ML20084U847
| ML20084U847 | |
| Person / Time | |
|---|---|
| Site: | Wolf Creek  |
| Issue date: | 04/16/1991 |
| From: | Irwin D HUNTON & WILLIAMS |
| To: | Rutberg J NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| References | |
| NUDOCS 9104230076 | |
| Download: ML20084U847 (13) | |
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,,gg,on,%,,,, g,,ogu, B NonviLLE.,t h~ t ttt s R I C tt M O N D, V IIR O I N I A 20219-4074 TrttonoNE (804) 788-8200 DONALD P. IRWIN
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- 6 t 1804) 700-8210 File No. 36769.000005 Direct Dial No. (804) 788 8357 April 16,1991 Joseph Rutberg, Esq.
80' Office of General Counsel U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Kansas Gas and Electric Company (Wolf Creek Generating Station):
NRC Operating License NPF 42
Dear Joe:
In connection with the Staff's continuing review of KG&E's request for permission to transfer its interest in the Wolf Creek POL in connection with its merger with KPL, I enclose the following documents relevant to settlement of issues relating to competition:
1.
Kansas Corporation Commission, Order Accepting Stipulation and Agreement on Limited issues (April 3,1991) (accepting stipulation and agreement dated March 25,1991);1' 2.
Settlement Agreement dated April 9,1991, among The Kansas Power and Light Company, Kansas Gas and Electric Company, and Kansas Electric Power Cooperative, Inc.; and 3.
Letter Agreement dated April 9,1991 between Kansas City Power
& Light. Company and Kanse.s Gas and Electric Company.
This Stipulation and Agreement was already forwarded to the Staff as part of the March l'
28, 1991 Request for Transfer of the Wolf Creek License.
l 9104230076 910416 PDR ADOCK 0500o481 n
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HUNTON & WILLI ANS Joseph Rutberg, Esq.
April 16,1991 Page 2 I hope that these will be of aid to the Staff in resolving competition related issues associated with the transfer application and related license amendment. Please call me with any questions. KG&E is interested in resolving all outstanding issues successfully with the Staff at the earliest possible time.
Sincerely yours,
/
/-...;
Donald P. Irwin Counsel for Kansas Gas and Electric Company Enclosure.
cc w/ enclosure: Edwin J. Reis, Esq. (OGC)
Darrel A. Nash (NRR)
William M. Lambe (NRR)
Robert D, Martin (Region IV)
Douglas V. Pickett (NRR) /
Secretary of the Commission
. Richard D. Terrill, Esq.-'(KG&E)-
i Martin J. Bregman,' Esq. (KPL)
. Samuel Cowley, Esq. (KCPL)
Harold.L. Haun, Esq.-(KEPCo)
Warren B.-Wood, Esq. (WCNOC) 1.
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THE STATE CORPORATICH COMXISSi t0N 0F THE STATE OF KANSAS h
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j LtCM. DM; toy d
Before Cormissioners:
Jim Robinson, Chairmm.
- - = _. _ _ _w Keith R. Henley Rachel c. Lipman In the Matter of the Application of Kansas City
)
Power & Light Company for approval of its
)
Consolidated acquisition of all classes of the capital stock
)
Docket Nos, of Kansas Gas and, Electric, to merge with Kansas )
172,745-U Gas and Electric, to incur debt obligations, and )
to transfer Kansas Gas and Electric's retail
)
electric service authority and municipal
)
franchises.
)
In the Matter of the Joint Application of the
)
Kansas Power and Light Company, KCA Corporation, )
and Kansas Gas and Electric Company for approval )
of the acquisition of all classes of the capital )
174,155-U stock of Kansas Gas and Electric Company to
)
merge Kansas Gas and Electric into ECA
)
Corporation, to incur debt obligations, and to
)
transfer Kansas Gas and Electric Company's
}
retail electric service authority and municipal
)
franchises.
)
otDan acenterme affPtTLATION AMD 1GREENRWT OM LIMITED 13503s NOW, _ the above-captioned satter comes on for consideration and determination-by the State Corporation Commission of the. State of Kansas (Commission).
Having considered its files and records and being duly advised of the premises, the Commission finds and concludes as follower j
1.
On November 20, 1990, Kansas Power and Light Company (KPL) and Kansas Gas and Electric Cospany (KGE), (together referred to_ as Applicants) filed an application to obtain approval of-their L
proposed merger.
