ML20097B872
| ML20097B872 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 01/23/1996 |
| From: | Straus D, Strauss D CLEVELAND, OH, SPIEGEL & MCDIARMID |
| To: | NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| References | |
| 2.206, NUDOCS 9602070287 | |
| Download: ML20097B872 (91) | |
Text
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l UNITED STATES OF AMERICA l
BEFORE THE NUCLEAR REGULATORY COMMISSION l
IN THE MATTER OF
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i CLEVELAND ELECTRIC ILLUMINATING COMPANY
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(PERRY NUCLEAR POWER PLANT,
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Docket No. 50-440-A UNIT 1, FACluTY OPERATING LICENSE
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No. NPF-58)
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Docket No. 50-346-A
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(DAVIS-BESSE NUCLEAR POWER STATION,
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UNIT 1, FACluTY OPERATING LICENSE
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No. NPF-3)
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TO:
Executive Director for Operations U.S. Nuclear Regulatory Commission -
Washington, D.C. 20555 l
PETITION OF THE CITY OF CLEVELAND, OHIO FOR l
EXPEDITED ISSUANCE OF NOTICE OF VIOLATION, ENFORCEMENT OF j
LICENSE CONDITIONS, AND IMPOSITION OF APPROPRIATE FINES l
Pursuant to 10 C.F.R. QQ 2.201,2.202,2.205 and 2.206, the City of Cleveland, Ohio, which owns and operates Cleveland Public Power ("CPP" or "the City"), a l-municipal electric system, hereby requests that the Commission:
!j (1) find that the Cleveland Electric Illuminating Company
("the Company" or "CEI") is obligated to provide the wheeling and interconnection services specified in this Petition under Antitrust License Conditions which are a part of CEI's license for the Davis-Besse Nuclear Power Plant, Unit I and Perry Nuclear Power Plant, Unit 1; (2) issue a Notice of Violation against CEI for its failure to comply fully with the obligations under its license conditions; 60 70287 960123
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PDR ADOCK 05000346 H
PDR U
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(3) require CEI to submit a timely written reply admitting or denying that CEI is in violation of these obligations, I
setting forth the steps it is taking to ensure com-l pliance with the Antitrust License Conditions, and providing other compliance information required by this Commission; l
(4) direct CEI to comply immediately with the portions of the Antitrust License Conditions at issue here, including requiring CEI to withdraw immediately from the Federal Energy Regulatory Commission j
portions ofits filings in Decket No. ER93-471-000, j
as specified in this Petition, which are contrary to CEI's obligations under the Antitrust License r
Conditions; and i
(5) impose appropriate fines for CEI's repeated violations of the license conditions.
CPP asks that the Commission undertake these actions on an expedited schedule.
Expedition is appropriate and necessary because of the ongoing, intensive, and unique door-to-door competition in which CPP and CEI are engaged. Each day that CEI refuses j
to comply with its license condition obligations allows the Company to prolong an unfair i
i competitive advantage. CEI stands to gain enormously - and CPP to lose by equal measure - from the Company's continued refusal to abide by its license condition commitments. In light of CEI's demonstrated unwillingness to comply with its legal f
obligations, the Commission should act quickly to ensure compliance and to fine CEl,
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both as a punishment for past misconduct and as an incentive to ensure that CEI changes
-l its ways in the future.
In addition, CPP is filing today its " Motions... For Partial Summary Judgment Or, In The Alternative, For Severance OfIssue And Expedited Hearing Procedures," in g
which CPP seeks summary judgment on Count 1 of this Petition. As explained infra, i
Count I concerns CEl's failure to comply with its obligation to transmit CPP's 40 MW i
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3 power purchase from Ohio Power Company, which is scheduled to commence September 1,1996. Alternatively, if summary judgment is denied, CPP asks that the Commission sever Count I and initiate expedited hearing procedures to resolve promptly this time-sensitive dispute.
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COMMUNICATIONS l
l Communications concerning thin raatter should be served upon the following persons, who should also be included on the official service list compiled for this proceeding:
Sharon Sobol Jordan, Director of Law William T. Zigli, Chief Assistant Director of Law i
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CITY OF CLEVELAND, OHIO 106 City Hall l
601 Lakeside Avenue Cleveland, Ohio 44114 (216) 664-2814 t
l David R. Straus Scott H. Strauss I
SPIEGEL & McDIARMID Suite 1100 1350 New York Avenue,N.W.
I Washington, D.C. 20005-4798 (202) 879-4000 l
t l
Glenn S. Krassen CLIMACO, CUMAcO, SEMINATORE, LEFKOWITZ AND GAROFOLI, CO., L.P.A.
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The Halle Building, Suite 900 l
1228 Euclid Avenue l
Cleveland, Ohio 44115
.t THE PARTIES CPP provides retail electric service to customers within and outside the corporate boundaries of the City. CPP's 1995 system peak load was 234 MW. CPP is a f
r
-4 transmission dependent utility that has three pennanent, synchronous interconnections with CEI: (1) at Lake Shore-Lake Road (established in 1975), (2) at Clinton-West 41st l
Street (established in 1982), and (3) at Nottingham Water Pumping Station (established in 1991).' In 1993, CEI filed with the Federal Energy Regulatory Commission ("FERC")
additional amendments to the Interconnection Agreement.
Those amendments are pending before FERC in Cleveland Elec. Illuminating Co., FERC Docket No. ER93-471-i l
000.
In recent years, CPP has undertaken an expansion program to extend its transmission and distribution systern to be able to provide service throughout the City. A major component of this expansion program is the construction of a fourth, contested 1
1 interconnection point between CPP and CEI, probably to be located at the Company's l
Fox Substation. As discussed below, although FERC recently ordered CEI to provide i
this interconnection, the Company has thus far refused to comply with FERC's directive.
i Moreover, CEI recently refused to provide requested transmission service to CPP, while i
admitting that the Company has transmission capacity available to do so.
i CEI is an investor-owned utility wholly owned by its parent, Centerior Energy i
Corporation.2 CEI engages in the generation, transmission and distribution of electric l
t The 1975 Lake Shore-Lake Road interconnection, CPP's first with CEl, was the result of an order issued by the Federal Power Commission (now the Federal Energy Regulatory Commission) in City of f
Cleveland v. Cleveland Elec. Illuminating Co.,49 FPC 118 (l973), afirming with modifications, Initial Decision,49 FPC 126 (1972), reh'g denied,49 FPC 631 (1973). He FPC's order led to the execution of an April 17,1975 " Agreement For Installation And Operation Of A 138 kV Synchronous Interconnection."
His Agreement was amended in 1982 to add the second (Clinton-West 41st Street) interconnection, and in 1989 to add the third (Nottingham) interconnection.
Centerior was created in 1986 to acquire the common stock of both CEI and Toledo Edison Company (Toledo Edison is also subject to the license conditions). On April 27,1994, CEI and Toledo Edison filed an Application for approval to merge those two utilities, with CEI to be the surviving company. He merger
5o power and energy, and provides retail electric service in northeastern Ohio, including the City of Cleveland and its suburbs. CEI's peak load is approximately 3,700 megawatts.
In recent years, CEI has experienced substantial competitive pressures, due in part to the financial burdens ofits investments in nuclear generation.'
CPP and CEI compete directly on a door-to-door basis to serve customers within j
i and outside of the City of Cleveland. Indeed, a major purpose of CPP's system expansion program is to improve service to existing customers and to make service available to i
customers throughout the City. Retail customers change from one supplier to the other, in both directions. Since 1960,33,191 customers have switched from CEI to CPP, while 12,290 have switched from CPP to CEI. See Attachment 1.
l BACKGROUND In 1979, an Atomic Safety and Licensing Appeal Board, affirming the 1977 I
findings of an Atomic Safety and Licensing Board, concluded that CEI (and the other license applicants, each of which were members of the Central Area Power Coordination j
group, or "CAPCO") had engaged in repeated and significant anticompetitive conduct.
The Toledo Edison Co. and The Cleveland Elec. Illuminating Co.,10 NRC 265 (1979),
j
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affirming as modified,5 NRC 133 (1977). The Licensing Board and the Appeals Board j
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found that CEI and the other license applicants had deliberately acquired monopoly t
i has been opposed by CPP and others and remains pending at FERC (in a proceeding captioned as Cleveland Elec. Illuminating Co., Docket No. EC94-14-000). On December 20,1995, the Commission issued an order deferring consideration of the merger unless and until CEI and Toledo address and correct substantial deficiencies in their proposed merger transmission tariffs. Cleveland Elec. Illuminating Co., et al.,73 FERC 161,349.
In 1993, CEI " wrote off' approximately $1 billion. In addition, CEI has taken several plants out of service, although it is not clear whether CEI has done so permanently.
L power in the relevant markets and used that power to force municipal electric systems, including CPP, either to go out of business entirely or to become totally dependent wholesale customers of the license applicants. More specifically, the Boards found that CEI was guilty of multiple violations of the antitrust laws, including improper restrictions upon the resale of electricity (10 NRC at 320-322), refusals to wheel (id. at 327-331),
i refusals to interconnect upon reasonable terms (id. at 362-369), and unilateral refusals to l
deal (id. at 341-362).' In summarizing the Licensing Board's findings with respect to the anticompetitive conduct of the CAPCO companies, including CEI, the Appeals Board stated:
[E]ach of the member [CAPCO] companies had participated I
in actions intended or having the foreseeable effect of reducing the reliability and the economic viability of competing electric generating and distribution entities within their respective service areas.... Applicants provided bulk power services to each other even as they avoided competition in the retail and wholesale power transaction market. This avoidance was not passive.. [E]ach Applicant took actions intended or with the foreseeable effect of eliminating competition with non-l Applicants in retail power transactions. These restmints took i
the form of agreements in restraint of trade with municipal generating and distribution systems including territorial or customer allocations, attempts to fix prices for retail power transactions, and refusals to provide bulk power services where the refusals had the known effect of reducing the reliability and the economic competitive potential of these rival systems.
These citations are to the separate opinion of Board Member Sharfman. Mr.Sharfman had been a member of the Appeals Board in this proceeding and had drafted an opinion intended to be adopted as that of the Appeals Board but, before the other two Board Members could review the decision, Mr. Sharfman left the NRC for private practice. The remaining Board Members concurred in and relied upon Mr. Sharfman's " ultimate factual and legal conclusions" (including the above-cited findings of antitrust violations) and differed with Mr. Sharfman only with respect to the scope of relief to be ordered in light of those conclusions.10 NRC at 270. Accordingly, the opinion of Mr. Sharfman was published immediately following the opinion of the remaining Board Members.
. _ _. _ _ _ _ _ _ _. __..__ _ These actions have continued over a period of years and their cumulative effect has been to reduce the level of competition
. or to prevent competition from being as vigorous as it other-wise might have been.
10 NRC at 279.
The NRC's findings were recently reviewed by the United States Court of l
l Appeals for the District of Columbia Circuit. In City of Cleveland, Ohio, et al. v. NRC, 68 F.:31361 (D.C. Cir.1995), the appeals court considered the findings made in these dockets in the context of an appeal by CEI (and other plant licensees) of the NRC's refusal to grant the companies' request that the license conditions be suspended:
Not only did CAPCO members [ including CEI and the r
l l
other applicants] realize the legitimate benefits of economies of scale and coordinated operation, but more importantly, they I
used this a:Tangement to forestall competition from other l
smaller utilities in the region. CAPCO members avoided competition among themselves, through explicit aps.uents or i
failure to solicit customers of fellow CAPCO utilities. [ citations omitted). They denied competing utilities membership in the l
power pool and refused to make available to competitors any l'
of the benefits of interconnection, including sharing of reserves and exchanges of emergency or economy rate power.
[ citations omitted]. CAPCO utilities also refused to " wheel" i
power, or transport it from outside utilities across their transmission lines, to competing utilities inside 'CAPCO tenitory [ citation omitted).
4
/d at 1363-64. The court went on to state that "[a]fter examining these facts," the NRC l.
concluded that the market stmeture created by CAPCO memben through their formation of an exclusive power pool gave them the ability to prevent competing utilities from gaining the benefits of coordinated operation and economy of
. scale which they themselves enjoyed, and that this ability had,.
in fact, been used to create or maintain a situation inconsistent with the antitmstlaws.
'Id at 1364 (citations omitted).
.g.
As a consequence cf its findings, the Appeals Board (again affirming the Licensing Board) concluded that approval of the licenses under which CEI and others sought to operate the Perry and Davis-Besse nuclear units would be conditioned upon, inter alia, continuing compliance with a set of stringent antitrust conditions. In reaching this conclusion, the Appeals Board conectly rejected the contention that the conditions were unnecessary in light of the applicants' good faith commitments to change their ways:
We think that the applicants should not be taken at their word.
The record is replete with evidence that, in the past, they have g
either refused or delayed the provision of wholesale power or of the interconnections necessary for it, to the great detriment of the small electric systems in their area.
A company bears a heavy burden in showing that past conduct will not be repeated.... We decline to find that the likelihood of similar conduct in the future is so remote that the present case is moot.
Applying this test, we have concluded that the extensive past misconduct of the applicants suggests a real possibility that they may again try to force small electric systems in their area out of business once the heat of this litigation has passed.
Therefore, whatever must be done to protect the small systems must be done through the imposition of license conditions.
We cannot rely on the good faith of those who have acted in i
bad faith.
10 NRC at 398 (footnote omitted),400 (ellipsis in original) (separate opinion of Board Member Sharfman).
In general, the antitrust conditions imposed by the NRC require the five licensees i
to provide wheeling services and interconnections on reasonable terms, and to refrain s
i from conditioning the sale or exchange of wholesale power or coordination services on i
anticompetitive terms.10 NRC at 296-99. In this way, the Antitrust License Condition t
b
9 obligations mirror the types of competitive conditions that Congress and FERC have sought to create, especially since the enactment of the Energy Policy Act of 1992
("EPAct"). FERC has actively pursued the objective of a competitive wholesale power market, using the authority granted under the EPAct to require transmitting utilities to provide a full range of services, including " network" transmission service.
Recently, FERC informed CEI that in order to pursue its merger with Toledo Edison, CEI would be required to file a tariff. On May 25,1995, CEI (along with Toledo Edison) filed (in a proceeding captioned as Cleveland Elec. Bluminating Co., Docket No. ER95-1104-000) what purports to be a non-discriminatory, "open access" tariff in compliance with FERC announced standards but which, in reality, would permit a continuation of CEI's anticompetitive behavior. On June 20, CPP filed an extensive protest challenging much of the CEI transmission tariff as contrary to FERC precedent.
