ML20087A557
| ML20087A557 | |
| Person / Time | |
|---|---|
| Site: | Perry  |
| Issue date: | 03/06/1984 |
| From: | Zahler R CLEVELAND ELECTRIC ILLUMINATING CO., SHAW, PITTMAN, POTTS & TROWBRIDGE |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| References | |
| A, NUDOCS 8403080140 | |
| Download: ML20087A557 (42) | |
Text
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. e wRf7E R S OtRECT DIAL NUMSE R (202) 822-1130 March 6, 1984 Harold R. Denton, Director Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Re:
Cleveland Electric Illuminating Company, et al. (Perry Nuclear Power Plant, Units 1 and 2), Docket Nos. 50-440A and 50-441A
Dear Mr. Denton:
.On November 23, 1983, the Nuclear Regulatory Commis-sion (" Commission") published in the Federal Register notice of your initial finding that no significant antitrust changes in the Licensees' activities or proposed activities had occurred subcequent to the previous antitrust review conducted at the construction permit stage of the Perry Nuclear Power Plant, Units 1 and 2 (the " Perry Plant").
See 48 Fed. Reg. 52992-93.
In accordance with the Commission's procedures set forth in 10 C.F.R. 5 2.101(e)(2), the Federal Register notice invited re-quests for reevaluation of your no significant change determi-nation within 30 days.
On January 5, 1984, counsel for the City of Cleveland (" Cleveland") requested an extension of 30 8403080140 840306 PDR ADOCK 05000440 M
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l SHAw, PITTMAN, PoTTs & TROWBRIDGE A pantseteswim OF pmOFEsteONAL Compomattoses Harold R. Denton, Director March 6, 1984 Page 2 days within wnich to study and respond to your findings; a Mo-tion for Clarification and Correction of Finding of the Direc-tor of Nuclear Reactor Regulation Concerning Operating License Antitrust Review was filed by Cleveland on February 6, 1984.1/
While the Cleveland Motion for Clarification and Cor-rection raises a number of issues to which the Cleveland Elec-tric Illuminating Company ("CEI") responds below, the crucial point is Cleveland's explicit concession that it "does not ex-cept to the Director's decision not to conduct a second anti-trust review as part of the operating license proceedings for the Perry Nuclear Power Plant * * *" (p. 8).
Likewise, on the
(
first page of the Motion, Cleveland explains that the purpose of the Motion is to " correct certain [ alleged) factual inaccuracies," "to make the Director and Commission aware of recent controversies between [ Cleveland] and CEI," and "to put the Commission on notice of [Cloveland's] intention to pursue these matters."
Significantly, however, Cleveland doee not seek a reevaluation of your no significant change determination or any other proceedings in connection with the Perry Plant op-erating licenses.
All Cleveland seeks in the way of relief is the right to " bring complaint proceedings to enforce the exist-ing license conditions governing the Davis-Besse and Perry Nu-clear Power Plant" (p. 1).
Such a right is, of course, always open to Cleveland pursuant to 10 C.F.n. 5 2.206.
In these circumstances, where no request for reevaluation has been received within the prescribed period, the Commission's regulations direct that your initial finding of no significant change "shall become the NRC's final determi-nation."
See 10 C.F.R. 5 2.lOl(e)(2).
Because Cleveland has in this case filed a Motion for Clerification and Correction, albeit not a request for reevaluation of your no significant change determination, and in order to avoid any later ambigu-ity, CEI respectfully requests that you issue a notice pursuant to 10 C.F.R. 5 2.lol(e)(3) reaffirming your finding of no significant change.
1/
While CEI is not objecting to the Cleveland comments as untimely, it should be clear that when Mr. Goldberg wrote on January 5,-1984, seeking a thirty-day extension, the Cleveland comments already were two weeks late.
I
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PITTMAN, PoTTs & TROWBRIDGE
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I Harold R. Denten, Director March 6, 1984 Page 3 With respect to the balance of Cleveland's Motion, CEI believes it is premised on numerous statements of fact unsupported by any objective review of the record and seeks re-lief from you that is beyond your authority.
Accordingly, Cleveland's Motion for Clarification and Correction should be denied in its entirety.
CEI responds to Cleveland's claims in the order presented by Cleveland.
A.
Cleveland's Request that the Director Issue Various " Advisory Opinions" The first half of the Cleveland Motion (pp. 2-9) es-sentially asks that you make various commitments and interpre-tations of the antitrust license conditions appended to the Perry Plant construction permits.
The commitments and inter-pretations sought by Cleveland are little more than a request that you issue advisory opinions further defining and speci-fying some of the antitrust license conditions.
In support of the four specific opinions identified on pages 8 and 9 of the Motion, Cleveland excerpts language from your finding of no significant change and from these snipets engages in a rambling and unfocused attack on the activities of CEI.
First, CEI is aware of no authority delegated to you by the Commission which would authorize you to issue.he re-quested advisory opinions.
As noted in your finding of no sig-nificant change, the Commission has specifically delegated to the Director, Office of Nuclear Reactor Regulation, the author-ity to make the "significant change" finding.
In South Carolina Electric & Gas Company (Virgil C.
Summer Nuclear Sta-tion, Unit 1), CLI-80-28, 11 N.R.C. 817, 824 (1980), the Com-mission identified the three specific criteria that are to be used in making the "significant change" finding.
Simply put, your authority is to apply those three criteria to the # acts at hand and render a decision as to whether a significant change has occurred.
No part of that inquiry either requires or an-ticipates that you would issue advisory opinions on the meaning of existing antitrust license conditions.
Moreover, as a matter of policy, CEI sees no purpose served by having you issue such advisory opinions.
Absent a full and complete factual record placing before you a live con-troversy between CEI and Cleveland that requires you to
SHAw, PITTMAN, PoTTs & TROWBRIDGE" l
. - m
=co Harold R. Denton, Director
' March 6, 1984 Page 4 interpret the license conditions in order to resolve the con-
.troversy, issuing such opinions runs counter to traditional concepts of American jurisprudence.
The antitrust license con-ditions involved here were crafted by an' Atomic Safety and Li-censing-Board and. carefully reviewed and modified by an Atomic Safety and Licensing' Appeal Board.
In both cases, the Commis-sion's judicial bodies had before them a factual record that placed in controversy specific allegations which formed the
-basis of the license conditions.
Here, by contrast, there is no factual record.
Indeed, there is no actual controversy pending before the Commission.
All that Cleveland has done is make certain allegations, unsupported by any factual record, and sought your interpretation of the license conditions.
This is precisely akin to situations where judicial bodies histori-cally have refused to act.
Second, the alleged " facts" offered by Cleveland in support of the requested advisory opinions are incorrect and
' inadequate to justify your taking such action.
- 1. :
Cleveland begins by rehashing the dispute over wheeling services (p. 2).
Suffice it to say that your staff has found that any noncompliance was fully addressed and remedied through the Commission's 10 C.F.R.
$ 2.206 process.
And, as your staff also found, at no time did Cleveland suffer any' economic harm since the power to be wheeled was not avail-able prior to successful resolution of the matter.
See Staff Analysis.at 30 and 31.
Significantly, Cleveland does not deny either of these conclusions.
2.
Next Cleveland maintains that CEI has inappro-priately attempted to terminate short-and limited-term power services it previously had provided (pp. 2-3).
Cleveland goes so far as to assert that CEI hac refused to comply with an order issued by the Federal Energy Regulatory Commission
("FERC") and has attempted to impose burdensome terms as a con-dition to.providing short-and limited-term power services (p.
3).
SHAW, PITTMAN, PoTTs & TROWBRIDGE -
A PARTNERSettp OF PROFE90eONAL CORPORATIONS Harold R. Denton, Director March 6, 1984 Page 5 The facts as evidenced by the published opinions of FERC are very different than the Cleveland allegations.
Attached hereto as Exhibits A and B are copics of FERC Opinion No. 172 (issued June 16, 1983) and a FERC letter opinion in Docket No. ER83-138-000 (issued March 1, 1984).2/ Those deci-sions show that on August 30, 1983, CEI filed with FERC service schedules to provide to Cleveland emergency service, firm power, short-term power and limited-term power.
The short-and limited-term power schedules would have been in effect months ago, but for the fact that on October 3, 1983, Cleveland filed a protest to the schedules submitted by CEI.
In that protest Cleveland raised the very issue about burdensome conditions now being raised before you.
In its March 1, 1984 letter opinion, FERC addreL~ed each and every one of Cleveland's numerous ob-jections aid. found as to each complaint that Cleveland's position was unfounded and that the CEI contract provisions thould be accepted as filed.
So much for Cleveland's claim that CEI has unreasonably delayed in providing short-and limited-term T'wer.
3.
Cleveland then asserts that CEI has refused to coordinate its transmission system expansion plans with similar plans that Cleveland may have (pp. 3-4).
The unstated premise of this claim is that the antitrust license conditions require such coordinated development.
CEI thinks not.
There are only two conditions that relate in any way to the question of coor-dinated transmission development.
License Condition No. 4 requires CEI and the other CAPCO utilities to make membership in CAPCO available to 2/
The last paragraph of the antitrust license conditions ex-plicitly provides:
The above conditions are to be implemented in a manner consistent with the provisions of the Federal Power Act and all rates, charges or practices in connection there-with are subject to the approval of regula-tory agencies having jurisdiction over them.