The Commission consolidated the application with the application filed by Kansas City Power and Light Company (KCPL), which previously requested approval of their proposed 4
l merger with KGE, established a schedule for filing testimony and set the matter for hearing.
2.
In its order dated September 7,
1990, the commission identified a wide range of potential issues presented by the applications.
These issues included the issue of the merger's effect on competition; specifically the ef fect of the merger on competition in the Kansas power supply market and the ef fect on regional power supply and pooling arrangements, including transmission access and pricing.
On December 13,
- 1990, KCPL withdrew its unsolicited tender of fer to KGE shareholders and withdrew its application to merge with KGL, Subsequently, the KPL/KQE application was set for hearing on Montay, March 25, 1991.
3.
On December 11, 1990, Applicants filed for approval of their proposed merger before the Federal Energy Regulatory Commission (FERC).
On January 4, 1991, the Commission filed its petition to intervene and became a party in the TERC proceeding.
On January 30,
- 1991, FERC set the matter for hearing and established a procedural schedule, under which intervanors will file testimony on May 1, 1991, in Docket No. EC91-2-000.
on February 27, 1991, FERC Administrative Law Judge (AIJ) Jon Lotis issued a Notice Concerning the Establishment of Conditions Committee, wherein AIJ Lotis directed the parties to establish a conditione committee for the purpose of discussing conditions that, "to the maximum extent possible, would come to grips with the operational concerns or reservations that parties may have" with the merged company.
In effect, the purpose of the committee is to 2
I i
4 give the parties the opportunity to develop conditions rather than have the AL7 or TERC impose conditions from among those proposed by the various parties. The conditions comittee has held meetings on March 12, 20 and 28, 1991, comission representatives have been present at each of these meetings.
4.
In order to enable the Comission to make a determination regarding the ef fect of the merger on the bulk power market in which Kansas utilities participate, which would then provide an affirmative position for the Commission in the FERC proceeding, Applicants, staff, and the parties entered into a stipulation, accepted by the commission, to phase the hearings in these proceedings.
The comission set the issues of (1) the effect of the merger on cospetition in the bulk power market in Kansas, and (2) the appropriate transmission policy for the merged company, for hearing on March 25, 1991.
The hearing for all remaining issues in the case was scheduled to begin on April 11, 1991.
5.
On March 25, 1991, the hearing in the above-captioned matter commenced before the Commission.
At that time, staff and Applicants presanted the Commission with a
stipulation and Agreement regarding general principles for the provision of transmission service by the merged company.
Staff moved that the Stipulation and Agreement be made part of the record in the proceeding.
The Commission accepted the Stipulation and Agreement for consideration and made it part of the record.
6.
Staff indicated it met with KPL and KGGE, on numerous occasions, af ter the filing of testimony, to discuss and, where 3
i
- possible, resolve their differences on competition and trannaission-related issues, including (1) the ef fect of the merger on competition in the bulk power market in Kansas and (2) the teren and conditions that should be adopted to govern the use of the Joint Applicants' transmission facilities should the merger be approved.
As a result of these extensive discussions, the parties ultimately finalized and entered into a stipulation and Agreement, attached to this order as Appendix A, on Monday, March 25, 1991.
The Stipulation and Agreenent established general principles for the provision of transmission service.
There were no objections to the Stipulation and Agreement, hevever, counsel for Kansas City Power and Light Company (KCPL) did reserve its right to file a response tc, the Stipulation and Agreement.
Sevaral other parties reserved their rights to express their views regarding the transmission issues in the FERC proceeding.
On March 28, 1991, KCPL filed writtan comments on the stipulation and Agreement.
KCPL indicated it would raise its concerns regarding transmission conditions in the FERC proceeding and that, due to KGE's commitment in testimony to enter into a new lease of the Wolf Creek-Lacygne transmission line on similar terms and conditions as the initial lease, the line lease issue need not be addressed with regard to the Stipulation between Applicants and statf.
The successful./rt fb d'R P A #6 Ws rif&SQ+1omentatien of the pr 7.
j in the stipulation and Agreement will serve as a condition to this NlN 4C. FER.C 4
Comission's final approval of the proposed merger should the Commission, after review of all remaining issues, determine that the merger as proposed otherwise satisfies Fansas law.
