitial ::ecisics at 5. Zowever, time constraists led him .s defer to the C:maissi=a or the Justfes Copartment. I y g , Caiseretile 7tilities teear mant.7. Fl ert:fs ?ev e r t Lacce Cs., suers, 173 f.2 at 301, acts 14.
-$/ Federal ?over C:=sissien v. Cer'.vav Car:. , 425 7.3.
171 (1376); ci-v of 7.- stur 7. ??c, 237 F.2d 741, l e 7!! (C.C. Cir. 133o): 7ac t:= cas 7 d tiectric Co., F7C Pec$ect :res.1988 anc 1733, s:seo at ;J-il, ceder of April 1, 1375. I l I b d i F , A132 p l l - .. ..a {
I l d, I 8 I I l' 13 - i := cites :tes. I273-LS, el d. 4holesale Market civisien Dsf. has been f=und to have engacec .a a er se viciation of the Ster =an Act my ==sspi.risq wi E"?13rida Power Cseparation :s
ditsde- ::e riorida wnolesale power markoc. In Caines-vt11e ceilities Seeart=ent v. Pierida Powee s 5: n-t C:::anv, ijf .se Cs;;ea states Caur. at Appeala :=r ::e i;4:s Circuit reversed and remanded a district court j judgment, based en a review of ste evidence wnics *: m-
.- ;elled" a findisq that de two largest utilities in the state of Ficrida had c=nspi od to avoid selling wnolesale power .c c'estomers is eacs other's ser-rice territ: ries. E/
c This case arcse f::a efdcets by the caisesville, riorida, susicipal utility system to end its costly ( operaties is isolatica by i=ter ennecting with either Y?st. cr Ticrida 7cwer Corp. 31/ 2.9 Court found dae begissis; i: 1965 Gainesv111Fs effsets to ister:ennect . and coordisate its operations were set vt.a a f oist se:ategy :s i duce the sunicipal to interconnect with Florida Power Car?., en ;cecondition that all three
t. systems agree to a retail ter:itorial allocation.
Carresposdence sent to Gainesville and to the Federal I Power C mmission, rega: ding as inter ==n=ection applica-i; tica under section 23 (t) ed the Federal Power Act, was F rautisely ;.ssed between 77st. and Florida Power Corp. wita [r the understanding stat c=r.cetted action was centemplated and i=vited. 11/ [ l 6 J,9_/ s3y;a,, acte 25. Tie record is this case =ntains a nu:.cer of exhibits fr:s that antit:ust pe=ceed.sg. { 30/ cainesville ceilities cecar =en: v. Pierida 7ever
& ;I:n: Co., su=ra, 173 F.2d at 199, JGJ. Gaises- ' v1.11e anc florma Power C:rp. reacted a set lement ~
i before the actica was teisd. Jy g, cainesville :tilities Oe:ar*= rent v. Florida Power Cer c.stien, 40 f ?C L2.27 (1364), reversec, 42.5 f.2c 1134 t.ita Cir. 1970), reversed, 402 G.3. 515 (157*.). i -32/ See also tas cen: rent decree is Onited States v. ITIrIII~7evar Cert. and Ta==a Elac :::.C . (1371 ace Cases ga:a. iLo- nio .t . : . ELa. LhiG6 . . . G e i e . ... p A183 k . s e a T m m- w be .e O
\ . l 1
. l t
l t Q> . . .-. - I . l lllcchet :Tcs. Z3*3-13, el 11
l
. Se court was particularly impressed by the dccuzen-tar 7 evidence weich demonstrated a *routise* course of -
conduct spannisq two decades waeracy each utilit7 would refuse :s sell power to esisting wholesale customers of
te other or :s municipalities served at retail by .te other which were attempting to es aolish new dist:ibutica l u.111.ies. Cn remand, the case is once again before the district court for precise determinatism of the effect l i<
of the wholesale territorial allocation on Gaisesv111e's r' diffic=127 is chtaisisq an intercensection, plus attendant damages. Catil the trial' court enters its new judgment, l we stall not kscw how F75L is to be enjoised f ca engaging is anticompetitive conduct against municipal utilities e or di ected to remedy the damage done.
'~
g-Accuisition Effects and Franchise cemeetition == priscapal 4Alegataan ieveiec against (PEL's tar:.If limita-ticas is that by restrictisq access to vaalesale ;cwer
i the campany may thereby iscrease its d'esisance as a retail
; supplier. Se record is richly detailed with evidence t . of retail competition es serve entire ccamunities between
F7st and existing sunicipal systems.
I F7sL's fi:sc attempt to acquire the Lake Worth util-I itT is documented is a letter to TPEL employees feca the Ccapany's *4est Paiz Seect Division Manager, dated June 13, [I 1958, which sought 'a. list of your relatives and *:iends was live is Lake Wo-** * ""*e District Manager proposed i to send these sTapathetic samtars of the ccamunit7 isfar-
! sacion eencerning a fortteeming electica on a proposed- -~
i 30-year lease- of the municipal system :s T76L, where a 3 successful vote would ' assist us is our negotiaticas "ce ( ceter sunicipal systems" (Exhibit GT-34, at 541. Liter-ature distributed to Lake Worth voters premised better [ , service and an immediate rate reduction averaging Ica r , ;1:s- -- an aggregate reductics of $14 million over the 30-year - e lease. Although wissing a sispie majority vote, :te elec-I ' tien failed :n att:act the requisite sat voter participa-tica and the proposition failed.- Efforts wee renewed
. is 1968 tt:cugh a Lake Worta property owneer however, prelisisar7 discussions were carsisated without actictr. ~~
FPsL offered to fursisa fi:2 power to the New Smytna 3each municipal utill:7 durisq the vistar of 1923, provided i the Ci:7 C:smissics would agree not to ceder any additicnal _ generat:. q equi; ment and enact an ordisance wnica vcul. Permit dispositics of its electric utilit7 on a majori:7
i e
. A184 -{p .
0 l l
l ( _ . . .- - - 3 , I I
.cckat nos. Z2 3-13, g d. .;-
3 vote. 33/ rysL then planned to negotiate a lease of he
- utili:-T:te following sprisq and summi: it to the voters for approval (haihi O-34). An April 1959 report to
C:mpany sanagement stated aac 3e proposed acquisition
*cer.aisly provides scue distiscs advantages other em i
just taking over a municipally owned Iregerty.' O.e
,t report noted ::= considerable possibi.ities of indust:ial I
and residential develcyment is the area (haibit GT-34, at 73). O.e C:spany's ac ion is 1959 did not win it a lease
of the New Spa 5each system (Dhibit C-34, at 61);
hovrever, T7sL tried again is 1965, sendisq an iscuiry to l j ( : e city C maission weica was virtually identical to the letter sent to Fort Pierce is May of t at year (Exhibit C-34, at 75) . W F75L Docutive 71ce President R. C. . Fullerton descr.med the ptospect of taking over the New i say:na teaca municipal systes to the chairman of another l ;: i=vester-owned utility as semething the C:mpany viewed -
wits satural enthusiasa" (rzaihi: GT-34, at 75). Also I is 1365, T7sL purchased f :a New Smyrna teaca all of its elect:ic utill:7 facilities is the City of Edgewater b vasee it had ;ravLously pravided eetail setvice := caly a portion cf tue c=nurunity, k
6, Intermittent negotiations occurred between F7&L and Q~ New Wa Beaca is 197CL and 1973. Is 1974, the Campany
' devised an internal ;1an for acquiring the =unicipal utility- (hhibit GT-34, at 32), and sent senter canage-('b sent representatives to discuss an acquisition :;roposal witn the city utill:7 ccumission, estisatisq a rate
{q reduction of more than 3600,000 under T7tL ownership.
