ML20080G336
| ML20080G336 | |
| Person / Time | |
|---|---|
| Site: | River Bend  |
| Issue date: | 09/15/1983 |
| From: | Guttman D, Spiegel G AFFILIATION NOT ASSIGNED, LAFAYETTE, LA, SPIEGEL & MCDIARMID |
| To: | Regan W Office of Nuclear Reactor Regulation |
| References | |
| ISSUANCES-A, NUDOCS 8309200230 | |
| Download: ML20080G336 (15) | |
Text
_
LAW OFHCES GEORGE SPIEGEL PC SPIEGEL & McDIARMID RON M. LANDSMAN ROBERT C. MCDIARMID JOHN MICHAEL ADRAGNA SANDRA J. STREBEL 2600 VIRGINIA AVENUE. N.W.
CYNTHIA S. BOGORAD ROBERT A.JABLON GARY J. NEWELL JAMES f t HORWOOD WASHINGTON. D C. 20037 MARC R. POIRIER ALAN J. ROTH JOSEPH L VAN EATON TELEPHONE (202) 3314500 FRANCES E. FRANCIS STEPHEN C. NICHOLS DANIEL L DAVIDSON TELECOPtER (202) 333-2974 PATRICIA E. STACK THOMAS N. McHUGH. JR.
P. DANIEL BRUNER DANIEL J. GUTTMAN SCOTT H. STRAUSS PETER K. MATT NANCY E. WlEGERS DAVID R. STRAUS BEN FINkELSTs0N BONNIE S. BLAIR DONALD WEIGHTM AN THOMAS C. TRAUGER September 15, 1983 OF COUNSEL SUSAN T. SHEPHERD William Regan Chief Site Analysis Branch Office of Nuclear Reactor Regulation U.S Nuclear Regulatory Commission Washington, D.C.
20555 Re:
Operating License Application, antitrust review, Gulf States Utilities Company (River Bend Units 1 and 2), Docket Nos.
50-458A and 50-459A
Dear Mr. Regan:
On June 30, 1981, the Commission noticed the receipt of antitrust information from Gulf States Utilities Company ("GSU"),
on behalf of itself and Cajun Electric Power Cooperative
(" Cajun"), in connection with the filing of an application for an operating license for the River Bend 1 and 2 nuclear units.
That notice stated that persons wishing to have their views considered with respect to "significant changes" related to antitrust matters which have occurred in the applicants' activities since the construction permit antitrust re views, should submit their views. If Laf ayette's counsel has also received a recent inquiry 1/
The Notice stated that views should be submitted to the
" Chief, Utility Finance Branch."
It is our understanding from inquiry with the Commission that this branch is no longer in existence and that the " Antitrust Analysis Branch" under your purview is the appropriate recipient of the information.
Should this not be the case, referral to the appropriate of fice is requested.
8309200230 830915 DR ADOCK 05000458 h
2-
-from the Commission staff as to whether it would be submitting comments.
The City of Lafayette, Louisiana
(" Lafayette") hereby submits-its views.
As explained below, in the interim since the construction permit antitrust review and, indeed, since the receipt and notice of the operating license antitrust information, significant changes have taken place which (a) render the information provided in 1981 outdated and substantially deficient, and (b) show that Gulf States is now apparently acting in a manner inconsistent with the terms of the antitrust conditions in its construction permit and antitrust law and policy.
Summary Laf ayette requests that the Staff require GSU to make a complete and updated submittal of antitrust information and that
.the Staff defer making its " initial finding" as to antitrust matters relating to issuance of the operating license until such information is received and considered, or alternatively, that the Staff make an initial finding that "significant changes" in the licensee's activities have occurred subsequent to the previous antitrust review conducted by the Attorney General and the Commission at the construction permit stage and that a second antitrust review is now required at the operating license stage.
In the interim since the 1981 filing, it has become apparent that, when River Bend 1 comes on-line in late 1985, Gulf States will have a very substantial excess of capacity where it previously had projected none.
Indeed, the measure of excess above " desired reserves" is projected to be substantially greater than the size of GSU's share of the River Bend unit.