8.
After due consideration and review of the issues to which the parties have reached agreement, the Cor. mission will accept and adopt the Stipulation and Agreement.
IT Z8, TERREPOR2, BY TM5 COMMISSION ORDERED TEAT 1.
The stipulation and Agreement, attached as Appendix A, 1
is hereby approved and incorporated by reference into this order.
<umtgsgari^-tr.ttti r. ef U.. ycine(ples set forth d fy dPL & XGA C fG The euerte fu_
2.
reac in the stipulation and Agreeman vill serve as a condition to th'.a Commission's final approval of the proposed merger should the Commission, after review of all remaining issues, determine that the merger as proposed otherwise satisfies Kansas law.
3.
Any party.nay file a petition for reconsideration of this order within 15 days of service of the order.
If this order is
!j zalled, service is complete upon mailing, and three days may be j
added to the above time frame, l.
The commission retains jurisdiction of the subject matter and l
-the parties for the purpose of entering such further order or -
orders as it aay deem necessary and proper.-
l' BY THE COMMISSION IT IS SO ORDERED.
Robinson, Chan.; Henley, com.; Lipman, Com.
~
ORDER MAILED Dated
- ppR, 3g l/
DR 3 1991 l:
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Judith McConnell
'r
- owwtz Executive Director 5
l,
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4 SETTLEMENT AGREEMENT With respect to the proposed merger of %e Kansas Power and Ught Company (KPL) and Kansas Gas and Electric Company (KG&E), KPL, KG&E, and the Kansas Electric Power Cooperative, Inc. (KEPCo) agree to the following:
1.
KEPCo shall, in Federal Energy Regulatory Com'W=bn (FERC) Docket No. EC91-2-000, Kanus Corporation Commission (KCC) Consolidated Docket Nos. 172,745.U and 174,155.U and in any proceeding directly relating to the approval of the merger of KPL and KG&E (the Companies): (a) not oppose the merger; (b) not seek to have conditions imposed upon the merger or upon the merged company other than those agreerl upon herein; (c) rescind all data requests propounded to KPL and KG&E in FERC Docket No. EC912 000 and excuse the parties from responding to such requests; (d) not be required to respond to data requests propounded to KEPCo by KPL and KG&E, and (c) waive its right to cross examination of all witnesses of KPL and KG&E, However, KEPCo may file cross-answering or rebuttal testimony, briefs and engage in cross exainination where the failure to do so may prejudice hs rights vis a vis other parties, provided that, KEPCo will notify KPL and KG&E in advance of undertaking any such activities.
2.
If benefits are extended to other similarly situated utilities either through settlement in this proceeding or ss a condition of approval of the merger, such benefits shall also be offered to KEPCo.
3.
This agreement is not intended to limit in any way KEPCo's rights in any other proceeding filed by KPL or KG&E except as provided in Paragraph 1 above.
4.
KPL and KG&E.will honor all the terms and conditions of their respective agreements with KEPCo except as herein modified or as those agreements in the future may be modified under their own terms or upon mutual agreement of the partica. KPL and KG&E will be bound by and honor all Wolf Creek Generating Station License Conditions.
5.
KEPCo's currently contracted level of firm transmission service from KPL and KGAE for service across both systems will be provided by the Companies before additional firm transmission service shall be provided by the Companies.
6.
Transmission service for the sale and delivery of power to the KEPCo delivery points within the areas served by KPL and KG&E will be provided on the same basis as the KPL and KG&E nadve load in the area. In planning and operationa, including curtailment and restoration of service; KPL and KGAE will not differentiate between 1
l KEPCo and nattve loads and KEPCo will panicipate in the pleaung of transmission and distribution facilities. Nothing in this Paragraph shau modify the provisions of Paragraph 8 herein as it is effective brtween KPL, KO&E, and KEPCo.
7.
Transmission tarifts to be filed at FERC shau be consistent with Paragraphs 2 and 7 of the principles set out in the Stipulation and Agreement between KPL, KGAE, and the Staff of the KCC in Docket Nos. 172,745 0 and 174,155.U filed with the KCC on March 23,1991, attached hereto, and will be based on embedded costs and include the option for customers to provide or purchase their own line Inases, and will maintain recognition of cost differential for servions utillains different voltage levels.
8.
