ML20043B124

Requests Clarification of Competitive Issues Raised Re Concerns of Client

ML20043B124
Person / Time
Site:	Hatch, Vogtle, Farley
Issue date:	07/18/1988
From:	Gillespie F Office of Nuclear Reactor Regulation
To:	Fogel J CAJUN ELECTRIC POWER COOPERATIVE, INC., DUNCAN, WEINBERG, MILLER & PEMBROKE, P.C. (FORMERLY
Shared Package
ML20042C775	List: ML20042C774 ML20042C783 ML20042C801 ML20043B026 ML20043B057 ML20043B059 ML20043B064 ML20043B069 ML20043B073 ML20043B079 ML20043B082 ML20043B086 ML20043B089 ML20043B092 ML20043B095 ML20043B099 ML20043B107 ML20043B108 ML20043B122 ML20043B124
References
FOIA-89-559 A, NUDOCS 9005240218
Download: ML20043B124 (2)

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< 7 HUCLEAR REGULATORY COMMISSION We ASHINGTON. D. C. 20665

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July 18, 1988

-J. Cathy Fogel, Esquire Duncan, Weinberg, Miller & Pembroke, P.C.

.1615 M Street, N.W.

. Washington, D.C.

20036

Dear.Ms.'Togel:

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SUBJECT:

_YOUR LETTER DATED JUNE 15,1988 PURSUAk? TO CAJUN ELECTRIC POWER 1

COOPERATIVE, INC. AND THE SOUTHERN COMPAhY Pursuant to your captioned letter requesting a meeting with the Nuclear Regulatory Commission staff regarding competitive concerns of you'r' client,.

r, Cajun Electric Power Cooperative, Inc. (Cajun) and the Southern Company or,its y

C subsidiaries, staff would appreciate it if you would clarify and focus the

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. competitive 1 issues you have raised so that staff can: determine if your concerns

address areas-of the NRC.'s antitrust' licensing jurisdiction.

The staff-is currently engaged in an ongoing 10 CFR 2.206 antitrust action involving the - Alabama - P.ower Company, a Southern Company subsidiary, and the Alabama Electric Cooperative. Inc.

The issue in this proceeding involves non-comp 1'iance -with an - antitrust license condition attached to the operatin license of the Joseph M. Farley-Nuclear Plant -(Docket Nos. 50-348A, 50-364A)g.-

. Another inatter before the--NRC involving the Southern ~ Company concerns a proposal by -the Southern Company to form a new corporate entity,' SON 0PCO, that would operate all of the nuclear units presently owned by the Southern Company (Farley, Vogt1e: and Hatch).

Though an' amendment' application has not-formally been submitted by' the Southern Company, staff has been asked by Southern

- Company to provide guidance on ' data the NRC would require 'in conducting its

. review in conjunction'with the formation of such an operating company.

4 In-addition-to these two ongoing antitrust actions involving the Southern Company or its operating subsidiaries, the Georgia Power Company -is a co-licensee of the Vogtle Nuclear Generating Station and the Hatch Nuclear Plant.

Each of.these nuclear plants underwent antitrust licensing reviews by the NRC with. antitrust license conditions ultimately being attached to Vogtle Units 1 and 2.and Hatch Unit 2.

(Hatch Unit I was " grandfathered" under the provisi.ons ofSection105coftheamendmenttotheAtomicEnergyActof1954.) Mississippi Power Company, referenced in your letter is not an NRC licensee and NRC has no regulatory jurisdiction over them.

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If you would specify with greater part'icularity your intent, e.g.,

petition for action pursuant to 10 CFR 2.206 or allegation of potential-wrongdoing, staff would be better able to ~ determine whether or not it has jurisdiction and, if 50,-the appropriate course of action.

For your ' general information, unless the s.ituation' warrants, meetings held with the staff are generally published as notices in the Federal Recister and are open to the public, including all persons whose interest mail e affected.

Sincerely, 3

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[ Original signed by F.P. Gillespie) y

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Frank P. Gillespie, Director Program Management, Policy Development and Analysis Staff 1

Office of Nuclear Reactor Regulation I

DISTRIBUTION:

NRCPDR LPDR PTSB Reading File PMAS Reading File-C. Thomas D. Nash W. Lambe

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E. Reeves, NRR:PD21 (WFN 14.B.20)

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l Vice Presidentdeclear Technology Gulf States Utilities Company P.O. Box 2961 Beaumont, Texas 77704 Re: River Seed Station, Unit 13 Docket No. 50-458; Update Antitrust '. -

Infomatica Responsive to the Commission's Regulatory Guide 9.3

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Dear Mr. Draper:

As a part of the operating (license review process, the NRC staff reviews changs in the applicant's s) activities that have occurred since the init' al antitrust review at-the contruction permit stage. The data submitted by Gulf States Utilities Cor (GSU) in response to the Commission's-Regulatory Guide 9.3 (copy attached) is now more than two years old..More-over, the antitrust,infomation submitted by co-applicant Cajun Electric Power Cooperative (Cajun) that-accompanied the October 26 1979 application to amend GSU's construction wmit is almost four years' old. In order for staff to adequately assess wiether or not there has been' changed activity.

since the construction pemit review, we would appreciate updated responses to the Commission's Regulatory Guide 9.3 by both GSU and Cajun..