SHAw, PITTMAN. PoTTs & TROWBRIDGE a wr ene.a. or enovene.o aa. co comario.
Harold R. Denton, Director March 6, 1984 Page 6 Cleveland.
Presumably, if Cleveland had chosen to take advan-tage of this license condition -- which it has not, despite what now appears to have been a mere litigation position that Cleveland strongly desired to participate in CAPCO -- it would be entitled to participate to the same extent as the CAPCO com-panies in whatever joint or coordinated development of trans-mission occurs in CAPCO.
This, of course, also would have re-quired Cleveland to assume the substantial obligations that CAPCO imposes on its members.
Thus, while it may be that coordination in construction and operation of transmission fa-cilities is a benefit enjoyed by the CAPCO utilities (p. 3),
that benefit has not been denied to Cleveland since membership in CAPCO was available to Cleveland under License Condition No.
4.
What Cleveland really seeks is a preferential form of coordination beyond that enjoyed by the CAPCO members at any point in time.
4 i The other conceivably relevant provision, License Condition No. 3, requires that CEI make reasonable provisions for Cleveland's disclosed transmission requirements in planning future CEI transmission lines.
This provision only relates to CEI's transmission facilities and imposes no obligation on CEI to coordinate its transmission plans with those of Cleveland.
Notwithstanding the lack of any obligation to coordi-nate transmission facilities with Cleveland, it is simply un-true that CEI has refused to consider Cleveland's plans.
On February 10, 1984, four days after Cleveland filed its Motion, Joseph Pandy, Cleveland's Commissioner of Power, wrote to CEI referencing a meeting between CEI and Cleveland on January 19, 1984 --
i.e.,
18 days prior to the Cleveland Motion -- at which the parties discussed each other's plans for transmission ex-pansion.3/ Nowhere in the letter does Mr. Pandy imply that CEI has been or is unwilling to discuss transmission expansion plans.
Moreover, it is clear from the Pandy letter that nei-ther Cleveland's plans nor those of CEI have progressed to a sufficiently precise stage to warrant agreement on a coordi-nated transmission program.
Rather, the letter indicates that 3/
A copy of Mr. Pandy's letter is attached hereto as Exhibit C.
SHAW, PITTMAN, PoTTs & TROWBRIDGE A PARTNERSMep OF P40 FESS 40NAL ComPOmateONS Harold R. Denton, Director March 6, 1984 Page 7 both parties are still considering various options and that ad-ditional refinements in each party's plans will be necessary prior to additional discussions.
This is as it should be, and there simply is no reason for you or the Commission to intrude into these discussions.
4.
Cleveland also makes the totally unsubstantiated claim that "CEI has refused to provide for coordination of die-tribution facilities with [ Cleveland) despite the fact that such services are routinely provided amongst the CAPCO compa-nies" (p. 4; emphasis added).
There is not a single fact to support the assertion that the CAPCO companies coordinate dis-tribution facilities, let alone routinely undertake such coordination.
Not one CAPCO contract, memorandum or practice evidences such coordination.
Not one single sentence of testi-mony during the lengthy antitrust proceedings before the Com-mission even intimates such a practice.
Nor could one construe any part of the antitrust license conditions as imposing such an obligation on CEI.
In short, there is no basis for this Cleveland claim.4/
5.
Cleveland's next allegation is that CEI has "made it increasingly difficult for [ Cleveland] to engage in economical purchase power transactions with third parties" (p.
5).
This Cleveland claim is long on rhetoric and short on spe-cific factual support.
The actual facts belie the Cleveland claim.
4/
Cleveland also refers to a dispute between it and CEI relating to a pole attachment tariff.
That matter is pending before the Ohio Supreme Court on Cleveland's appeal from a ruling by the Public Utilities Commission of Ohio in favor of CEI.
See Cleveland v.
CEI (Ohio Supreme Court Case No.83-699).
There is no reason for you or the Commission to get involved in a matter being litigated before the Ohio courts that is totally unrelated to the Commission's antitrust responsibilities or the antitrust license condition attached to the Perry Plant construction permits.
SHAw, PITTMAN, PoTTs & TROWBRIDGE A p6mtestesseep OF pmOFESSsONAL COmpONAficoes Harold R. Denton, Director March 6, 1984 Page 8 Monthly reports filed by CEI with FERC concerning power sales transactions with Cleveland show that CEI has fully assisted in making alternative sources of power available to Cleveland.5/ These reports show that CEI not only has wheeled to Cleveland power from the Power Authority of the State of New York ("PASNY"), but also has wheeled power from Buckeye Power Cooperative, power originating in Kentucky from the Big Rivers Cooperative,6/ and recently power originating from Ontario Hydro.
These reports show that Cleveland has relied on CEI's transmission system to obtain sources of power from entities other than CEI.
In fact, Cleveland has taken very little power generated by CEI.
It is thus apparent that Cleveland has been able to effectively search out and receive alternate sources of power and energy, and the CEI has not hindered such efforts.
In sup-port of its claim to the contrary, Cleveland complains about a 12-month demand ratchet which it states CEI has imposed on Cleveland's firm power purchases from CEI (p. 5).
This is just another example of Cleveland's overreaching argument.
Cleveland also complained about this ratchet provision to FERC and the matter was fully resolved in CEI's favor in FERC Opin-ion No. 172 (attached hereto as Exhibit A).
In upholding the
-ratchTt, FERC stated (p. 6):
5/
Copies of these reports are sent to Mr. Benjamin H.
Vogler, Assistant Antitrust Counsel, Office of the General Counsel, U.S. Nuclear Regulatory Commission.
6/
The Big Rivers transaction is an example of CEI's coopera-tion with Cleveland in Cleveland's efforts to obtain power from other sources.
Within about 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> of first being notified by Cleveland that the city had obtained access to Big Rivers power, CEI agreed to wheel that power from its interconnection with Ohio Power and implemented that agreement.
As part of that agreement, CEI agreed to assume liability for all charges for such power to the point of its interconnection with Ohio Power.
CEI undertook such a liability despite the lengthy record before this Commission which evidences the enormous dif-ficulties CEI has had in collecting amounts owed it from Cleveland.
C g
SHAw, PITTMAN, PoTTs & TROWBRICGE A PAm?NEWSMip OF pmOFE9ttONAL CompORATION5
- Hardld R. Denton, Direedor March 6, 1984 Page 9-4 We have reviewed [ Cleveland's] arguments and the precedent on this issue, and con-clude that the 50 percent, ratchet is re,a-sonable.
The purpose of a ratchet is to insure that a utility has'an opportunity to recover its projected demand costs and that customers bear their fair share of the de-mands placed on the system.
The record shows that [ Cleveland's] firm demand fluc-5tuated considerably in the past.
Because of [ Cleveland's] ability to use alternate power sources and vary its demand on CEI's system, a 50 percent ratchet would provide a fair means of protecting CEI from load variations'.
[ Emphasis added.]
The FERC opinion establishes a number of important points.
First, it explicitly confirms that Cleveland has had access to alternate sources of power.
Second, it indicates that the demand ratchet does not unfairly preclude Cleveland from obtaining access to alternate power sources.
Third, it establishes the reasonableness of the particular ratchet used by CEI.
In light of the FERC opinion, Cleveland should not be heard to complain about the ratchet before you or this Commis-sion.
6.
Cleveland's final claim is that CEI " resisted and delayed" establishing a second 138 kV synchronous interconnection with Cleveland, and that CEI " continues to re-sist the establishment of additional interconnections" (pp.
6-8).
As to the first part of the claim, it is simply untrue and Cleveland providos no support for its assertion.
As to the second part of the claim, the sole support is Cleveland's as-sertion that, "despite four written requests by (Cleveland, CEI has refused] to state in writing any intention to cooperate with [ Cleveland] to establish additional interconnections at points mutually agreeable to the parties" (p. 7).
The simple answer is that CEI has no reason to confirm in writing to Cleveland a willingness to establish additional interconnec-tions with Cleveland.
The applicable license condition already provides that CEI "shall offer interconnections upon reasonable terms and conditions at the request of any other electric enti-ty(ies) in the CCCT * * *"
CEI's oft stated policy is to
SHAw. PITTMANe PoTTs & TROWBRIDGE A pantestmesesp OP pmOFESSIONAe. Compomar ONs Harold R. Denton, Director March 6, 1984 Page 10 comply fully with that license condition.
In such circum-stances, there is no need for CEI to state in writing its will-ingness to establish additional interconnections with Cleveland, and CEI is at a total loss to understand why Cleveland needs or desires such written assurances.
There has, in fact, been an exchange of information between Cleveland and CEI about additional interconnection 4, and further studies by both parties are underway.
I-is ex-pected that such activities between the parties will continue.
However, you should be aware that CEI is concerned that, in the guise of seeking additional interconnections, Cleveland may be seeking to have CEI perform distribution functions for Cleveland.
Such obligations were never discussed at the Davis-Besse/ Perry antitrust hearings, and the license conditions nei-ther require nor intend that CEI perform distribution functions for Cleveland cr any other entity.
Certainly the wheeling pro-vision was not intended to require CEI to wheel power to an ul-timate customer that is not an entity as defined by the licens-ing board.
B.
