ML20084U647

Informs That Kansas Corp Commission Accepted Settlement of Transmission Issues Reached Between Ksge & Kansas Power & Light Co.Settlement Agreement Encl

ML20084U647
Person / Time
Site:	Wolf Creek
Issue date:	04/04/1991
From:	Irwin D HUNTON & WILLIAMS
To:	Pickett D, Reis E, Rutberg J HUNTON & WILLIAMS
References
NUDOCS 9104220065
Download: ML20084U647 (8)

Text

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MEMORANDUM To Joseph Rutberg, Esq. DATE: April 4, 1991 Edwin Reis, Esq.

Douglas Pickett /

Fromt Don Irwin FILET 36769.000005 KG&E Wolf Crock

. Transmission Issues Resolution before KCC Yesterday the Kansas Corporation Commission accepted a settlement of transmission issues reached between its staff, Kansas Gas and Electric Company and Kansas Power and Light Company. Copies-of the settlement agreement and of a contemporaneous press release issued by the KCC are attached. I would appreciate your seeing that they are distributed to all concerned in anticipation of our meeting scheduled for 1:00 next Monday afternoon, April 8.

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. t SEFORE THE STATE CORPORATION CONNISSION OF THE STATE OF KANSA8 e

IN THE MATTER OF THE APPL! CATION OF )

XANSAS CITY POWER & LIGHT COMPANY FOR )

APPROYAL OF ITS ACQUISITION OF AL!. ) Consolidated CLASSES OF TNE CAPITAL STOCK OF KANSAS ) Docket Nos.

GAS AND ELECTRIC, TO NERGE N!TH KAN8AS- ) 172,745-U GAS AND ELECTRIC, TO INCUR DENT )

OsLIGATIola, AND TO TRANSTER KANSAS GAS )

AND ELECTRIC'S RETAIL ELECTRIC SERVICE )

AVTMORITY AND MUNICIPAL FRANCN!$24 )

IN THE MATTER OF THE' JOINT APPLICATION )

OF THE KANSAS POWER AND LJOHT CONPANY, )

XCA CORPORATION, AND KANSAS GAS AND )

ELECTRIC COMPANY FOR APPROVAL OF THE )

ACQUISITION CF ALL CLASSES OF THE CAPITAL )

s'20CK OF -KANSAS GAS AND ELECTRIC COMPANY, ) 174,155-U TO NERGE KANSAS CAS AND ELECTRIC COMPANY )

INTO RCA CORPORATION, TO INCUR DEBT )

OSLIGATIONS, AND TO TRANSFER KANSA8 GAS }

AND ELECTRIC COMPANY'S RETAIL ELECTRIC )

SEEVICE AUTHORITY AND MUNICIPAL FRANCHISES)

STIPULATIDtLatHLAGREEMEET on_ Novenber 20, 1990, The Kansas Power and Light Company -

(KPL), KCA Corporation (KPL Sub), and Kansas Gas _and Electric ,

' company - (KG6E) (hereinaf ter referred to - collectively as " Joint.

Applicants" or " Companies"): filed a Joint Application in the above-captioned dockets requesting 'all . Commission .authorizationa necessary to consummate a proposed merge'r under which KO&E would be merged with=and-into.KPL sub. .By order dated February 15, 1991, I the Commission established a procedural schedule for.the pre-filing of testimony and exhibits and the holding of hearings. Pursuant to that L schedule, both cne Joint- Applicants .. and the- Staf f of _- the Commission (staff) FHed testimony and exhibits addressing 4 number 3 of issues, including (1) the of feet of the merger _ on competition in t.he bulk power market and (2) the terms and conditions that should y

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, Q 003 be adopted to govern the use of the Joint Applicants' transmission facilities should the merger be approved.

Subsequent to the filing of this testimony, the Joint Applicants and Staff met on several occasions in an effort to i

discuss and, where possible, resolve their dif forences on these issues. As a result of these extensive discussions, the undersigned parties have reached the following stipulations and >

agreements which dispose of the competition and transmianton-related issues raised in this casos

1. The tarif fs filed by the merged company shall provide for wholesale firm and non-firm transmission service at cost based rates and on terms and conditione consistent with those applicable to other retail and wholesale services. Such tariffs shall be filed within sixty days of the closing of the merger.

2. The. Joint Applicante commit to make a subsequent transmission rate filing pursuant to the Federal Power Act as soon as practicable but no later than two years following the closing of the merger. This i111ng will contain all cost data and operating parametern for the combined companies that are necessary to evalucte alternate firm transmission rates. Joint Applicants will propose and support in their- transmission filing a single rate for-all transactions requiring the joint use of the transmission facilities of both pre-merger Companies.

3. Once a customer and the Companies enter into agreement for a particular transaction, neither party may unilaterally

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request FERC ' to change the terms of that particular transaction 2

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• unless such contract itself explicitly sets forth the right to seek changes under Section 205 or 206.