This excess in part is due to GSU's 1982 contract to purchase 1,000 Mw of coal-fired unit power for a period also beginning in 1985.
In the face of present and potential cost increases on the GSU system, including those related to' River Bend 1, present I
municipal wholesale customers of GSU have sought to purchase wholesale power from Lafayette.
In the first part of 1983, three l
l of them entered into formal agreement with Lafayette to do so.
Gulf States, however, has refused or ' delayed the provision of l
' transmission service.
It has done so despite express commitments l
to provide such service.
These commitments are contained in j
outstanding interconnection agreements,. recent Gulf States letters to at least one customer, and the antitrust conditions in I
( _.
. the River Bend construction permit.
Moreover, in lieu of making available transmission service, Gulf States has required wholesale municipal customers to execute long term contracts that would preclude them from taking service from Lafayette or others although.these customers can expect substantial wholesale rate increases ~in the period in which River Bend Unit I comes on-line.
In sum, faced with cost increases and substantial excess capacity as River Bend 1 nears completion, Gulf States is using its control of' transmission lines to prevent current customers from gaining less expensive power supply from Lafayette, or
- perhaps others. ~ These actions are directly contrary to Otter
-Tail' Power Company v.
United States, 410 U.S. 366 (1973) and Consumers Power Co. (Midland Units 1 and 2), 7 NRC (1977).
These developments are substantial, indeed "significant
~
changes" which require (a) a direction to Gulf States that.it revise its application to fully account for all power supply, load'and other changes which have not been reported;-
(b) a determination by the Commission that "significant changes" have occurred requiring Commission review and. consultation with the Justice Department; (c) a determination that Gulf States has violated the conditions of its construction permit; and (c)- further action to modify the project antitrust conditions'as a condition of the maintenance of the construction permit and grant of the operating license, to require that Gulf States provide (on reasonable terms) assured' access to its l
transmission system to Lafayette and to those GSU customers who wish service from other suppliers, including Lafayette.
In addition, Ewe note that GSU is also applying for.an operating license for River Bend Unit 2 although it appears that this unit has f been indefinitely suspended or abandoned. 1/
This 1/
As stated at page 6 of GSU's 1982 10-k Report to the SEC, 4
T(A) decision regarding construction of River Bend Unit 2... has d
been deferred at-least until the completion of River Bend Unit 1."
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1
. is not only a "significant change" but also requires the Staff to reject the application for an operating license for Unit 2 and to initiate steps to consider whether the construction permit for Unit 2 shoold be revoked.
Lafayette The City of Lafayette owns and operates a municipal electric
- system for the benefit of its citizens and ratepayers.
At present, the system includes 364 Mw of oil / gas-fired generation located in Lafayette, Louisiana and an additional 265 Mw (or 50 percent) ownership share of the Rodemacher No. 2 coal-fired unit located in Boyce, Louisiana, for a total capability of 629 Mw.
Lafayette is electrically interconnected, and has power interconnection agreements, with the Central Louisiana Electric Company ("CLECO") and GSU.
In addition, Lafayette, along with other Louisiana municipal systems, is a member of the Louisiana Energy and Power Authority ("LEPA").
That entity, whose creation was authorized by the Louisiana legislature in 1979 entered into an interconnection agreement with GSU in 1982.
In the recent past, Lafayette has experienced peaks approximating 250 Mw (summer) and 125 Mw (winter) on the loads of its local service area.
With the start-up of the Rodemacher No.
2 unit in the summer of 1982, the re f ore, Lafayette had available substantial capacity in excess of its local needs, which it has been seeking to sell to other systems.
In 1982-83 Laf ayette has been able to sell portions of this capacity to the Cajun Electric Cooperative, the Louisiana municipal systems of Alexandria and Natchitoches, and certain municipal systems in Mississippi, In 1983, Lafayette entered into discussions with Louisiana municipal systems that are wholesale customers of GSU.
As a result of these discussions, Plaqueminc, Abbeville and New Roads entered into separate agreements with Lafayette for the purchase of power to begin on June 1, 1983, and St. Martinville formally expressed interest in an agreement.