Cleveland's Request that the Director Impose a Civil Penalty on CEI Though it is not entirely clear from Cleveland's Mo-tion, it appears that Cleveland desires you to push for the im-position of a civil penalty against CEI (pp. 9-13).
Whatever merit this request may have had at an earlier time -- and CEI obviously believes imposition of a civil penalty was never jus-tified -- Cleveland's request is clearly now untimely.
On January 31, 1984, Chairman Palladino wrote to Assistant Attor-ney General McGrath indicating that the Commission had voted on the matter and determined not to impose a civil penalty.
Ac-cordingly, CEI believes you no longer have authority to pursue the matter.
As Cleveland readily concedes, the issue is not relevant to your no significant change finding and need not be considered as part of the Perry Plant operating licence anti-trust review (p. 9).
While the matter has been fully resolved by the Com-mission's decision not to impose a civil penalty, CEI believes the Commission's decision to be a sound exercise of its discre-tion.
As Cleveland notes (p. 10). and as indicated in Chairman
SHAw, PITTMAN, PoTTs & TROWBRIDGE
' A PARTNERSMep OF PRortgesONAL CORPORATIONS Harold R. Denton, Director March 6, 1984 Page 11 Palladino's letter, a primary reason for not imposing the civil
-penalty was your staff's view that the matter had been resolved to the satisfaction of the parties without substantial detri-ment to Cleveland pending that resolution.
In response to this observation, Cleveland obfuscates the issue by going through a recital ~of the evidence relied upon by the licensing and appeal boards to support their findings that a wheeling condition was necessary (pp. 11-12).
That argument wholly misses the point.
The crucial fact identified by your staff, and relied upon by the Commission, is that, durit; the period between imposition of the wheeling license condition and CEI's filing of a wheeling tariff acceptable to Cleveland, no PASNY power or any other alternative power source was available to Cleveland.
Significantly, Cleveland does not deny this crucial point.
Thus, even if one were to assume CEI acted in bad faith -- and we' firmly believe-that a careful review of all the events sur-rounding the wheeling tariff would not show bad faith -- the fact remains that Cleveland suffered no harm from CEI's ac-tions.
In such circumstances, the Commission correctly con-cluded that no purpose would now be served by imposing a civil
. penalty against CEI.
SHAw PITTMAN, PoTTs & TROWdRIC,GE A PARTNEntMW OF PROFE90eONAL CONpORATIONS Harold R. Denton, Director March 6, 1984 Page 12 For the foregoing reasons, CEI believes you should reaffirm your finding of no significant change and should deny Cleveland's Motion for Clarification and Correction.
Rev.p tfully submitted, b
Robert E. Zabler Shaw, Pittman, Potts & Trowbridge 1800 M Street, N.W.
Washington, D.C.
20036 Tel:
(202) 922-1000 Counsel for The Cleveland Electric Illuminating Company Of Counsel:
Donald H. Hauser, Esquire General Attorney The Cleveland Electric Illuminating Company Post Office Box 5000 Cleveland, Ohio 44101 cc:
Service List
4 UNITED STATES OF AMERICA 103403 FEDERAL ENERGY REGULATORZ COMMISSION Before Commissioners:
C. M. Butler III, Chairman:
Georgiana Sheldon, A. G.
Sousa and Oliver G. Richard III.
The Cleveland Electric
)
Dockct No. ER63-138-001 Illuminating Company
)
(Phase I)
OPINION NO.
172 OPINION AND ORDER APPROVING TERMS AND CONDITIONS OF EMERGENCY, SHORT-TERM AND LIMITED-TERM SERVICES (Issued June 16, 1983)
This proceeding involves proposals by the Cleveland Electric Illuminating Company (CEI) to:
(1) increase rates for partial requirements and transmission services provided to the City of Cleveland, Ohio (City); (2) change the terms and conditions of its firm and emergency power schedules for service to City; and (3) impose a new firm power demand ratchet.
Pursuant to a Com-mission order of January 18, 1983, which suspended the proposed rates to June 19, 1983, an expedited hearing was held on the
. proposed terms and conditions and the demand ratchet so that a Commission decision on those issues could be-issued prior to the end of the suspension' period.
An initial decision was issued May 9,1983 on the expedited hearing, or Phase I, issues.
This opinion addresses only the Phase I issues.
Issues related to CEI's proposed rate increase will be dealt with in Phase II.
CEI provides emergency power service to City under Service Schedule A, and firm power service under Service Schedule B.
The May 9 initial decision describes these service schedules in'
' detail.
CEI proposes some major changes in the schedulee.
For Schedule A, CEI proposes to eliminate Class II (short-term) and Class III (limited-term) emergency power.
It would retain only
. Class I power, which is availaul,e during the first 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br /> of any emergency.
However, " emergency" wculd be radefined to require the City to be experiencing some kind of breakdown in generation or transmission either on its own syse.em or that of its power
. supplier.
For Schedula B, CEI proposes a 50 percent demand ratchet, based on City's peak monthly usage during the previous 12 months.
This would replace the current 70 percent minimum I
QS-3
103404 Docket No. ER83-138-001 billing demand provision.
CEI also would eliminate the netice provisions which allow City to increase contract demand up to 100 MW, or to decrease the demand.
A major initial area of. concern in the proceeding was CEI's proposal to eliminate the Classes II and III emergency services.
During the hearing, however, CEI testified to its willingness to separately provide for the short and limited-term services covered by Classes II and III, subject to seven specified condi-tions which are discussed below.
The presiding judge approved CEI's proposed Service Schedule A for emergency service, with one modification.
Because emergency power schedules with other CEI customers permit the service not only for system breakdowns but for other emergencies as well, he concluded that service-under Schedule A should also be made available for emergencies' other than breakdowns.
The judge also approved the short and limited-term services proposed by CEI, but with ' modification and/or rejection of some of CEI's proposed conditions, and with the requirement that all conditions be ineceporated into the service schedules.
CEI's seven proposed service conditions and the judge's dis-position of them,.as we interpret the initial decision, are as follows:
. Condition 1:
There will be no oreference given to any potential customer with respect to any otner potential customer.
The judge approved this condition.
Condition 2:
There will be no preference given with respect to any retail customer.
The judge modified this condition to incor-porate two additional provisions: (1) CEI will not be required to curtail an ongoing service to any of its customers in order to initiate short-term or limited-teca services.
(2) Short-term or limited-term services should not be given indefinite curtailment preference over CEI's retail interruptible customers.
Condition 3:
Such service will be furnished only when in the sole judgment of the sucoly-inq oarty it is available.
The judge deleted
" sole judgment
- and suostituted the following:
"Such serivce will be furnishod by the supply-ing party when it is reasonably available."
He also stated that CEI will be required, with-in three days after a denial of service, to set forth in writing the reasons for denying or curtailing service to City.
at -O
^
.103403 Docket No. ER83-138-001,
Condition 4:
Such service will not be fur-nisned as a sucatituts for firm eewee. wnich would have. Deen or could oe obtained.
The judge rejected this condition.
Condition 5:
Such service shall be dispatched in the same manner as is done currently.
The judge rejected this condition as unacceptably vague.
He modified it to state that a. pros-pective buyer would be required to provide a schedule to the seller of the amount of power to be delivered throughout the sales period, and the buyer would be free to make changes in the schedule at any time.
Condition 6:
Payment shall be based on sched-uled quantities unless curtailed by the supplyinc party.
The judge approved a modifieo version of tnis condition:
" Payment shall be based on scheduled quantities unless curteiled by the supplying partyr provided however, that the buyer shall pay for the amount of power delivered if it is greater chan the amount of power initially reserved."
Condition 7:
The sucolving party shall have the riont to impose minimum ratas of take based on load conditions in its system.
The judge rejected this condition as too open-ended.
The judge also approved CEI's proposed 12-month, 50 percent demand billing ratchet as just and reasonable, ' based on a finding that the ratchet's benefit to CEI and other customers on the system outweighs any possible detriment to City.
He adopted CEI's new firm power Schedule B, subject to its being clarified to indicate that only the amounts of power taken under the firm power schedule will contribute to the ratchet, and not purchases of power by City under other CEI rate schedules.
Exceptions to the initial decision were filed by City, CEI; and the Commission staff.
City's Exceotions At page 8 of his decision, the presiding judge rejected City's proposal that CEI provide short and limited-term services similar to those provided under the current Schedule A.
City claims the judge erred in concluding that its proposed terms of service are preferential.
It further argues thac the initial 6
i
n'.
Docket No. ER83-138-001 103406 decision will result in unlaw (ul discrimination because it limits City's ability to purchase power on days other than the Thursday
" market day" on which all potential power purchasers submit their l
requests.
This is so, says City, because there are other days on which service requests can be made.
We affirm the judge's conclusion that City's proposed.
i' terms of service must be rejected as unduly preferential since they would provide City with a' service more favorable than that provided to similarly situated customers, without any cost differences to account for the superior service.
As to City's clata that the decision would not allow it to purchase power on any day but Thursday, we do not agree with City's interpretation.
CEI's witness described the Thursday market day procedure by which purchases normally are made, but further recognized that potential purchasers are not precluded from seeking short-term power earlier than Thursday. _1/ The judge clearly indicated an intent to treat City on the same basis as other short and limited-term purchasers.
While his decision refuses to permit City to obtain service. busediately upon request, it does not prohibit City from seeking service earlier than Thursday.