For GSU, we would like updated responses to all portions of 9.3 including B.1.a. through B.1.h. as well as GSU's response to B.2. which included i

your 'B.2.a.--implemented actions and policies" and "B.2.b.-present negotiations". Your responses should include all' changed activity which has taken place since your original 9.3 data response, dated April 22, 1981.

Cajun has not filed any antitrust information pertaining to changed activity.

We would like responses to all portions of 9.3 from Cajun since its October 26, 1979 antitrust information tditch was included in the application to amend GSU's construction.pemit (CPPR-145).

To the extent there has been changed activity, please so designate and identify by category. A copy of GSU's original' 9.3 response is attached for your reference. If you have any questions, please contact Mr. W1111am' Lambe of my staff at (301) 492-8048.

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. Please provide your responses within forty.five (45) days of the date of this-letter.

Sincerely.

Originalsigned by W. H. Regeri,Jr.

Wm. H. Regan. Jr., Chief Site Analysis Branch.

• office *of nuclear Reactor Regelatica Attachements:

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Regulatory Guide 9.3 2.

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, y g 375gq g.y,9, DIRECTORAT8 OP R84WLATORY STANDARDS R80ULATORY GUIDE 9.3 INFORMATION NEEDED BY THE AEC REGULAYORY STAFF IN CONNECTION i

WlVH ITS ANTITRUST REVIEW OF OPERATING LICENSE APPLICATIONS FOR NUCLEAR POWER PLANTS l

Items and any related changes that have occurred or A.. INTRODUCTION are planned to occur since ebenission of the As isquimd by the December 19.1970, amendments constmetion termit application:

to the Atomic Energy Act of 1954, the Atomic Energy Commission conducts antitrust reviews with respect to

a. Anticipated excess or, shortage la generating construction pennits and oposating licenses it ismes for capacity enources not expected at the constms-casamercial nuclear facGities. 'the Ca==ladaa must tion permh stage. Reasons for. the excess or under certain circumstances, make a Anding a to shortage along with data on how the excess wSt be i

whether the activities under the permit orlicenas would anocated, distributed, or otherwise utilized or how create _or maintain a situation inconsistent with the the shortage wilbe obtained.

antitrust laws. An antitrust aview at the operating bcense stage is not requimd unless the AEC determines

b. New power pools or coordinating groups or such review is advisable on the ground that gipiocant chanps in structum, activities, policies, practices,

' changes in the licensee's activities or proposed activities or ' membership of power pools or coordinating have occuned subsequent to the previous. antitrust groups in which the licenses was, is, or wil beia review conducted by the Attomey General and the participant.

_j Commission at the construction permit stage. This regulatory guide identifies the type of information that

c. Changes in transmission with respect to (1) the -

t nuclear plant, (2) interconnections, or (3) 1 the Regulatory staff considers germane for a decision as to whether a second antitrust review is' required at the connections to wholesale customers.

I operatinglicense stage,

d. Changes in the ownership or contractual allocation of the output of the nuclear facility. Reasons and -

8. INFORMATION NEEDED BY TH,E AEC basis for such changes should be included.

REGULATORY STAFF IN CONNECTION

e. Changes in design, provisions, or conditions of rate WITH ITS ANTITRUST REVIEW -

schedules and seasons for such changes. Rate OF OPERATING LICENSE APPLICATIONS increases or decreases are not necessary.

FOR NUCLEAR POWER PLANTS

f. List of al (1) new wholesale customers, (2) transfers from one rate schedule to another,.

1. To assist the regulatory' staff in its review. an including copies of schedules not previ w if furnished, (3) changes in licensee's se:vice ama, applicant for a license to operate a commercial nuclear power plant should consider the fonowing and (4) licensee's acquisitions or mergers.

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Ucense Appucation" and conmining the above onber electric power wholesale or retail die requested leformation should be wbmitted wtwa the istutos, and lisenese's esposes, for any type of operating 16eens application document as sub electric serv 6es or cooperative ventum or study.

mitted or a soon thereafter as possible.

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x BEPORE THE UN,ITED STATES hTCLEAR REGULATOR.Y COMMISSION DOCKET N05.

50-458 & $0-459 ISTHEMATTEROT:

GULF STATES UTILITIES COMPANY, AND CAJUN ELECTRIC POWER COOPERATIVE l-e.

OPERATING LICENSE APPLICATION 1.