In each case, agreement was contingent upon the availability of transmission from Lafayette through the GSU system.
In each case, as discussed below, GSU has unlawfully refused and/or sought to frustrate the transmission of power necessary for these transactions.
E.g.,
Sherman Antitrust Act, SSl and 2, 15 U.S.C.
S12.
As a result, Abbeville entered in a new longer term contract with GSU, the transaction with New Roads was delayed, and the sale to Plaquemine was not only delayed but required to be accomplished through LEPA.
The negotiations between Lafayette and St.
Martinville have come to a halt.
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It Is' Premature For The Staff To Make Initial Findings Until GSU-Sdbmits Complete And Current Antitrust Information, 11
- Since Substantial Changes Are Not Reflected In The-Filing Gulf States. filed antitrust information in support of the
- operating license on April 22, 1981.
In the interim, there have been substantial,-indeed "significant" changes in the facts in Gulf States' present and projected activities which bear directly on its compliance with the antitrust conditions in its
~
construction permit, and its compliance with the antitrust laws
'and'the policies underlying them. LAs. summarized here, the a
information which has not yet.been provided by Gulf States constitute "significant changes" which require the provision of
' further information by Gulf' States.- Alternatively, should Gulf
- States concede the accuracy of. the information presented here, the informati'on constitutes the basis for a determination that "significant changes" have occurred.which require consultation with the attorney general. 1/
A.
Recent Alterations In GSU's Load Growth And~ Projected Capacity Which Have Not Been Reported By GSU Constitute l
Significant Changes' Requiring Revision Of The Antitrust Information And "Significant' Change" Finding
+
There has been a significant change-in Gulf States' utilization of -River Bend power.in the interim since the
' construction permit antitrust review and, indeed, since Gulf
. States submitted its operating license application in 1981.
It-f
'now appears that, in the period following the commencement of
~
River Bend's operation, Gulf States will have substantially more L
. excess capacity than'that for which it previously planned and than that ' for which it now projects a need.
11 In the antitrust material' submitted in'1981,' Gulf States
'noted an increase -in, the reserve margin for. the ' projected r
i:
operating date of River Bend from 15 percent to' 20 percent, jb/
~
I:
1-1/ : Pursua'nt.to Section 105(c)(2) of the Atomic Energy Act.and 10 C.F.R. 50.42.
2/
See April :22, 1981 Gulf States " Operating License Application Antitrust Review Information," River Bend Units l'and 2, response to question B.l.a.
As that states:
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Based on this estimate, it concluded that "there is no anticipated excess or shortage in generating capacity reserves."
Projections most recently provided by Gulf States before the FERC, however, show that the 1981 (and prior) projections considerably understated the excess capacity that will be available to Gulf States when River Bend Unit 1 comes into operation.
February 1983 Gulf States projections 1/ show that in calendar-1986, the first projected full year of River Bend 1 operation, Gulf States will have a reserve margin of 48.7 percent (summer) and 75.6 percent (winter), stating a_" desired reserves" level of 18 percent.
The February 1983 report further shows that in each of the years 1985-1989, Gulf States " surplus capability" at~ peak -
that is, its margins in excess of load, desired reserves and capacity out for maintenance -- will be significantly in excess of its share of River Bend Unit 1. 2/
FOOTNOTE CONTINUED FROM PREVIOUS PAGE The reserve margin for the original proposed in-service date of 1981 for River Bend Unit I was 15.8%.
In an analysis at 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..."
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 reserves.
1/
" Gulf States Utilities Company Load and Capability Estimate 1982-1988 Inclusive" Attachment A hereto, at page 4.
(This document was provided by GSU in a May 1983 response to a data request of the Louisiana Public Service Commission in Southern Company Services, Inc., FERC Docket No. ER82-579.
2/
GSU's share of River Bend is projected as 658 Mw during the years (subject to further adjustment).
The February 1983 projections show the following " surplus capability":
1985 1986 1987 1988 summer winter summer winter summer winter summer 1,050 1,621 1,803 1,421 1,600 1,232 1,390 r
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. The Gulf States data show that this significant change is a result of both a decline in' projected load growth and the entrance into a substantial new power purchase in the face of the declining r.eed.