This is not to say that City may ignore the Thursday market day practice, but only that it must be treated in the same manner as the other short-term purchasers.
City next objects to the judge's decision that an ongoing shert or limited-term transaction may be curtailed to avoid indefinite interruption of CEI's retail interruptible custcmers.
The judge approved this provision as part of Condition 2.
In support, City cites to testimony by a CEI witness that inter-ruptible customers have a lower priority than short or limited-term customers and should be curtailed first.
2/ What City fails to mention, however, is the further testtmony of the same witness which indicates that in periods of extended curtaibnent, it would not be CEI's policy to continuously interrupt or curtail the interruptible customers in order to continue short-term trans-actions.
3/
It appeats that CEI's policy in this regard is industry-wide, 4/ and City has of fered no rationale for requiring indefinite curtailment of an interruptible cu.stomer.
The judge's decision is affirmed.
The Commission, however, does believe that a clarification should be made to insure equitable treatment for all customers.
The following' sentence should be added at the end of provision (2) of Condition 2, cited on page 2 of this opinion:
"This condition is to be applied uniformly and equitably to all of CEI's short-term and limited-term customers. "
_1/
Tr. 19 7-19 9.
_2/
Tr. 207.
_1/
Tr. 208.
._4,/
Tr. 209; 214.
sf f
f 103407 I
Docket No. ER83-138-001 -
The initial decision modified Condition 3 to require that
-within three days after a denial of service, CEI shall set forth in writing the reasons for denying or curtailing service to City.
City objects to the fact that the decision 2 ails to include a specific reporting requirement pertaining to denial of service.
-The staf f also advocates inclusion of. a specific reporting requirement.
CEI objects to any written reporting requirement, but would agree to orally advising City of its reasons for denying service.
The reporting requirement proposed by the staf f and supported by City appears to be reasonable and would not be unduly burdensome on CEI.
Accordingly, the following requirement shall be incorporatad into the short and limited-term service schedules:
In the events (1) the party requested to supply the short-term power or limited-term power advises the reserving party that such power is not avail-able, ca (2) the supplying party curtails an ongoing transaction, then:
the supplying party shall promptly, upon request, furnish in writing to the reserving or purchasing party, estimates of loads, capacities and other relevant data by means of which the reserving or purchasing party can assess the availability of such power or need for curtailment.
City further contends that the initial decision should specify in Condition 5 precise language to be incorporated in the rate schedules to insure that scheduling and dispatching of power is done in the same mannet as currently.
Included in City's brief on exceptions are approximately two pages of scheduling and dispatching procedures it claims should be appended to the rate schedules.
The proposed provisions cannot be accepted.
They are unsupported by the record and were not subjected to cross-examination.
In its brief opposing exceptions, CEI alleges numerous deficiencies in the provisions and states that it will include-its-practices and policies in its compliance filing, to which City may riise any objections.
We agree that this is the preferable method of complying with the judge's decision.
City next excepts to the judge's cdoption of CEI's proposed 12-month, 50 percent demand billi.ng ratchet.
The judge based his decision in part on a finding that the balancing test enunciated
$('7
Docket No. ER83-138-001 103408 in Central Illinois Licht Comoany (CILCO) _5/ had been met.
This test r7 quires that in order to justify use of a demand ratchet in conjunction with-12-CP cost allocation, the disadvantage to the customer being ratcheted-must be outweighed by the benefits to the utility or the-consuming..publie.
City claims this test was.
not met.
Among the other claims advanced by City in arguing for rejec-tion of the-ratchet aret (1) The initial decision ignores the fact that the proposed rate schedules eliminate City's ability to control and.=chedule* firm power takes from.CEI.
(2) The ratchet will penalize City by preventing it from taking advantage of more-economical power sources and forcing it to take power at the time of CEI's peak loads.
(3) CEI has not quantified in the record any demand costs that have gone uncompensated.
(4) The judge improperly relied ~ on. Minnesota Power & Licht Comeany _6/
and. Connecticut Licht & Power Compang _7/ in approving the ratchet.
'me have reviewed City's: arguments and the precedent on this issue,. and conclude that the 50 percent ratchet is reasonable.
The purpose-of a ratchet.is to insure that a utility has an oppor-tunity to' recover its. projected demand costs. and that customers bear their faic share of the demands placed on the system.
The record shows. that City's firm demand fluctuated considerably in the past. ja Because of City's ability to use alternate power
- sources. and vary its demand on CEI's system, a 50 percent ratchet would provide a-fair means of protecting CEI from load variations.
The judge properly relied on Opinion Nos.114 and 155, supra, in which we emphasized 'that a. demand ratchet in conjunction with 12-CP allocation may be appropriate where partial requirements customers
_f,/
Opinion No. 81',,10' FERC 161,248 (1980).
_6/ Opinion No. 155r 21 FERC 161,233 (1982) (a 90 percent ratchet for partial requiremens customers approved).
_7/ Opinion No. 114,. 14.FERC 161,139 ( l'9 81 ), aff'd sub nom.
Second Taxing District of the City of Norwalk v.
F.E.R.C.,
683 F.2d 477 (D.C. Cir. 1982) (a 100 percent ratchet for
_ partial requirements custaners approved).
_S/ On September 30, 1982,. City informed CEI that it wanted to increase its contract demand. frcm 10 MW to 40 MW for the period December L,.1982 through February 28, 1983.
On October 28, 1982, City notifed the company that it wanted to increase its centract. demand from 40 MW to 70 MW for December 1962..
Exh.
1,.p.
8-9.
j n.-
~
Docket No. ER83-138-001 103409 are involved.
This is because those customers have the ability to control their load by using alternative sources of capacity and the ratchet will. compensate the utility for the capacity it must hold ready for the partial requirements customors should they choose to take it.
City has presented n, persuasive argu-monts for not applying this rationale of the judge at pages 13-17 of his decision.
Lastly, City faults the judge for not recommending that the Commission initiate an investigation into CEI's changes in billing practices under Schedule A.
Phase I of this proceeding was initiated solely to determine whether CEI's proposed changes in
.the taras and conditions of its ' emergency and firm power services are just and reasonable.
The judge therefore properly rejected the billing practice issue as being beyond the scope of Phase I of this proceeding.
CEI's Exceptions The judge rejected CEI's proposed Condition 4, which states
'that short and limited-term service will not be furnished as a substitute for firm power which would have been er could be obtained.
CEI excepts.
The company claims City is not entitled to such power where it has failed to ccnstruct or purchase suffi-cient fica capacity to meet its fica peak load.
We agree with CEI that all utilities, includihg City, should have available sufficient firm power to meet the firm demand of-their customers, and that CEI should not be' required to sell non-
. fina power in order to remedy deliberate deficiencies in capacity.
However, there has been no showing that City does not have avail-able sufficient firm p-ower to meet its load, or that City has abused the emergency services due to poor forecasting or deliberate underscheduling.
.To adopt CEI's position would totally preclude city from using more economical short-term power in lieu of the firm power it has available, a result that would not only be unfair to City, but could result in lost sales of excess power by CEI.
Moreover, CEI has not shown that there would be any cost impact on the company to justify precluding the purchases by City, and CEI has admitted that the short and limited-term sales have no impact on its system planning and operations. _9/
_9/
Exh. 34; Exh. 30 at 8.
I e
,~.-I m-
_.. _, _ _ _.__. ___ _ __. _, ~._,...._, _..._. _ _
c.
F 10!3410 Docket No. ER83-138-001 g<
f a
As pointed out by the judge, the restriction CEI wishes to
~
impose on City has not been imposed on other CEI customers, and F,
therefore would be discriminatory.
The company testified that it r
sold short-term power to the City of Painesville to meet firm J
power requirements. 10/ These sales have continued since March 1982. 11/ On exceptT3ns, CEI argues that those sales began on a temporary basis because of environmental restrictions on Paines-
[
ville's generation, and that it has advised Painesville the sales will not continue indefinitely.
However, as of the date of the
[
hearing, it had been almost a year since CEI told Painesville it k
would have to find another alternative. 12/ We cannot allow CEI to impose its proposed restriction on City when it continues to allow such purchases by Painesville.
f' CEI's second objection is to the judge's refusal to accept 1
its proposed condition 3, which would allow service to be furnishad at the sole discretion of CEI.
The company claims it reserves this right in each of its other short and limited-term schedules and that it is necessary to retain such flexibility in non-firm transactions.
CEI also objects to the judge's requirement that the company, within three days af ter a denial of service to City, must provide in writing to City the reasons for denying or cur-l tailing service.
We cannot accept CEI's argument that the " sole judgment" language must,. be retained in order to prevent discrimination.
Although CEI rate schedules with other customers may contain
" sole judgment" provisions, that does not establish the propriety p
of such a provision in this case.
In view of the competition between and antipathy of the parties, we believe the judge properly modified the " sole judgment" condition.
His determina-tion that the short and Ibnited-term services will be furnished when " reasonably available" will not, as CEI alleges, result in inflexible'and burdensome workin; arrangements.
CEI will still retain control in determining whether to provide service and will be affected only if it acts in an unreasonable manner.
As for CEI's objections to the three-day reporting requirement, these were rejected in our earlier discussion at page 5 of this opinion.
12/
Tr. 232.
11/
.Tr. 67.