ANTITRUST REVIEW IhTORMATION SUBMITTED PURSUANT TO THE ATOMIC ENERGY ACT, SECTION 105c(2) AND REGULATORY GUIDE 9.3 a

FOR RIVER BEND STATION UNITS 1 AND 2 e

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UKITED STATES WCLEAR REGULATORY C0FMISSION DOCKET NOS. 50-548 & 50-549 IN THE MATTER OT:

GULF STATES UTILITIES COMPANY,'AND CAJUNEi.ECTRICPOWERCOOPERATIVE IhTORMATION FOR ANTITRUST REVIEW OT OPERATING LICENSE APPLICATION Gulf States Utilities (G.S.U.) on its own behalf and in behalf of Cajun Electric Power Cooperative (Cajun) submits herein the antitrust review infermation for the operating license application as required by the Atomic Energy Act of 1954, as amended, and in accordance with Regulatory Guide 9.3, Section B.

Construction of the River Bend Station facility was authorized in March,.1977 by the issuance of Construction Permit Nos. CPPR-145 and CPPR-146

-for River Bend Station, Units 1 and 2.

Cajun antitrust information was previously submitted pursuant to 10CTR30.33a(2) in an application requesting an amendment (October 26,1979) t5 CPPR-145 and remains unchan'gish Therefore t.he following information provided only addresses the GSU Company.

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g3 ANTITURST INFORMAT10';

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Antitrust Information Required by Regulatory Guide 9.3, Section 8.

B.

Information needed by the NRC in connection with.it's,antiturst review of operating license applications for nuclear power plants.

3.

To assist the regulatory staff in its review, an applicant for a license to operate a commercial nuclear power plant should consider the following items and any related changes that have occurred or are planned to occur since submission of the Construe, tion permit application:

a.

Anticipated 4xcess or shortage in generating capacity resources not expected at the construction permit stage. Reasons for the excess or shortage along with data on how the, excess will be allocated, didtttbuted, or ot:arwise utilized or how the shortage will be obtained.

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Response

The reserve margin for the original proposed in-service date of 1981 for River Bend Station Unit I was 15.8%.

In an analysis at e

that time, the Atomic Energy Commission wrote, "The Federal Power Commission considers limits of 15% to 25% margin of reserve capability over peak demand acceptable." (Environmental Statement, River Bend Units 1 and 2. Docket' Nos. 50-458 and 50-459, September, 1974).

The reserve margin for the River Bend Station Unit 1 in-service date of 1984 is. expected to be 20.6%. The Southwest Power Pool (SWPP) currently requires a minimum of 15% reserves.

This minimum is expected to be revised upward in the near future. Using these criteria, there is no anticipated excess or shortage in generating capacity resources.

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New power pools or coordinating groups or changes in struct::re, activities, policies, practices. or membership of power pools or coordinating groups in which the licensee was, is, or will be a participant.

kespense:

In 1973, CSU vas (and still is) a member of the SkTP. Attached hereto is a list of Sk?P members as of December 31, 1973 (Attachment 1) and a list of SkTP members as, of January *1,1931 (Attachme.nt 2). There has been very little change, if any, in the structure, activities and policies of the SWPP. A Sk?P "Second coordination Agreement" became effective January 1, 1980 (Attachment 3). This agreement changed the method of allocation of

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expenses and redefined and establis'hed coassittees.

In 1973, CSU was (and still is) a member of the South Central Ele'ctric Companies (SCEC) and opdrates under a Coordination Agreement dated February 10,.1964. There have been no changes in the activities and policies of the SCEC group.

(See reply to B.2 for additional information.)

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Changes in transatssaon with respect to-(1) the auclear pla:t's (2) interconnections, or (3) connections to wholesale customers.,

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(1). There have been no changes in respect to the design and planning of transmission lines for the River Bend Station Unit 1 (see C.2 below).

(2) The changes in interconnections in the GSU system are as follows's The planned 500 XV line between Webre Station and River Bend Station switchyard nas been changed to provide an interconnection for Big Cajun No. 2 Generating Plant which is located between Webre and River Bend Station. -The line has been used to provide piectric service to the Bit Cajun No. 2 plant as a delivery point which will continue until Cajun begins commercial operation of their first coal unit which Will establish the intepconnection. The section of line between Big Cajun No. 2 and River Bend Station has been completed. A planned 500 KV line between River Bend Station and McKnight Substation will be completed in the next few years.

Since Cajun will own 30% of the River Bend Station Unit No. 1, these lines will carry their capacity and energy from both their' coal plant and their share of River Bend Station.

N A new 345 KV interconnection is to be complete about April 1, 1981, with Southwest Electric Power Company (SWEPCO) between GSU's Grimes Substation and SWEPCO's proposed Pirkey Power Plant site.

The division.

of ownership will be at the Houston County / Walker County line.

A new 138 XV interconnection (GSU line 420) is to be completed about June 1, 1981, from Favil to Central Louisiana Electric Company (CLECO) near Herryville, Leuisiana.