On December 20,1995, the Commission rejected CEI's filed transmission tariffs as deficient, and directed CEI (and Toledo Edison) to file additional information and data to address these deficiencies. The Commission stated that "[f]ailure to respond to this order within... [30 days] may result in a further order rejecting the Applicants' tariff submission and merger application...." 73 FERC 161,349, slip op. at 10.5 In the years prior to and following the imposition of the antitrust conditions, CPP and CEI have been engaged in a head-to-head competitive struggle to provide electric i
Moreover, on September 12,1995, CPP filed an application under Federal Power Act Section 211 (captioned as Cleveland Public Power v. Cleveland Electric illuminating Company and Toledo Edison Company. Docket No. TX95-7-000) asking that FERC require CEI and Toledo Edison to file immediately a tariff (or service agreement) setting forth rates, terms and conditions of service for point-to-point transmission.
i 10 i
service to customers in and around the City.t During that time, some important facts and j
circumstances have changed, while others, sadly, have remained the same.
The changes have been significant.' In the past sixteen years, the City has grown into a vigorous and viable competitive attemative to CEI. The role.which the Antitrust License Conditions - and the ability to obtain enforcement of those conditions - have i
played in fostering CPP's competitive progress cannot be understated. Prior to the imposition of the conditions, CPP was facing extinction, largely as a restilt of CEI's anticompetitive activities. See 5 NRC at 165176.7 Since the imposition of the conditions, CPP has obtained access to transmission and coordination services and new wholesale power sources, enabling the City to provide
-its customers with substantial power cost savings as compared to the costs that would have been incurred had CPP remained a captive customer of CEI. In 1980, CPP made its first purchase from a supplier other than CEI, obtaining an allocation oflow-cost " preference" 1
As described below, customer-by-customer competition between CPP and CEI has not diminished j
over time. For example, included in Attachment 2 are two marketing flyers recently distributed by CEI in an effon to thwart CPP efforts to acquire additional load served by CEl. The first flyer, entitled "Some Questions To Consider About The ' Hidden Costs' Of Making A Change," wrongly questions whether a switch of electric supplier from CEI to CPP will have negative consequences for the customer's "home" and " landscaping." The second, a "
Dear Friend" letter,
tries to convince customers that the switch in streetlighting service from CEI and to CPP will mean the removal of streetlighting from their area. In fact, the conversion of streetlighting service to CPP will result in more streetlights and greater illumination.
]
As of the late 1970s, CPP had a single interconnection with CEl, and could buy firm and emergency power only from CEl. As previously determined in this docket, CPP is a transmission A*paadant utility in that it cannot access power supply sources outside ofits own system without the use of CEI's transmission system 5 NRC at 167; 10 NRC at 328 (separate opinion of Board Member Sharfman). Indeed, the Licensing Board, affirmed by the Appeals Board, found that "it would be impractical for Cleveland to construct transmission lines across CEI territory." Finding 60,5 NRC at 175; 10 NRC at 328 (separate opinion of Board Member Sharfman). Although American Municipal Power-Ohio,Inc. C' AMP-Ohio"), an organization of which CPP is the largest member, is now evaluating whether to construct a transmission line to which CPP might consider connecting, CEI has obstructed the planning of that line and was recently ordered by FERC, over the Company's objection, to provide data needed for AMP-Ohio's evaluation of the transmission line.
American Municipal Pouer-Ohio. Inc. v. CEl,7i FERC 161,325 (l995).
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l power from the Power Authority of the State of New York ("PASNY"). CPP had been anocated a PASNY power share during the 1970s, but could not receive it until CEI was obligated under the terms of the Antitrust License Conditions to provide transmission senice. Prior to that time, the Company had refused to wheel the PASNY power to CPP.
10 SRC at 327-329 (separate opinion of Board Member Sharfman). In the ensuing years, CPP has expanded its power supply options, again as the result of the ability to obtain wheeling services pursuant to the Antitrust License Conditions. At present, CPP buys c.!> minimal amounts of power from CEI, as other suppliers offer resources at far more competitive rates.
On the other hand, in the past sixteen years the situation facing CPP has in many
- gnificant respects remained the same. As was the case before the Antitrust License renditions were imposed, CEI has at every tum sought to prevent the City from exercising
- ghts accorded it under law, including rights secured pursuant to the Antitrust License
( enditions issued by this Commission.
As CPP's strength as a legitimate competitor has grown, CEI has stepped up c:k:d to undercut competition by the City, engaging in a near-epidemic of anticompetitive n:sonduct, some of which has been addressed here, at FERC, before federal courts, and m state court and regulatory agency proceedings. The success of the license conditions is demonstrated by CEI's 19E8 request (joined in by Toledo Edison and Ohio Edison) that the NRC amend the operating licenses for the Davis-Besse and Perry Units by suspending 9e Antitrust License Conditions. In November 1991, the Atomic Safety and Licensing Ibad rejected the 10Us' contention that suspension of the conditions was warranted because the power produced at the two nuclear plants had become more costly than
_. attemative resources. The NRC declined to review the Licensing Board s decision, and 9
the Court of Appeals for the District of Columbia Circuit recently affirmed the NRC's
\\
determination. City ofCleveland, gj al. v. NRC, supra, SPECIFIC VIOLATIONS OF ANTITRUST LICENSE CONDITIONS The events leading to the filing of this Petition as well as the multiple actions at FERC demonstrate, yet again, that one "cannot rely on the good faith of those who have acted in bad faith." 10 NRC at 400. Absent strong enforcement by this Commission and other federal agencies, CEI has shown repeatedly that it will not voluntarily comply with its legal and contractual obligations. For the reasons detailed below, CPP asks this l
Commission to take actions to enforce certain of CEl's Antitrust License Condition obligations and to penalize CEI severely for its compliance failures. Specifically, CPP will demonstrate that CEI has:
(1) violated Antitrust License Condition No. 3 by refusing to provide firm wheeling service to CPP; (2) violated Antitrust License Condition Nos. 6 and 11 by entering into a contract to provide Toledo Edison Company with emergency power on a preferential basis; (3) violated Antitrust License Condition No.2 by failing to offer the City a fourth " interconnection [ point] upon i
reasonable terms and conditions" (10 NRC at 296); and (4) violated Antitrust License Condition No.2 by unrea-sonably burdening use of the existing interconnections through unilateral imposition of a $75.00/kW-month
" deviation charge."
. i COUNT 1:
CEI'S REFUSAL TO PROVIDE FDG1 WHEELING j
SERVICE TO CPP IS A VIOLATION OF LICENSE CONDITION NO.3 On August 11,1995, CPP sent to CEI - pursuant to CEI's Transmission Tariff No.1 - a request to reserve firm transmission service for use during 1996. See l
i.
Tariff No. I provides for firm wheeling services to eligible entities, including CPP, stating that "CEI shall provide Transmission Service within the limits of the capacity of its bulk transmission facilities... to the extent that such Transmission Service does not impose a burden upon the system of CEI" (emphasis added). FERC Electric Tariff, Original Volume No.1, Section A, Original Sheet No.2, contained in.
I CEI Transmission Tariff No. I was intended to satisfy the Company's obligations under License Condition No. 3, which states in pertinent part that the Applicants shall engage in wheeling for or at the request of other entities in the CCCT:
- 1) of electric energy from delivery points of Applicants to the entity (ies); and,
- 2) of power generated by or available to the other entity, as a result ofits ownership or entitlements [ footnote omitted) in generating facilities, to delivery points of Applicants designated by the other entity.
Such wheeling services shall be available with respect to any unused capacity on the transmission lines of the Applicants, the use of which will not jeopardize Applicants' system.
10 NRC at 296.8 The omitted footnote explains that an " Entitlement" is defined broadly to include, but not be limited to, " power made available to an entity pursuant to an exchange agreement." Id.
- 14 CPP's 1996 wheeling service request includes, inter alia, c reservation for 40 MW of firm transmission for a firm power purchase by CPP from Ohio Power Company. After several CPP requests for a response, CEI, in letters dated November 2 and 3,1995, stated its refusal to provide transmission for the Ohio Power purchase. See. CEI's November 2 response expressly states that its denial of service "is not due to any limitation on the CEI transmission system, and CEI will provide the other transmission services requested by CPP in its letter dated August 11,1995." Instead, CEI refuses to transmit because, it claims, the transmission service will in fact be used to facilitate a sale by Ohio Power directly to the Medical Center Company ("Medco"),
currently a CEI retail customer located in the City of Cleveland.'
l l
CEI's refusal to provide the requested wheeling is an outright violation of License Condition No. 3 and should be corrected expeditiously. CEI has made no allegation that the provision of service would somehow " jeopardize" operation of the CEI system.
License Condition No. 3 (and CEI Transmission Tariff No.1) allow no other bases for denying transmission service and permit no restrictions on the use or resale of power l
transmitted.
i Indeed, imposition of the Antitrust License Conditions that CPP here seeks to i
enforce was based in part upon NRC findings that the Applicant companies had wrongfully imposed resale restrictions upon potential competitors. The NRC was well CEI and CPP engaged in active competition to serve the Medeo load in 1991. CEI won that competition and entered into a five-year service contract with Medco. Contemplating the 1996 expiration of that contract, Medco initiated another competitive battle between CEl and CPP. This time, Medeo decided to purchase electricity from CPP as of September 1,1996.
- transmission planning and maintenance decisions. In fact, during the peak service period in question, CEI had 1429 MW of capacity out of service for scheduled maintenance.
CPP subsequently challenged the Company's transmission service interruption as part of a complaint filed with FERC, captioned as City of Cleveland, Ohio v. Cleveland Elec. Bluminating Co., FERC Docket No. EL94-80-000. Without any investigation of the underlying facts, the FERC rejected this portion of the CPP complaint. " Order On Complaints," 72 FERC 161,040 (1995). CPP has sought rehearing of this determination, which remains pending.
To be sure, CPP has been irrepambly harmed by CEI's unnecessary threatened and actual service interruptions, as well as by the Company's provision of"non-firm" transmission service in place of the firm wheeling requested by CPP. By threatening or actually failing to provide firm service, CEI is able to create questions about the reliability of CPP retail service. Indeed, CPP believes that CEI has actually used this perception of diminished reliability in marketing efforts by planting doubts in the minds of potential switch-over customers as well as those, like Medco, that have already shifted i
suppliers. See n.5, supra. Such customer concern and dissatisfaction would be of little concern to this Commission if the dissatisfaction were somehow the result of CPP's actions. However, CPP's concern arises solely as a result of CEI's steadfast refusal to comply with its unequivocal license condition obligation to provide transmission service to CPP.
Finally, CPP notes that the pendency of two proceedings at FERC concerning the legality of CPP's refusal to transmit the Ohio Power purchase should not forestall expeditious action in this case. On November 29,1995, CPP filed a Federal Power Act Section 206 L
_ _ complaint (and rel:ted requests for relief) against CEI. Designated as Docket No.
EL96-21-000, this complaint challenges CEI's failure to provide the requested 40 MW of firm wheeling service as contrary to CEI's transmission tariff and license condition obligations.
In addition, on November 2,1995, CEI filed a petition with FERC (designated at Docket No. EL96-9-000) requesting a ruling that CEI is not required under Federal Power Act Sections 211 or 212 to provide the requested fum transmission service to CPr. CPP filed its opposition to this Petition on December 13,1995.
This Commission s. suld not stay its hand because FERC may resolve CPP's complaint based entirely on the language of the Company's Transmission Tariff No.1, and will choose not to address CEI's obligation under Antitrust License Condition No. 3.
(CEI's Petition does not address the Antitrust License Conditions.) Indeed, CEI has taken the position in a rehearing application filed in another pending FERC proceeding, Docket No. EL93-35-000, that FERC does not have the authority to enforce the NRC's Antitrust License Conditions, stating that "[e]nforcement of nuclear plant license conditions is subject to the jurisdiction of the Nuclear Regulatory Commission, not this Commission."
See Attachment 6, which contains an excerpt of CEI's pleading, at 19." CEI went on to contend that "[i]mplementation of the Atomic Energy Act is beyond the FERC's jurisdiction, and the FERC has no basis for usurping the NRC's statutory authority." Id.
at 19-20.
Docket No. EL93-35-000 involves CPP's challenge to CEl's refusal to provide a requested fourth interconnection point between the CEI and CPP systems. On June 9,1995, the FERC issued an order which, inter alla, directs CEI to provide the requisite interconnection. On July 7,1995, CEI sought rehearing of the June 9 order. CEl's failure to provide the fourth interconnection constitutes a separate violation of the Antitrust License Conditions, addressed in Count 3, infra.
i
- 15 o aware at the time it adopted the Antitrust License Conditions of the presence of door-to-door customer competition between CEI and CPP, and of specific efforts by CEI to preclude customer switching, including through the use of direct and indirect restrictions on power transmitted to Cleveland by CEI.'8 With respect to specific examples, the Licensing Board noted CEI's willingness "in the 1960's" to interconnect with CPP "on the condition that (CPP] would fix its intes at the level of rates set by CEI and that Clevuand would reduce its charges to the City for street lighting service." 5 K'.C at 167, citations omitted. The Board found that in sesing these conditions, CEI's " larger motivation was clear. CEI considered an increase in the rates charged by [CPP] as essential to a successful acquisition of[CPP)."Id. The Board went on to note that:
CEI also believed that if[CPP] would fix its rates at CEI's level, this would not only eliminate the major reason for customers leaving CEI to take service from [CPP], [ citations omitted], but also would result in customers switching from
[CPP] to CEl. [ citations omitted].
Id. The NRC found CEI's " attempt to fix [CPP's] rates and street lighting charges in exchange for interconnection constitutes a per se violation of the antitrust laws." Id.
at 167-168.
In addition, the NRC found evidence that CEI " sought to prevent future competition with" the Painesville, Ohio municipal system (the only municipal system in the CEI service territory other than CPP) by offering Painesville a territorial agreement that would have eliminated competition and foreclosed the growth of the municipal As mentioned earlier, the NRC Licensing Appeal Board, summarizing the finding of an NRC Licensing Board, noted that "each Applicant took actions intended or with the foreseeable ef'ect of climinating competition with non-Applicants in retail power transactions." 10 NRC at 279.
16 -
0 system by allotting to CEI those areas where Painesville had the greatest potential load 9
growth." 5 NRC at 177, citations omitted. Similarly, CEI subsequently offered to
" supply an interconnection" to Painesville in consideration for CEI taking over Painesville's greatest load growth ama [ citation omitted), together with Painesville's promise not to seek to serve that area in the future. [ citations omitted). In addition, CEI explicitly conditioned intercon-nection on rate equalization. [ citations omitted].
5 NRC at 177-178.
l Similarly, the NRC noted the presence of language in each of Ohio Edison Company's contracts with several rural electric cooperatives prohibiting sale for resale of wholesale power wheeled by Ohio Edison. 5 NRC at 201. The Commission found that
"[b]y these restrictions, Ohio Edison has eliminated wholesale competition between it and the rural electric cooperatives within its service area." Id. Similarly, the Commission l
found that
[p]rior to 1965, Ohio Edison restricted its municipal whole-sale customers in reselling power to industrial customers except in relatively small amounts controlled by Ohio Edison [ citation omitted].