Thus, GSU's internal March 31, 1981 1/ load forecast projected a 1985 peak of 6,801 Mw, in contrast to the 5,781 Mw peak projected by the February 1983 forecast.
- However, despite the dramatic drop in projected load growth, in 1982 GSU entered into a contract under which it will purchase 1,000 Mw of unit power from the Southern Companies in the 1985-92 period. 2/
Finally, in addition to the outdated load forecasts and the absence of reference to the Southern purchase, the load and capacity data in the 1981 application presumed that Cajun would own 30 percent of River Bend 1 and the Sam Rayburn Electric Cooperative would own 7 percent.
According to GSU's current (1982) form 10-k report to the Securities and Exchange Commission, 3/ however, thia is no longer the case.
As the report states, the REA "has refused to approve such participation" by Sam Rayburn and GSU and Sam Rayburn "are presently negotiating contract amendments whereby SRG&T would become owner of a 342 percent interest in such unit.
Such participation, if agreed upon, would require REA approval. "
The 1982 10-K report further states that there are questions about Cajun's ability to pay for its allocated share of the unit. 4/
The report states that if Cajun cannot pay its share, 1/
Attachment B, hereto.
(The document was also provided in May 1983 in response to a Louisiana Public Service Commission data request in FERC Docket No. ER82-579.
2/
The contract and related agreements, are currently before the PERC in Southern Company Services, Inc., Docket No. ER82-579.
Service is to begin in 1984 at 500 Mw, and go to 1,000 Mw in 1985.
3/
At 3.
4/
As the report states, at 2, Under existing agreements, CEPCO has acquired a 30 percent ownership interest in River Bend Unit I with funds from loans guaranteed by the REA.
Under the joint FOOTNOTE CONTINUED ON NEXT PAGE
. GSU will have to make up the dif ference.
The report does not, however, state whether a reduction in Cajun's ownership share would result.
The information provided in 1981 must the re f ore also be revised to reflect those developments.
Thus, it would appear that the information provided in 1981 1/ must also be revised as GSU will now likely own a greater share of River Bend than previously stated.
In sum, it is now apparent that when River Bend 1 comes into operation, Gulf States will have considerably more excess capacity than previously planned, and considerably more than it needs.
Under the circumstances, Gulf States' incentive to retain FOOTNOTE CONTINUED FROM PREVIOUS PAGE ownership agreement, CEPCO is obligated to pay its 30 percent share of the construction costs as incurred and is doing so.
Based upon the latest projections of the total cost of such unit, CEPCO's share will exceed its existing loan guarantee and it will need additional load guarantees from the REA or other funds to fulfill its obligations.- Based on the Company's estimates, CEPCO's presently available. funds will run out in mid-1983 unless additional guarantees are arranged or other financing is obtained by CEPCO.
The Company has been advised that CEPCO filed,. in September 1982, an application for an additional loan guarantee to cover its estimated participation in River Bend Unit 1, however, there can be no assurance that such application will be granted.
The Company's estimate of its 1983 construction program of
$620 million does not include $132 million (excluding AFUDC) of expected participation by CEPCO in 1983, approximately $62 million of which exceeds CEPCO's present loan commitment and would have to be paid by the Company if such loan-commitment is not increased.
CEPCO's participation in construction expenditures, excluding AFUDC, in 1984 and 1985, is presently estimated to be approximately S112 million and S66 million,
.respectively.
1/
Lafayette notes'GSU's 1982 report to shareholders, at 3, characterized Sam Rayburn's " lack of financial participation" in River Bend as "not unexpected."
. present customers, as captives, (and, of course, seek new ones) is obvious and powerful.
Moreover, recent Gulf States projections further show that it not only expects to have substantial. excess capacity, but that its average cost of generation will increase substantially.
Thus, from 1984 to 1985 GSU estimates an increase in the " running costs" of GSU generated power from 19.1 to 52.5 mills /kwh. 1/- The Gulf States load and price forecasts are themselves a "significant change" which both help explain Gulf States' efforts to prevent its customers from purchasing power from Lafayette (as discussed below) and require Commission attention and remedy to insure that the River Bend Unit is not used in furtherance of anticompetitive practices.