. company management indor=ed the utilit7 censissioners
ac ??st cocid provide cheaper and more dependamle service because of its greater power plant capacity and i'
& Cha:acteristi= ally, Florida municipal charters recuire t=e appr= val of g eater than simple majorit7 of voters for disposition of Iccal utilities. Sisila: terms , were ext acted f::a the City of Cloviston in 196!.
see the 1.sitial decision is Florida Sower s tient E , i17 F.7.C. 560, 573, adertec, 27 (Pc 344 iiss;),
- E# med tub m ., Ted e r si ?cver C: mission v.
Flee:ca Power 6 *isse ca., 404 0.4. +$a ( .372) . J_4/ sfra, at 22. I, A185 4> - I
h . _. _.
~,
e
.ccxet :ics. K373-13, et al.~*,*
1:a diversity of fuels (Exhibit GT-34 at 34). Anotter acquisiti:n ytesentation was made to the utility c=mmis- ,
sica is 19*5, at ce CA:7's request. i F7sa sougnt en acqui e ::e Fort Pierce utili:7 is 1365 ween the su9ect was raised my a city c mmissioner at a seetisq c=nvened :s fiscuss a possible ister==nnec-tica of tae- two systems (Izaihit GT-59). te response of :=e C:apany's division sanager sensioned tae i=ter-
,i c=nsectica only as an interia arrangement, concentrating isstead on the sale or lease of the municipal a:111:7 '. F76L stated tat any lease should te for a ;eriod of - 20-years :s coiscide wi.3 the ters of a standard electric
c 2:ancaise. *: . return, tse C:mpany offered to immediately ister:ennect :te systems, a;;1y r7sL's icwer retail rates
( and ' lend its !=11 support toward at.= acting isdust:7 to
. tte area.* Fort Pierce taereafter isvited lease or sale ;rc;osals; however, negotiations sus;;ed stort of acqui- . siti:n.
t I. Acquisitiert was agai= raised by rett Pierce officials is Mar == of 1976. n e si=utes of a seeting wt:2 T751
; senior management officials record taat == City felt that a dispositi:n of 1:s c:111:7 system was necessitated by an ' amility :s ez;1mit the economies of scale is electri-city ;roductica:
f
,I .tr. Skinner (Fort Pierce's Chief '.gisser!
said we this* its ver7 efficiottly c;er-
-g' ated. We realize the big pecoles facing ' us is not the higs cost of fuel or te isefficienc7 of our system, mut : e 1:effi- !, ciency as ccupared vita put.isq oil ists
(\ a larger toiler and turbue. O at's weece [. we' re getti:q caught short on te heat i rate i=put to the toiler. We have a pr clem ccupetisq with r75L favoratly :: day because it represents around $5% roughly of :2e ess; of doisq tusi=ess, the ecss !se fuel oil. (Izaibit GT-31.) titen fort Pier == i= qui:ed at stat se=e meetisg amou: .te pu:22ase of 33
of tase-Lead firs power, ::e C:=;any l responded taa it did set wiss to sell fi.= ;cwer unless
e ;u::tasar could rect;tecate with sales of fir = power
[ , tis would require fort Pier:e to sais-i to ::e C:spany. tais generati q espact:7 sufficient c :eet its cwn 1:4d. T751 also disecuraged pur aase under 2e 52-1 se edule, i A136 f i ) . O
,<*Vn',___,, _ , _ _ __
l tk h n . i. I l Occxes ses. I275-13, g d. - :: -
. indi=atisy .24: it was not really fir = and 'awfully I esponsise* ( Ez=itit C-31, at 17) .
1 i
' 'e C:ssany continued to f avelop an acquisitica ;ro-posed :: cuqacut 1375 (Izsibit C-34) . Iowever, snesu-i stasur was apparently dampened when Fort Pierce inter-l vened is proceedings before t=e :ruclear Regulatory 1
C::esissica regarding F?sL's pecposed Scuta :ade nuclear
. generatst.
F7sa proposed a sale or lasse of .te Icaestead
, u.ility is 1976 ween its ;cesident met wits city cifi-
[c . . cials em discuss Ecsestead's request for a retail ter-titmetal agreement, an emergency intere nnectica and (L wnolesale pur:2ases (Izhibit C-18, at 1). :s 1975 the Ecmestead City Csusc11 discussed de topic with TPsL: however, =egetiations were apparently not cantinued. 1
* . Se reened isdicates cat acquisition of the 7ers
[ ' 3eae: utility was ==csidered by rPsL is 1957, 1358 and 1959 15j tereafter, a sericus effset to acquire tha j 7ero Beach system was undertaken is 1975 which cuisi-
, sated is approval of the sale by the City electorate and an application n the Federal Power C:mmission under b
Section ::.T of the Federal Power Act. ! sternal sanagement [ 6 estrespondence concessisy isplementation of the acquisition by F7sL suggests that 7ers Beaca would te viewed as a [ belivetter by ceter sunicipais thiski:7 of enterisq ce j leaving t=e utility busisess: Se impact potential of the vero ( 5each acquisiti=n on the franchise election is :aytona Beach and otter { Municipal operations such as & Pierce, Ecsestead, et=. = axes at
! userative c:at we not under achieve with our vers Seach c;eration. (Emphasis supplied.) is/ . _
Af ter hearings is Oceket :!c. -9574, tte vero teach acquisition was 4;;reved by an admisistrative law judge en ge=unds, advecated by T75L, that :e municipal utility c=uld so Icager efficiently generate its own power require-i seats a=d that ??s; would pr= vide an ec= nemic sourcs of recall supply f=r .2e citi ens of 7erc 3eaca.' tis c=n-f li/ Iztihits C-34, at 74: C-5 : and C-42. j 16/ Staff Exnibit C-14, at 1. t' e
, w ~;
I
.e
s l ( . _ _ . . . i . I
! .acaet ses. 2:s-ts , e2 41,, - 2 4 -
trases with tae finding by the Presiding Judge taat vero - Ioaca was a 't uly excellent" utility with outstandisq l
. growta potential. see, Flortfa Power s t.iehe es., :oczet l
No . E-9 5 74 , :nitial""I'lling anc Cecer on inases ; and : (rectuary 5, 1373). However, T7sL taereafter wttsdrew its application is early 1973 ;rior to the c:amencement
. of a fisal phase of sne acquisitica preceedisq wnica was , to censides ::e possible anticcupetitive effects of :te preposal. ,f '
s summa:y, the record documents 20 years' worta
. of franchise competition between F75L and the municipal % utilities 1ccate:1 vitais its servicar territory. At various times F76L mar ;rcaoted acquisition or willingly - received anni =ipal proposals. .uc s t , if not all, et ~ , (~ those incidents occurred wcen the =unicipal systems A were arrangist new hulx ;cwer supplies from tse options 3
of self-generation, wholesale purchase f:cs ??sL, and .
' recall puremase f:ca r7sL after f:antaise disposition.
The C:spany has not succeeded is many acquisitions, l' . because tse municipal candidates solved eseir supply ) ' proeless by adding generation. Iowever, the record j st:cagly isdicates taac self-generation is becoming less and less attractive to the ;cist waere r7sL's I witness Gerce bas described small scale generation as I an anachsenism. Sinco F75L controls tae remaining
}
two options, JJf we conclude taat its wnolesale sonopoly powee can only isc= ease, and, thereafter, its retail I t power as well. See, Borouch of tilweed ci v v. Pennsvivania 7ev E Cs., 4e1 E. supp. 1242, 1246 (4.D.
74. 1J73).