An existing 69 XV interconnect, ion with CLECO near DeQuincy, Louisiana is being converted to 230 KV and is :urrently scheduled to be completed about June 1, 1981.

This is being done by converting 69 XV line No.

263 to 230 XV from the CSU Nelson Power Plant to DeQuincy.

(3) The Sales for Resale Schedule in the Company's 1980 Federal Energy Regulatory Commission (PERC) Form #1 reflects the current status of connections to various wholesale customers or points of delivery.

Major changes in wholesale connections are as follows:

Since 1973, there have been several changes it, voltages and capacities where G.S.U. had contracts for Wholesale Service with both municipals and cooperatives.

In most cases voltages were changed from 13.8 XV to 138 XV and transformer capacity was increased. All changes were made'

s in accordance with thi, contracts.

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Municipals:

The City of College Station, Texas became a municipal customer (TERC Rate Schedule 123) on April 1, 1977.

Kirbyville Light & Power was sold to the City of Kirbyville, Texas' and became a municipal customer (TERC Rate Schedule 110) in January of 1975. The City of Rayne, TERC Rate Schedule.127, superseded previous service TERC Rate Schedule 124 in April of 1980.

The City of New Roads, TERC Rate Schedule 125', superseded previous service TERC Rate Schedule 119 in May of 1977.

Cooperatives:

.. Deep East Texas Electric Cooperative, FERC Rate Schedule 69,

, as transferred to Sam Houston Electric Cooperative, TERC w

Rate Schedule 98.

Robertson Electric Cooperative TERC Rate Schedule 107 became part of Brazos. Electric Power Cooperative in January of 1975,,TERC Rate Schedule 126. Mid South Electric Coope'rative, TERC Rate Schedule 76, became part of Brazos Electric Power Cooperative in March 1979, TERC Rate Schedule 126.

e There have been several changes made in voltaget for Cajun under our Power Interconnection Agreement.

In most' cases Cajun combined distribution voltage meter points and took transmission service.

All of the following changes were made in accordance with the contract. Jeff Davis Electric Cooperative, FERC Rate Schedule 70; Dixie Electric Membership Corporation, FERC Rate Schedule 74; pointee Coupee Electric Membership Corporation FERC Rate Schedule 75; and Beauregard.

Electric Cooperative, FERC Rate Schedule 73, became members of Cajun TERC Rate Schedule 104.

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Changes in the ownership cr contractual allecatica of the output of the nuclear faciitty.

Reasons and, basis for such changes should be included.

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There have been the following changes in the ownership of River Bend Station Unit 1.

On August 28; 1979, CSU and Caj0n signed a Joint. 0wnership Participation and Operating Agreement under which Cajun would own 30% of River Bend Station Unit 1.

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On October 11,_1979, Sam Rayburn G&T (SRG&T) signed and entered into the Joint Ownership Agreement with CSU and Cajun with SRG&T to own 7% of River Bend Station Unit 1.

On October 26, 1979, CSU filed a construction permit amendment with the NRC requesting joint ownersh'ip approval.

On October 3,1980, the NRC approved the Cajuu portion of the joint ownership. The SRG&T approval is still pending.

As of January 5,1981, the REA Administrator approved. Cajun's share of ownership and on January 7, 19817; Cajun started contributing construction funds to " earn-in" to their 30% ownership.

SRG&T's loan approval for the'ir 77, ownership is pending the REA-Administrator's approval.

TheCo-oEerswillshareintheoutputofthenuclearunitinproportionto

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their ownership shares.

The reasons for the. changes in ownership are as follows:

Under Item (8) in GSU's letter dated March 20, 1974, to the United States Department of Justice, GSU agreed to other entities participating in River bend Station. Subsequently, this became the Item 9 under the antitrust conditions of the NRC issued Construction e

Permits.

In addition, GSU had made certain commitments in regard to ts proposed -

Blue Hills Fuclear Plant. When GSU had to indefinitely defer its Blue Hills project, it offered ownership participation in Rivtr Bend Station te those entities in Texas which would have been.offeret ownership in Blue Hills.

As a tesult of this, SRG&T contracted to own 7% of River Bend Station.

f As of this time Cajun'and SRC&T have contracted for.'30% and 7%

ownership, respectively, of River Bend Station Unit 1.

Under the Ownership Agreement, other entities in Louisiana and Texas may still l

obtain a percentage ownership'from GSU's 63% share, subject to regulatory approval.

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Changes in designs pr3visicns, er condetons cf rate schedules and reasons for such changes.. Rate increabes or decreases are abt necessary.

Response

There have been no changes in rate schedules other than those rate increases which have been approved by Regulatory Agencies.

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list of C d ) rm whe esale customers, (2) tra?sfers free sce rate scheduit t: ar.other, including copies of schedules not previo.usly p.-

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,3' changes in licensee's service area, and (4) licensee's acquisittens or mergers.