12/
Tr. 277.
e
<a-la
103411 Docket No. ER83-138-00. CEI next excepts to t,e juo e's rejection of Condition 7, s
under which CEI would retain t.se right to impose minimum rates of take based on load conditions on its system.
The condition was rejected because it does not specify any minimum rates of take and it is impossible to assess the justness and reasonableness of such an open-ended provision.
CEI interprets the decision as saying that the company must either specify a certain take now end forever, or never be able to impose one.
We do not interpret the decision this way.
The judge did not reject a minimum take provision Ler se, but rejected this particular one as unacceptably vague.
We affirm his decision, but with the recognition that CEI is not precluded from attempting to justify a specific minimum take provision in the future. 13/
At page 11 of his decision, the judge modified CEI's Condi-tion 5 proposal that service be dispatched in the
.e manner as
.is done currently.
Because the condition was vague, he concluded that it should be clarified to reflect testimony of a CEI witr.sss that a prospective buyer would have to prcvide a schedule to the seller of the amount of power to be delivered, but that the buyer would be free to make changes in the schedule at any time.
On exceptions, CEI points'out that its witness further testified that schedule changes by the buyer are infrequent.
CEI contends that to allow City to make frequent schedule changes would be burdensome on the company and would be discriminatory as to the.
I fother customers.
CEI's arguments regarding the dispatching condition serve to accentuate the problems encountered when a utility does not incorporate in writing its practices and policies relating to services provided.
The judge attempts throughout the initial decision to insure that City is provided the same terms and conditions of service as provided other short and limited-term customers.
In modifying Condition 5, his intent was to incor-porate in City's rate schedulas the dispatching practices used in dealing with other purchasers.
The testimony is clear that under current practice, a buyer is permitted to make schedule changes.
Although CEI's witness did say that schedule revisions do not occur very often, 14,/ he nevertheless twice reiterated that 13/ CEI stated in its brief on exceptions that if a minimum rate
~~
of take must be specified at this time, it proposes the minimum take it tmposes on Ohio Power Company, which is 50%
of the power purchased. -This proposal must be rejected because there is no evidence in this record to support application of a 50% minimum take to City.
14/
Tr. 220.
p.;!
w
______________._.-__m_
i .
10341:3 Docket No. ER83-138-001.
.I changes may be made by the purchaser. 15/
It is true the testi-s',
mony does not state that CEI's practice is to allow frequent
?
)
schedule changes.
However, the evidence indicates that Painesville was permitted to receive more power than originally scheduled J'
several times in 1982. 16/. City should be accorded the same y
flexibility as Painesville, and no more.
CEI is directed to g.
reflect such treatment in the revised Condition 5 ordered by the h
judge.
V.
CEI argues taat it should not be required to record in writing all of its practices and policies associated with the short and limited-term services.
The company alleges this will impair the ability of the patrties to enter mutually beneficial transactions because the terms would not be subject to quick modification based on condit. ions existing at the time of the
~
sale.
We cannot accept CEI's arguments.
The judge's require-ment that CEI file its p'ractices and policies simply requires compliance with Section 205(c) of the Federal Power Act and Section 35.1 of our regulations.
The initi.a1 decision recommends that the rats.: contained in the Ohio Power Company short and limited-term schedoles be applied in this case on an interim basis, pending a determination of appropriate rate levels at the end of Phase II.
CEI does not object to this per se, but requests that the Commission reject any implication that it would be barred frem filing just and reasonable rate's prior to the end of Phase II, to reflect any
~
differences in the services rendered to City.
We affirm the interim rates adopted by the judge and do not interpret his decision as precluding the company from filing new rates at any time.
CEI's final exception is to the fact that the judge did not specifically address City's obligation to pay the Ohio excise tax.
CEI requests that the Commission order City to pay taxes as set forth in the company's proposed Schedule C and D.
City and the staff do not object.
Accordingly, CEI's request is granted.
o Staff Exceptions The Commission staf f generally agrees with the initial decision but on exceptions regemmends certain refinements to the decision.
It claims these refinements will insure that CEI i
i provides services to City that,are similar to the short and limited-te.rm services provided by CEI to others.
15/
Tr. 222; Tr. 223.
16/
TR.225-29.
l *.,,.
103413 Docket No. ER8 3-138-001,
First, the staff suggests that the Commission adopt specific language, patterned after the language in other CEI emergency power agreements, defining emergency service and describing its availability.
Attached as Appendix A to the staff's brief on exceptions are revised Sections 2.1 and 4.1 ;o be placed in the CEI-City emergency service schedule (Schedule A).
tio party appears to object to staff's request.
The suggested language, included as Appendix A to this opinion, is therefore adopted.
Staff also requests that CEI be required to include in its short and limited-term service schedules all practices and e
policies bearing on the services, including its curtailment priorities and market day practices.
We interpret the initial decision as requiring the filing of all practices which affect or eclate to the services rendered, inclucing those cited by the staff.
The last point raised by the staff concerns the reporting requirement imposed on CEI when it denies or curtails service.
This matter was resolved earlier in discussing City's exceptions, and the staf f's proposed reporting requirement has been adopted.
3 The Commission orders:
(A)
The initial decision issued in this docket on May 9, 1983, is affirmed to the extent not modified herein.
(B)
Within 75 days from the date of the opinion and order, CEI shall file revised rats schedules for emergency, short-term, and limited-term services in accordance with the findings and coaclusions of this decision and the Commission's rules and regulations.
However, if applications for rehearing are pending at the close of the 75-day period, the above-mentioned filings shall be made 30 days from the date the applications for rehearing are disposed-of by the Commission.
By the Commission.
( SEAL)
.Aah.
Kenneth F.
- Plumb, Secretary.
gg.-l?
k.
l C Docket No. ER8 3-138-001 Accendix A 103414 Revised Sections 2.1 and 4.1 of Proposed Schedule A 2.1 In the event of a breakdown or other emergency in or on the system of either party involving either sources of power or transmission facilities or both, which impairs or jeopardizes the ability of the Party suffering the emergency to meet the loads of its system, the other Party shall deliver to such Party electric service in amounts up to and including 100 MVA, which 100 MVA is hereby designated and herein called Emergency Capacity.
Such capacity limitations may be changed fecm time to time as the capacity of the interconnection may be increased pursuant to determination of the Operating Committee established by Article 3.
h 4.1 An Emergency transaction is a scheduled transaction 3
wherein one Party supplies energy to the other Party
,e which said Party cannot supply because of a breakdown or other emergency in or on the system of either Party
[_.'
involving either sources of power or transmission facilities or both, which impairs or jeopardizes the
~,
ability of the Party suf fering the emergency to meet g
the loads of its system.
, et s
t 9
t I
s S
FEDER * '. ENERGY REGULATORY COMMISSION WASHINGTON, D.C.20428 Docket No. ER83-13 3-000 Reid & Priest A ttention:
Mr. Stephen L. Huntoon i.Ld r Attorney for The Cleveland Electric Illuminating Company 1111 19th Street, N.W.
Washington, D.C.
20036 Deer Mr. Huntoon:
On Movember 19, 1982, CEI submitted for filing a proposed rate increase for partial requirements and transmission service provided to City of Cleveland, Ohio (City).
CEI also proposed changes to the terms and conditions of its emergency and firm power schedules.
By order dated January 18, 1983, the Commission accepted CEI's submittal for filing and suspended the proposed rates for five months to become effect!ve, subject to refund on June 19, 1 983.
The Commission granted City's request for an expedited hearing with respect to these changes in terms and conditions to afford the Commission an opportunity to render a final decision on the reasonableness of such changes prior to the end of the suspension-period.
The remaining issues were deferred to Phase II of the proceeding.
On May 9, 1983 an initial decision was issued directing CEI to substantially revise the terms and conditions of the service schedule =
and to establish separate service schedules providing for short-term and limited-term firm power.
On June 16, 1 983, the Commission issted opinion No. 172 chich adopted the initial decision with some further modifications.
On August 30, 1983, CEI submitted for filing revised service schedules in compliance with Commission Opinion No. 172.
Notice of the filing was published in the Federal Register with comments or protests due on or before September 19, 1 983.
City requested and was granted an extension to October 3, 1983, to file its comments.
On October 3, 1983, City filed comments wherein City protests numerous provisions of the compliance service schedules as being inconsistent with Opinion No. 172.
City also requests certain editorial changes.
EX L Bil b
F. i.
. The Cleveland Electric Illuminating Company on October 18, 1983, CEI filed an Answer and Response to City's pleading wherein CEI consented to certain of the editorial changes requested by City and challenged many of the other revisions requested by City..
On November 7, 1983, City filed a Motion for Leave to file Reply to Answer.
City alleges that CEI's answer for the first time indicates CEI's rationale and justification for the inclusion of unauthorized provisions in the service schedules and therefore City was unable to respond to these issues in its earlier pleading.
On November 22, 1983, CEI filed an answer in opposition to City's motion and requested an opportunity to respond to the City's reply should City's motion be granted.
On December 15, 1983, City filed a Motion for Expedited Consideration and Decision on the Compliance Filing.
City alleges that CEI has refused City access to short-term and limited-term firm power on the -grounds that no such service schedules exist prior to acceptance of the compliance filing.
City alleges that CEI's action frustrates the objective of the expedited hearing, nullifies the Commission's decision, and subjects City to irreparable harm.