4. Firm service shall be avaliable for any length of time as short as one year, and as long as 30 years. companies shall provide firm transmission service for less than one year, il needed to provide emergency, ref ueling or maintenance outage service. If the companies provide firm transmission service to each other for a term of less than one year, auch servlee will be of fered to other wholesale customers on a non-discriminatory basis.

5. Available transmission capacity shall be estimated and annually announcte in 6 manner designed to pr9 vide prospective customers the opportunity to evaluate the availability of transmission service from the Companies.

6. Whenever a request for transmission service rt; quires the construction of a new facility, the Companins will determine the economic feasibility of the construction. The cost of any added transmission facility shall be charged to t. hose customers who create the need for such facility. Theres shall be no presumption that a transmission customer requesting service is the customer croating the need for such tacility. The determination of which customer (s) create the need for a new fac111ty shall be made on a j case-by-case basis.

7. Line losses shall be calculated based on methodologies no i

different from those used to calculate losses when the Companies use the transmission. system to serve other customers recogg like ,

services. Line losses for firm transmission so'rvice chall be-3

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6 ealculated on an average basin and line losses for non-firra service shall be calculated on an incremental basis.

O. Companies will une due diligence in completing construction of new f acilities. Companies will neck expedited resolution of any dispute concerning the construction of new facilities, and will seek expedited review of any agreernent for cor.struct. ion of new f acilitica.

9. Assignment shall be parini t t ed . Where the assignee is making no change in services being rendered, no c.,reement of the Companies is necessary. Any assignee shall accept assignment only on t.h e condition that it undertakes all obligations of the ansignor.

10. All interruptions and curtal;,ments of firm service shall be made pro rata acrose all firm retail, wholesale requirements and transmission loads affected by the interruption or curtailment.

11. The issue of transmission reciprocity shall be lef t. open for resolution in TERC Docket No. EC91-2-000.

12. Upon issuance of a commission order approving these principles, the Joint npplicants and the commission will take appropriate action before TERC to assure that the principles set forth in this agreement and the companies' proposed tariff, as modified consistent with the above principles, are implomonted.

Each party shall participate fully in the discussions required to develop the detailed tariff language necessary to implement the principles set forth above.

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13. This stipulation and Agreement will be made part of the record in RCC Docket No. 174,155-U.

14. Except as othorviso provided for herein, none of the signatories to this stipu3ation and Agreement shall be deemed to >

have approved or acquiesced in any ratemaking principle or any method of cost determination or cost allocation underlying or allegedly underlying this Stipulation and Agreement. i

15. In the event the Commisalon accepts the specific terms of this Stipulation and Agreement, the signatories agree to waive, with respect to the issues resolved herein in Docket No. 174,155 U, their rights to cross-examine each other's witnesses, their rights to present oral argument and written briefs; their rights to the reading of the transcript by the Commission; and respective rights to-judicial review.

16. This Stipulation and Agreement has resulted from extensive negotiations among the signatories and the terms hereof are interdependent. In the event the Commission does not approve

and adopt this stipulation and Agreement in total, the Stipulation l

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cnd Agreement shall be void and no signatory shall be bound by any of the agreements or provisions hereof.  ;

Respectfully submitted, i

10 COMPANY THE KANSMP ., JDW'*t" n {' , /y,

- STAFF OF THE KANSAS CORPORATION COMMISSION b.a\

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KCC News

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Media contat Sarn Van 1mewan, DLratr of PEblic Aff an Othce: (91!) 271425 &ans (910 2331503 Apr113.1991/ Fcr immedime reloon CertiTtission approves KPL/KG&E transmission stipulation The Kansas Corporation ComnMon today approv(d a stipulation on electdc tmnmim slon tssaes reached t.y the KCC steff, XPL Gas Sewice and Kan5m Cas & Electric.

The dipulatLon was presental to the convrission March 25 during the first phase of hearin5s on the propaed merper The first phase dWt with tnuurr)esion (mues. Phase tw c ci tie homings, w hlch w 01 oddme all remaintry imms, will begin April 11.

The transn JssJen stipulation is intanded ta prevmt KFL and KG&E from increadng nonopoly control of the w folsele doctrle narket threugh the proposed merger. The stipulo.

tion outlina conditiom that slouki be adopted to swem the use of transndmion feelities of the menpd ccmpany should the maier ultimak4. y be apprwed ty the commisslor..

XCC staff said the commission's ajyroval of thestipulation on elec'rk tmntmlmion issues doa not inply the mmmission wUl apprcve the merger.

Thestipulation ensures that if the mergertakes place, the nvrged cortpariywill provide finn (non intstuptilde) and non firmaccess to transmtsaan fadittice at cost tweed rates.

The dipulation w L11 be the beds for the conuniston's position on trammim,lon issues in the proceeding before the Federal Energy Peguletory Conwnsion, in addition to nadin5 KCC approval, KPL and KG&E have filed an application for approval of their prcpor,ed entgur with FERC, which has judsdiction ove wholena!e ttant misalon transadions.

The date set for fulng testinony ty the KCC in the FERC procralin5 is May 1.

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Kansas Ccrpora*Jon Commissa 1500 SW. Arrewbead Foad Topeka, ksas 66604  ;

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