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See response to c(3).

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1. and (4) * "he following ' items relate to changes in certificated service

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reas and transactions with other utilities 'since 1973:

'exas Public Cttlity Cosnission of Texas' (PUCT) Naminer's Report and Order in Docket No.130 - Application of GSU for a Certificate of tonvenience and Necessity withii Grimes County.

PUCT's Examiner's Report and Or er in Docket No.1989 -~ Application of Mid-South Electric Coopeistive Association to Amend Certificate of Convenience and Necessity within Montgomery County.

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PUCT'Y Examiner's Report and Order in Docket No. 2601 - Application of CSU to Amend Certificated Service Areas within Liberty County.

PUCT's Ixaminer's Report and Order in Docket No. 3141 - Appfication of.

GSU to Amend its Certificate of Convenience and Necessity within

. Madison County.

PUCT's Ixaminer's Report and Order in Docket Nos'. 3278 and 3279 -

Application of CSU to Amend Certificates of Convenience and Necessity for Proposed Transmission Facil,ities within Gregg, Lee, Milan and Williamson Counties..

Agreeme:.t of Sale Between GSU and Jasper-Newton Electric Cooperative for the Sale of Teeder Nos. 8 and 9 dated December 9,1977.

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Bill of Sale between GSU and the City of Lafayette for certain electric distrib; tion facilitier dated May 25, 1976.

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Bill of Sale between GSU and City of Abbeville for certain electric distribution facilities dated December 21, 1977.

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Bill of Sale between GSU and the City of Lafayette for certain electric distribution facilities dated February 16, 1978'. '..'.*

Agreement of GSU and City of Lafayette for sale of certain electric distribution facilities dated May 21, 1980.

Bill of Sale between GSU and the City of Lafayette for certain electric distribution facilitici dated May 21, 1980.

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areas exist in the State of Texas.

In Texas, it is possible that there have been other changes in the certificated area as a result of actions brought by other utilities in which CSU may have only been marginally involved and as a result of actions taken by the PUCT in initially establishing It should be noted that the d'esignation of certificated certificateo areas.

areas is a matter of public record before the PUCT and those records may be consulted for a final and conclusive determination of any changes in service areas within the State of Texas, O

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hst of these generating capacity aiutions come sted for cperatise after the nuclear facility, includir.g enership rights or power output a'. ocations.

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Respor.se Tr.e st:.erating capacity. additions which a:e now connitted for operation af ter River Bend Station Unit *1 are:

Nelson Station No. 5, *k'estlake, Louisiana a 540 W coal fired plant which, at this time, is owned by GSr.

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3.1.h.

Summary o'f requests or indications af interest by other erectric power wholesale or retail distributors, and licensee's response, f.or any type ef electric service or cooperative venture or study.

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Response

I The ic11owing list shows requests received by GSU which did not result in the scpplying of service or to date the negotiations are. incomplete (see answer to B.,2 for those we completed).

In1976and'1977,GShworkedwithandsuppliedinformationtoBrown&

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Root, Inc. Houston, Texas, who prepared a very comprehensive Power Supply Study for an organization which was to be named the Sabine Basin Development Corporation. The study contemplated development of electrical generation from some sixteen generating plant sites 'along,

.the Sabine River Basin. They anticipated-there'would be thirteen cooperative and municipal members.

GSU was. agreeable to jcint ownership of plants in or near its service area and would have provided transmission serivce under Power Interconnection Agreements as' necessary.

The organization was not consumated.

There has been no activity on their part since 1977.

2.

On May 21, 1979, the Public Utilitied Board of the City of Brownsville, Texas, sent GSU a lettei indicating their interest in purchasing 50 MW, in base load capacity including potential ownership.

GSU replied to their letter June 20, 1979, asking for a meeting to se.t up negotiations for Brownsville's ownership in GSU's future generating units.

Brownsville did not reply to GSU's letter.

Brownsville is approximately.350 mi,les from the GSU service area.

3.

On March 12,-1980, GSU met with representatives of the City of Denton, Texas, to discuss the future power requirements of the City.,GSU supplied all information requested and offered to enter into negotiations with the City to allow co-ownership of some of the GSU generating units.

The City's consultant enginee'rs, Gilbert / Commonwealth, have not yet advised G.S.U. of any further interest.

Denton, Texas is approximately 150 miles from the GSU service area. The City of Denton is a member of TMPA, see 4. below.

4.

By letter dated March 14, 1979, Texas Municipal Power Agency'llifPA)

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requested Joint Generation Planning information and asked about GSU's interest in a joint (ownershipi generation venture o.r about the ability to make a short-term or long-term sale of power to TMPA.