}
i ( Tae Presidi=q Judge expressly accepted the C:spany's representation that it was not isterested in acquirisg Iosestead or Fort Pierce because of capacity pecolems and operating difficulties. $1=ce we fisd tae premise of tais reyresentatton u=ccaviscing, js/ we would be resiss ts wholeheartedly accept its conclusion. :s any event, it does set overccme the weight of the evidence to tm. eent ary. 3y
))/ As discussed infra, at 31, musicipal ;uremase of entitlements = 1arge generatisg units constructed by F7sL does not currently appear to to a viaale option.
i; i IS/ Infra at 34-37. ._ . . . . _......_... l JJ/ Alternatively, it appears team the riorida Putlic Service C = mission could requize F76L to provide retail service g
. if tae cust:mers of a municipal utility voted *.s dis-band operaticas. Se,e,, Florida Statutes Annstated, $366.03.
A138 I r s
i (
s. .
l ' i Occhet Ncs. CL73-L3, E d. 23-7etential ',csses of ??sneMises ".*.e C:spany j appears weA. aware of :..e relataanssi; terween its waelesale sales to municipal utilities and its amility l to retais esistisq retail franesises. Is .w.arca of 1377, a sartet development presentation was 2ade to nsa sanagement weies stressed, inter alia, t2e l l'
seed ts saistais the istegrit7 of tse ccmTEy is relation :s puslicly fisanced utilities (nuibit C-4 4 ) . 40/ 5etween 1976 and 1985, for example,
- j franchises coverisg retail sales to 41.3% of nsL's l
custeners are to expise (naihit G:*-44) . :s addition,
. DEL serves another 93 cennunities at retail with no i, *:ancaise agreement. Franchise ccupetitien can to a positive force- to encourage better service and Icwer , rates thus, a utility should not he allowed to
(. .ilt the talance by artificially saxing wnolesale service anattractive- ts potential retail sarket , entrants. Onited states v. cttoe sil power es. , sucra, 331 r. supp, at $1. : e recccc cantaans evidence e.t. acing to three francaise expiraticas, of weica
ayt:na 3each is the sont fully dccumented.
J In 1375 or 1975, the City of ,aytena teach under-t=ok a s .:47 of musicipal distribution versus nsk l franchise renevel. Is response, the C:spany accated
, a significant effort. to isform City residents of ther L tenefits of franchise renewal. cf ,,ar icular note are i 23e C:spany's statements that eacs of the Florida _
p sunicipal utilities had rates higher than nsL (except r far two with access to hyd::electri power) and that f municipals esarge .hese tigter rates tocause nsL *can j ( gais greater ecencsies of scale is all facets of its c; era-
% -d an* ( utihit S-*-5, at 1 and 3 ) . nsL won renewal f g In a 1975 paper on ' strategic :ssues :s : star-utility Reiatiens* ;tepared by C mpany witness Garfser, em;nasis was placed, inter alia, en franchise renewals and ; nase out of wcoissale tariffs (utibit C-30) . See also , naibit C-49.
g I me e *
A189 m
v e I
I t k i 4 1 - b
=cc. tat Nes. Et73-13, og g. *5 -
of its f:ancaise af ter a record high election expendi-l -" e ( Exhibit G"*-7 5 ) . :ue :s tae continuing ezpt:ations I. of : stall 1:aactises, we conclude that vigorous francaise ec=petitica exist.s withia cae retail sarxes waien ??sL
can inf'.uence th cuga its vecionale sales policies.
i n e C:mpany caaracteri:es its efforts en renew
,; francaises and acquise others as sales pecmotion and i husisess preserratica. 41/ However, these actions say 1, still c a afoul of anti ~:ust law and policy ween undert. Den by a ;cssessor of monopoly power. ettee " ail ' 7ever Co. 7. Cnited States, 410 U.S. 366 (1973); ana C n r of .tisbawaca v. American !!ectric Power Co.,
l '. 4e5 f. Supp i.120, 1323-31 69.3. Inc. 1379).
~ ??st,'s itelzeienshis vita Tcmestead Traditionally, ??sL' cas demonst:atec cons 14eracle elucunce :s engage is fi:2 power ::ansactions with sunicipal utilities, even witais its own service tec-itory. Ouxity the . 1950's and 1960's tais amounted to an u= qualified :sfusal. ! Race schedule RC under which fizz service was provided !; s cooperatives required that capacity and esorgy "not be- resold. ce distributed by the Cust=ser :s any :suaici- 'l ;ality or uniseceparated community for resale" (Izhimit
[ GC-51). T.s an isitial decision adopted by the F7C
, is Florida 7 ewer s tiebe Co., 37 TPC 544 (1967), g Eeacang Izamaner emnner recounted six separata instances I cver a pericd of 13 years when the Clewist=a sunicipal ! u 111:f requested and was refused waclesale ser rice i by T7sL. 41/ :s 1963, tue C:ssany's president isformed l :se City of wintee carden that FPsL did not " supply b
y T7st. brief on excepticas at 45.
' ' ' " ~ ~ '
y Affirmed, Federal 7ewee C: :nissien v. Flor?da' 7ever 6 Lica: ca., 404 G.S. 4$3 (1371). l 4J/ 37 ??C at 572-73. 4 0 e
* *-se ,
4
< . A130 .J > -
m em e eem . s,
1 I h i 1 l l =cc. set sos. ms-u , e.e. g. - :7 - su=icipal systems firm wholesale power !== distribution
te ugt a susicipal distribution systes* (Extihi C-18 ) . 3,'
Ecmestead first requested firm waalesale torvice
' rem T7 5 L is 136 * , to whica :te C mpany resconded : tat it did =ot provide : tis service to sunici=alities and did not visa to serve any. Wholesale ;cwer from r75L . was Ecmastead's alternative :n the 1:znediate i=stalia-tima of new generati:n or disposition of 1:s system , (Iztihi GT-21) . Racert Fite, the C:mpany's president, . and F.C. Actrey, a vice president, stated stat T7sL ; would not :sfuse to sell wholesale ;cwer,14 t=at.wsz . _ tte only arrangement negotianle towever, ster added-stat .:e City would not receive the rate at veich fir s ~
sales were made to c operatives and : tat a retail territorial aliccatica was a secessary precendition to - t any service. T7sL e=paasired the comparative benefits of an emergency inter:bange agreement or sale of :te musicipal system is lieu of wnolesale puretases (rzaihi:
; C-13 ) . Ecmestead was u=aale s negotiate a firs wholesale centract and instead made intermittent pur: bases from
[; T75L over ute ensuing *ive years at average prices stat were censideramly tigter than stase paid by r?sL's
,0 c= operative cust:mers (Exaihi: C -19, at 33).
L r In April of 1977, E=sestead requested a more sophisticated ister:tange agroceen: with T7sL including [( the puretase of *ie:2 ;ower :s =eet a ;cetica c* the City's Icadr towever, F76L negotiators responded that T7sa was only interested is an inter:bange waere bott (* yarties tad capacity ec =eet steir cwn demands ;Lua i % ample reserves ( Extihit C-IS , at L-3) . Isstead - -- - - - 1 Ecmestead and F75L entered iste new emergency service agreements waeremy ::e C:spany caly agreed to supply
j. emergency ;cwer needs *:c the extent it has capacity -- --
i: available. . . .* TP&L ap;Lled its sten-existing rate
' setedule " m," applicable c :stal :equirements pur- - --
chases 27 cooperative cust:mers (Z2mihit GT-29, at 4-11). Icmestead next requested ;cwer
rem 77s; is Augus:
of 1973, pr posing a *ir= ;ur==ase c* 12-15 W frem 1973
. grocyt 1960. *e City statsd : tat it istanded s use L
q n/ See aise, Oainesvt!!e 7tilities tecar*=ene v. ricride
?cwee 6 *ie:- c:., su=ra, 373 f.;c ac lid.