Sections 4.1, Coordination. 4.4, Capabillev Limit. 4.5, New Palats of Delfverv. and 4.6, UnusuaLCircumstancas. of Article IV. Delivery Pents and r1* livery Transminion L
Saryice, and Anicle VI, Coordinating Cummittaa. in its entirety, of that certain l
Electric Sales, Trans:nission and Service Contract between KPL and KEPCo, dated l
November 23,1987, will be adopted by KO&E.
9.
The term of Article IX,7erm and Mamive Da**- of that certain Electric Salm, Transmission and Serv'.e Contract between KPL and KEPCo, dated November 13, l
1987, shall be modiF.id to provide the same primary term as the term provided in Section 2.3 of the Neember 28,1981, Transmission Agreement between Kansas Gas and Electric Company and Kansas Electric Power Cooperatives, Inc.
- 10. '
Subject to FERC approval, billing units for salaa nervice from KGAE to KEPCo wUl be converted to reDect KEPCo's coincident peak responsibluty with KO&E's net
_ system load, prmided that appropriate pricing adjustments wiu be made to maintain revenue neutrality for the service rendered.
- 11. -
The billing period for service from KPL to KEPCo will be adjusted to rece5 the -
calendar month beginning at 12:01 a.m. on the first day of the month.
I 12.
KPL, KO&E and KEPCo wiu coordinate load management planning and operations to achieve beneSts of iced management to the parties,
- 13.
KPL and KG&E provide transmission service across the Companies' transmission facilities and tNismission and sales service to some 156 KEPCo delivery points. Total:
services provkhd involve approximately 84 percent of KEPCo's power requirements.
Derefore, the parties hereto agree to undertake a joint long range power supply and transmission study commencing as soon as is pracdcal after the marser. The parties -
further agree to negotists'in good faith to achieve the optimum mutual beneSts-identi5ed by the study. Such study will include but not be limited to: a) ownership of existing and future generating capacity, b sale of power and enerEy between KPL, KG&E and KEPCo, c) necessary reserve ca)pacity requirements types of services rendered, d) nop.ntm and $nn transmission requirementa e) necessary dispatch and coordination services to be provided by companies for KEPCo resources in areas served by the Companssa or such other services as may be appropriate in the future, f) joint uses of power control communication systems, and 2-D
4 g) t'.a other anas of mmmon interest that may be appropriate to achieve the benm, to all parties and their respective customers. The costs of such study will bc shared one half by the Compardes and one half by KEPCo.
14.
Amendments to the respective current agreements between KPL, KO&E and KEPCo will be cornpleted as soon as is practical after the merger to implement the agreetnents stated herein.
All the above paragraphs, except Paragraphs 1 and 3, are subject to the closing merger and are not binding on the parties unt0 the merger has closed.
j DATED: __ APRIL 9
.1991 l
1 1
THE KANSAS POWER AND UOHT COMPANY KANSAS ELECT 1UC COOPERATIVES INC, By /2 lb-f v,,
William E. Brdwn
~
By.
+-
Charles W. Terrill President and Chief Executive Officer KPL Division Executive Vice President and Odef Executive Officer KANSAS OAS AND ELECTRIC COMPANY h
- By 4 %
Kent R. Brown ~
m ----
Group Vice President,
. Technical Services 9
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1
_ _ _ _ _. _ _ _ -. _ _ _ _.._. _ __~._ _ _ _ _ _._
4 l
l l-KANSAS CITY POWER 6s LIGHT COMPANY Iaat tuftaseeg Avta,W8
- e. o. m e.we KANSAS CITY. Wls60UR! 64141.M79
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Aprn 9,1991 l
l Mr. Kant R. Brown Orcup Vies President l
Kansas Gas and Electric Company 120 E. First F. O. Box 208 Wichita, Kansas 67201 j
Dear Mr. Brown:
As we have discussed in aux recent phone conversation, KCPL is wGling, in response to your reosat proposals, to agrw to the following terms to rescdve the remaining issues regarding catension by Kansas Gas and Electric Company ('KGE') and Kansas Oty Power
& Ught Company (*KCPL*) of the October 1.1984 Laass Agreement ( Leans') of the Wolf Cruk/Lacygne trana=laniaa line, We will agree to the foDowing:
1.