GSU replied a

by letter dated March 26, 1979, indicating GSU would be pleased to meet with them to discuss' future generation plans and. 3o' int generation,

'i planning. TMPA then waited until September 12, 1980, to reply and a L

meeting was held as described in the next paragraph. -

On November 7, 1980, GSU met with representatives of TMPA (an organization made up of the cities of Greenville, Garland, Denton and Bryan, Texas).' TMPA is building a 408 MW lignite unit'near Carlos, Texas, and is performing studies to build a second unit at the same-1.

site.

GSU expressed an interest in buying power from the second unit l

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g to coet GSU system d2mands d. iring the transition to ether frels in the

'. ate 1980's.

After TMPA makes a decision on building the second unit, SSU will have further discussions with them.

In*1979, the City of Opelousas, Louisiana requested CSU and others to submit proposals for supplying them power.

GSU made a proposal based sn GSU's applicable FERC approved service schedules.

After several

.eetings and some correspondence, the City, upon recommendation of their Consultant rejected all proposals, including CSU's.

On February 5, 1981, the mayor of*Opelousas sent GSU an addenda to the Consulting Engineer's report requesting CSU's study rind comment.

On February 13, 1981, CSU responded and offered several comments and observations. By letter' dated February 18, 1981, the mayor asked GSU to reply by Tebruary 25, 1981, with any additional reply. or* alteration,*or affirmation of GSU's original proposal.

GSU is now preparing an updated proposal.

6.

In 1973, the City of Jasper, Texas, had plans to install a 25 MW wood burning genera' ting plant and approached GSU to provide another interconnection and tran6 mission service. GSU met with representatives of Jasper and offered to work out a power Interconnection Agreement including reserve sharing and transmission service to bulk power. from and to Jasper with other entities.

Jasper has not yet notified CSU of their plans to go ahead with the construction of this unit. Jasper is a member of Sam Rayburn. Municipal Power Agency (SRMA) which will be a co-ovner of the GSU Nelson Station Unit #6.

7.

On April 24, 1979, the City of Hearne, Texas, sent GSU a letter in

.hich they said they were evaluating their long-term electrical cptions. 'In subsequent meetings the basis for a proposal was worked out rad GSU submitted a proposal. Hearne also had a proposal from Erazos Electric Cooperative, Inc.

By letter dated June 5, 1980, Hearne advised,GSU that for the time being, Hearne would continue to operate its power plant and continue to maintain its interchange agreement with Irazos.

8.

Ey letter dated November 5, 1980, from attorney Wallace E. Brand to GSU's M. M. Williams, Manager, Business Development, Mr. Brand said one cf his clients had need of approximately 17,000 KW'at 50% load factor at or near one of GSU's major substations in Louisiana.

Mr. Brand said t.is client would require service about May 1, 1981.

M. M. Williams responded by letter dated November 10, 1980, requesting more information and suggested a meeting with the client or the client's consulting engineer to work out details.

In a subsequent telephone call, Mr. Brand told Mr. Williams the client was the City of Winnfield, louisiana. There have been no further developments. The City of Vinnfield, Louisiana is approximately 85 miles'fso'n'OSU's' service area.

9.

Central and Southwest Corporation (CSW) is seeking int'erconnection with electric companies operating as part of the Electric Reliability Council of Texas (ERCOT).

GSU is not a member of ERCOT.

GSU and Southwestern Electric power Company, an affiliate of CSW, have constructed' interconnection facilities and are now in the process of entering into and obtaining regulatory approval of an interconnection agreement.

Due to this new interconnection and the geographie I'

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f prsxinity of GSU to Stustin Lighting or.d Pswer oopany, a. meinber of

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ERC07, the interconnection arrangements effected as. result,'of the various regulatory proceedings between CSV and ERCOT may affect the type and availability'of interconnections of GSU. GSU ha's intervened in a Docket Number EL79-8 before the yederal Energy Regulatory Comiss(on concerning the proposed interconnections between'CSW and ERCOT.

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Licensee's whes onstru: tion permits include c tions pertaining to antitrust aspects should list and discuss those actions or policies which have been implemented in accordance with such conditions.

Response

a.

GSU has implemented actions and policies in accordance with those conditions pertaining to antitrust aspects included.in the construction permits. All conditions listed under D (Attachment 4) have been implemented under the.followf ng arrangements or contracts:

SWPP Coordination Agreement.

The SWPP was formed to provide joint planning and coordination in construction and operation of transmission systems for increased operating efficiency and service relisbility, interchange of information, preparation of joint reports, coordination of generation, and to establish criteria concerning service' reliability and encouraging transmission line interconnections and interconnections contracts among the members. This Agreement is not an interconnection agreement. Since 1973, there have been many new municipal and cooperative members.

See reply to B.1.b.

SCEC Coordination Agreement dated February 10, 1964.

SCEC was formed 1

to de. rive efficiencies and economies from an interconnected transmission system as well as greater reliability. The Agreement recognizes interconnection agreements between the various members and ccastitutes an agreement to remain interconnected and operate in a synchronized system. Tr.e Agreement provides for joint planning for installation of generating units, transmission facilities, coordination of generation, and communication facilities by the various Participants.