I t e
..mo m e ame= O e
1 t
cckat Nos. I275-13, e2 d. .25 -
his espacity for base load, purenase intercaange energy
' s meet its i=termediata load and use its evn generation -
only for peax load capacity and reserve (Extibit C-29, at 11) . f,j{!/ Se C mpany fi:st decided to respond ts Zonestead's request wi.a tre so-called ".w.arana11 neory*: Ecmestead
;1 was to he told that nsL had no firs ;ower to sell. ~ C=ispany negotiators were advised to have load and re-serve estimates availaole to sumstantiaca this response
( mihit G"-ZS , at 14) . Immediately thereaf ter, however, the Campany ccacicded that Homestead had teen listed as
, a cust=mec under all requizenents schedula 52 and was - act: ally receivi=g fi:2 power at ccaisittad ister rals. 44/
Osr. then decided that if Eemestead requested a trans- ~~~ sission interetange agreement as well as fits power, it would empicy Schedule 3 and :se Scaedule 52 as the nego- - tiatad rata thereunder. j, *
s cctater of 1973, Ecuestead submitted a compre-
', hensive request for an inter:nange agreement and sisul-taneous purtaase of fi.m power f:ca DEL s serve the I
tase-load portion of the City's requirements (Ex3ihit I' C-29, at 14-23) . Eowever, Exhibit C-23 (at 29-31) reveals that the C mpany wanted to avoid any obligation
[ to sell 21:2 power tn rosestead by withdrawing sc:edule 32 fram its existi..g wnolesale cust=mers, iscicdisq Icme-l [g stead and replacing it with an 'I=ergencf late Sctedule* ( ., talling the city that it has no firm. ;ower to sel.1. L l r 4j/ Oe C:mpany's chief representative at this 1:eeti g was its vics president, E.T 317ans, wco later testified is this pescuedisq. C pies of 317an's i notes (Ixtihit C-23, at 11) were sent to the C:=- pany's president and other executiver. W *. is discussion is recounted is the notes of com-pany employee 'WMI* (apparently 4..t Kleis, a nege-I c14ts is dealings wit: Eemestead), I=hibit C-29, at 13. Ce notes besysiak a car.ai= surprise is learni=g that gemestead was an 52 cust mer: ' Pace
l. .
52 offers fi:2 power. Apparently, the C:mpany has been honorist ei- request for a nuzner-of yeacs,- - -- i and is not is a good position er refuse to ==ntinue offerisq fi:s base load power of 11 W to 14W, voich is c:nsistent en (sici thei: pretteus- demands.
I l
6
. A132
[ r s
~-
[
,w ee me ----- "
I 1 I
. 1 l
i bh a l Ocekes Nes. 271-LS, se g. - IS - Alternative 1Y, it considered offerisq Icsestead a setedule : ( fi s interchange) rate lowe stan sc3edule SP is rets:s for a signed contract stating taat the
; city would install additional generation capamle of car ytag its elec. ical load. Se final paragrapa of t:12 ister=al memorandus seems an apt sunnaarization I of r75L's reactica to Icaesteed's request fc= firm , power:
i It is one belief tat if we refuse
.. to sell the City of Icaestead F1:2
{ Power ther will immediately request
~
us to wheel f::a other sunicipalities.
. we encouraga them to inc: ease their
. generation where we can purchase ;cwor . f :a them, we say offsee the demand
( for wheeling as well as avoid a long-
%. *ers Fi:r Power ccanitt:ent. (Exhibit . ; GT-29, at 31.) .
r7sL'a hope to isd:ce Ecmestead to const :ct addi-tianal generatica for base load requirements is lieu of f fi:s power purchase was not fone without d.cwledge of j the consequences for the City. Is ecencer of 1373, F75L's fisancial planning departseat prepared an analysis of r7sn and the municipalities is or near its service [ area entitled "Ocaparative Analysis of Municipal and [ := rester Cwned Utilities ansi the Benefits to nei:
C:st=sers" (Exhihit c -34, at 42-44). mis study
). determised that, except for criando and Jacksonv.11e, i musi=1;al ceilities enarged higher retail rates taan . F74L, tocauses i
l ne si = of most sunicipal units is ( limited by the si== of the city, nis limit on size prevents the smaller muni-cipal ceilities !:03 realizi=q sany of the occuenies of scale availamle to la:ge
- utilities. n is fact was clearly revealed is the analysis. ne smaller utilities had less effi=ient heat rates and higher fuel and operating costs per KWE of power sold. nose higher costs appeared to be sajor c=ntrihuting fact:rs is tue high cost of ;cwer ts .tei cust:mers.
l Negotiations on t2e Iomestead intere=ange agreement . _
; centi =ued and is :ece==ee of 1973 a final set of fiscus-si=ns cccurred, f::s vnica FPsa learned . mat .as t.
4
]h -
A193 i .
i i
/
f I a ccxet Ncs. I273-L.9, E d. " 30 *
**<ey" to ais agreeement was 175L's willingness to
simultaseously supply service under too ce intercnange I agreement and se:edule 3R after construction of neces-
} sary utertensectica facilities by Ecsestead. Eng in-i eertsq and silling peceless were not consifered sericus by T7st personnel. towever, ccupany negotiatzes opposed a written ccumi= cent to serve ce City under Sc2edule 52 I
after completion of t:e istercensection *tecause we (F75LI already have a contract to serve them on 52 and the agree-sent does ces necessarily pronibit such as arrangement to continue * (Dhibit GT-29, at 39) . Isstead, F75L's vice president, E. G. Muitolland did send a letter to Nemestead's City Manager, is January of 1974, after the
; istarchange agreement was signed, stating the Ccapany's -~
understandisg that it would provide Icmestead wits elec-( tric power for 36 =enths after ccapletion of the City's new interconnectica faciist es at a rate not to exceed
.te ccupany's approved wcolesale rate schedule is effect at that time (haihit GT-29, at 43) .
Ecmesteed's high-voltage interconnectica facilities g were ccepleted in Cctcher of 1377. ~41t20u4 advasce
, notice to Ecaestead or any indication f:ca the City that - it so longee wasted average-priced firm power, r76L filed 1 ce rata c ange application wita this ccanissica wnich
[ g pecposes to terminate 52 servi == to Ecmestaad. Is place of $1 power, r75L states it will sell Ecmestead incre-t' sentally-priced, curtailamle schedule 3 power, whica
' he Ccapany admits is core expensive than schedule b
i PK when used for base load. I Thus, Ecmestead has received wholesale service frca I r7sL since ce 1950's, including firm requirements ser-vice under ce 52-1 tasiff sisce tsat tariff first became e f fective. frem the time of agreement is 1973 to ecmpletion of ce istarconnection is cctccer 1977, F76L served Ec:se-i stead under the 52-1 tariff (E2hibit 29) . ~4e find no evidence to support T75L's contention that ccmpletion of de intercensection somehow elisisated Ecsestead as an existis7 wnolesale requirements custemer. Nor is it persuasive to assert that the parties intended for Eeme-stead to be served ac'an incrementally-griced Schedule
rate instead ci the average-cost senedule 52 9 I
y ._* e recced isdicates that F7st did not publish a case level formula for Sc:edule 3 until Fectuar r 13,
. 1978, vnen it cadas an offer of Sc edule
capacity to Fort 7ter:e.
l O
~. \> .
O t
~
A134
~
l .