The effect of these restrictions was to maintain Ohio Edison's position with the municipalities and to eliminate competition for virtually all new industrial loads located outside the boundaries of the municipality although, under Ohio law, municipalities were entitled to compete for such business.
Id.
As a result of these findings (and other equally significant findings), the Commission imposed conditions that would prohibit precisely that which CEI now seeks to do. That is, the NRC conditions were intended to preclude restrictions on the resale of
- 17 power wheeled by the Applicants, including CEI. In refusing to provide the wheeling services needed by CPP to service a significant retail customer formerly served by CEI, the Company ignores the NRC's conditions and, equally important, their historical bases.
The Commission should find CEI's actions to be contrary to the Companies' obligations under License Condition No. 3.
Furthermore, CEI's refusal to wheel it, only the latest in a recent spate of such conduct by the Company. In May 1995, CEI stated that it would not provide on a firm basis 62 MW of transmission service needed by CPP to take delivery of power purchases from Ohio Power Company (30 MW) and PASNY (32 MW). The Company did not demonstrate that furnishing service fcc either purchase would cause a capacity or other operational problem for CEI. CEI's refusal to commit to transmit the PASNY purchase on a firm basis was particularly appalling in light of the Company's provision to CPP of firm PASNY wheeling service during the previous nine years. CPP subsequently filed a state court lawsuit challenging CEI's refusal to transmit on a firm basis, which was dismissed on jurisdictional grounds. Order of August 23,1995, in City ofCleveland, el al. v. Cleveland Electric Illuminating Co., Case No.290259 (Common Pleas Ct.
Cuyahoga County), appealpending. The requested transmission services were ultimately provided by CEl, though on a non-firm basis.
In mid-June 1994, CEI went one step further, and actually interrupted transmission service to CPP because of alleged system constraints. As a result of the interruption (which occurred on June 17 and lasted roughly one and one-half hours), CPP was forced to blackout service to approximately 40 percent of its load. CPP contends that the interruption was unnecessary and, even if necessary, was the direct result of CEl's poor If CEI's argument were accepted by FERC (or ifit were to order transmission on other grounds), the Commission would likely not address CEI's obligations under Antitrust License Condition No. 3. As there can be no dispute about this Commission's authority to enforce the License Conditions, the NRC should not withhold action in anticipation of FERC action. Absent a grant of summary judgment in CPP's favor, CPP asks that the Commission establish hearing procedures to resolve on an expedited schedule CPP's valid contention that CEI-independent of any obligation it has under Transmission Tariff No. I or anywhere else - has violated its obligation under Antitrust Licente Condition No. 3 to provide firm transmission service.
COUNT 2:
CEI HAS VIOLATED ANTITRUST LICENSE CONDITION NO. 6 BY CONTRACTING WITH TOLEDO EDISON COMPANY TO PROVIDE EMERGENCY POWER ON A PREFERENTIAL BASIS Antitrust License Condition No. 6 provides in part that Applicants, including CEl, shall sell emergency power to requesting entities in the CCCT upon terms and conditions no less favorable than those Applicants make available: (1)to each other either pursuant to the CAPCO agreements or pursuant to bilateral contract....
10 NRC at 298.
The April 1987 "Centerior Dispatch Operating Agreement" contains provisions relating to the sale of emergency power that do not comport with the requirements of License Condition No.6.i2 The Operating Agreement states under the heading CPP did not become aware of this agreement until it was submitted to FERC on May 9,1995, in l
Docket No. EC9414-000, the proceeding in which the CEl-Toledo Edison Company merger is under consideration. A copy of the Operating Agreement is Attachment 7 hereto. The Operating Agreement sets l
-21o
" Emergency Power / Reliability of Short Term Power" that CFI and Toledo (collectively
" Operating Companies"):
will assign highest priodty to provide each other emergency power. An Operating Company will terminate an existing emergency supply to an outside utility in order to honor a request for emergency power from an Operating Company. at 4.
This provision of the Operating Agreement includes identical priority language with respect to sales of"Short Term Power." Id. The agreement by CEI and Toledo Edison to assign each other the " highest priority" for the provision of emergency power, including the expressed willingness to terminate a sale of either emergency power (or Short Term Power) to another utility in order to provide it to each other, is in blatant violation of the requirements of License Condition No. 6.
I COUNT 3:
CEI HAS VIOLATED ANTITRUST LICENSE CONDITION NO. 2 BY FAILING TO OFFER CPP A FOURTIIINTERCONNECTION POINT Antitrust License Condition No. 2 states in paa that CEI (and the other applicants) shall offer interconnections on reasonable terms and conditions at the request of any other electric entity (ies) in the CCCT
[ Combined CAPCO Company Territories], such intercon-nection to be available (with due regard for any necessary and applicable safety procedures) for operation in a closed-switch synchronous operating mode if requested by the interconnecting entity (ies).
10 NRC at 296. Based upon this condition, as well as an express, written commitment from CEI, CPP asked CEI to permit installation of a fourth interconnection between the fonh cenain " activities" that are being undertaken "to perform coordinated dispatch of the electrical facilities of" CEI and Toledo Edison. Attachment 7 at 2.
. CPP system and CEI's Fox Substation. The Company refused to grant this request. CPP i l challenged this refusal in April 1993, filing a complaint with the FERC designated as Docket No. EL93-35-000.
On June 9,1995, the Commission directed CEI to provide a fourth interconnection with CPP. City of Cleveland v. Cleveland Elec. Illuminating Co., 71 FERC 161,324 (1995)." FERC found that CEI's refusal to provide the fourth interconnection was a violation of both the Company's contractual commitments and its Antitrust License Conditions. Specifically, FERC's order is based upon CEI's commitments as stated in:
(1)NRC Antitrust License Condition No.2; (2)a September 19,1985 letter from the former Chairman of CEI to then-Cleveland Mayor George Voinovich, stating CEl's willingness to provide the interconnection; and (3) a 1985 contract among CEI, Toledo Edison and AMP-Ohio, in which the companies agreed to provide interconnections to the AMP-Ohio members. 71 FERC at 62,267-269.
CEI was directed to: (1) provide the fourth interconnection; and (2) file with FERC CEl's proposed charge for the fourth interconnection." With respect to the License Condition, FERC stated:
NRC Licensing Condition No. 2 describes conditions under which CEI is bound to provide an interconnection to Cleveland,11, upon request by Cleveland in exchange for the NRC's approval of the licenses. Cleveland has, in fact, made such a request. As such, given the facts of this case including the close nexus between NRC Licensing Condition The Commission order also rejected Cleveland's complaint with respect to improper billing by CEI for inadvertent energy during a " locked in" past period.
The Commission also directed CEI to file with FERC a 1985 Agreement between CEI and American Municipal Power-Ohio, Inc. (" AMP-Ohio")(discussed below) and NRC License Condition No. 2. Without any explanation, CEI has not done so.
_. _ _ ~.
No. 2 and the matters st issue hire, we likewise will direct CEI to file NRC Licensing Condition No.2 pursuant to section 205(c) of the FPA, [ footnote omitted] and, consis-tent with the condition, to file a proposed interconnection agreement.
Slip op. at 14.
Notwithstanding the FERC Order, issued in response to a CPP Complaint filed roughly two and one-half years ago, CEI remains unwilling to provide the requested intercone.cction. The Company was required to cubmit, by October 9,1995, its proposed charges for the interconnection. Instead, CEI submitted a letter, ircluded as Attachment 8 to this Petition, informing FERC that the Company could not and would not provide the proposed interconnection charges absent resolution of a host of unrelated issues." In defiance of FERC's mandate, CEI maintains that it cannot comply absent resolution of a!!cgations concerning stranded investment charges and claimed safety violations on the CPP retail distribution system. Attachment 8 at 3-5."
CEI has also raised specious technical roadblocks including, "the voltage at which the interconnection will operate, the facilities to be installed by each of the parties, and the modification or reinforcement of existing facilities that may become necessary as a result of the interconnection.' at 1. These new roadblocks are specious because CEI has already built three interconnections with CPP since 1975. In any event, the Company's resort to self-On January 12,1996, CEI submitted an engineering study to CPP that claimed that the physical cost to CEI of building the interconnection, to be reimbursed by CPP, is $7.1 million, plus or minus 40%. CEI has not filed this or any other cost data with FERC, has not withdrawn its opposition to providing the fourth interconnection and has not modified its claim that a host of extraneous matters must be resolved in advance of determining the full cost of the interconnection.
For example, CEI seeks "proef" that CPP has " specific plans and procedures" for, inter alia,
" discouraging the City and its contractors from trespassing against, altering, removing or interfering with CEl's lines, facilities and service equipment." Attachment 8 at 5.
t help tactics demonstrates that CEI believes it can flout its legal obligations with impunity, t
l taking comfort in the apparent belief that the Company's disobedience will lead to l
nothing worse than yet another order to comply.
Although FERC's order (which is pending on rehearing and is, of course, subject to possible court appeal by CEI) directs CEI to permit the fourth interconnection, CPP nevertheless urges the Commission to grant expeditiously CPP's request in this proceeding for an order directing a fourth interconnection. This case is distinguishable from the circumstances involved in a May 1995 " Director's Decision" by the Office of Nuclear Reactor Regulation ("NRR") that dismissed a Section 2.206 petition for license condition enforcement submitted by Florida Municipal Power Agency ("FMPA") because the issues l
raised by the petition were being addressed in an ongoing FERC paceeding."
l In dismissing the FMPA proceeding, the Director stated (at 12) that "FERC's Order requiring FPL to provide network transmission service to FMPA and the subsequent ongoing rate proceeding before the FERC[] adequately address and resolve the concerns raised in FMPA's Section 2.206 petition...." That is not the case here. CPP is asking that this Commission exercise its statutory authority (under 42 U.S.C. Q 2822(a)) to impose penalties upon CEI if it is found to have violated its license conditions. A significant financial penalty is sorely needed here, but FERC lacks the authority to impose one. CEI should be penalized because it is apparent that the prospective relief In its May 26,1995, " Director's Decision Under 10 CFR f 2.206" in Florida Power & Light Company (St. Lucle Plant, Unit 2), Docket No. 50-389A, the NRR Director denied FMPA's request for the initiation of an enforcement action against licensee Florida Power & Light Company ("FPL") for alleged violations of FPL's St. Lucie antitrust license conditions. As in this case, a proceeding had previously been initiated at FERC by FMPA seeking similar prospective relief.
35 available from FERC has been and is likely to remain insufficient to convince the Company to honor its license obligations. Indeed, it is hard to escape the conclusion that 1
CEI's unwillingness - in the face of a clear FERC directive - to provide the fourth interconnection is based upon the Company's realizations that: (a)every day of delay inflicts competitive injury upon CPP; and (b) further CEI inaction will, at most, result in yet another FERC compliance order.
This Commission has already been required to pursue an enforcement action against CEI to ensure compliance with the license conditions. In 1978, a Notice of Violation was issued against the Company." In 1979, following CEI's persistent unwillingness to correct the violation, the Commission modified CEI's License Condition j
No.3 to direct CEI to file with FERC a transmission service tariff that complica with very specific requirements.
CEI's status as a " repeat offender" with respect to the violation of its license condition obligations requires that this Commission do more than simply defer to pro-ceedings before FERC. For the reasons presented in this Petition, CEI needs and should j
receive another effective and enforceable reminder that the Company must comply with its license condition obligations.
Moreover, on July 7,1995, CEI sought rehearing of the FERC's order directing installation of the fourth interconnection. There, the Company renewed its rejected contention that only the NRC - not FERC - has legal authority to enforce the Antitrust Notice of Violation (issued June 28,1978) and Order Modifying Antitrust Liceme Condition No. 3 of Davis-Besse Unit 1, Liceme No. NPF-3 and Perry Units I and 2, CPPR-148, CPPR-149 (issued June 25, 1979), Docket Nos, 50-346A,50-440A, and 50-441 A.
r
.- License Conditions." There can be no question that this Commission has the authority to g
enforce the Antitrust License Conditions and,in so doing, to provide to CPP the types of relief requested here. The appropriate procedures for imposing the remedies sought by CPP - including issuance of a Notice of Violation and, where appropriate, the imposition of civil penalties - are provided for under 10 C.F.R. Q 2.200, et seq.20 Finally, FERC's delay in taking action, and CEI's subsequent defiance of FERC are only two of the reasons why CPP has chosen to file a petition with this Commission.
As the course of the FERC proceeding demonstrates, even when available, after-the-fact, t
sanctionless relief from FERC is slow and often ineffective, particularly as a deterrent against new violations.
I For the reasons explained here, CPP requests that this Commission, in accordance with recent action by FERC and in light of even more recent refusals by CEI to comply with FERC's ruling: (a) issue a notice under 10 C.F.R. Q 2.201(a)(1) stating that CEI has violated Antitrust License Condition No. 2; and (b) if CEI remains unwilling, join FERC by issuing an order under 10 C.F.R. Q 2.202(a) directing that CEI comply with the license condition by offering immediately to CPP the requested fourth interconnection on l
i
" at 18 20.
Relief from the NRC is available for violations of the antitrust conditions of a license as well as for violations of technical license provisions. The Commission's Office of Nuclear Reactor Regulation's
" Procedures for Meeting NRC Antitrust Responsibilities," NUREG-0970 (1985), provide:
In its June 5,1977 Memorandum and Order on South Texas, the Commission referred to Section 186 of the Act as follows:
Indeed, all concede that other language in Section 186 gives the Commission authority to initiate a postlicensing enforcement proceeding in the event of violation of a specific antitrust licensing condition.
Houston Lighting & Power Co.,5 NRC 1303 at 1311 (1977).
A h
reasonable terms and conditions. In addition, the Commission should do what FERC cannot by imposing appropriate and substantial penalties upon CEI for its refusal to agree to provide the fourth interconnection absent an order from this Commission.21 A.
THE PROPOSED FOURTH INTERCONNECTION Is NEEDED To PROVIDE RELIABLE SERVICE To CLEVELAND'S WEST SIDE The proposed founh interconnection is part of CPP's Phase II system expansion program, and it is critical to the maintenance of reliable electric service in Cleveland.
l CPP is undertaking the system expansion program to enable the City to serve additional residential, commercial and industrial customers on the west side, including the Cleveland Hopkins International Airport. Reliability of service to that ponion of the City will be l
improved substantially if the proposed interconnection is completed.
CPP's present interconnections with CEI limit the City's transfer capability to 300 MVA. CPP's 1995 summer peak reached 249 MVA, and with its current additions of residential and small commercial customers in the eastern area of the City, CPP expects to exceed the 300 MVA limit within the next two years.* Customer connections on the City's west side are projected to begin within this time frame, at which point CPP's customer requirements will exceed the capacity of its existing interconnections.