On December 30, 1983, CEI filed an answer to City's motion which does not object to City's request for expedited action, but which.
states that delays in processing the compliance filing have been caused primarily by City and states that implementation of the short-term and limited-term' power service schedules without Commission approval.would be enlawful.
CEI's original. submittal in this docket provided for, among other things, a redefinition of emergency energy service which effectively eliminated the availability of short-term and limited-term firm power which had previously been called Class II and Class III emergency power.
CEI also proposed certain revisions to the terms and conditions of the redefined emergency power and firm power.
The initial decision modified certain terms and conditions of the 1-The Commission's Reguletions do not permit answers to answers; therefore, the November 7 pleading of City and the November 22 1 pleading of CEI have-not been considered in our review.
City's motion for leave to filo reply to answer is hereby denied.
.. The' Cleveland Electric Illuminating Company remaining services and established certain terms and conditions for new service schedules for short-term firm and limited-term firm power which LCEI-had voluntarily offered to make available during the
-proceedings in this docket.
Opinion No. 172 generally adopted the
- initial decision modifying certain provisions of the various service schedules.
The instant submittal represents CEI's compliance with Opinion No.o172.. City has filed a lengthy and detailed protest of numerous provisions and modifications included by CEI in its compliance service schedules.
City generally contends that certain terms and
- conditions are inconsistent with the findings of the Commission, are vague and indefinite, or introduce provisions which are not supported by the record.
City also requests many editorial changes, e.g.,
punctuation and capitalization.2 We note that ordinarily the
-determination of whether a compliance filing reflects the Commission's opinion,is accomplished with a straightforward comparison of the compliance with-the opinion's directives.
In the instant docket, however, the Commission directed CEI to reduce to writing its existing practices and policies to be incorporated into two new service-schedules.
Such practices and policies had not been included in the original submittal and were therefore unreviewed by the Commission '
during the proceedings.- Our review of the submittal, discussed more fully below, indicates'that CEI's submittal complies with the Commission's directives; therefore, City's request for rejection is hereby denied and the submittal is accepted for filing.
The balance of the comments herein will. discuss the City's substantive objections topically.
Effective date (All service schedules):
The emergency and firm power service schedules initially submitted by-CEI-stated-that the schedules would become effective on the interconnection date of the original agreement.
This language is identical to: language in the original service schedules which were susperseded in this docket.
In its compliance filing, CEI revised the language to make all the service schedules (emergency, firm and the
- two new schedules for short-term firm and' limited-term firm) effective upon. approval of the compliance filing submitted herein.
City objects to this revision.and believes the schedules should be made effective
. on June 16, 1983, the date of the opinion in this docket.
City states that CEI.did not apply for a stay of the opinion and that no stay was issued by the Commission on its own motion.. City further notes that 2
I'n its response, CEI consented to most of the editorial changes requested by City.
Those changes not made by CEI and not discussed later are nonsubstantive.
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The. Cleveland Electric Illuminating Company rehearing.does not operate as a stay of any Commission order.
City
. concludes that.the revisions ordered by the Commission should become effective on the date of the order, June.16, 1983, and that such an
- effective date is consistent with the purpose of the expedited hearing.
'CEI states that City's proposal-is contrary to Ordering Paragraph (A)
~
~
of the initial decision and that the appropriate time for City to object was on rehearing.. CEI also contends that its revision is
. consistent with the filed rate doctrine.
Similarly, in its motion
'for expedited decision, City contends that CEI has refused City access to short-term firm power on the grounds that the service schedule is not effective prior to Commission approval of the compliance submittal.
In its response, CEI acknowledges City's
. allegations, stating CEI's belief that the provision of services without Commission acceptance would be unlawful.
Although the Commission intended to ensure the availability of
.all services without interruption, the very nature of the service requires some mutual agreement as to the operational aspects of the scheduling of the service.
Because no rates are at issue in Phase I of this proceeding, City's request for a June 16, 1983, effective date relates only to the availability of services which CEI acknowledges Thave been withheld pending acceptance of the compliance filing.
The only practical significance to assigning a June 16, 1983, effective date is in the context of a subsequent request by City to have CEI retroactively rebill deliveries to City as if short-term power transactions had occurred.
Such rebilling is not appropriate since availability of short-term and limited-term services is governed by'many changing. day to day system conditions which cannot be reconstructed without substantial assumptions as to the prevailing system operating conditions on -tx)th systems.
Scheduling of such service can only realistically occur after the parties reach some
. mutual working relationship among the operating personnel as to the operating procedures to carry out the service.
The pleadings make clear that this did not occur.
Since the service must now be implemented via-the interpretations in this order, the appropriate date for commencement of scheduling of service is upon issuance of the-order herein.
Cancellation Provision (All Service Schedules):
CEI's original submittal provided that the emergency service schedules would " continue in effect for one year, and thereafter for similar periods unless changed, modified or superseded."
The fire power service schedule, as originally filed, provided for service "until five years ~after notice of cancellation shall have been given by eitheriparty.'"
In its compliance submittal, CEI adopted the five
'. year notice of cancellation provision for all service schedules.
City does not object to this revision, except that City requests Lthat the language be expanded to recognize that CEI would be required
t
. 1The Cleveland Electric Illuminating Company
'he Commission.
City states to file _the notice of~ cancellation wi controversy and the proposed
~
that its revision will obviate any futlanguage is supported by disposition a
connection with CEI's transmission service rate schedules.
is attempting CEI objects to City's proposal, alleging that City to impose upon CEI a requirement to make a filing five years inCEI states adva've of cancellation.the Commission's Regulations which limits a filing to only prior to the proposed effective date.with this~ Commission of a notice of can CEI also contends that the the service is not being superseded.
modification is unnecessary inasmuch as Section 2.3 of the In all applicable Commission Regulations.
It is not necessary City's proposed modification is unnecessary.
for-a utility to explicitly acknowledge or reference the Commission's Regulations in its contracts on file with this Commission in order The regulationa to. ensure that the regulations will-be observed.
apply equally to all jurisdictional services, no matter what,the absent contract language, and we have no reason to believe that, this modification, CEI would violate the regulations.
.Take-or-Fay Provision (Emergency Service Schedule):
In its original submittal, CEI's billing terms and conditions provided for "the billing of and compensation for demand charges...
based on scheduled deliveries of power..." and " billing of and d
. compensation for energy charges... based upon actual metere quantities." This language is the same as was included in theIn its compliance original service schedule.
the phrase " demand charges" to " service".3 City alleges that the retention of the billing language as modified by CEI would introduce a take-or-pay provision for energy in which is not taken and1that such a provision. is without support i
the re' cord and was made without an opportunity for cross-examinat on.
City also states that the two billing provisions are now inconsistent heduled
. inasmuch as one provides for billing of energy based on sc quantities and one provides for billing of energy based on actual metered quantities.
the rate does not
,3 iUnder CEI's~ revised emergency service schedule, include a demand charge.
[
s L
. The; Cleveland Electric. Illuminating Company 1
CEI~ states that its modification is required to conform with'the decision in Opinion No.-172 that the City pay for the service'it schedules.
In order to minimize controversy in this
. filing, CEI proposes to retain " demand charges" but opposes the elimination of the entire sentence.
We note that the inapplicability of the phrase " demand charges" was present in CEI's-original submittal in this docket when CEI first
- proposed.to' modify its rate design to eliminata a demand charge for emergency service..During the proceedings, no one objected to the retention of the " demand charge" language or-to the apparent
- inconsistency.
We further note that the initial decision and Opinion No. 172 dealt only with.the payment for scheduled quantities under the short-term and limited-term firm service schedules.
- The inconsistent language,which appeared in the original submittal and which was not litigated during the proceeding should be left in place.
Since(the rate no longer includes a demand charge, the provision is moot.
o
- Short-Term -and Limited-Term Firm Power Service Schedules:
' City objects to many of the provisions included by CEI in its short-term and limited-term service schedules.
City generally contends
'that certain terms and conditions are inconsistent with the findings
-offthe Commission, are vague and indefinite, or introduce provisions which-are'not supported by the record.
The present controversy to file two new service results;because the opinion' ordered CEI ~
. schedules, unreviewed during the' proceedings in this docket, and further directed CEI to. reduce to writing its existing policies
.and practices to'be incorporated into the schedules for the first time.
The initial decision-directed that the short-term and limited-term service schedules be patterned on-similar schedules under which CEIiserves Ohio Power, expanded to include specific terms and conditions approved in the initial decision and incorporating CEI's general practices.and policies related to such services.
Opinion No. 172
, generally affirmed the initialidecision, clarifying and expanding Esome specific' terms and conditions.
The opinion also provided that
, City'could object to any of the practices and policies included in
.these. service-schedules at-the compliance phase'of the proceeding.
-Our-review of the compliance submittal indicates that CEI has constructed its short-term and limited-term' service schedules in Leo.apliance with the! Commission's directives.
Although the contract 1
,e'n.
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..r Lt
. The Cleveland Electric Illuminating Company language includes somt nonspecific phrases (e.g.,
accepted industry standards), the specific terms, conditions, practices and policies which CEI has included serve to clarify ambiguities resulting from the occasional use of an indefinite word or phrase.
In the discussion below, we discuss City's specific objections separately.