!j g .. . . .. . . .
l Ocekst :tes. I275-13, E d. {'
! 2 deed, 4=cwing Ectnestead's desire ice mase-Load 'ir s ;cwer, se C:mpany's representations as :s the seanisq of .aei: ; interc2ange aq eement is January of 1974 are quite s ::e 9 cont:ary. :: would be difficul: :s reaca any atter con-l clusion, given ::e weight of tais largely unrecutted evidonce.
f - r7et's Relatienshi with ?ce- sierce n e eficets of Fce:
. Pierce .o purcsase :a.s power :::a i?6L cear a sacked similarity
:n those of Ecmestead. is March of 1378, for: Pierce a;yrcacned the C=mpany about ;uretasing fits power :s meet :e l - e City's base 1:ad requi ements and using 1:s own generat=es
, far yeaxisy pu:7cses. Fort Pierce renewed its request is letters to T76L is April,and Oecommer of 1975 Se *ecenter i letter raquested separate price quotations for base, inter-sediata and peaking capacity. Se City also isformed T76L * {. that it i= mediately visted to begis pur:nasisg 'tase capacity and energy es a year-round easis is ascusts rangiaq f::s 22 .*W to 30 W," and requested a statement of te Campany's ter=s and c=nditions. C :cuqu TPsL recognized its caligation :s ;;cvide service under senedule 52-1, toca is as i=:ernal sencranduz and is a letter ts Fort Pier =e, te ! C:mpany failed :s respond with specific isfor=ation on
[ wnica fort Pier:e c=uld act. Af ter another letter :s T76L r is April, of 1977, the parties set is July and Fort Pierce [ was told stac F76L had :o firs ;cwor to sell. 4,8/
~
[ rett Pier:s saistained its ;csitica stat it was entitled
! s firm power under te 52-1 tariff :::cuquout the renaisder i of 1977. Ca cet=cer 14,1977, F76L filed etanges :n :te ! .ariff vai=t limited itz. availamility :s esistisq ::s:c=ers.
l. Sereafter, :te C:mpany offered Fort Pierce up :s 240 W of capact:y strouqu ete end of 1380, but under ::e terms of
( inter:tange Scaedule 3, not scaedule 32.
. Cs .*. ares 24, 1373, during :te ::ess exasination of , r7sL's rate design wi =ess, Lloyd Williams, by ccunsel
( ise Fort Pierce, Mr. Williams ack=cwledged ::at the City was eligible to pur:tase fi s service under the 52-1
.ariff. Se same day, r7sL delivered a draft sarvice agreement .s : e City and fi:=, service begas i:==ediately.
Iowever, a dispute renaiss c=ncerning the duration of servi == and T76L has stated its i=: ancien to ternisats service to Fort Pier =a if we approve its ;;c;osed re-i seri= tics of fits see rice to aased and ex: sting :ist:mers * * ~ ~ ~ '
. 43/ != wever, is July af 1975 775L's System Plansi:q Oegart=ent ;; spared a ca:Nec assesssen: of fir t l:
istar=ta:ge sales toeveen 1377 and 1385 wais: pro-
\ f ecsed an 'availacle supply f: s r;L* =anging toeveen +
1604 W and 1995 W is 1377. nis report assessed :te cyportunities !se sale of firm ;cwor := 13 dif feren:
, ut111:iss is peninsular Fl=rida, includisq rer Fieces (Iztiti: GT-7) . > u3s H
1 s 1 1 1 I bh Dockee Nos. E371-13, it, d.' whica do not have generati=g capacity sufficient to meet
; eir peak Icada.
l tisitseiens on Alternative scurees of Caracitr a r e-- butteo C:mpany cccuments as evtsence ascicate . sat it is F75L's policy to retain !=11 cwnersaip of ce nuclear l generating plants wcich it c=nstructs. S e C:spany has _ l stated cat the full capacity of stese uni.s is needed to serve its own cust=mers, so sharisg is not es be anti-cipated until F76L reaches the optimum amount of nuclear
! capacity for its system (Exsihit 17). Iowever, no party . disputes that joist cwnership of such facilities would provide municipal and c= operative utilities (as well as ceaec utilities is the region) with access to F75L's economies of scale (Exaihit C-1, at 6) .
L F7&L'is the sole owner of three operating nuclear .
. Plants having aggregate capacity of 2,138 .or. F75L has
! agreed en share a portica of St. Meie No. 2 suelear plant with neightering s7 stems i=cluding !caestead and New l Smyr=a Beacht however, F75L dec.= sects is evidence indicats t that this was done at the issistance of the *catice capart-1 sent and that F7sL has not censisted itself ts snare ::e capacitf of any future unit (Ex31 hit. C-71, at 11) . g I'
i' se- Aveilabilit-r of - snsmission ser rices F7sL now offers four wcesaacq services vn:cs cor:esponc ta its f interchange capact:7 and energy servi =as, y Wheeling 14 may te provided !se ene-year pericds, with service
! availabla at the sole discretion of F7EL wcen trans-zissica capacit7 is not otherwise required by the C:mpany.
l '"rmnemissica secedules n, 3 and i'C correlate s ister-i { i
,4,9/ :s 13*3 F7sL c=nsidered cancelling St. Lucie No. :
because of
escalating costs and Jus.1:e Oopart-sent review of our antitrust status" (chihi: 20).
San is 1975 the C:mpany considered a shift to coal-fired plants !=r futu:e base-load generation
*ts eliminata .te At:mic Isergy Act as a r=ute te munici,,als' is-restment is generation" (I=hibit C -1, at 13). See also, the decisi n of the l
At mic Safety aE ~Lacensisq Appeal Board, Nuclear -' j Requiatory C:scaissica, is Floeida Power s tient Cs., i
=ccxet No.' !Q-389A ( ALA3-413, My la, ij n ) ,
regardisq antitrust review pr=ceedings on St... . . _ , , _ , . Mcie No. 2.
~ ?c/ A c=spiece description of stese f:ur services is !cund l is chihi: 23 (1Z3-A.Z), a draft service agreement ! sent to ::e City of Fort Pier:e on :acancer 6,1377.
Os rats for these ser rices is currently under adjudication. A196 . . . .
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; Occhee Ncs. E273-13, e,,c,ai,.* 33 -
caange secedules for emergency, scheduled and eccaczy capacity ==d/or energy services. R/ Cf particular
significance to emis case is setecule T3, denesinated
* *itz .:ans:sission service.' However, "fi:n* is a sissemer because schedule T3 ser rice say be reducM
[ cr tatse: pted at tue C:mpany's discretton for periods up s 30 days. g
= stort, these ! cur vueeling services only ofier
, surplus transmission capacit7 en an as-availatie basis.
F7sL does not contend cat any of tasse four weeelisq services could to utili:=d to transmit alternative power supplies to utill.ies wittis tue relevant sarkets f: s thi:d parties equivalent ts those cocainanle under schedules SX-1 or PR. The C:apany states that a.: appr:griate rate would have to to segotiated at the ti:se a potential wheeling customer arranged its ( alternative power supply, y i
& Se=ra at 4-5.