Given these objectives, the City originally anticipated having the fourth interconnection To be clear, the arguments presented here are offered in addition to the finding by FERC in City of Cleveland v. Cleveland Elec, ll/uminating Co.,71 FERC 161,324 (1995), that CEI is obligated to provide the requested four*h interconnection. CPP asserts that FERC's finding -in and of itself-is sufficient basis for the NRC to issue: (a) the requisite Notice of Violation; (b)an order directing the founh inter-connection; and (c) an order imposing appropriate penalties. To the extent the Commission disagrees and wishes to make an independent evaluation, CPP's arguments are presented in the sections which follow.
22 The September 1996 addition of Medco as a CPP customer, which is the subject of Petition Count 1, supra, will by itself represent an additional 50 MW load on the CPP system.
-28e in service by the end of 1995; CEI's violation of its license condition obligations has rendered achievement of this timetable impossible.
Moreover, Antitrust License Condition No. 3 states in part that CEI "shall make reasonable provisions for" CPP's disclosed transmission requirements. 10 NRC at 297.
CEI's failure to install the fourth interconnection constitutes a violation ofits obligation to make " reasonable provisions" for CPP's transmission needs. CEI has known for many years of CPP's need for the fourth interconnection, and of the concern that the current three-interconnection configuration would be insufficient to meet CPP's planned needs; nonetheless, the Company has refused to comply with CPP's request.
I B.
CEI PREVIOUSLY COMMITTED TO PERMIT TIIE PROPOSED FOURTIIINTERCONNECTION, AND NOw SEEKS TO VITIATE TilAT COMMITMENT Antitrust License Condition No. 2 obligates CEI to " offer interconnections upon reasonable terms and conditions" upon the " request of any other electric entity (ies) in the CCCT," including CPP. Although the issue had been raised previously, CPP clearly gave notice to CEI of the City's need for the fomth interconnection in 1985, during ciscussions concerning a pending Securities and Exchange Commission proceeding in which CEI and i
Toledo Edison were seeking authorization to move toward merger (by allowing newly-
{
created Centerior Energy Corporation to acquire all of the outstanding stock of the two utilities).
In a September 19,1985 letter from CEI Chairman of the Board Robert M. Ginn to Cleveland Mayor George V. Voinovich, Attachment 9 hereto, the Company acknowledged the City's requests for both the third and the fourth interconnections, and - in exchange for Cleveland's agreement not to oppose the merger - CEI committed to " concur" in the i
City's requests for FERC approval of the two interconnections. Paragraph 5 of the letter states:
The Company acknowledges the desire of the City to con-struct transmission lines from -(l) The City's Collinwood Substation to the City's Nottingham Pumping Station and (2) From the City's existing Clinton-West 41st Street line to Cleveland Hopkins Airport. The Company agrees that if such lines are constructed, it will interconnect them to its system. The first interconnection would be made to the Company's Lloyd-Jordan line in the vicinity of the Nottingham Pumping Station and the second either to the Company lines in the vicinity of the Airport, or alternatively, to CEI's Fox Substation. Although CEI agrees to such interconnec-tions, it must, of course, reserve the right to take whatever I_
actions it deems appropriate with respect to the proposed construction of the lines, but the Company will definitely concur in the City's effort to obtain from the Federal Energy Regulatory Commission its regulatory approval of the interconnection. at 2, emphasis supplied. The proposed fourth interconnection is plainly described here, as it will involve the connection of a 138 kV transmission line "[f] rom the City's existing Clinton-West 41st Street line" to "CEI's Fox Substation."
Notwithstanding (1) CPP's request for the interconnection, (2) CEI's commitment to support that request, and (3)the Company's obligations under Antitrust License Condition No.2 to offer the interconnection, CEI has steadfastly refused to permit the interconnection, let alone " offer" one on " reasonable terms and conditions." As a con-sequence, on April 22,1993, the City filed the complaint initiating FERC Docket No. EL93-35-000. Years after agreeing to provide the precise interconnection at issue, CEI responded to the CPP complaint by taking the position that the Company
.- -... cannot consider agreeing to any such interconnection until i
all of the details of the proposed interconnection have been established and until CEI has assurance that the inter-connection will not impair reliability of service to CEI's customers and that the City will pay all of the costs associated with creation of the interconnection and services to be provided across the interconnection, including stranded investment costs.
CEI's Answer to CPP Complaint in FERC Docket No. EL93-35-000, at 23-24.23 Now that FERC has ordered the interconnection, CEI's position - as expressed in the aforementioned October 9 letter - remains the same: CEI will not consider complying with the FERC order "until all the details" and some major, unrelated issues have been
{
i worked out.
l Consistent with FERC's recent order, the NRC should reject CEI's position as not credible and inconsistent with the Company's prior commitments to Cleveland and to this Conunission. CEI should be held to its obligation under the license conditions, as well as its 1985 representation that it would " concur" in the City's request for regulatory approval.
i Given CEI's explicit obligations and voluntary commitments, and viewed in light of CEI's history of (and ongoing) anticompetitive behavior, it is apparent that CEI's current unwillingness to agree to the new interconnection is based upon a continuing desire to stifle the City's ability to compete. The Commission should issue an order:
(1) finding, consistent with the FERC ruling, that CEI has violated Antitmst License Condition No.2; (2) requiring CEI to comply with the Antitrust License Condition by offering the fourth interconnection (as requested by CPP) on reasonable terms; and An excerpt from CEl's Answer is Attachment 10 to this Petition.
__ (3) penalizing CEI for its failure to comply with its Antitrust License Condition obligation.
COUNT 4:
CEI HAS VIOLATED ANTITRUST LICENSE CONDITIONNO.2 BYIMPOSING AN EXORBITANT AND UNREASONABLE l
$75/KW-MONTH " DEVIATION CHARGE" In March 1993, CEI unilaterally filed with FERC (initiating the still pending Docke No. ER93-471-000) a set of proposed amendments to the 1975 Interconnection Agreement between CEI and CPP. One of the proposed amendments would add a requirement that CPP pay a " deviation charge" of $75/kW-month for the maximum number of kilowatt, of power delivered by CEI in any hour in excess of the amount of power CPP had scheduled for delivery in that hour. The charge is exorbitant, as it is three times CEl's proposed firm power " ceiling" rate of $25/kW-month. Indeed, the " ceiling" rate is itself enormous; by contrast, emergency power is available to CPP on the market for 100 mills per kWh, with no demand charge.
The Commission accepted the proposed amendments for filing, including the deviation charge, suspended their imposition for five months (the maximum suspension permitted by law), and set the amendments for hearing. The amendments became effective, subject to refund, following expiration of the suspension period in November 1993. Cleveland Elec. Illuminating Co., FERC Docket No.ER93-471-000,63 FERC 161,244 (1993), order on reh'g,64 FERC 61,097 (1993). While the Initial Decision in Docket No. ER93-471-000,69 FERC 163,008 (1994), would reduce the $75 charge to a still exorbitant $25, FERC action on that ruling is still pending and it is not known when
~
- FERC will act. Thus, the amendments remain in effect today, and CEI's proposed "open access" transmission tariffs propose continuation of the charge.24 i
CEI's deviation charge is a facially discriminatory and anticompetitive restriction on CPP's right under Antitrust License Condition No. 2 to obtain interconnections with CEI "upon reasonable terms and conditions." It is discriminatory because the proposed i
charge would, without justification, enable CEI to treat differently transmission cus-tomers who provide their own control area services as compared to those, like the City, who purchase such services from CEI. Under the proposed transmission tariffs, the former customer class would be able to address imbalances between scheduled and actual i
, ll energy delivered through the retum in kind of energy inadvertently interchanged between I
F control areas. By contrast, " positive deviations" between scheduled and actual energy 1
flows experienced by the City result in a deviation charge of $75/kW-month, applied against the maximum kilowatthours of positive deviation in any one hour of the month.
The charge is anticompetitive in that the only utility against which the charge would be imposed is CPP, which is also the only utility with which CEI is engaged in direct, door-to-door competition for retail customers.
[
In addition, the charge is unreasonable because it grossly exceeds even the penalty provisions imposed by other utilities upon unscheduled deliveries to their wholesale customers. Although FERC will allow a utility to depart from cost-based pricing and As mentioned earlier, the Commission determined by order dated December 20,1995 in Docket Nos.
EC95-1104-000, et al., that the tariffs are deficient and must be revised substantially. Absent the requisite l
revisions, the Commission has stated that it may issue a further order rejecting the tariffs and merger application, as well as a related application for approval to charge market-based generation rates. Slip op.
at 10, Ordering 1(C).
l
-33o charge " incentive rates for unscheduled emergency service (to keep wholesale customers from unduly relying upon the utility to make up scheduling shortfalls), there are limits to l
a utility's ability to exceed the costs of providing such service.25 In Indiana Michigan l
Power Co.,44 FERC 161,313 at 62,079 (1988), FERC approved emergency energy rates of 100 mills /kWh (or ten cents), but cautioned that this rate represented "the upper end of a range of reasonable sates to act as a disincentive to use emergency service as an economic altemative to non-emergency service,.ud at the same time not to be exorbitant or exploitative." Id. at 62,079. At $75/kW-month, the Company's deviation charge applied tl'/
to a single unscheduled delivery of 1,500 kW in one hour of a month would produce a u
higher payment to CEI than if it assessed a 100 mill /kWh rate for 1,500 kWh of l
emergency energy in each and every hour of the month. Thus, CEI's deviation charge is insupportable, even as a penalty provision.
Moreover, when CPP overschedules deliveries of power from third parties to avoid the enormous " deviation charge," it is competitively harmed by another of CEl's proposed amendments. In hours when CPP schedules more energy for delivery than it can use, a prudent practice in light of the $75/kW-month charge, CEI retains the excess energy for its own use and pays CPP a rate equal to only one-half of CEI's fuel costs, while CPP must, of course, still pay its suppliers full price for that energy. Thus, CEI gets cheap energy that it can use, while CPP pays full price (less the modest payment made by CEI) for energy that CPP cannot use. As a result, CEI has an unfair competitive The Antitrust License Conditions provide that "all rates, charges or practices in connection" with the 25 implementation of the Conditions "are to be subject to the approval of regulatory agencies having jurisdiction over them." 10 NRC at 299.
B
_ advantage either way - the Company either gets very inexpensive energy or it collects enormous penalties.26 Even if CPP prevails at FERC and obtains a refund of penalty charges paid, CPP will be unable to recover the costs of overscheduling energy in order to avoid this penalty or the permanent costs of competitive harm during the period in which the penalty charge is effective.
Further tilting this " heads I win, tails you lose" mechanism in its favor, CEI is proposing that these provisions apply to all " deviations" above and below zero, no matter how insignificant. The failure to utilize a "deadband" approach (within which no penalties would apply for deviations of less than, say, five percent of scheduled amounts, to i
recognize the impossibility of zero deviation) is contrary to standard industry practice.
I REQUESTS FOR RELIEF For the reasons set forth above, CPP requests that the Commission:
(1) find that CEI is obligated under the Antitrust License Conditions to provide interconnection and wheeling services as specified in this Petition, including pro-viding the requested fourth interconnection with CPP at the Fox Substation; (2) issue a Notice of Violation against CEI for its failure to comply fully with these obligations; (3) require CEI to submit a timely written reply ad-mitting or denying that CEI is in violation of these obligations, setting forth the steps it is taking to ensure compliance with the Antitrust License Con-2.
This impediment to accurate scheduling was exacerbated by CEl's unilateral and unwarranted 1994 imposition of severe schedule change restrictions that prohibited changes in scheduled deliveries of energy except on a day-before basis. The FERC initiated a proceeding on scheduling issues in response to CPP's August 12,1994, Complaint. A recently entered into settlement agreement in that proceeding that substantially increases scheduling flexibility in a manner more consistent with widespread industry practice is now pending before FERC.
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UNITED STATES OF AMERICA BEFORE THE NUCLEARREGULATORY COMMISSION IN THE MATTER OF
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CLEVELAND ELECTRIC ILLUMINATING COMPANY
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(PERRY NUCLEAR POWER PLANT,
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Docket No. 50-440-A UNIT 1, FACIUTY OPERATING LICENSE
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NO. NPF-58)
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Docket No. 50-346-A
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(DAVIS-BESSE NUCLEAR POWER STATION,
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UNIT 1, FACluTY OPERATING LICENSE
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No.NPF-3)
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TO:
Executive Director for Operations U.S. Nuclear Regulatory Commission Washington,D.C. 20555 PETITION OF THE CITY OF CLEVELAND, OHIO FOR EXPEDITED ISSUANCE OF NOTICE OF VIOLATION, ENFORCEMENT OF LICENSE CONDITIONS, AND IMPOSITION OF APPROPRIATE FINES Glenn S. Krassen Sharon Sobol Jordan CUHACO, CUMACO, SEMINATORE, Director of Law LEFKOWITZ AND GAROFOLI, CO., L.P.A.
William T. Zigli The Halle Building, Suite 900 Chief Assistant Director of Law 1228 Euclid Avenue CITY OF CLEVELAND, OHIO Cleveland, Ohio 44115 106 City Hall 601 Lakeside Avenue Cleveland, Ohio 44114 David R. Straus Scott H. Strauss SPIEGEL & MCDIARMID Suite 1100 1350 New York Avenue,NW Washington,DC 20005-4798 January 23,1996
. ditions, and providing other compliance information required by this Commission; (4) direct CEI to comply immediately with the portions of the Antitrust License Conditions at issue here, including requiring CEI to withdraw immediately from the Federal Energy Regulatory Commission the portions of CEI's filing at issue in Docket No. ER93-471-000 that are inconsistent with the License Conditions, as specified herein; l
(5) direct CEI to provide firm wheeling service during 1996 in the amounts rec.utsted by CPP in its J
August 11,1995, letter to CEI and in accordance
{
with CEI's obligation under Antitrust License
' li Condition No. 3; 1
i h
(6) impose the maximum fines under the Atomic I
Energy Act permissible for CEI's violations of the license conditions (42 U.S.C. Q 2822(a)) which, through the end of 1995, would amount to close to
$100,000,000;27 and 1
l (7) undertake these requested actions on an expedited basis, consistent with the demonstration here that CEI has not met its License Condition obligations, and that each day of delay in its doing so is causing unlawful competitive injury to CPP.
i With respect to item (4), above, the specific actions which CEI should be directed to undertake include requiring the Company to:
(A) withdraw the $75.00/kW-month " deviation" charge from the rate schedules at issue in ER93-471-000 and those filed at FERC on May 25,1995; and Even if the violations are considered to be a single violation, and if they are deemed to commence in April 1993 when CPP formally filed at FERC for the fourth interconnection, after CEI had refused to provide it, that represents almost 1,000 days of violation. 42 U.S.C. l 2822(a) permits the imposition, for a
" continuing" violation, of up to $100,000 per day of violation.
o36-(B) withdraw that portion of the " Operating Agreement" providing to Toledo Edison ' highest priority" treat-ment for its purchases of emergency power from CEI.