B.
Recent Changes In Gulf States Coordination Activities Require Revision To Reflect "Significant Changes".
As provided for by NRC Regulatory Guide 9.3, in its 1981 submission, GSU provided 2/ information on "(N)ew power pools or coordinating groups in which the licensee will be a member,"
and "(C)hanges in transmission with respect to...
interconnections."
In the interim since 1981, there have been major developments in these areas which significantly effect the power supply market and competition in the South Centr-1 region.
First, as noted above, GSU has entered into a maj>r uniL power sales agreement with the Southern Companies.
In connection with the agreement, it has entered into an interconnection agreement with Southern and-an agreement to construct a 500 Kv interconnection between GSU and Mississippi Power Corporation, a member of the Southern system.
Second, Gulf States, the Middle South Utilities system and the Southern Companies have agreed to enter into a " coordination" agreement. 3/
Lafayette, by letter of July 5, 1983 has formally 1/
GSU response to Initial Data Request 6 of the Louisiana Public Service Commission, Southern Company Services, Inc., FERC Docket No. ER82-579.
2/
See question B.l.6.
3/
The_ commitment to enter. into such agreement is contained in a December 13, 1982 " Agreement Among" GSU and the Middle South Southern Companies (including member companies) in relation to the withdrawal of Middle South's intervention request in the FERC proceeding (Southern Company Services, Docket No. ER82-579) concerning the GSU-Southern unit sales agreement and.
interconnection.
10 -
sought to become a party to this agreement, but has not rece ived responses to its request.
The Southern-GSU arrangements and the coordination agreement are "significant" new developments that must be reported on by GSU for examination in connection with the competitive context of the River Bend license. 1/
In addition, since the 1981 filing, GSU has also entered into new interconnection agreements with the Southwestern Electric Power Company ("SWEPCO"), the Mississippi Power & Light Company, and the Louisiana Energy and Power Authority ("LEPA").
These developments also require - reporting by GSU, and consideration by the Commission.
C.
The GSU Antitrust Information Must Be Revised To Reflect Significant New Developments In Gulf States Dealings With Its Wholesale And Transmission Customers In its 1981 application, GSU was required, pursuant to Regulatory Guide 9.3, to provide 1/ a "[s]ummary of requests or indications of interest by other electric power wholesale or retail distributors, and licensees' response, for any type of electric service..."
As summarized below, GSU's recent refusals to transmit power on behalf of sales by Lafayette and requests for service related to those refusals constitute a "significant change" requiring GSU report and Commission scrutiny.
Conclusion In summary, the antitrust information previously supplied by GSU pursuant to the Regulatory Guide 9.3 is inadequate, incomplete and outdated, so that it cannot furnish a basis for a Staff " initial finding" as to "significant changes" as called for by the Atomic Energy Act, Section 105(c)(2) and Part 50 of the Commission's Regulations at 10 C.F.R. 50.42, as follows:
1/
According to GSU, it entered into the Southern unit power and interconnection arrangements in the expectation that they will
" improve the re tiability of its '[GSU's] system, provide access to additional sources of and markets for power..."
GSU 1982 Form 10-k report to the SEC, at 7 (emphasis added).
2/
As antitrust question B.l.h.
-- 11 _
.a.
GSU asserted "no anticipated excess in generating capacity resources" but now discloses that there will be a substantial excess in such resources.
b.
. GSU has not yet reported. the significant new coordination and interconnection arrangements in which it has.
entered, or plans to enter into, since April, 1981.
ac.
The arrangements-for River Bend 1 ownership and cost as_ to Cajun and the Sam Rayburn G&T-have been changed and are now in flux.
d.
GSU has-not provides information on recent changes in the provisions and conditions rf its wholesale rate schedules and service agreements.
e.
GSU has not provided.information on recent requests for electric. service, including, in particular, the transmission services summarized below.