I' I & Section E of the dra't agreement (F.ztibit 23, RE3-AX) provides: i [ Is the event that Fi:2 tansmissicrr Ser rice i.' cannot te provided due tz an unanticipated reduction or interruption of F7tL's transnistics facilitias supplyisq suct service, or id suet service is provided in an amount less than 30% of the Centracted :esand for Fi:s Transmission Ser rice as a result of unanticipated reduction or inter:uption of power delivered by the f C:amissica to F7sL for ete City's account ;ur-( scant s Ser rice Schedule 3 of the Cit 7-<ccarissien- - Centract, and suca reduction or inter;;; tion continues for a pericd of thi ty (20) days, the I Charge for Firm Trassaission Se:vice will he adjusted as folicws: *n each succeeding senta,
! the tiquer of (a) the masimum W delivered to F75L is any one tour durisq that =cata, or (t) the sasisu:s MW delivered to F750 is any cae tour during the precedisq sia ten.ts, wil2. te susstituted for tse Centract :emand for Fizz Transmission Service for purposes of cal- ; __ culating tue Charge for Firs Trans=isison Ser-rice . C;cn suca reduced or isterrupted l serrice keisq restored to 30% or scre of the 1 Centract :emand for Firm Transmission Service, l I! tte Charge it. eacs succeeding cents small to l tased upon ete fdl Cent: acted :emand for Firs Transmission Service. , W F7sL triei opposing exceptions at 42.
e l A137
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i .. t i, Occhet :Tcs. Z373-L3, e3 d. l *EE RCSCNS wW 3T i F7sL TOR TOS 3RI?? t*M!"A-"tM 7'cPCSAf.3 F76L would seek to justify its proposed limitations en full and par 1al requi:ements availamili:7 is terms of c;erational constralsts. Specifically, it asserts
; that future ;cwer supply is tco uncertais to allow j - un11 sited access to its requirements service.
( Accordi.w.r tm FPsr., cust:mers waich are self-sufficient in generati.m.r espacity could actitrarily saift stei Lami totween service f: a F?sL and thei: own generation.
'{ mis would pu.portedly lead F7sf. to saistais capacity it. escess of its atter cust=sers' needs but with no * -
assurance that such capacity would be fully utti2:wd7 t thecacy i= creasing rates to all cust mers. te C:mpany i proposes to remedy tais cacertainty by maki 7 taese - ~ on-agais/off-agais custeners isoligible f=r service
== der schedule PR.
Bewever, :te diffic=1ty with this propostrica is stat j it has virtually =o record support and is based en a [ few c=ndectural statements by C:spany witnesses. In p fact, TPst.'s rate desig:r witness prepared a sedel Icad
, durati=n curve in 1975 showing taat custeners vita
[ genera isq capacity less than peak demand and cust:mers e vita capacity greater than ;eax demand would each pur: nase
; tase-load requirements f :a the C:spany, u= der as 3R j schedule =cdified for ;arallel cperation, and use their own l
(- ca;act:7 intermittently to meet intermediate, peak and reserve demanda (Izaihit C-71, at 33) . mis is consistent with :te ~ repeated requests of Ecmestead and Fort Pier:e for base-. 1 cad firs power. f 4/ Moreover, the natural inclination of stese systems E buy base-Lead power would apparently be reisfarced by the design of r?sL's PR rate wcich is intended :s pt: mete high load fact =rs. ji/ t
If/ Serra at 17-11. Agais i= their testi=cny, Florida f
Ca aer state their istenti=n ta use schedule PR f== base-L=ad purposes and use seir evn generati n f:e peaking (T . 639). Ij/ Su=rs at 3-4. W.ile rys; is discouraqisq ;uretases
-l sy self-sufficient su=ici;41s it has apparently adopted a marketisg strategy vcica prese ss hign load fac ce ! usage as a seams of impecsist its declining system Lead fac =r (Izaihi: C -14).
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? ::cchet :tos. Z375-13, g d. 33 i
r7st relies on oil, natural gas and cranium to fuel its generation. It cites the 1973 oil esca:go and resulting 8 drasti= oil price increases and the expira 1on of long-l ters cil supply cent: acts and replacement by three-year
cont: acts to cast uncer aisty upon its oil supply.' As ice gas supplies, it references high levels of cu:.211sent and : e expt:scica of a sajor gas supply cent:act is 1377.
Concerning nuclear fuel, r7sL notes aat it only has a two l yea: inventory and that its long-tors supply centrac : was
. cancened *y .he sener is 1375.
r7ss say wo n facs fuel supply proclass, as do other suppliers is the electri utility isdustry. Icwever , they c are not of a nagnitude that would justify the pecposals
, before us is this case. It appears that T75L continues to possess Imag-t' irs fuel oil contrac.s and that it has entered r _
i=ts shorter-term oil cent: acts (3 years) with favorable casconation provisions is orde: to gain greater flexibility ,
in respondis$ ts price changes on the open marxat (Exhibits u, at 3 51, at 9 ) . r?sL's natural gas weeranty cent:act with Amoco Produc. ion C:spany provides for daily deliveries of 200 2'=cf tt:cugh 1388, such deliveries teing beyond the
'r purview of tae present curtail:sent plan of the t:assporter f of this gas, ricrida. Gas :ansmission Corporation (Exhibit 31, j
at 9 T . 431). ji/ risany, an affiliate of F7sL is engaged i= cranium exploration (T:. 454) and r7sL's existing nuclear r units do noe appea= is danger of heisg curtailed due to fuel J shor age. 52/ L b t
!6/ ~
See, seerine Otilities ce= mission 7. ?!?c, F.2d , TG C :. Nos. 77-1311 ana 77-1972 (Ma:cs 20, 1379). { 12/ Is 1275 F7sa asc several other utilities won a judgment is federal district cou:t against thei: nuclear fuel e requirenents supplier, Westisgtouse Electric Corporation. l vireinia !!ectrie s 7ower Co. 7. Westincheuse tiectric C:re., Cav. so. 75m3514-A t i.3. Va. Cct:cer 17, 1973). Is an us:eported epision the cou:t held hat Westisgacuse was act excused for deliverisg suciaar fuel by reason of force ma4eure previsions in its centracts with the - various ust. ::es. See, Antitrust *:ade Regulation 2eporter,:To. 387, a H -L3 (Novencer 2, 1373). i l' l l F A199 l l (~
e- - e ase .
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,' Oceses Nos. I273-13, g g. Among tse fuel-related proclees wnica nsL gives i as a reason for 11:sitisq firs wnolesale service is its 4
anility :s procure a coal su;;iy c=ntract. Iowever, on c:sss esamasation, F7sL vice ; esident Gardner ack=owledged that ce unyany has no coal-fi:ed generation and has so plans s c nstruct any. =e se points are confirmed by ce restimony of F7tL's vice president is esarge of hel precurement veica was
! presanted to the Florida Pus 11c Service Cammissicn is ::e *l spring of 197y (Izaibit 22) . !8/ Cs brief, F75L has argued 23at the isanility to oTsais a coal supply centract has impa1:ed its an111:7 ts plan esal-f1:ed qeneraticn.
l
- Iowever, the caly evidence is tae record of r75L's need for ' such a plant was its desire to avoid sunicipal access to nuclear generatica, the tase Isad alternative. to coal, f-weica ecu14 :=ne f::a , anti :sst eeview 2efnee tse Nuclear
( Regulatory C:snaission. y
' F7st poists to envi:ccuental regulaticas vales =aze const=:ction of coal-fired units difficult and make nuclear units alsome impossible :s build. :t also poists s
[l escalati:q cos s, litigation and regulatory delays and requi:emen.s as additional factors stopping hture nuclear 1: i unit. construction, or at least yieldi..g a 11 year lead time I wnic!r necessitates equal lead ttne fst Isad facecastisq.
* :: refers to t:s cancellation of the proposed Souti ade I nuclear units and ce substantial delay is licensing and I resulting iscrease is capital costs of its St. Mcie No. 1 I
suclea: unit. As fur esistiny generati..g units, ??tL status taat its ":: key Point nuclear units have es7erienc.sd . , steam generats: leaxs causisq usscueduled cutages is t e past
- and requizing estensive scaeduled ou age is ce future for repair, and stat its ccabined cycle ?utsaa : nits, due L ( to thea: novel design, have not been reliable. Fisa117, ! 77tL refers to its ccamen steet selli=q telow book value as evidence of financial difficulties watch have limited its c sst::ction budget to internally generated casa.
l 18/ traibit :: i=dicates stat valle coal =ay well be used eccccaic, envi:ccsental and reliamility is ce ht==e, pecalems same it largely 1::elevant to r7sL's cu= rent capacity planning.