It also provides for the review of load and capability forecasts of the Par,ticipants, determination of minimum percentage

- reserve capacity requirements, and establishment of operating procedures for the interconnected operation of the system. SCEC administers the diversity interchange with TVA.

Interconnection Agreement and Service Schedules between GSU, Louisiana Power and Light Company, and Central Louisiana Electric Company dated September 1, 1951.

(Usually referred to as the "Three-Party Agreement") This Agreement provides for interconnection points and exchange of power and energy between any two parties of the three under i

various sch,edules, and coordination of generation.

Power Interconnection Agreement dated December 12, 1972, between GSU i

and Cajpn. This contract provides for GSU to furnish Cajun with transmission s.ervice from its Big Cajun #1 Plant to four member cooperatives and interchange of power and energy under various schedules, and coordfhation of generation.

This,. Poyer Interconnection Agreement will be supe'rseded shortly by a new Power Interconnection '

Agreement dated June 26, 1978, which will provide transmission service for the two existing gas generating units and for two additional Cajun generating sources consisting of three coal-fired units and a co-owned nuclear unit. The new agreement will also serve any of Cajun's twelve cooperative member delivery points in or near GSU service area.

The new agreement also provides for emergency service, scheduled maintenance service (replacement energy), economy service, transmission-

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o-ef bulk p:ver (por Cajun) from ene entity to another, trans31ssio power for Cajun from their generating source to another entity.

A Wholesale Power Agreement provides for GSU to supply full requirements to certain small usage delivery points, temporary delive'ry points, etc.

This Interconnection Agreement includes Service Schedule Transmission Ownership Equalization (CTOC), which provides for ownership of an Integrated Transmission System by GSU and Cajun.

Power Interconnection Agreement dated January 3,19h4, between'GSU and' the City of Lafayette; Louisiana.

This contract provides for Gulf States to furnish Lafayette with transmission service. from Lafa'yette to other " entities" and interchange of power and energy under various schedules, and coordination of generation. Under this contract GSU has provided transmission service for bulk power from the City *of Lafayette, Louisiana to Louisiana Power and Light compsey for delivery

, to Jonesboro, Jonesville, and Minden, Louisiana, and for Cajun delivery points on LPR's s'ystem.

Power Interconnection Agreement dated January 8,1974, between GSU and the City of Plaquemine,* Louisiana.

This contract provides for Gulf States to furnish Plaquemine with transmission service from Plaquemine

• to other "entit'ies" and interchange of power and energy under various schedules, and coordination of generation. Under this contract we have provided Plaquemine with emergency service and scheduled maintenance service (replacement energy) from time to time as requesteQ.

Plaquemine has had some troubles with their fuel supply and power plant. At Plaquemine's request, CSU started serving Plaquemine's full requirements on January 19, 1981, under an interim wholesale contract until Plaquemine can get their power plant and fuel supply problems worked out.

Since the beginning of the 1974 contract, Plaquemine has not been able to supply any emergency service or. replacement energy to GSU.

l On August 28, 1979, CSU and Cajun signed a Joint Ownership Participation Agreement for. River Bend Station Unit 1 providing for Cajun to own 30% of the unit.

On October 11, 1979, SRG&T (a Texas G&T) signed the same Ownership Agreement to own 7% of the unit.

(See reply to B.1.h. for more information, on River Bend Station Unit 1 ownership.)

On June 6,1980, GSU, SRG&T, and SRMA signed a Joint Ownership Participation and Operating Agreement - Nelson Station, Coal Unit f/6, under which GSU will own 70%, SRG&T will own 10%, and SRMA will own 20%

of the $40 MW Unit near Westlake, Louisiana.

On June 6,1980, GSU, Sam Rayburn Das Electric Cooperative Inc.,

(SRDE), SRG&T, and.SRMA signed a Power Interconnection Agreement, Interim Power Supply' Agreement, and Power Supply 'Agnemint. These,

agreements provide for transmission service, coordination of generation, sharing of reserves, obtaining reserves, and credits to SRDE for San Rayburn Hydro Project Capacity. and Energy.

On November 14, 1980, GSU and Cajun signed a Joint Ownership Participation and Operating Agreement - Big Cajun No. 2, Coal Unit No.

t 3 under which Cajun would own 51%, GSU yould own 42%, and SRG&T would own 7% of the 540 MW unit.

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GSU has furnished Cajun a letter of intent for GSU to own up to 25'% of the Big Cajun No. 3, Oxbow Unit No. 1, which vill be a 540 6' lignite fired unit.

Cajun will be a majority owner and Project Manager.