II. Above And Beyond The' Outdated Information In The 1981
' Application, = Gulf 9tates Ongoing Actions To Frustrate
-Lafayette's Use Of GSU's Transmission System And Prevent GSU Wholesale Customers From Taking Service From Lafayette Require-A Finding Of "Significant Change" And Appropriate Remedy In 1982-83, as Lafayette has. undertaken to market'its excess
' power, it has become increasingly apparent that GSU will do all it can -
including refusal of transmission in-violation of contractual,1 NRC license condition and:other written commitments to frustrate Lafayette's ability to sell power in competition with GSU.
GSU has refused and/or resisted. requests for transmission between Laf ayette and GSU municipal wholesale
-customers.
Simu ltaneously, it has asked its municipal wholesale customers to enter into new long term contracts which effectively foreclose their' ability:to seek more' economic supplies from.
Lafayette or others.
Finally, GSU has refused to provide Lafayette transmission across its system into the Mississippi Power & Light system -on behalf of a sale from Laf ayette to the -
Municipal-Energy Authority-of Mississippi.
These activities individually and collectively constitute a "significant change" requiring Commission scrutiny and remedy.
In summary, the-significant developments. include the following.
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Gulf States has refused to provide the transmission between Lafayette and the City of Abbeville needed to consummate an agreement for the provision by Lafayette of Abbeville's wholesale power requirements.
On April 28, 1983, Lafayette and Abbeville-entered into an agreement under which Lafayette would supply Abbeville's power and energy needs beginning on June 1, 1983.
Abbeville had been served as a wholesale requirements customer of GSU.
In entering into the agreement, Abbeville and Lafayette relied on GSU's express written commitment, made in letters of March 1983, that, if Abbeville wished to take power from another source, GSU would provide the requisite interconnection and transmission arrangements.
When GSU was informed of the Lafayette /Abbeville agreement, however, it renegged on its commitment, stating that it would not provide the wheeling as promised.
This and other GSU actions forced Abbeville to enter into a new agreement with GSU notwithstanding its belief that the agreement with Lafayette was in its best interests.
2.
St. Martinville, like Abbeville, is a non generating wholesale customer of GSU.
By letter of April 5, 1983, the Mayor of St. Martinville stated his interest "in purchasing electricity from excess power the City of Lafayette now has for a period of 2 to 5Jyears."
On receipt of this letter, Lafayette promptly wrote to GSU requesting that transmission service be made available.
GSU declined to provide service.
In light of GSU's contemporaneous refusal to provide transmission for Abbeville, despite its express commitment to do so, Lafayette's negotiations with St. Martinville, of necessity, came to a halt.
3.
On April 27, 1983, Lafayette entered into agreement with the City of Plaquemine to supply it with its power and energy requirements f rom June 1, 1983 through April 1986.
Plaquemine has been receiving its supply from Gulf States.
Plaquemine, like Lafnyette, has an~ interconnection agreement with Gulf States.
Both the Plaquemine and Lafayette agreements provide for use of the Gulf States transmission system for the transmission of
" wholesale power and energy."
Gulf States, however, has refused to provide transmission under these agreements.
Instead, it claims that Plaquemine and Laf ayette must use the Gulf States interconnection agreements with LEPA which requires a higher price.for the service.
GSU simultaneously raised technical objections to the provision of service under the LEPA agreement.
As a result, Lafayette and Plaquemine were required to arrange for service under the LEPA agreement, and service did not begin until mid-July 1983.
4.
In April, 1983, Lafayette entered into agreement with the Town of New Roads to supply it 3 Mw of power with service to begin on June 1, 1983.
This power and energy would replace power
. and energy previously supplied by GSU.
Again, GSU refused to provide transmission service on the. date requested, and service did not'begin until'mid-July.1983.
5.
It also appears that, in the recent past, GSU has sought to enter into new contracts with its wholesale municipal customers that provide for minimum ten-year terms.
These contracts would replace existing contracts that provide for cancellation upon a year's notice.
In seeking a ten-year term, GSU has refused requests for lesser terms on grounds that it must maintain consistency among contract terms.
In order to retain Abbeville as a customer, however, GSU backed down on this refusal and agreed to a-three and one-half' year initial term.
6.