. y Suces at 32, :. 43.
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t .. I Occket Nos. EK73-13, E 11 . -3** I
' We certainly cassot deny that tasse constraints do pose pronless for utilities such as' TPsL, but the record fails to estan11sa tsat nsL is so hampered by regulatory g
requirements and financial difficulties as to to iscapaale of espandisg its generating capacity as needed is ese l future.. TPsL is, af ter all, offerisq 240 .W of $ctedule 3 capacity to Ecaestead and Fort Pierce, and the recent rate
' of iscrease is demand by TysL's other cust=mers cannot to ' caaracterized as rapid. DEL has been greatly reducisq its i demand and load '!stecasts is recent years, with the actual . ! rate of growth being relatively low averagisq at oost i'
around !su= percent annually (T . 848) . To the es-ent that the record gives any indication of FPEL's current financial condition, it reveals taae FPsL has esperienced I
,' significant improvement is earnings and related market i
factors. About the time FPEL filed this case, it was ( reportisq lower, more manageaala growcar greater internal
-< b generation of Mads: isproved earnisga and coverage ratiost . and increased dividends (Exhibit GT-78). Suffice it to say .
thae the eecoed, cespeised lasyely af c:zepany doc =nenes, is amaivalent on this issue.
F7sL would support the separation of 2:11 and par.ial
; '. requi ements tariffs is terns of costs of service on the ,I basta of difj!arent Iced patterns. 60/ These separate full and partial requi ements tariHz differ both in terms g of demand and energy charges. TPEL contends, therefore, i
( that it has designed different rates to reflect sore preci.sely the differene c=sts of serving these different cust=mer groups. Estaalistment of separate- full and i i partial weelesale requi ements rates is ccamos prac. ice.
} We have is fact recoquimed the differences in the costs of servisg full and partial requirements cust:mers,'
not to sention different types of partial requirements {. b cest:mers. 61/ Is the present case, TPat's proposal of separate Tull and partial requirements rates appears cessonable. g I 40/ F7sn asserts that its wnolesale cust=mers without any generatist capacity have relatively stacle and-- - --- - - - - - predictable Iced patterns voich allows it to plan cperaticas and design rates to recover costs of servisg these ful'. requirements cust:mers. It ft:tter con- [ 1 a tends that partial requi ements 1cada are less stable l but taat the PR tariff allegedly encourages such cust:mers to stacilize tasi: puretases of power. 41/ !.e., testen !disen Cemeanv, Cpisicn No. 309EA, CocSet Nos. Z-ind anc t.-77a4, tasued ecaster 3, 1977 (siseo at ZC). I i y cf course, is 75ase I of this decket we are act addressisg 1 te specifi= costs of service and rate designs of tue
' 52-1 and PR tariffs. Acccedisgly, our detsenisation d:es not re!!ect en how tasse two cates will actually Msc icn.
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ocket sea. Z373-LS. g al,. 3g, i nALAsc se -sr 7est:e - r-rars- c ns::rxAntss j when the $2-1 and 7R tariffs are viewed from a per-i spective en tae relationsai;s between F75L and other I I utilities wi.ais the relevant sartets, the Presidisq
! Judge's conclusica that the Campany's proposal has ' "no discernihie anticcupetitive effect is and of it-sell' is inadequate. 53/ With alternative sources of base-lead wholesale ca7acity unavailamle, r7sL's tariff restrictions would deny to Homestead, Fort Pierce and other scaisally self-sufficient utilities wittis the relevant zacket .no only remaining source of supply, schedule PR. It would conclude, finally, the municipals effsets ever ten years en catain a source of ecencaically-priced, F hase-load power. wunicipals Like fomestead and Fort Pierce would beccue likelier to leave the utility business.
1: deed, the citizenry sight force these utilities to cese { to F75L requesting takeover. g, Cit-r of Mishavaka v. Amertean !!ectrie Power Co. , sucre, 4o5 F. dupp. ac 1319.
C even greacer w,ortance to cae Company would be t3e assurance taat is future franesise renewal centests with potential retail sarket entrants, it could point to existisg I, sunicipal utilities as characteristically expensive and
[, unahle to exploit scale occacmies. d Homestead and Fort Pierce would not be able l to occacmically utilize higher-priced, icwor-quality i schedule 3 service em seet their base-load requirements. Such offers to sell at impractical prices and terss have been construed as calawful refusals to deal, when done to further sonopoly power. Eastsan redak Co. v. Souther l } 7 tote watsetals Co., 173 U.S. 359 (1917). (.
.l y We recognize and fully appreciate that the Isitial ! Cecision was written before F7tL agreed *c continue to serve Ionestead and Fort Pieces under its 7'R tariff' ~~~~ "
pending the final out==me of this case. We have not been turdened by the tise constraists faced by the Presidi=g Judge. Ur. der .he circumstances the Judge is to be connaanded for his offsets. Si i i 1> fe l i
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l : cket Nos. I273-L3, og si. 39
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Oe rest:i=tica of wnotasale servics es named and ' existing cust mers is an even greater threa: a potential t francaise cc:speti:ica. Oe record indicates nat n6L
; generally plans a sisimize sales of average-priced waclesale power :n musi=ipals and cooperatives (Exhibit S -17). Af ter reviewing :ne record of nnL's effnets to renew tae Oaytona Beaca fractise, it does not appear likely - ::at tse C:spany would offer a ;otential distribution utility
an average-cost rate. Se signal to potential retail dis-
"l ~" utors is areas presently served by nst at retail a=d i
over vnica nsL has waolesale scacpoly ;cwer is qui-te clear. Cf., City of Mishawaka r. American Electrie 7ewee Co., surra. TFia's armar := cuscuss the i.es: stas:7 og serv ce :o new
' cust=sers c= der specific cent =act rates does act reassurs C' "' * ~
Oe balanci=q of c=mpetition against other public interest c=nsideraticas, required by ciev of Yuntinceure .
v. 3, ,6,JJ toccmes relatively simple once :::s case is I
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A.a staff =ctes is its brief ca exceptions, at 3, the I prasidisq Judge erred is **-disq that FPnL had ce=mitted
; to serve new systems is nsL's service territerf.
1 [ W 438 F.Li 773 (0.C. Ciz.1974) .
)
f I . _ . - . _ . . l __ _ . _. G 0 I t !- o I i A203
- e- e ee.m m em o ese . gu.mo
1 ( h l I Occkat Nos. 23*1-13, g g. ,I stripped to its essential elements. The proposed restrie-tive provistans are anticempetitive, we fist no counter-I vailisi reasons !se taoi: implementation, and taey are to
' te deleted. *e C:npany has not demonstrated stat it saould to allowed to c ange ete general ava11acility provision of schedule 52-1 wnica : saxes vnelesale service availacle to
' all musicipal and c= operative cust mers is ??ti's service
' territ=ry. 64/ Proposed termisations of 21:2, aver ag e-cost service es Enestead and Fort Pierce a:e based en these i restrictive provisicas, so the proposed cancellaticas ara rejected. 'e Ecmestead cancellation would also violate the ~i understanding of tae parties that this custeuer would enneisce i to purchase schedule 52 af ter the cespletion of their inter-connectica. F7su small continue to serve Homestead add Fort Pierce, u= der semodulle 73. However, the proposal to bi-furcate scredule 52-1 ists separate rates for total require-(_ seats and partial requirements service is soundly based vita
o disecenible anticespetitive effect and we approve it.