CONCLUSION WHEREFORE, for the foregoing reasons, CPP asks that the Conunission act expeditiously to enforce the Antitrust License Conditions attached to CEl's nuclear plant licenses in the manner specified in this petition.
Respectfully subnitted, Sharon Sobol Jordan Director of Law William T. Zigli Chief Assistant Director of Law h
CITY OF CLEVELAND, OHIO 106 City Hall 601 Lakeside Avenue Cleveland, Ohio 44114 (216) 664-2814 Glenn S. Krassen CUMACO, CUMACO, SEMINATORE, LEFKOWITZ AND GAROFOLI, Co., L.P.A.
The Halle Building, Suite 900 1228 Euclid Avenue veland, Ohio 44115
\\
Nvid R. Straus' Scott H. Strauss SPIEGEL & McDIARMID Suite 1100 1350 New York Avenue,NW Washington, DC 20005-4798 January 23,1996 (202) 879-4000
LIST OF ATTACHMENTS 1.
GRAPH DETAILmo CEI-CPP RETAIL CUSTOMER SWITCHmo,1960 TO DATE 2.
CEI MARKETWG FLYERS 3.
LETTER TO CEI FROM CPP, DATED AUGUST 11, 1995, REQUESTWO FIRM TRANS-MISSION SERVICE RESERVATIONS FOR USE DURING 1996 4.
EXCERPT FROM CEI FIRM TRANSMISSION TARIFF NO.1 5.
LETTERS TO CPP FROM CEI DATED NOVEMBER 2 AND 3,1995, STATNG CEI'S REFUSAL TO PROVIDE TRANSMISSION TO CPP FOR ITS PURCHASE FROM OHIO POWER 6.
EXCERPT FROM CEI APPLICATION FOR REHEARING IN FERC DOCKET NO.
EL93-35-000 7.
CEI-TOLEDO EDIFON COMPANY OPERATING AGREEMENT, DATED APRIL 1987 8.
LETTER TO FERC SECRETARY CASHELL FROM CEI, DATED OCTOBER 9,1995, IN FERC DOCKET NO. EL93-35 000 9.
LETTER TO CLEVELAND MAYOR GEORGE V. VOmOVICH FROM CEI CHAIRMAN OF THE BOARD ROBERT M. GmN, DATED SEPTEMBER 19,1985 10.
EXCERPT FROM CEI'S ANSWER TO CPP COMPLAINF IN FERC DOCKET NO. EL93-35-000 i
7
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l ATTACHMENT 1 I
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Cbveland Public Pouer Annual Meter Gains and Lessee
-2000 0
2000 4000 6000 8000 10000 t
t i
t i
1980
-256 M 390 l
1961
-303 M 470 1982
-281 @ 462 l
1983
-538 M. 355 1964
-476 M 442 1985
-355 M 300 1963
-374 E 144 l
l 1987
-346 E, 233 1964
-609 M 149 1969
-641 M 120
- 70 -1601 M 56 1971
-320 M 99 l 1972
-1223 M 125 A 1973
-433 E 133 1974
-297 k 226
, 1975
-342 E 105 l 1976
-175 E 31
- 1977
-14? E 40 1974
-153 E 120 1979
- 6 ', u l 792
. 4 80 23 3?2 1981
-Si C 3J5 582
-1C5 545 1983
-125 m 11T24 884 142 m i1220 l
l 1986
-132 l' O 659 2 66
-109m' i 1034 1987
-129 m-11028
- 88
-99m 1823 1989
-153 K i1021
, #90
-105 m i929 l 1991
-108 m i 1116 1992
-63 I I1683 993
-65 i i5707 404
-542 1995
-317 C 1957 i
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TO CONSIDER ABOLT THE l
"IllDDEN COSTS" 0F MAKING L
A CHANGE.
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Will(N YOUR IIOMIC'S I.00K IS AT STAKli, MAKE SURli YOti KNOW Al.l. Till! 1% CTS You may be sked to lest the Illumlasting
- Who will he responsible for any possible Company for anmher ekctrk supplier But damage toyourhomeithe replacement there are many " hidden coAs" in making a settice boaisinstalled?
change, some of which can dect the cuador
- gmhow much addiconal ofnourhomeandSwr' Wag.
equipmeswillbe mached to 3ourhome?
m Solue are a few quesiomyou might munt
. To whom do you ghe permission to install answered concerning theseissucs, say more equipment?
uh.st work duur h tht other vietant.el g
3 supplier t.in.dh tt an houir?
MnghmW up to erh
- Ydl there be a problem running a power supplier ce he difficuh if all preparadon line through any trees, shrubs, huAes, etc.
work is nm completed properly. You may want in find out if the other supplict rx:cds
- Will anylandscaping right nest to 3our to imtall its equipment to the outskin of home be dectedby a replacemem tour home.
a vill the other electric supp!!er put in an
~
additional mice box on your home if their P03C5 M P adin front of your property!
We hope the abee questions can sene as a l
starting point in getting the answers )ou need e Will your presem ekctrical senice box if)ou are approached by mother ciectrk needto be remomp suMyehillece cM company,
- the wel k responsible for any possihte
- P m unes are 4 open.
h dansge to your homeif equipmentis 1%mefeelfree se callm ssrytinso-sommed?
dId1 er sig6t-at 861-9004
- That nierior work on your home needs to 4
be completed if a ny:4sr. cat service hm islastalletP e
A w
8 THE Cl.EVELAND ElICTR p.o. so some. cuwwa omo me. mmes annuneso. uuuwmo num. is m amm Serving The Best Location la the Nation
Dear Fdend,
'the Bluminating Company has been prodding strostilghting for your neighborhood for rasny years.
I We recently were told by the City of Cleveland to remove strostlights in kont of your house and along your satire street. Because of this change, you may notice less light on your street or streetlights burning during the day or ones that are out at night. These problems should be reported to The City of Cleveland at664 2000.
The h-* t!.g Compr.ny != ni!! hors to cerve yeue home with s4, rdiable electricity We would be happy to have you join the 750,000 Northeast Ohio customers who are served by the aren only Ibt! ssevice electric utility.
Sincerely, The FM==ag Company ACentenor Energy company
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[hf Cr j.Y MlOtAtt R.WHITL MAYCR
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00C LAXIIICE AVLNUE p' Il' llI CSYLANO, CHIC 4Jt1411CG
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August 11,1995 Mr. Thomas G. Solomon, Manager Sulk Power Operations Cleveland Electric illuminating Company 6896 Miller Food Erseksville, Ohio 44141 l
Dear Tom:
Encfosed are transenission service agreements under the CEI FERC Transmission Tariff for the fo!!owing reservatiens:
East Kentucky Power Cooperative for 30 MW from January 1,1996 through December 31,1996 Cine!nnati Gas & Electric Co. For 50 MW from January 1,1996 through December 31, 1996 New York Power Authority for 32 MW from January 1,1996 through December 31, 1995 Chio Power Company for 40 MW from Septemoer 1,1996 through Decem' car 31, 1996 F!aase respond to these reservation requests as soon as pessicie. The transmission reservations for the 35 MW of AEP Tanners Creek and 10 MW AMP Chio Gorsuch power will be sent to you by AMP.Chio.
Very truly yours, JH Jerome W. Salko, Manager Electric System Operations cc:
Nagah Ramadan George S. Pofok William Zigli d a Feeml dannesse.',w (,swefmper m,
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ATTACHMENT 4 I
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ta n.inq nd Cicvelcad Electris g,gfi'.a1 shee Illyrincti'ag Compnay
.AC Electric Tatiff Effeniv*
s dyimet volums No. 1 fug &sNt*
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ACCEMED TQR FILIN 10 SECOME EFFECTiv L
z/ub, FERC ILECTR2C TARZFT 1
OR2 GENAL TOLUME NO. 1 Or
. TIE CLE*M ELECTMC ZLLtacNATING COMMrt F% LED WITN FEDERAL INERGY REcm.A; CRY COMt=332cN s.
s 2851133 ST R2 2 ARD 1. MILLER EEECUT:v3 '122 PRE 32 E:f TIE CLEVELAND E2.ECTMC ILLCMINAT3NG CSMA.Tr 11 H
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esey=nal vtal. No.1
.e fosse Ay, ACCEPTED ran ryg,m.
ED #ECOME ETTECTIVE m-1 g
~
A. *serden Prwidad
' Die earvice p:widad harsuhder thansmissim Service) shall to the tranauisaian of electric 3 ewer beeman delivary (inta.
.c.ien) peints of Da C1svelard Mec=ric Illuminating C:rpey (Cr) to, fr:n, boomen, or arzrq rural electric accgaratives or utr.icipalities 1ccaud within the certiand CUCD (Cantrul Area Pcur Cecriina*% Crrup) C:rn-pany Tar =itorias (CCCT) (curtmar). O m service will be 60 Ber u,
altannating current and thras phase.
It is tederstood that the chligatien of CI2 to trana=it 1sur der custcent's accomt shall be s@ ject to C22's ability to transult and deliver stated yewar consistant with the operstian of its systam wder me:a1 and energency acriditiens fee its em F.r7 eses.
The av=4'**4 uty of Tran= i==4 m Service harmrder shan he daur-mined by cm, and the obligaticn of C22 shall be f.=.tur 11ritad ts tiras dur:.aq *ich pcuar is actually received by CII for delivtry to custceur. M:rthing harmin shall be ccratr.and as rec e. iring cc to anlar.a its facilitias to trans=it r.z:5 scar. teen cc daur=: as that Transmissian service is unav=H =hla, it shall n..y.ly crally f
ret.tfy the roquarting party to that effect and the raascn(s) thern-l far. This shall be cer*4 -=d in writing as acon as practicable L-c ret latar than three (3) days M"Mg the oral ratificat.im. Sa writtan cenitrustian shall be in sufficient detail to explain clearly the capacity ccnstrsints up:n the system Wish nake emalig sortice tanavai,lable. If, aftar having agreed to transmit pcuer em any par- '
ticalar arm =4m, C22 is n.
J.ed frta saking or centim.ing such delivery, it shall nas all due M"a=nce to ruzne the cause of dianhility and shall rssues delivery as pctmytly as pcssihla.
a C22 shall gewide TransuLsaien Service within the 1*u
.e of the capacity of its bulk trar=-4==4m fr.euisias, and relatai facilitias, withcut undue intarfaruice with servtes to these intar-connec ad systams the aparattara of Wich aru cunductad, in ecle or in part, pursuant to the pewisions of an agreammt with Cn, somspt as stated balsw to other numbars of the CUCD gecup, and to the extant that such Trard==4= Sarrice &:ss not impces a h= dan gen the systssa of C32.
.e 2n the wount that CE2 msrt reene= *ealing seedcas to
- ether antities under this service Schedule das to C21's lack of capacity, such reductica shall not be effected until reductiere of at laast 54 have baan sede in CE2's trar*==4m allocatigra to other 07CD==r+mes, ard thsenattar shall be ands in rWice to reductions ingomed gen.other CMcD sunbars.
k g
t No* 3
, TrPC Eloctric Toriff Effoetivos octobor 1, 1985 Original Vol. NO. 1 prior to commencement of Transmission service under this tariff each customer shall execute and deliver to CII a service Agreement in the Form of service Agreement attached to this Tariff.
The customer by eciamencing to take Transmission Service from GI agrees to take and pay for, and GI by commencing to furnish such Service agrees to furnish the Service, subject to the terms and conditions of this Service Tariff as they may be in effect from time to time subject to action by the governmental bodies having regulatory jurisdiction over services rendered hereunder.
Transmission Service shall be provided by 22 from time to time, upon (1) written request by a customer for the reservation of transmission capacity (Transmission Reservation) for a period of one week or longer, and (11) concurrence in such request by G2 in writing.
When necessary, any request or concurrence relating to the availability of transmission service may be made orally and shall be confirmed in writing as soon as practicable but not later than the third day following the day such oral request or concurrence is given.
When GI plans its future transmission capability, it will make reasonable provision for disclosed future transmis-sion requirements or entities using wheeling services. J/
~
E.
Duration This service Tariff shall become effective 30 days after filing with the FERC and shall continue in effect for one year, and thereafter for similar periods unless changed, modified, or superseded.
CI reserves the right to make a filing with the FERC for termination of service under this tariff.
C.
Changes in Charves and Terms and conditions'of ISEZ1ER.
This Service Tariff, the services to be rendered, compensation and the tarus, conditions, and rates included herein are subject to being superseded changed, or modified either in whole 'or in part, ande.fres time td time by a legally effective filing of CEI with or by order of the FERC or any superseding regulatory
- authority having jurisdiction and both 32 and customer shall have the right at any time to seek unilaterally superseding services, compensation, teras, conditions, and rates from such regulatory authority.
1/ The term " disclosed" is defined as the giving of reasonable advance notification of future requirements m
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. 4 cancels Fcazeth. Revised Shaat No.
rgy E1ecuzic Taxidf Effectives. haly 1,1337
- h iginal Vol. Ms. 1 3
D.
Cumanatim Cammer shall, dth respect to===te=% services wich shall be reserved w-any patied of ma mek = 1angur (the Base.mi m
Paziad) tador this Servian Taziff, pay to 3 man:hly, an amenart calcu-laced separately ear earth hmei<=4= Reservation agal to the product.
of (i) the yearated suurely reta,31.718 and (11) the maxiasm azaz:t of kilawatts 41ch shall have best reserved (the ammmeved Qumatity) for M7 the Base and i
tz-ad==% fl ram or to och interuummetim paint m
paziad; prenridad,' however, that if at any tima during sa.id Desarmi paziad the ammet of poner and enery actually delivered at the dalivery point, adtasted for lasses theram from at to the interconnectim paint AarMaists such===i==4=
servisa shall be se reserved, shall commed the acunni asunzet of smuur and enszw reanised at the receiving point, the asumas shall be dammad to be and shall be paid Aar by C:rtuner as an =N'1-4 inadvesunt. poker, dalisery. Any mactt escasa delivery zhall be settled $ar either by the retunn af equivalant peer and ena=gy or paymast of the cun ofA cost incus =ad by 3, plus lot of ma=1 Out-of-gochas cost aball czmpensata CI2 ihr costs 4=
.". tNL cces.
w:asid otharvise not have baan inc=t=ud and shall be as of 12s delivery point
- --d'4-4 in the on wh Servian 1, -
If equivalant ensegy is ruummari, it shall be retusend at tians est the Imad cmdi-a tiens of CEI are equivalant a tbs load ceditions of m at the t:.ma the amargy fcir t.mich it is ree:cand was dalivered ar, if CIZ alacts as have equivalanc energy recusand eder diffurunt czedities, i-shall, he retucand in ax:n aucunt, to be agrand spat by M and the C:ruzame, as will e=t=== for the diffacunce in canditions.
Sa=e shall be addni to any amount entstme=4 puzzment to any of the !