A.
Preference over Retail Customers:
City objects to the first part of the first sentence of Section 2.1 which states that no preference be given to any potential short-cerm or limited-term customer with respect to any retail customer.
The. remainder of Section 2.1 includes additional language specified by the Commission stating (1) that the supplying party will not be required to curtail an ongoing service to any other customer in
-order'to initiate short-term or limited-term power; (2) that short-term or limited-term power will not be given indefinite curtailment preference over the supplying party's retail interruptible customers; and (3) that any curtailment of short-term and limited-term power shall be: applied uniformly and equally among all such customers.
City states that the introductory phrase was not adopted by the initial decision because the administrative law judge found that this general provision should be replaced by more specific language.
CEI -states that the general language is taken verbatim from Opinion No. 172 and:that the Commission intended that more specific language be appended to the general phrase.
Our review indicates that the language used by CEI is identical to that specified in Opinion No.
172.
B.
Time Frame-for Curtailment Notification
-City objects to the provision in Section 2.1 which states that the supplying party will furnish a written description of the need for curtailment "promptly".
City states that the Administrative Law Judge directed CEI to specify a three day period.
CEI states that the language'is~taken verbatim from Opinion No. 172.
CEI's language is taken directly from the opinion and we note that City did not raise this issue on rehearing of the opinion.
C.
Written Confirmation:
City objects to the provision in Section 2.11 which requires
'ituto furnish to CEI, if requested, a written confirmation of the short-term or limited-term power reservation and a schedule deliniating quantities of power to be delivered during the period of the reservation.
City states that this provision is inconsistent with I
I
. The Cleveland Electric Illuminating Company Section 5.1 of the short-term service schedule which provides for oral confirmation and Section 5.1 of the limited-term service schedule which provides for the submission of a preliminary schedule, if requested.
CEI states that a written schedule, if requested, is not inconsistent with an oral confirmation of purchases.
CEI contends that the right of the seller to receive from the prospective buyer e schedule of the amount of power to be delivered throughout the sales
. period was affirmed by the Administrative Law Judge.
The Commission directed CEI to pattern its short-term and limited-term service schedules on its present contract with Ohio Power.
The Ohio Power contract does provide for a schedule to be confirmed in writing at the request of either party.
Furthermore, we do not believe that this language is inconsistent with Section 5.1 since that section deals with oral rather than written confirmation.
D.
Schedule Revisions:
City objects to the provision in Section 2.11 which it claims provides that the reserving party can revise the schedule up to the reserved amount with sufficient notice and that revisions may
-be made occasionally, because of unusual circumstances, with at least ene day's notice for such schedule changes up to the reserved amount.
City contends that these provisions were clearly rejected in Opinion No. 172 and that CEI is attempting to make it difficult for City to make needed scheduled changes.
CEI states that the Commission directed CEI to permit City to revise its schedule on the same ~ asis that Painesville (served o
in interchange by CEI) has been allowed in the past.
CEI notes that the provision does not require one day's notice, but merely urges it.
Opinion No. 172 directed CEI to modify its contract to make it clear that City would be accorded the same flexibility to revise its schedule as Painesville, but no more.
We believe that CEI has made a good faith attemr' to meet the Commission's requirements, while ensuring that CEI is rot left open to unlimited and frequent schedule changes.4 With respect to the limitation of changes up to 4
The Painesville contract is silent on scheduling and dispatching procedures.
The Commission directed CEI, however, to codify in City's contract the existing and unwritten practices and procedures
)
which CEI had implemented with respect to Painesville.
Testimony during the hearing indicated that Painesville had been permitted, on occasion, to make schedule changes.
CEI is correct that the one day notice is preferred rather than required.
. The Cleveland Electric Illuminating Company the reserved amount, we believe this is appropriate, inasmuch as revisions over the reserved amount would constitute a new request for service.
E.
Multilateral Procedures:
City objects to the provision in Section 2.11 which states that the reservation and scheduling procedures are not intended as a substitute for good faith observance of established " multilateral procedures"S by which potential power sellers buy and sell power on a nondiscriminatory basis.
City contends that this provision is not included in the Ohio Power contract, and is vague and indefinite.6 was never discussed in hearing, CEI states that this provision is intended to meet the Commission's requirement that City be permitted to use the same multilateral procedures available informally to other purchasers.
CEI states that the provision-is fair, sufficiently precise and consistent with Opinion No. 172.
CEI further contends that the provision was inserted to ensure City's equal access and yet make the process sufficiently flexible to respond to any multilateral changes in procedures.
5 " Multilateral procedures" apparently references the market procedures, discussed during the hearing, whereby CEI solicits requests for short-term and limited-term power on the Thursday prior to the week service is required.
l 6
~
~The Commission directed CEI to pattern its new service schedules on the Ohio Power and Painesville contracts but further ordered l
CEI to expand City's service schedules to incorporate as part of the written contract CEI's existing practices and policies which heretofore had been unwritten.
We note an inconsistency in City's arguments throughout its protest in that, although City favors the requirement that CEI incorporate its previously unwritten practices and procedures into City's service schedules, City frequently objects to the inclusion of a particular practice on the basis that it is not included in the existing Ohio Power l
or Painesville contracts.
p 1..
4 The Cleveland Electric Illuminating Company The initial decision and Opinion No. 172 recognized M.st there were many. day to day operational practices employed by CEI In selling short-term power to potential customers and direc':ed CEI.to CEI believes incorporate those practices in its service schedules.
that its reference to multilateral procedures and nondiscriminatory CEI could access'.to power satisfies the Commission's requirements.
arguably be expected to provide more detailed practices and policies However, we believe in complying with the Commission's directives.
the Commission's that:the other modifications made to the contract at direction, together with the~1ess detailed language included herein, will' serve to protect the interest of City while still affording CEI flexibility to operate.
Curtailment of Short-Term and Limited-Term Power F.
City objects to the provision in Section 2.11 which states that CEI may reduce scheduled deliveries which are being reserved by CEI from another system "when during such period conditions arise that could not have been reasonably foreseen at the time of the reservation and cause the transmission to be burdensome to the supplying party's system."
City states that this provision was not proposed during hearing and is not included in the Ohio Power In addition, City contends that this provision violates contract.-
the Davis Besse project license issued by the Nuclear Regulatory to CEI and to its co-owners which required CEI to Commission (NRC) provide transmission service to City and to have sufficient transmission capacity to carry out-that-condition.
City also states that this provision conflicts with CEI's transmission service rate schedules
-on file with the Commission.
CEI states-that this provision protects CEI's system during
- provision of short-term power acquired from another utility with the same' standard applicable to short-term power supplied directly from CEI notes that wheeling is not involved in these transactions CEI.
therefore, since.CEI.is acting in a purcnase and resale capacity and,
.the NRC license requirements and transmission tariff are irrelevant.
We believe this provision is reasonable since it applies the same-curtailment criteria-to a purchase and resale transaction as to a' direct sale.
Moreover, CEI's NRC license does not establish any conditions or obligations as to short-term or limited-term power.
4:
+
, The Cleveland ~ Electric Illuminating Company G.
-Criter'ia Af fecting Availability:
City objects to the provision in Section 5.1 which states that the time required for CEI's response to requests for short-term and limited-term power are affected by the magnitude and duration of the transaction, conditions existing on CEI's system, and in some cases the approval of an officer of the company.
City contends that these provisions are' vague and indefinite, without record support, not in the Ohio Power contract, and in violation of Opinion No. 172, in that the provisions-include conditions on the availability of service not specified by the Commission.
City alleges that CEI's insistence on the approval of a corporate officer in the past led to extended-delays in emergency conditions when City suffered a major emergency.
City further contends that this provision seeks to retain for CEI the " sole judgement" criterion rejected by the
~~
Administrative Law Judge.
CEI states that this provision accurately sets forth CEI's existing practices. and policies for the sale of short-term power which the Commission ordered CEI to include in the service schedules.
CEI: notes that this practice ensures that short-term and limited-term
. power will be offered on the same basis as such services are provided to other entities.
CEI also challenges City's reference to a prior emergency situation where delays were allegedly caused by CEI's
'need for approval of a corporate officer.
CEI states that this provision in no way risks a " lights out emergency" in City's system because (1)' City should'not rely on the unknown availability of short-tt m power to meet its syqtem requirements; (2) the City can
~
and.does have emergency energy available from CEI for emergencies; and (3)fthe City can take firm power from CEI on demand.
City's references to a lights out emergency are misplaced because, as CEI indicates, City should not rely on the availability of short-term power to meet an emergency.
This provision satisfies the Commission's opinion ordering CEI to include its various existing
-practices _and policies in the service schedule and such provision appears reasonable.
In any event, we have directed CEI to follow up any refusal of power with a written explanation of the criteria for refusal;-therefore, City has recourse to the Commission should CEI refuse' power on an improper or discriminatory basis.
-H.
Oral' Confirmation:
City objects to the provision in Section 5.1 which requires oral confirmation and, upon request, further confirmation at least three days before the start of a weekly short-term power arrangement and at'least one day before the start of a daily short-term power arrangement.
City states that this provision is not in compliance with the' Commission's decision,.is not supported on the record, and conflicts.with. Section 2.12 which provides that the reserving party has:the right to associated energy upon call.