Is spite of the anticespetitive conduct recounted above, we visa to stress taat. there say- to acceptacle servree risitacions with dimisished antic =mpetitive effects veica aneldf rate some i f legitimate operational proolens faced by T75L. : deed, the I istervenors rec =gnize that the C:mpany srculd be allowed to
fasaica reasonable terms and conditions to wnolesale service.
Rowever, T7sL has not provided us vita any middle genusd, sucs f less a showing that it has selected a tariff limitation that is [ tae least antic =m,etitive seans of solvisy any sucs 4 operatienal penales. 1 l I Finally, we note that F?st has satters pending before t us is crer 30 deckets, sost isvolving interchange ::assaission I < service fill qs is vnich antitrust allegations have been sade. 1 ( (t
.sg scaedule s2-1 provides:
A7AC.A31Z
s all territ:ry served by the C:npany.
APPCOATION: T3 elec.:ic service supplied to a
' sunicipal electric utility cc um a c=r;erative =en-profit sammersaip corporatica organized under the provisiens of tse Rural Electric C cperative law for : eir own use for resale.
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u l- e see Little need is esose cases for the tisd of elaterate presentatica sade in this one. It would to helpful to t e C maission far ete parties to pispeist the cespetitive pro-hiens cases.
and defenses relatisq to the filings in each of taese "he C missien orders l (A) ne Initial :ecision issued is tasse consolidated proceedisqs en April 21, 1375, is heracy reversed. (31 All limitations on the availanility of vaale-sale requirements service, as proposed by F75L, except for the limitation of full requirement service e,r. der the
$1-2 tariff to utilities with no generati q capacity, are
[. - herocy rejected. r (. (C) FPar. is directed to revise its proposed 32-2 and 73 tariffs to confor:r to tais order vitais 60 days. f.'stil revised tariffs are accepted by the cauzission, t3e ava11amili.7 provisions of the otherwise superseded SR-1 tariff saall renais is effect. _ . . . (D) ne notices of cancellation of requirements g service to domestaad and Fort Pierce are heremy rejected. 1 I ( E) Excepticas see graated are denied. 37 the Ccatsissica. , j [t (fZA*1 e (' Lois D. Cashallr- - - - - - - - - - Act.i=g Sec:reta:7 i l i e l
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, P'* I S IN3 s CPINICN NO. 57-A ricrida 7cwe: E Light )' Occket Nos. E278-13 C=mpany ) (7hase Il and
) Z278-81 ., o f -
i I-CPI 3 ION AND CREER OZNCJG RIH:"AMUG I Ql ,li 4I
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ssued: Cctche: 4, 1979 O
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Y
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i h i CNITID STAT!S CF AMERICA FZ ESAL ENERGT REGUI.ATCRT CCMMISSICN 3efore C:mmissioners: Charles 5. Curtis, Chai =ans 8 Georgiana Sheldon, Matthew Holden, Jr;, j I and George R. Kall.
' Florida Power & Light ) Cocket Nos. Z373-19 C:=pany ) (Phase :) and ) E178-81 j *i .
CP UICN NO. 57-A i i CP UICN AND CRCE2 CENT 3G RESEAR3G e
* ( ssued Cctober 4, 1979)
Cn August ,T,1979, the Commission issued Cpinion No. 57 i in these consolidated proceedings which rejected the proposal , of Florida Power & Light C mpany (FPEL or Ccapany) to limit
, the availability of its firs 'wnolesale requirements service to cartain named and existing custcaers. Notices of cancel-
- lation filed by FPEI. with regard to two esisting wnolesale customers were also rejected, because they were based on the l Campany's restrictive availability proposal. In our decisterr
[ we found that FPEL's proposals were unjust and unreasonacle
, under tse standards of Sections 205 and 206 of the Federal Power Act, particularly because of their anticompetitive ef-facts. Cn September 4. I'979, FPEL filed an applicstion for I
t
' rehearing of Cpinion No. 57 in which it requests that tse decision be mcdified in certain limited respects. J/ The Cem-l pany has raised no legal or factual consideration not pre-vicusly considered and we shall deny the application. However, l- we wish to reemphasire the holding of our opinion in light of several representations made by FPEL in its latest pleading. ~
l l FPsL now represents a willingness to provide wnolesale I requirements service under its tariffs to a number of Florida l' utilities in addition to those presently served: The company is either serving, or is willing to provide service to, the following: Clewistent i . J/ No other party applied for rehearing. 6 I I
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; cocket Nos. 3273-19 (?hase ) and 1378-81 Florida Public Utilities at Fernandina seach I Fort Pierce: Green Cove Springs: Ecaestead: ! Jacksonville Beacht Key West: Lake Helent Lake l ' Worthr New Smyrna Beacnr Starke 7ero Beach ' Clay Electric Cooperativer Florida Keys Electric Cooper ative Glades Electric Cooperativer Lee ! County Elec*ric Cooperativer Ckefonokee Rural Electric Cooperative Peace River Electric Cooperativer and Suwanee Valley Electric Coopera-tive. Reasonable terms and conditions, including reasonable notice provisions, will, of course, C'
be necessary, as the C=amission itself recognizes 2
* (Mizeo, p. 40).
The C:spany is willing to continue providing service to the cooperatives listed above to , j the estent of their loads in the geographical
! areas in which they are now receiving service frca FPsL. 2/
I No controversy remains regarding the provision of wholesale requirements service to these utilities. Also, FPsL now l agrees to provide requirements service to. 'new utilities i in its service area that may be estaclished by those en-tities it presently serves at retail . . ..
J/
L
' The sole purpose of TPsL's application is to request that we modify Cpinion No. 57 to permit the Lasettien of a new availanility restriction into the C:mpany's require-monts service tariffs. TPsL now proposes to exclude large self-sufficient utilities, including the Jacksonville j Electric Authority, the criando Otilities Crmaission and l the City of Gainesville. The company does not represent j
(, that any such large utility has requested service. 2/ Application for Rehearing of Florida Power s Light Company at 3. Two of these utilities, Fort Pierce and
,Hemestead, were the subjects of the notices of cancellation rejected in Cpinion No. 57.
4 - - - - - - Id. at 2. See, Cpinion No. 57 at 39. .- - 3/ . l l - om, .. , M- 6 m sam- e-ee aw e . e
-__ __~ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . ___
l i bh ~. . l .. _ . . . . _ . . _ . _ i
- . . . .-___u_
1 1 Ocenet Nos. 1375-13 (7 Base :) and E278-41 t In support of its request for modification ??sL reiterates l 23e arguments considered during our earlier deliberations.
It argues that our decision should be sedified in light of the C:spany's weeeling policy and opportuntties off erednuclear to other utilities to participate is T75L's St. T.acie No. :
[ power plant.
*de shall not consider adoption of the company's new proposal at this stage of the proceedings. If F76L wisnes l to propose any ters or condition of service undee its requirements tariff, the C apacy should do so in a new filing , wherein it snould be prepared to demonstrate that tse proposal is 't.he least anticospetitive method of obtaining legitimate planning or other cajectives.' y *te C:=missien eederst ,
F76L's application for rehearing of Cpinica No. 57 is hereby7 denied. J O j' By the C:maission. (SEAL) i l s ( _ _ _ _ .
' Kannath F. Plu::b, Secreta.y.
a t 9 e h y Opinion No. 57 at 2. l 9 4 e ,.ee.. t> - na 4
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ML20039G556

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