--;=47 pramrd cd this Sectim a amount in dallars r d-
cient to reimburse m ihr any ammunes paid or payable by it as salas, emise or similar temas (other than tunes based tquat or masured by not facumme).
L L -
Ittth other svvemos If the rugamated W servian involves +wsm-m amo,t ALEastly or indirmetly a the facilitias of a ttdad ucility syreset.
Castzuume dal aka as=ungummits for uma of these facilitias di=uctly dith that ttdai systum, and CIZ shall act be ahtiged to czmaneca t=ans-
=Immim service estil mast - - r--- " - have basa smds. Q2 shall be AW M a= -en.ly 4tti copias of all agressmuts relating thereen and any -..
r--- "- cu' sqqlasmurcs ttments. Casament aupressly ag= ens to indsunify and save hazalass and defend CEE agadast all c.tains, demads, costs, er egenes arising out of providing 12m h====%
Servias, including, dthout limi,tztim, claims e desumis assertad by any maglying utilier er any thiad party in acenacticus with ths
- delivuty of paper to c21kar cascumer's asuman.
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F. 3333, Addest a the prurisians of Sectim I sid i harset, CE
.in each hour that paar is delivs.ud to it for trannissi:n en e I w.-
.:n, asummt, traned.t ard daliver aleght ymnant (795) af sue ym:
4dNstad to the naarsst id'ala W) e dalivery point af cat:rar, is as apand that 18 af sah peer iniz1y reflects lassas an the CE:: syram=.
- e. w% ard w..
mi.us ear 2 namissim se.-vies shau he rurdered serie.ly 3r.
E ard paid aanthly by castner. An such hills shan he due and prynhia Wahin saety-five days arms the remies of the hin. Any aar.:
em and apaid aftar the due date shan he ta=md daalar.mns and thers shan he adast intarnst af one persmat C.0%). For and rmesating th.
day parted an addisiarai ans paammet C.0%) af tem emn wgaid sur.:t tus added atti the asunt is paid in full.
2n arder that tdals say he rundared prug.ly aftar the and and senth, it may he reemasary tras tia to ti=m to as i. ass sar.ai=.
fac==rs i= valved in calculatLsg the sonthly hiMLv. M$r=unts f=
acr=rs in such astiratas ahau be included la the hiu far the zenth r
i fauswing the time teen inf==matim hennas avsilable as seks z=h f-Q's encreetimas er adjustammas in the W47 far the premedia; unth er f.
sus =shs.
=
L L+ =.W.cr'.s of 23.smissian Servian 2t is inds=st=sd and apsed that the Dur.si:issim Sarrime, if ard seien available, will km.6 ammapt G) f== in.arrg.4=r.s er rs6ar.ims &as to furnas described in Sectim I af this servsan hs.df G) for tre.a. gtians er redus.ians has to as.ise irur=.:.nat by annuatie or surnal amtzs1 thish results in di.narrwet.ian far t.*a purpose af maintaining overan stilmhili y and surr.' irs:ity of ct!'s t
transmLasim systas er sur the purpose af presas.hsg its genantim at transnissian facilities er Q) tar tugurary insa.
rm6artians, thish, la the ='=d '- af G2, are amenasar%==.iara er i er desirshla sur the puzymee of smissanansa, repairs, replassen=ts, er instane-tian af spipant, er Amertigation sad insynesbur CEZ duas not t
para =tes that, the 2ansW. asian SaW.se delivered harr.rdar dal u
, he irse tras inta:r.sytim er 1rgafasons and CEZ ahall not he habla as cussmar for is:mgas result.dng theru2 rum, m, esmops in anaa af ensayansy as date y d tanymenry inta.sysians er i= pair-m, trial give custmar raamanshis advuman astian af any schadr s mas ad t unsuuLasian Sarrian. custusnur will astLfy CEZs di.c- '---
ad 1stscheduled intaaret.im.ar d*"=ds ad 2snaniasian serf.se r
by ta socian@ses given.ns and so-41=:n mah astian in writing as the sarn dat
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- I m will use due dim af such ta.a=r.vtad er i=pai.ud assrias.innes as raum an asuses 3
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M' ACCEPTED FOR flung 4
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10 #ECOME EffECTlvt: /
t[dg/pg L Forte Meieurs In case either CEI ce Cust::=ar sh:mid be dalayed la er pre-sented freen parfor:d.M ce carrying out any of the agreer: ants, ceve-c.ts, ard obligaticrss anda by and imposed ugen said partias by this SeM=e
'Zariff by rua.st:n of or thr: ugh strika,tsteppage in lah:r, failurs of centract=rs or suppliars of notarials, riot, fire, IL:cd, ice, invasien, civil war, cermotien, insurrectims, military or usurped p: Mar, cedar of any Ccurt grantad in any boda tids advarse lagal m "' m er actim, or of any civil te af.11tary aut%, rity either de fae:m or da
$2re, anglesima, act of God or the public enemias, or any cause rassen-ably boycrd its curstrel and acrt attributable to its neglacts then, and in such case er cases, such party shan turt be liabla to the othat party for or en account of any loss, dacage, int:cy or sotper.se resulting dra or arising out of such delay or prvventim: r Adad, hcurver, that the party suffaring suc:h dalay or preventien arm use dus and, in its $a'.gcunt, pen W * = diligence to receve the cause ce causes tharacts and prwidad, f.:: har, that neithat ps: :y shall he requi sd by the feregolag previ.siens to settia a strika e.w when, accx:irding to its cun best $xigment, such settiscunt meers advisabla.
J.
C:st=:r:ar's and C! 's hstz:ns*Wties
(.
Custcrar ard C2 will semzt:ise diligence to use and pr:s.da the alactric service fu::nished urdar this Service Tariff with a v.r.-
to securing afficiency of custceur's and CEI's apparar:ss and syr:ses in keeping with generally h 74, gced cparating sta,dards, w.n saintain a ycur facter as amar unity as practicable censistant with g:cd engineering practice, will coordinata their respec ive systacs relaying and fusing so as to penclude unnecassamy intaze. tims, w.11 saintain their ruspective 1Lasa at au tiras in a safe cymrat:M canditien*, will aparata their respective lines in such sannar as
,e ret to intarfarm with the service to custzriars of althat party and wi.11 oceedianta unintenanen Wtices say adversely affect the egeratien of thmix r r.n.iva facilities. Custcrur will use electric service equally from three phaams as nearly as pessible. If CEI shall deem it neansaary that voltage regulating equipesant, including but not united to the structuras and devicas assectatad with such equipment.
is zuquired, such agdm shan be prw:Ldad,, cuni and suissai,ud
.t by Customer.
QNtEEEE asskstas all rtSpernihili?/ fK a10Ctricit",* br.Cd n
the palat of dalivery and CEI shan riot be liable for dansens to the paraan er = wi of Curtamar or its arp1=yses or any other perscne resulting from the une er 3r==== cf alactricity bryd the peint of dalivery.
2 4
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Meterirg ensipment will be suppliad, insta11ad, wired, seed i
and saintained, enlibrated ed scalad by 32. Ash antars shan be of a type aslected by Q2.
Wan antarirq is at a pains other than the delivery point, l
3 the artaring equipment shan he arpenantad to sugistared valums, w.ich i
tendd have been recorded if the equipannt had hamn immatad at the dalivery pains.
the accurney of the estarirq equismmnt shan be verified by proper test at any tism upon reasonable notism given by either 22 or Customer to the othar, and each party ahan he antitled to have a repro-l i
sentative grasant at mah inzification.
I 1he wek of tn6.etirq and adtastir4 arry notar fer ar=ncy shal:
he is ;G by and at the expense of 32, provi. dad that such tant is re.
canad for by Castmar nues oftan than ance in twelve sunths. If either party shan rege. ire anzu than me verifi=atian of any nutar in any selve nunth parted, and the notar peuves to be awasts within two (2) par-m plus or ad.nus, the additicnal verificatim shan he at the expense cf the j
party requesting it.
1 I'f M ElviIrWrt 18 fDmd tO b inacCuratS by EErt than T,1:
('
(2) par =mns plus or mimus, the equiprunt shan km seda ace =ata and the notar readirgs for the pariad of inacemacy ahan be adte.stad to==m such inacemacias as far as the seen can be renacnably ascar.a!. rad. If the part.cd of inaccuracy cannot km reasonably ascartainsi, the par.:d of inaccuracy win be deared to have esurpassed ans half of ce ti.m period aimme the last test at the seter.
In the event that 52's antars fail to registar pr=parly i
8 during any hilling par: lad, the depend and energy cantitias will te estinatad by 22 from the best availabla data.
Customer to sgply, true of cost, a suitable imma-tima est the of GZ's notarirg equignant and such other ten 111tias as are zuquired by CEI in its takyrant in pesvidirg the usemeted servias. mam samation annu be in assurdanen with speci-stantians as eg p11ad my CEE.
custname gives an ancassary &-% = snable en avets t
.of 32 to carry eut the tazum and carditions of this rata schedule and 4,*
construst and saintain its lines and circuits la and at au placas re-Cust=rur quired Dy CEZ and emed, leased or sentronad by custment.
gives to 21 the riprt for its ealy authorized agunts and ampleves to antar the prumLaes of Custerer at an reasonable tinus for the purpose of readirg antars, keepirq in repair a rumW.nq its e,.r- /
or inspecting its task incident to...e.% servias under this y
Servian Tariff.
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heations my to med as any ha autmany agreed to by CI2 ed Custmar.
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Ito Dedicatie of Facilities i
Any W.aking by one party to the other undar at:y p=o-vision of this Servian Tariff shan rurt amstituta the dedicate.cn og the systa er any partian tharoef of any party to the public or in the other party, and it is andarstead and agreed that any such adar.
taking by any party shall amase p turnination of this service tariff.
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- Th'a Clevelcad Elcetric Soccnd Roviscd Shoot No. 9 Illuminating C mpany Cancolo First Rovised Shoot Ne ERC Electric Tcriff Effcetivos Octob:r 1,1985 Criginal Vol. No. 1,
FORM OF SERVICE AGREEMENT i
4 This Agree, ment made and entered into this day of
, 19 by and between The Cleveland Electric Illuminating company 8 _CEI) and (Customer).
WITNE35ETE That in consideration of th's mutual covenants and agreements herein contained, the parties hereto covenant and agree with each other as follows:
CZI shall provide transmission service in accordance with the terms and conditions of CEI's FERC Electric Tariff, Criginal j
Volume No. 1, as the same may be amended from time to time and in accordance with the specifications set forth on attached Exhibit i
A.
In Witness Whereof, CEI and Customer have caused this Service Agreement to be exseuted in duplicate in their names by their respective duly authorized officials, as of the day and year first above written.
2 2
Attest Name of Customer D
Approved:
THE CLEVILAND ELECTRIC.
II.Z,UMINATING COMPANY ry 1
Issued by:
Richard A. Miller Executive Vice President
- no C1cvalcad Elcctria Sacand F.Oviscd Sh00t N3. 10 211uninsting Company cancels First Revised Sheet Nos.10 a TRC Electric Tariff Effectives October 1,1985
\\ Criginal Vol. No. 1 EXHIBIT A DELIVERY POINT AND SERVICE SPECIFICATIONS e
1.
Name of Customer 2.
Location of point of delivery:
3.
Description of electricity:
Elaetricity delivered by CEI will be three phase, wires, alternating current of approximately 60 Herts, at a nominal voltage of volts.
4.
Metered voltages 5.
Location of meter:
4.
Effective dates 7.
Provisions for special facilities or conditions:
In Witness whereof, CEI and Customer have each caused this Exhibit A to service Agreement for Provision of Transmission Service to Municipalities and Rural Electric Cooperatives, dated to be azacuted in their names by their respective duly authorized officials on this _ day of 19 e
TEE CLEVELAND ELECTRIC ILLUMINATING COMPANY Name of Customar BY SY Issued by:
Richard A. Millar Executive Vice Presidant e _
- cicvoiced Electric second Rovised shoot No. 11 p,luminating company Effectives october 1,1985 ti3C Electric Tariff
,ritinal Vol. No.1 This sheet Was cancelled By Second Revised Sheet No.10 Effective october 1,1985 l
i Issued by:
Richard A. Millar Executive Vice President.
send b
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ATTACHMENT 5 4
claveLamo oppics anommfys wayEomEuv CENTEGOs.
stoo oAct Tees steo
. Eves P. wuaP*v ggg)Cy coou us INDEPENDENCE. OH est3t asen4GL C. R0001WEIO sluCE T. ROSENf AUM OPERATING CoasPA8mES FAX (stem 47 ases i
00uGLAR J. WWEr.A CLEVELANO ELECTmec ILLUMINATING TOLEDO E0ttoN TOLEDO OPPICE 4
HWet R. MEMPIC EDesoN PLAZA i
ago MADIEoM AVENUE -
penaLBaAL an a MsCasE CORPORATE /REQUt.ATORY PRACTICE AREA TOLE 00, oNeo massa PAX (4tege44agt I
j November 2,1995 j
David R. Straus, Esq.
l Spiegel & McDiarmid 1350 New York Ave., N.W.
j Washington, D.C. 20005-4798 i
i i
Dear David:
f Please be advised that 'Ihe Cleveland Electric Illuminating Company (CEI) will not provide l
the transmission services requested by Cleveland Public Power (CPP) associated with the power sale by the Ohio Power Company (Ohio Power) to CPP for delivery of 40 MW to the CEI/ Ohio Power
)
interconnection commencing September 1,1996 through December 31,1996. 'Ihis transaction, j
although contractually described as a wholesale sale from Ohio Power to CPP, will be the functional l
equivalent of a sale "directly to an ultimate consumer"t accordingly,in accordance with Section 212 of the Federal Power Act, CEI is not required to provide transmission services with respect to this -
l l
transacdon. Furthermore, the Federal Energy Regulatory Commission (Commission) lacks authority to issue a mandatory wheeling order against CEI under the Federal Power Act to effectuate this i
1 i
transacnon.
s i
On this date, the Conpany has sought a declaratory onder from the Commission that it is not l
required to provide the required transmission services associated with this transaction. I have enclosed herein a copy of the peddon for declaratory order Sled with the Commission.
i l
Please be further advised that CEI's refusal to provide the requested transmission services is j
not due to any limitadon on the CEI transmission system, and CEI will provide the other transmission services requested by CPP in its letter dated August 11,1995. Copies of the other transmission service agreements are being returned to CPP execused by the appropriate CEI 3
J personnel on this date.
Very truly yours, 9
A hael C. Regulinski Senior Counsel MCR:ms
GNTE I
escoochseeseweed und Acesse:
IndependenseGM P0.ses 94001 as 447 3100 CoelorutOHd41016 November 3,1995 l
H AND DELIVERY I
i Jerome W. Salko. Manager Elecnic System Operations City of Oeveland, Ohio 1300 Lakeside Avenue Cleveland, Ohio 4d114-1100
Dear Jerry:
1 In response to your request for transmission service dated August it.1995 under CEI FERC Transmission Tariff, CEI will provide the services indicated below. CEI's agreement to provide the services is expressly conditioned upon the following:
1.