['
. The Cleveland Electric Illuminating Company CEI claims that this provision reflects the common sense need for the requesting party to reaffirm any purchase when the supplying CEI party responds as to availability to the initial request.
further states that it is industry practice and CEI's practice that a request'for confirmation can be made at any time.
CEI must reasonably be able to confirm purchase requests in advance so that, in the event that a purchase request is withdrawn, CEI will be able to market its available power elsewhere.
In addition, we do not see any conflict between CEI's request for confirmation and CEI's responsibility to provide associated energy on call after confirmation.
I.-
Allocation Among Potential Purchasers:
City objects to Section 5.3 which provides for the allocation among potential customers of limited amounts of short-term and limited-term power.
City alleges that factors listed by CEI as 7 restores to CEI possibly relevant to the allocation of power the " sole judgement" criterion rejected by the Commission.
City
-further alleges that the language in Section 5.3 attempts to circumvent the Commismica'c opinion which rejected CEI's proposed condition that the service not be available to City as a substitute for firm. power.
CEI states that Section 5.3 is consistent with the Commission's directive to' include all existing practices and policies with CEI notes that the sole
-respect to all potential purchasers.
. judgement criterion rejected by the Commission dealt with the determination of the availability of short-term power, not the allocation of limited amounts of power and energy.
The contract states that the supplying party shall have the right 7
to allocate available power equitably among all prospective purchasers in conformance with accepted industry practices and consister.t with the exercise of its sound business judgement and that the supplying party may consider in making the allocation, any factors it deems relevant, including, but not limited to, (1) the time the respective requests were received; (2) the amount of power requested; (3) the duration of the request; (4) alternatives available to particular purchasers; and (5) the likelihood that a particular purchaser may he able to provide reciprocal assistance to the seller at some point in the future.
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n The' Cleveland Electric Illuminating Company CEI has satisfied Commission's dicective to incorporate its existing policies and practices into the revised service schedules.
While necessarily general to permit adaptability to changing day to day operations, the provisions set out CEI's conceptual criteria and are sufficient to allow the customer recourse before the Commission if it believes that it has been treated inequitably.
- Moreover, CEI's criteria are reasonable and are reflectivc of the criteria which we would expect all utilities to take into consideration in allocating short-term power.
In addition, in accordance with
'the Commission's directives CEI has incorporated language which clearly states that service will be furnished when reasonably available.
J.
Recordkeeping:
City objects to Section 5.5 which relieves CEI of any responsibility to maintain records not otherwise needed for the conduct of its operations, or to provide reports or records to the other party which are not normally provided to other purchasers of short-term power.
City alleges that this provision conflicts with Opinion No.172, does not appear in the Ohio Power contract,.and was not proposed by CEI during hearing.
City states that a similar issue was raised by CEI in its application for rehearing which was denied.
CEI responds that this provision incorporates current CEI practice with respect to recordkeeping and record release.
CEI states that, where the Commission has directed otherwise, this provision does not apply.
City's apparent concern is that CEI's recordkeeping provision will conflict with the Commission's requirement that CEI provide City with documentation and information relating to any CEI refusal to provide City with short-term and limited-term power.
However, the Commission directed CEI to incorporate into the service schedules certain reporting requirements with respect to the grounds for CEI's refusal to furnish short-term and limited-term power and CEI has properly revised the service schedules.
K.
Procedures for Disputes:
City objects to a provision in Section 5.6 which states that any uncertainties with respect to the service schedule will be resolved by the Administration Committee or the Operating Committee.
City states that this provision excludes recourse to the Commission for resolution of issues arising from the service schedule.
CEI denies that this provision excludes recourse to
9
.. The Cleveland Electric Illuminating Company the Commission which City enjoys as a matter of law.
We agree that the provision of a mechanism for resolution between the parties of disagreements or uncertainties in no way precludes City from recourse to this Commission as is its right under the Federal Power Act.
Miscellaneous:
City objects to the word "plus" linking the rates applied to (1) service generated by CEI and (2) service obtained by CEI from a third party.
City believes that CEI'could overrecover from City by implementing both rates for service provided from a third party.
City's argument is meritless.
A reading of the plain language shows that the rates will be applied to the quantities generated or purchased as applicable.
The Commission orders:
(A)
City's request for rejection of compliance filing is hereby denied.
(B)
CEI's compliance submittal is accepted for filing to become ef fective on the date of this order, subject to refund in Phase II of this proceeding; (C)
Docket No. ER83 -13 8-004 is hereby terminated; (D)
The Secretary shall promptly publish the order in the Federal Register.
By the Commission.
f fl Secretary Enclosure 2
cc:
Goldberg, Fieldman & Letham, P.C.
l Attention:
Mr. Reuben Goldberg 1100 Fifteenth Street, N.W.
Washington, D.C.
20005 L
Enclosure Cleveland Electric Illunminating Company Docket No. ER83-13 8-000 Rate Schedule Designations Designation
- Description
-(1)
Supplement No. 10 to Service Schcdule A Rate Schedule FPC No. 12
%.argency Service (Supersedes Supplement No. 8)
(2)
Supplement No. 11 to Service Schedule 3 Rate Schedule FPC No. 12 Firm Power Service (Supersedes Supplement No. 9)
(3)
Supplement No. 12 to Service Schedule C Rate Schedule PPc No. 12 Short Term Power (4)
Supplement No. 13 to Service Sched.ule D Rate Schedule FPC No. 12 Limited Term Power The designatione incorporate all the substitute sheets submitted by CEI in its October 18, 1983, answer, including the retention of the original " demand charge" language in Section 3.1 of the Emergency Service schedule.
Clevelanci Public Power February 10, 1984 Cleveland Electric Illuminating Company 55 Public Square Cleveland, Ohio 44101 Attention: Mr. Don Jankura, General Supervisory Engineer System Planning and Operations Department Re: Inland to Lakeshore Transmission Lines Gentlemen :
As we discussed at our meeting of January 19, 1984, Cleveland Public Power's system improvements study of June,1983 contains recommendations for several improvements in the vicinity of the proposed Inland to Lakeshore line. It included the construction of a 138/13.2 kv substction, designated Northeast Substation, near the intersection of Wade Park Avenue and East 105th S tree t.
This substation was planned to be supplied by a proposed 138 kv single circuit line to be constructed between Lake Road Substation and the new Northeast Substation.
We also planned the construction of a 138/13.2 kv substation, designated East Substation, near the intersection of Woodland Avenue and East 79th S treet. This site is near the existing East 79th Street Substation.
This substation was planned to be supplied by a proposed 138 kv single circuit line to be constructed between Northeast Substation and the new East Cubs tation. We planned that the East Substation be eventually provided with a second 138 kv source from a new 138 kv interconnection to be established with CEI in the Southeast section of the City.
CEI's proposed alternate route A for the Inland to Lakeshore line is located in the same general vicinity as our proposed transmission lines connecting Lake Road Substaion, Northeast Substation and East Substation. The proposed site for East Substation is directly adjacent to alternate route A.
Alternate route A passes within 2000 feet of the Lake Road Substation.
Therefore, the second source into Lake Road Substation and the first and/or second source into East Substation could be provided from the proposed Inland to Lakeshore line with very little additional line construction. Northeast Substation could than be served from a tap on the Inland to Lakeshore line with provision for future looping of the line into Northeast Substation by con-structing the tapping line as future double circuit.
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i Cleveland Electric Illuminating Company February 10, 1984 Page 2 This scheme would appear to reduce the transmission line right of way mileage by approximately 5 miles as compared to alternative routes,.
If CEI should build their Inland to Lakeshore line on the alternate route B, there would be advantages for cooperation on this line. The proposed Northeast Substation site is located even closer to alternate route B than to alternate A.
If Northeast Substation were to be served by CEI from alternate route B, a considerable reduction would be made in the transmission line right-of-way to Northeast. It is also noted that alternate route B passes very close to Collinwood Substation. Thus, alternate route B could provide a second 138 kv source to the Collinwood area.
These routes are highlighted on the attched copy of CEI's plan.
In conclusion, we believe that cooperation on the proposed Inland to Lakeshore line by both CEI and CPP would be advantageous to both parties.
Please advise me at your earliest convenience of CEI's interest in coordinating development of transmission facilities.
Very truly yo s,
Joseph Pandy, Jr., Commissioner Cleveland Public Power JP/mcm cc: Bill Eingham, CEI John Weber, CEI System Planning Don Hauser, CEI June Wiener,CPP George-Pofok, CPP Ken Hobson, CL-mpbell DeBoe & Associates File
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SHAw, PITTMAN PoTTs & TROWBRIDGE A PARTNE: SMep OF PROFESSIONAL ComPOmat ONS SERVICE LIST
- Nunzio J. Palladino, Chairman U.S.
Nuclear Regulatory Commission Washington, D.C.
20555
- 3enjamin H. Vogler, Esquire Office of the Executive Legal Director U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Docketing and Service Section (3)
Office of the Secretary U.S. Nuclear Regulatory Commission Washington, D.C.
20555
- Reuben Goldberg, Esquire Goldberg, Fieldman & Letham, P.C.
1100 Fifteenth Street, N.W.
Washington, D.C.
20555 Donald H. Hauser, Esquire The Cleveland Electric Illuminating Company Post Office Box 5000 Cleveland, Ohio 44101
- By Hand Delivery
-