On December 1, 1976, CSU and Brazos Electric Power Cooperative, Inc.

started an Agreement for Wholesale Electric Service to Rural Electric Cooperatives under which GSU serves several delivery points, some of which are served at transmission voltage.

t On May 1, 1979, GSU started servicing the, City.cf Rayne, Louisiana under an Agreement for Wholesale Electric Service to Municipalities under which CSU serves Rayne and also gives Rayne an allowance for maintaining their electric generating plant for standby service.

Under a' contract dated May 14, 1974 GSU provides electric service to Kirbyville Light and Power Company (Kirbyville, Texas) and'gives them an allowance for asiintaining their electric generating plant for standby service.

b.

Present Negotiations:

CSU is now in negotiations as follows:

v 1.

Louisiana Energy and Power Authority - Power Interconnection Agreement 2.

SWEPCO - Power Interconnection Agreement On June 1,1977, GSU started serving the Town of New Roads, Louisiana, under an Agreement for Wholesale Electric Service to Municipalities which provides for firm power and emergency service. The Town of New Roads had previously rejected in March 1977, a Power Interconnection Agreement which had been offered by GSU.

The Power Interconnection Agreement was the same type which had been signed by Lafayette and Plaquemine, Louisiana.

GSU offers to other entities to share in Joint ownership of River Bend:

By letter dated August 10, 1977, (Attachment 5) GSD asked twenty-one entities in the state of Texas if they'would be interested in participating in River Bend Station. No written replies were received.

However, SRG&T did enter an Ownership Agreement to own seven (7) percent of River Bend Station Unit 1 and to receive seven (7) percent of the output.

In January, l979, GSil sent letters to the top 'off,iger of the following companies offering tbgm ownership participation in. River' Bend Station:

1.

SWEPCO 2.

Kansas Power and Light Company 3.

Oklahoma Gas and Electric Company 4.

Middle South Utilities, Inc.

5.

Central Louisiana Electric Company

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Nothing developed from these efforts to date.

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Pript to March 1, 1974, the cities of Lafayette atd Plaquemine, Louisiana expressed interest in Co-o.rnership of River Bend St& tion and.

their interest continued with CSU encouragement.

Plaquemine finally vithdrew their request for ownership because of financial' problems within the City. Lafayette has become a member of Louisiana Inergy and Power Authority (LEPA) which has been formed by.some cities in Louisiana to co-own electric generating plants.

Previous to the LEPA group being formed, another group named Electric Power System Authority (EPSA), of which Lafayette was a member, was interested in owning River Bend Station generation.

GSU and EPSA had several meetings on River

• Bend Station ownership The EPSA group has disbanded.

On October 11, 1980, GSU met with representatives of LEPA to furnish them information on River Bend Station and GSU's Nelson Coal Units.

It appears LEPA will own a percent. age of Cajun's first two coal units and will sign an Interconnection Agreement with GSU, which is in final draft form being sent 'o LEPA. LEPA has under study their possible co-ownership in t

River Band Station /.

In late 1978 the City of Lafayette, Louisiana, asked GSU to move about I

5,000 RW to Louisiana Power and Light Company (LP&L) for delivery to Clarksdale, Mississippi. GSU agreed since we havg Interconnection Agreements with both Lafayette and LP&L.

In subsequent discussions we pointed out that although GSU does not have an Interconnection Agreement with Mississippi Power and Light Company (MP&L) we do have a 500 XV electrical tie with them at the Louisiana-Mississippi state line near Phelps, Louisiana. MP&L interconnects with Clarksdale, Mississippi, and other members of MEAM (Municipal Energy Aesney of Mississippi).

Since we thought it would be in GSU's interest to have an Interconnection Agreement with MP&L, we contacted MP&L and with their agreement mailed them a draft of a Power Interconnection Agreement on November 7, 1978. After more than a year of negotiations j

we agreed on a Power Interconnection Agreement but MP&L would not sign

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it with Service Schedules attached.

The HEAM cities were putting pressure on MP&L to get the transaction started to move the power from Lafayette. Louisiana to Clarksdale and others. MP&L then filed with FERC an " unexecuted"fInterconnection Agreement without Service Schedules. MP&L stated that the purpose of its filing was to attempt to implement the transmission of power which the City of Clarksdale.

l Mississippi and the Greenwood Utilities Commission of Greenwood, Mississippi propose to purchase through the MEAM from the City of Lafayette, Louisiana. That filing was assigned Docket No. ER80-261.

Clarksdale ani Greenwood intervened and a settlement judge was appointed. Although GSU was not a party to the proceedings, we were invited and did attend the settlement conference. A settlement agreement dated December 15, 1980, was reached and power is now being moved by GSU from Lafayette to MP&L for delivery to the members of MEAM.

'..'J During the course of the negotiations between GSU and MP&L, representatives of MEAM met with GSU to check on the status of the negotiations. During those meetings, HEAM expressed an interest in,Co-ownership of River Bend Station and other GSU future units.

GSU

-1 furnished the riecessary information to MEAM. There have been no recent developments expressing their further interest.,

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