The installadon of the 138 kV capacitors before the 1996 summer load season as stated in your letter of September 22.
1995 and Mr. Porok's letter of October 30.1995: and 2.
Completion of the necessary transient interacdos studies involved with capacitor installations to avoid electrical disturbances on the Oty's and CEI's systems and communication of the results of the studies to CEL CEI can perform the necersary transient Interaction studies at your request.
Please notify me within ten days whether the City will meet these condidons.
In andcipedom of the City's agreement with these condidons. I have enclosed the following signed service agreements:
1.
East Konincky Power Cooperative for 30 MW from January 1 1996 through December 31,1996; 2.
Gadaa=d Oas & Electric Company for 50 MW from Janvery 1,1996 shrough December 31,1996; and OmWent(MefneGwnmeng Selete lease
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3.
New York Power Authority for 32 MW from January 1,1996 through December 31,1996.
The request for tranwnission services related to Ohio Power for 40 MW from 9/1/96 through 12/3166 is denied for the reasons stated in the enclosed letter to Mr. David R. Straus.
l Very truly yours, 3/7 Thomas O. Solomon Manager -Bulk Power Operadons 1
TGS:ms
~,
Clevalcnd ElCctric Sacond Rsviccd ShnOt No. 9 111umincting Compnny FERC Elcctric Tariff Effcctivo: Octob;r 1, 1985 Original Vol. No 1 SERVICE AGREEMENT This Agreement made and entered into this August 11, 1995 by and between The Cleveland Electric Illuminating Company (CEI) and Cleveland Public Power (Customer).
WITNESSETH That in consideration of the mutual covenants and agraements herein contained, the parties hereto covenant and agree witi: each other as follows:
CEI shall provide transmission service in accordan'ce with the terms and conditions of CEI's FERC Transmission Service Tariff, original Volume No.1, as the same may be amended from time to time in accordance with the specifications set forth on attached Exhibit A.
In Witness Whereof, CEI and Customer have caused this Service Agreement to be executed in duplicate in their names by their respective duly authorized officials, as of the day and year first above written.
CLEVELAND PUBLIC POWER Attest:
By:
h 7
Jerome W. Salko Manager Electric Date:
N h System Operations APPROVED:
THE CLEVELAND ELECTRIC ILLUMINATING COMPAN'l AJ<>A Y &
11 M
W By:
te: // / / / W l0l.?/97-Issued By:
Richard A. Miller President Centerior Corporation
C1Gvaland Elcctric S cond Rcvistd Shact No. 10 Illuminating Company ygRC Elcctric Terif f Effcctiva: Octobar 1, 1985 Original Volume No. 1 EXHIBIT A POINT OF RECEIPT AND SERVICE SPECIFICATIONS 1.
Name of Customer: CLEVELAND PUBLIC POWER 2.
Location of point of receipt: CEI's existing interconnect with the Ohio Power Company.
3 Description of electricity: Electricity received from supplying utility will be three phase, 3 wires, alternating current of approximately 60 Hertz, at a nominal voltage of 345,000 volts.
4.
Demand reservation:
30,000 KW originating from EK 5.
Metered voltage:
138,000 volts 6.
Location of meter:
CPP/CEI interconnections 7.
Effective date:
August 11, 1995 8.
Reservation period: January 1, 1996 0001 to December 31, 1996 2400 (hours ending).
9.
Provisions for special facilities or conditions:
In Witness Whereof, CEI and Customer have each caused this Exhibit A to the Service Agreement for Provision of Transmission Service to Municipalities and Rural Electric Cooperatives, dated August 11, 1995 to be executed in their names by their respective duly authorized of ficials on this August 11, 1995.
THE CLEVELAND ELECTRIC CLEVELAND PUBLIC POWER ILLUMINATING COMPANY W
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M /a d 4
By:
By:"
f
[/
[/JeromeW.
Salko v/ Manager Electric
/0/J//I System Operations D2te :
/
7-//~98 Date:
Issued by:
Richard A. Miller President Centerior Corporation
C1Gv31Gnd ElGctric Second Roviend Shact No. 9 Illumincting Comp ny FERC Elcctric Tariff Effcctiva: Octob3r 1, 1985 Original Vol. No 1 SERVICE AGREEMENT This Agreement made and entered into this August 11, 1995 by and between The Cleveland Electric Illuminating Company (CEI) and Cleveland Public Power (Customer).
WITNESSETH That in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree with each other as follows:
CEI shall provide transmission service in accordance with the terms and conditions of CEI's FERC Transmission Service Tariff, original Volume No.1, as the same may be amended from time to time in accordance with the specifications set forth on attached Exhibit A.
In Witness Whereof, CEI and Customer have caused this Service Agreement to be executed in duplicate in their names by their respective duly authorized officials, as of the. day and year first above written.
CLEVELAND PUBL C POWER Attest:
hwJ By:
~
Jerome fr'. Salko 1
/
Manager Electric Date:
bLU kh System Operations APPROVED:
THE CLEVELAND ELEC"I'RIC ILLUMINATING COMPANY
_ l By: y/ M f*
te: // ///Vf
/0l2 ff~
Issued By:
Richard A. Miller President Centerior Corporation
Cicvaltnd Elcetric Sacond Revis:d ShGot No. 10 Illuminsting Compcny FERC ElGctric Tcriff EffGetiva: Octob2r 1, 1985 l
Original volume No. 1 EXHIBIT A POINT OF RECEIPT AND SERVICE SPECIFICATIONS j
1.
Name of Customer: CLEVELAND PUBLIC POWER 2.
Location of point of receipt: CEI's existing interconnect with tne Ohio Power Company.
Description of electricity: Electricity received from 3.
supplying utility will be three phase, 3 wires, alternating current of approximately 60 Hertz, at a nominal voltage of 345,000 volts.
4.
Demand reservation:
50,000 KW originating from CGEE 5.
Metered voltage:
138,000 volts 6.
Location of meter:
CPP/CEI interconnections 7.
Effective date:
August 11, 1995 8.
Reservation period: January 1, 1996 0001 to December 31, 1996 2400 (hours ending).
9.
Provisions for special facilities or conditions:
In Witness Whereof, CEI and Customer have each caused this Exhibit A to the Service Agreement for Provision of Transmission Service to Municipalities and Rural Electric Cooperatives, dated 1995 to be executed in their names by their respective August 11, 1995.
duly authorized officials on this August 11, CLEVELAND PUBLIC POWER THE CLEVELAND ELECTRIC q
ILLUMINATING COMPANY By: M A t.,< J [
By:
Nov
~Jerome W. Salko v
g Manager Electric
/0 /1//9/~
System Operations Date :
/
/
}{-//-Yb Date:
Issued by:
Richard A. Miller President Centerior Corporation
Clovolcnd E10ctric SLcond Roviscd Shast No. 9 Illuminating comp ny FERC Elcctric Tariff Effectiva: Octobcr 1, 1985 Original Vol. No 1 SERVICE AGREEMENT This Agreement made and entered into this August 11, 1995 by and between The Cleveland Electric Illuminating Company (CEI) and Cleveland Public Power (Customer).
WITNESSETH That in consideration of the mutual covenants and agreements h: rein contained, the parties hereto covenant and agree with each cther as follows:
CEI shall provide transmission service in accordance with the terms and conditions of CEI's PERC Transmission Service Tariff, original Volume No. 1, as the same may be amended from time to time in accordance with the specifications set forth on attached Exhibit A.
In Witness Whereof, CEI and Customer have caused this Service l
Agreement to be executed in duplicate in their names by their respective duly authorized officials, as of the. day and year first above written.
CLEVELAND PUBLIC POWER Attest:
A4%x
!Al L __
s By:
e erome W. '$alko I
/
anager Electric h Oi 5
System Operations Date:
APPROVED:
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
// W By: M e:// / /V[
3; 9f NOTE: THIS SERVICE AGREEMENT IS BEING SUBMITTED UNDER PROTEST AND WITH FULL RESERVATION OF RIGHTS BY CLEVELAND PUBLIC POWER BASED ON THE SERVICE AGREEMENT EFFECTIVE JUNE 1, 1986 FOR THE TRANSMISSION OF NYPA POWER TO CPP AND THE PAST PRACTICE OF CEI SINCE THAT TIME.
Issued By:
Richard A. Miller President Centerioi Corporation
Clevaland Electric Sscond Revised Shoot No. 10 Illuminating Company FERC Electric Tarif f Effective: October 1, 1985 Original Volume No. 1 i
EXHIBIT A l
POINT OF RECEIPT AND SERVICE SPECIFICATIONS 1.
Name of Customer: CLEVELAND PUBLIC POWER 2.
Location of point of receipt: CEI's existing interconnect with the Pennsylvania Electric Company.
I 3.
Description of electricity: Electricity received from supplying utility will be three phase, 3 wires, alternating current of approximately 60 Hertz, at a nominal voltage of 345,000 volts.
4.
Demand reservation:
32,000 KW originating from NYPA 5.
Metered voltage:
138,000 volts 6.
Location of meter:
CPP/CEI interconnections 7.
Effective date:
August 11, 1995 8.
Reservation period: January 1, 1996 0001 to December 31, 1996 2400 (hours ending).
9.
Provisions for special facilities or conditions:
In Witness Whereof, CEI and Customer have each caused this Exhibit A to the Service Agreement for Provision of Transmission Service to Municipalities and Rural Electric Cooperatives, dated August 11, 1995 to be executed in their names by their respective duly authorized officials on this August 11, 1995.
THE CLEVELAND ELECTRIC CLEVELAND PUBLIC POWER ILLUMINATING COMPANY Als-,<.4. f b By:
I By:
Jerome W. Salko v
g Manager Electric
/o/2//#
System Operations Date :
/
9-//-9I Date:
NOTE: THIS SERVICE AGREEMENT IS BEING SUBMITTED UNDER PROTEST AND WITH FULL RESERVATION OF RIGHTS BY CLEVELAND PUBLIC POWER BASED ON THE SERVICE AGREEMENT EFFECTIVE JUNE 1, 1986 FOR THE TRANSMISSION OF NYPA POWER TO CPP AND THE PAST PRACTICE OF CEI SINCE THAT TIME.
Issued by:
Richard A. Miller President Centerior Corporation
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ArrACID4ENT 6 h
UNITED STATES OF AMERICA i
BEFORE THE j
FEDERAL ENERGY REGULATORY COMMISSION City of Cleveland, Ohio
)
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Docket No. EL93-35 000 j
)
i The Cleveland Electric
)
i Illuminating Company
)
i APPLICATION OF i
CLEVELAND ELECTRIC ILLUMINATING COMPANY FOR REHEARING OF ORDER ISSUED JUNE 9,1995 Pursuant to Rule 713 of the Federal Energy Regulatory Commission's rules of i
i practice and procedure, the Cleveland Electric Illuminating Company ("CE" or " Company")
i
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hereby requests that the Federal Energy Regulatory Commission ("FERC* or " Commission")
grant rehearing and modify its Order Directing Interconnection and Denying Complaint issued in this proceeding on June 9,1995 (the " June 9 Order") insofar as that order directs j
i CE to provide a fourth interconnection between its electric system and that of the City of Cleveland, Ohio (" City") and to file with the Commission certain materials pertaining to such l
fourth interconnection.
I.
INTRODUCTION I
CE is an electric public utility subject to the Commission's jurisdiction under Part II t
of the Federal Power Act which operates electric generadon, transmission and distribution i
factlities for the purpoes of providing electric service in northeastern Ohio, including the City.
'Ihe City operates a ma=W:=1 electric system within CE's control area for.the purpose of providing electric service to certain customers who reside within the City. CE is 1
presently interconnected with the City's electric system at three 138 kv interconnection points that are operated in parallel and have a total capacity of approximately 300 MVA. CE engages in interconnected system operations with the City pursuant to an Agreement for Installation And Operation of a 138 KV Synchronous Interconnection between CE and the City dated April 17,1975, as am mded (CE Rate Schedule FERC No.12) (the "CE-City Interconnection Agreement").
De three existing interconnections between CE and the City are more than ample to-serve the maximum loads imposed by the City over those interconnections in a reliable manner.' Nevertheless, on April 22,1993, the City filed a complaint in this i,iMing in which it requested the issuance of an order directing CE to establish a fourth point of int Won between the CE and City electric systems (the " Complaint"). The City alleged in part that CEI was obligated to establish such additional interconnection point as result of (a) a letter dated September 19,1985 from Robert M. Ginn, then Chairman of the Board of CE, to the Mayor of the City of Cleveland (the 'Ginn Latter"), (b) an agreement dated October 18,1985 among Toledo Edison Company (" Toledo Edison"), CE and American Municipal Power-Ohio, Inc. (' AMP-Ohio") (the " AMP-Ohio Agreement"), and (c) a license condition adopted by the Nuclear Regulatory Commission in na Toledo Edison comrav and ne c1=4.ad h*ie niumissn. cama =av,10 NRC 265 (1979) and incorporated in licenses issued to CE for ownership of certain nuclear power plants (the "NRC License Condition *).
1.
De total transfer capacity of those interconnections as specified in the CE-City Interconnection Agreement is 300 MW. 'the City's peak load in 1994 was approximately 210 MW.
2
Commission erroneously assumes in the June 9 Order that the City has made such a r (June 9 Order at 13).
Since the Complaint was submitted to the FERC, it cannot be considered to be a request InfJil for establishment of an addidonal interconnection. Moreove is void of many of the essential details pertinent to establishment of an additiona Dere is no evidence in this interconnection which must be included in any such request.'
proceeding of any other request for an interconnection which might support Commission's finding that the City has complied with the condition ph.t to establishment of any interconnection pursuant to the AMP-Ohio Agreement CEI a reasonably detailed request for a fourth point of interconnection in w the nature and character of the interconnection that it is seeking. For these r Commission's finding that the City had made a request to CE for an inter supported by substantial evidence and must be reversed
'j De FERC Erroneously Found Dat NRC License Condition Confers U he City The Dieht To A Fourth Inim.rwh With CEL 4.
De NRC License Condition obligates CE, inter.Alia, to:
offer interconnections upon reasonable terms and conditions at any other electric entity (ies) in the CCCT, such interconne (with due regard for any necessary and applicable safety pro De Commission has recognized in Section 2.20 of its regulatio Power Act that a good faith request for transmission services 7.
bi the character and nature of the services being requested so that the requested to provide such services may properly evaluate section is not directly applicable to this proceeding, the princip request to a regulated utility incorporate pertinent details a character of the request should not be ignored.