Both parties will treat the notice of latent not to renew the Lease upon Ibe expiration of its evo year term in 1990, sent by KCPL on July 8,1988, and the notico sent by KGE on May 2,1990, setdag a terminadan date of the Laase on August 2,1990, as void, a6hab.
1-2.
'the parties agra, all other notices, attempted nodcas and regulatory filings L
to dass notwithswt that the 14ase is in full force and effect pursuant to its own terms of automade renewal for successive one year terms unless either party, at least two years prior to the espiration of the original term or, if renewed, at least two years prior to the espiranon of the renewal term, gives written notias to the other party that the Lease term wul not be renewed.
3.
'the parties agree that throughout the operadng life.of the wok Crwk.
Generadng Stados celther party w0l give such a notice that the Lasse wGl be ennenled or otherwise not renewed, except for material breach by the other party or, for KCE except in the additional circumstance idend5ed la the Sfth paragraph at this letter agrument I
contained below.
i k
e.
. ~
.m e.
_. = _. _, _ _
s..
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l Mr. Kent R. Brown Apr0 9,1991 L
Page 2 I
I 4.
The parties agree that whBe the lease is la efect, KGB wul be entitled to no other compensation for delivery to KCPL of ECPL's Wolf Creek entitlements. The parties further agree that during that same period KDE will not esercise its right contained in Paragraph 6 of the 14ase to unilaterauy make application to the Federal Energy Regulatory Commission for a change tu the rental payment speci8ed in Paragraph 5 of the Laase, unless that change in rental payment is based on KGE's actual costs in the Wolf i
Owek/IACygne tansmission line, including any costs incorred by KGE in tat, circumstances identi8ed in Paragraph 13 of the Lesse.
l 5.
b parties agree that in the event KOE does mercise its right for a change in the rental payment under the terms of the preceding paragraph of this letter agreement, KCPL will be satitled, if it chooses, to esercise is right aantalad in Paragraph 4 of the Lasse to annoel the 1,4ase upon ninety (90) days written notloc if it is able to secure an alternative transmission path to Wolf Crwk, which could include construodon of lu own transmission has. KCPL agrees that in consideration of the autension of the Lease pursuant to the terms borounder it will not anarcise its right in that regard, samept in the circunstance described in this paragraph, throughout the operadng ufe of the Wolf Creek Generating i
Stadon.
~
6.
The parties agree that the Lasse and this letter agreement will be binding upon their respective successors and assigns. KGE represents that KGE has the authority under its asisting merger agreement with the Kansas Power and Ught Company ("KPL') to L
so bind KPL upon its merger with KGE (and the corporadon which wul emerge from that p
L
. proposed merger), or if it does not have such authority, that the concurrenos of KPL in,the terms of the 14ase, and this letter agreement, wQl be obtained in writing within S days of the eascution of the letter acrosanat by the parties.
7.
ECPL agrees that the esecution of this letter agreement (including any written concurrenos by KPL puranant to the preceding paragraph), and upon the -
fulng of this letter agreement by KGB for the neesssary approvals from the regulatory s'
4 agency having jurisdiction (which application would include KCPL's certi8cate of '
5 conarrene).. KCPL wiu prompdy withdraw its intervention in' FERC Docket No.
EC912400 and w!!! no longer perh* in addressing any issue regarding tbs transmission servions to be provided by K05 and/or KPL upon the -===ation of their propoud merger which may arise in KCC Docket No.174,155.U or in MPSC Docket No. EM 91213.
By remaining as intervonor in KCC Docket No. 174,155 U.and la MPSC Docket No.
E
. EM 91213 it is not KCPL's desire or intent to oppose KOE and KPL's merger application, but to proteca is interests on' any (non transadasion) issos afecting it as a utGity which L
would be interconnected with the merged company which may arise during the hearings in h
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9 I-i Mr. Kant R. Brown April 9,1991 Page 3 8.
This letter agreement will be efectiw and bindlag between KCFL and KGE even in the circaunstanos that the proposed merger between KOE and KPL is not annanmmatani jor Whatever reanotL If you o0nour that the foregoing rwa our agreement as to the continued efectiwness of the L4ase, please sign where indicated below and return a signed cepy to Ine.
very may youra, I
G s
JME:ch The above and foregoing letter agrooment gned by Gas and Electric Company
%s E day of April,1991, L
thi By
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m o
Kent R. Brown l
Group Vlos President I
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