From 1982 to late June 1983, GSU refused to provide Lafayette with through transmission to Mississippi Power & Light for sale of Lafayette power to municipal systems in Louisiana.
It did so despite MPL's' willingness to receive the power and GSU's own previous provision.of transmission to MPL for a similar sale by Lafayette.
7.
As noted above, in late 1982 Gulf States agreed to enter into a reliability coordination agreement with Middle South Utilities and the Southern System.
As described in a " draft" agreement made available to Lafayette, the new agreement would provide a basis for broad planning and coordination activities in the region including GSU and Lafayette.
By letter of July 5, 1983, Lafayette formally asked to join in the agreement.
It has as yet to receive a response from Gulf States or the other utilities.
In' sum, (1) certain Hof GSU's wholesale customers believe that it is in their best economic interest to switch from GSU to Lafayette; (2) GSU has denied or delayed required transmission, even in the face of its own express. commitment to provide transmission; (3) GSU is taking further unreasonable and unlawful actions to ensure that Lafayette will not have access to markets including, in particular, customers now served by GSU at wholesale, and conversely, to foreclose GSU customers from more economic power supply alternatives.
GSU asserts that these actions are consistent with its construction permit conditions, while we disagree.
If GSU is correct there is required a modification of the conditions before the operating license is issued.
14 -
IV. GSU's Violztion Of Antitrust Conditions In Its Construction Permit Is A "Significant Change" Requiring Commission Scrutiny And Remedy.
Pursuant to the 1974 antitrust re view, the construction permit entered into by GSU contains, inter alia, the following commitments by the Company:
7.
Interconnection and coordination agreements shall not embody any unlawful or unreasonably ~ restrictive provisions pertaining to intersystem coordination.
Good industry practice as developed in the area.from time to cime (if not unlawfully or unreasonably restrictive) will satisfy this provision.
10.
' Applicant shall facilitate the exchange of bulk power by transmission over its - transmission f acilitiec between two or more entities 1 engaging in bulk power supply in its service area in Louisiana with which it is interconnected; and between any such entity (ies) and,any entity (ies) engaging in bulk power supply outside Applicant's service area in Louisiana between whose facilities Applicant's transmission lines and'other transmission lines would form a continuous electrical. path; provided that (1) Permission to utilize such other transmission lines-has been obtained by the entities involved, (2)
Applicant has appropriate agreements for transmission service with the entities interconnected with Applicant at ' both the receiving and delivery points on Applicant's system, and (3)-the arrangements reasonably can be ' accommodated from a-functional and
. technical standpoint...
GSU's' refusal to provide transmission service between Lafayette and Plaquemine under the transmission schedules in the
. interconnection Agreements between these systems and GSU L
constitutes a violation'of provision 10 of the construction l-permit.= Alternatively, to the extent GSU would contend that
.these transmission schedules do not provide for the service
't is in violation'of provision 7.
i requested, GSU's refusal to respond to Laf ayette's request to participata in the planned coordination agreement among.GSU, Middle South, and Southern indicates that GSU is unreasonably limiting Lafayette's access to coordination, in violation of I-provision 7.
_- - - - _ _ - ~,-,--- _ _
.... GSU's refusal to provide transmission service for Lafayette's sale to Abbeville constitutes a violation of provision 10 of the permit.
Lafayette recognizes that GSU does not have a transmission agreement with Abbeville, but it has defaulted on its March 1983 written commitment to provide one, and cannot now claim that it is not obligated to transmit because of lack of 'an appropriate agreement."
Conclusion In summary, in view of the matters stated above, Lafayette respectfully requests that the Staff defer making its " initial findings" on antitrust matters relating to the issuance of the River Bend operating license pending receipt of revised antitrust information or, alternatively, that the Staff make an initial finding that "significant changes" have occurred subsequent to the antitrust review at the construction permit stage and that further antitrust review is in order.
Lafayette would be pleased to provide such further information and assistance as it can to clarify and/or elaborate on the facts and requests stated herein.
Very truly yours, George S,iegel Daniel Guttman Attorneys for the City of Lafayette, Louisiana cc: Cecil Johnson, Esq.