18
operation in a closed-switch synchronous operating mode if requested by the interconnecting entity (ies). (emphasis added) l In a crypdc and nanowly written discussion, the Commission stated in the June 9 4
N 4
For ournoses o5 Cleveland's M1ine here, NRC Licensing Condition No. 2 describes conditions under which CEI is bound to provide an interconnection to Cleveland, i,L, upon request by Cleveland in exchange for the NRC's approval of the licenses. Cleveland has, in fact, made such a request. As such, riven the facts of thin e== includine the close nasus heresa NRC r trentine conditian No. 2 and the martses at iaen* here, we likewise will direct CEI to fue NRC Licensing Condidon 2 pursuant to section 205(c) of the FPA, and, consistent with that condition, to file a proposed interconnection agreement. (emphasis added)
Enforcement of nuclear plant license conditions is subject to the jurisdiction of the Nuclear Regulatory Commission, not this Commission. As CEI noted in its response to the Complaint (CEI Response To Complaint At 11):
FERC does not have authority under Sec. 205 of the FPA to interpret or enforce conditions established by another agency which are not incorporated in a rate schedule on file with FERC. While having jurisdiction to regulate reasonable implementation of these licensing conditions, FERC has no jurisdiction to enforce those conditions. See ne Cleveland 51actric tiluminatine cr.,7 FERC 163,030 (1979), Mod. in Part at 11 FERC 161,114 (1980). In Nesh r'arolins Facm Municinal Power Ananev. 57 FER 161,372 (1991), FERC denied a motion to have filed with it the NRC antitrust Ucense conditions, reasoning, based on its decision in Florida Power & T isht, 30 FERC 161,230 (1985), that the conditions are public informadon and the licensee's obligations are not affected by whether or not the conditions are fUed.
The FERC did not promulgate the license condition at issue in this case, and therefo has no basis for attempting to impute meaning to that condition. Rather, this license condition was promulgated by the Nuclear Regulatory Commission pursuant to of the Atomic Energy Act of 1984, as amended. Implementation of the Atomic Energy A 19
is beyond the FERC's jurisdiction, and the FERC has no basis for usurping the NRC's statutory authority.
Moreover, the NRC License Condition is similar to nuclear plat license conditions made applicable to numerous utilities during the 1970s and early 1980s. Because these i
license conditions do not constitute rate schedules, the FERC has not as a general matter required that such license conditions be filed pursuant to Section 205 of the Federal Power Act. See, u, North Carolina htem Municinal Power Arenev v. Camlina Power & Light Comoany, sma,57 FERC at 62,252-62,254 The mere fact that the City requested an order directing CEI to provide a fourth point of interconnection in which it alleged, intgr alia, that failure to establish such an interconnection was a violation of that license condition cannot give the FERC the statutory right to assert jurisdiction over that license condition.
Accordingly, to the extent that the grant of relief in tb June 9 Order was justified on the basis of the NRC licensing conditions, it was beyond the FERC's jurisdiction and must be reversed.
The June 9 Order further assumes that there has been a request for an additional point of interconnection that was given to CEI pursuant to the NRC License Condition. On the contrary, as discussed above with respect to the AMP-Ohio Agreement, there has been no such request. It is therefore evident that, once again, the condition precedent to establishment of any point of interconnection pursuant to the NRC License Condition has not been met.
20
with respect to establishment of a fourth interconnection, it is not consistent with the terms of CEI's contractual commitments.
Accordingly, before the submittal of any compliance filing can be required by the Commission, it is essential that the Commission modify the June 9 Order in order to set forth clearly and unambiguously what is required for compliance with that order, and that any such requirement conform to the intent of the parties as reflected in the Ginn Letter, the AMP-Ohio Agreement and the NRC License Condition.
WHEREFORE, for the reasons set forth herein, CEI respectM1y requests that the Commission grant rehearing and modify the June 9 Order insofar as that order purports to require that CEI submit a filing to the FERC for establishment of a fourth point of interconnection between the CEI and City electric systems in the west side of Cleveland.
Respectfully submitted, i
CLEVELAND ELECTRIC ILLUMINATING COMPANY 4
M'7M By
/ James K. Mitchell Reid & Priest LLP 701 Pennsylvania Avenue, N.W.
Washington, D.C. 20004 (202) 508-402 Michael C. Regulinski Centerior Energy Corporation 6200 Oak Tree Boulevard Independence, Ohio 44131 (216) 447-2191 Its Attorneys July 7,1995 26
~
l l
CERTIFICATE OF SERVICE I hereby certify that I hava served the foregoing document upon each person designated on the official service list compiled by the secretary in this proceeding.
Dated at Washington, D.C. this 7th day of July, 1995.
m f /b.d/E.Y ames K. Mitchell
- Reid&PriestLLP 701 Pennsylvania Avenue, N.W.
Washington, D.C. 20426 i
(202) 508-4002 i
1 of Counsel for l
Cleveland Electric Illuminating company I
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ATTACHMENT 7 t
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1 CENTERIOR ENERGY CORPORATION CENTERIOR DISPATCH OPERATING AGREEMENT April 1987 1
1 i
i l
Issued By:
The Canterior System Engineering & Opera-tions Department l
J
This document lists the guidelines for the Centerior Dispatching operation including economic loading of generating units and power transactions with other utilities.
Y 7
Approved By:
Date HM/. Williams Executive Vice President Engineering & Operations Centerior Service company A7/T 7
/fDf#
Date W.D. Masters Vice President System Engineering &
Operations Centerior Service Company
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Date Y' Al * $ l J
Tanker S
r vice President l
sering & Operations The Cleveland Electric Illuminating company Y/2 Eff)
Yfk. a-Date R.P. Crouse Sanior Vice President Engineering & operations The Toledo Edison Company
.==a -
i CENTERIOR DISPATCH QPERATING AGREEMENT Descrintion of ' Parties 4
Centarior Energy Corporation ("CENTERIOR") through Centarior Service Company has undertaken activities to perform coordinated dispatch of the electrical facilities of The Cleveland Electric i
Illuminating Company ("CEI") ar.d The Toledo Edison Company
("TE").
The term " Operating Companies" refers to CEI and TE.
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Rour By Rour Transactions The guiding principle in making hourly transactions between the operating companies versus other utilities will be to minimize 1
total generation costs and maximize savings resulting from the combined Centerior operation.
All transactions between the operating Companies will be in accordance with and pursuant to a specific service schedule contained in the CAPCO Basic operating Agreement.
1.
In order to minimize the total generation costs of the operating Companies the following policies have been adopted.
a.
The Economy transactions as contained in the CAPCO Operating Agreement among CEI, TE, Ohio Edison Company, Duquesne Light company and Pennsylvania Power Company will be used.
b.
Incremental generation costs between the operating Com-panies will be compared with other utilities' costs and the most economic source shall be utilized.
c.
Normally, quotes shall be exchanged once an hour based on the forecasted load in the next hour.
l d.
For transactions between the Operating Companies, no min-imum spread constraints shall be required, after the ac-counting of third party losses on the Ohio Edison Company system.
e.
The operating companies shall strive for a o MW minimum power limit for transactions. The maximum power limits for transactions shall be the first contingency transmis-sion system capability of the CAPCO parties transmission systems.
f.
After the operating Companies dispatchers have determined the amount of power transfer required to equalize in-cremental generation costs, CEI shall notify CAPCO of this amount for operating and loss accounting purposes. A
Each Operating company Dispatch organization shall make all necessary contacts with non-Centarior operating Com-g.
panies for other hourly transactions.
One Day or tencer Transactions The guiding principle in making next day or longer transactions between the operating Companies versus other utilities will be to minimize total generation costs and maximize savings resulting All transactions between from the combined Centerior operation.
the operating Companies will be in accordance with and pursuant to a specific service schedule contained in the CAPCO Basic operating Agreement.
Next day transactions between the operating Companies will be based on a villing buyer, willing seller policy.
1.
CEI/TE shall initially charge the same demand charge for power sales to CEI/TE that is being offered to the other 2.
utilities.,,
If both operating Companies are potential power pur-chasers then the operating companies will always buy the j
3.
power for the lowest available cost.
If both the operating Companies are potential power sel-shall be 4.
lors, each company's selling price, and amount,The potential made available to all potential buyers.
buyers shall have the option of selecting either operat-ing Company as the power seller.
If one operating Company is.a potential buyer and the 5.
other a potential seller than the operating Company that is in the buying position shall always buy the most economic power available whether from the other operating If the Operating Company Company or another utility.
sale price is equal to the other competitors, the operat-ing Company supplier shall be selected.
Ronrovals The' dispatching elements of the operating Companies shall have the responsibility to approve all non-pass thru pur-1.
chases of one day er less and non-pass-thru sales of 1 week They will also approve all pass-thru transactions or less.
of one week or less.
The head of Centerior System Engineering and operations will have the responsibility of final approval on all non-pass-2.
thru interconnection purchases of more than one day and up to and on all non-2 weeks (not to exceed 200 MW's)
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I pass-thru sales of more than one week and up to 2 weeks (not to exceed 200 MW's).
He will also have the responsibility of final approval on all pass-thru interconnections transactions of more than one week.
3.
The head of Centerior Engineering and operations shall have i
the responsibility of final approval on all non-pass-thru in.
terconnections transactions that (1) involve more than 200 MW's for 1 week or longer or (2) exceed 2 weeks in duration.
,4.
Interconnection transactions include those involving OVEC and municipal electric systans.
Pricina All_ interchange between the operating Companies will be priced immediately above internal load and Senees pumping costs unless
. such pricing does not result in minimizing total generation costs and maximizing savings from the combined Centerior operation.-
i Emercenev Power / Reliability of Short Term Power operating Companies will assign highest priority to provide each other emergency power.
An operating Company will terminate an existing emergency supply to an outside utility in order to honor a request for emergency power from an Cperating Company.
operat-ing companies will assign highest priority to' provide each other Short Term Power.
In particular an Operating Company shall ter-i ainate short Term Sales to other utilities before terminating such sales to the other operating company.
I Mechanism for Solvine Problems Responsibility for resolving differences of opinion between the dispatching elements of the operating Companies concerning economic dispatch operations and interconnection transactions shall belong to the head of Centerior System Engineering and operations. If problems arise concerning Centerior dispatching l
the matter should be referred for resolution to the following three elements: Superintendent, System operations Department or his alternate from Toledo, General Supervisor, System Dispatching Section or his alternate from The Cleveland Electric Illuminating Company, and Manager, Systems operations Coordination or his al-ternate from Centerior.
If a mutually agreeable solution cannot be reached, the head of Centerior System Engineering & Operations will settle the disputes after hearing the respective arguments. -.
Pertinent Documents and Acreements Dispatching operation will recognize and consider the following:
CAPCO Basic Operating Agreement As Amended CAPCO Transmission Agreement Memorandum of Understanding and Agreement Dec. 19, 1985 (Regarding Centerior use of CAPCO transmission)
ECAR Document #2 (Daily Operating Reserve)
NERC Operating Guides and Minimum Criteria for Operating Reliability
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MEMORANDUM OF UNDERSTANDING and AGREEMENT 1
WHEREAS, The Cleveland Electric Illuminating Company 4
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("CEI"), Duquesne Light Company ("DL"), Ohio Edison Company ("0E"),
Pennsylvania Power Company ("PP") and The Toledo Edison Company ("TE")
cre members of the Central Area Power Coordination Group ("CAPC0");
l cad WHEREAS, CEI and'TE propose to become affiliated under a holding company structure wherein each would be the wholly owned j
subsidiary of a common parent and propose after that affiliation to make use for their benefit of certain transmission facilities which are owned in part by CE but which are subject to the CAPCO h
crrangements (the "0E CAPCO Lines"); and i
WHEREAS, CEI, OE and TE are concerned that questions may i
crise after the proposed affiliation as to what is a permissible l
use of the OE CAPCO Lines by CEI and TE and wish to clarify the Gatter in advance for their mutual benefit and in order to enable CEI and TE to formulate definitive plans for the operation of their l
olectric generating and distribution systems after their proposed affiliation is accomplished; and i
WHEREAS, DL and PP could in the future be affected by any precedent established as a result of the use of the OE CAPCO Lines CEI and TE after their proposed affiliation is accomplished if by such use is alleged to be a permissible use under the CAPCO arrangements.
!!O'd, THEREFORE, the par-ies acrec as follows:
(1)
That any use that CEI and TE cight cake of the OE CAPCO Lines would be improper unless such use was permissible under the CAPCO arrangements and that the CAPCO arrangements as they pesantly exist would permit CEI and TE to make use of the OE CAPCO lUnes after their proposed affiliation only if such use is specified in a Schedule contained in the CAPCO Basic. Operating Agreement dated as of September 1, 1980, as amended, or to obtain (each for itself to its own ownership intere'st and not for the other) their i ts evnership share of power generated by generating units designatad as
'4PCO Units under the CAPCO Basic Operating Agreement, and not other-
.Ase; and CEI and TE, intending to be legally bound and in order to induce OE to for= ally acknowledge in advance the permissible scope uder the CAPCO arrangements of their use of the OE CAPCO Lines after their proposed affiliation, agree that after their proposed I
affiliation is accomplished, any use by them or for their benefit of the OE CAPCO Lines that is not a use specified in a Schedule contained in the CAPCO Basic Operating Agremeent or to obtain their ownership
< hare of power as described above from a CAPCO Unit (hereafter called
" Additional Use").would be improper, would not be permissible
.4 uder the CAPCO arrangements as they presently exist and will be made only after consultation with all of the CAPCO parties, and after appropriate amendments to the CAPCO Basic Operating Agreement have been entered into or other arrangements have been made to permit the Additional Use being contemplated.
Any amendments to the CAPCO Basic Operating Agreement or other arrangements that are entered into for i the purpose of permitting an Additional Use shall take into account i
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3 tho extent of tho interfarence or burden that will be imposed upon any CAPCO. Party as the result of such Additior.al Use, and the Parties hereto agree that they will negotiate in good faith and on a reasonable basis to effectuate such amendments or other arrangscents in order to permit any Additional Use that CEI and TE may request.
CEI and TE specifically agree that any use of the OE CAPCO Lines to facilitate the operation of the CEI system (i.e., that part of the CEI-TE systems situated north and east of OE's service area) cnd the TE system (i.e., that,part of the CEI-TE systems situated west of OE's service area) as a single control area would be such cn Additional Use.
(2)
In the event of any conflict between the terms of this Memorandum of Understanding and Agreement and any other CAPCO agreement or agreements previously entered into by and among the CAPCO Companies, the provisions of this Agreement shall prevail.
IN WITNESS WHEREOF, the CAPCO Parties have caused this H;morandum of Understanding and Agreement to be duly executed as of the 19th day of December 1985.
THE CLEVELAND ELECTRIC ILLUMIN-CHIO EDISON COMPANY ATING COMPANY j
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By S'Etle': Ch rman of the Board 6 TQ P de DUQUESNE LIGHT COMPANY PENNSYLVANIA POWER COMPANY By T #/ bfI W By Title <:
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Washington, DC 20426 Res city of cleveland, Ohio v. The cleveland Elaetria Illuminating Comoanyt FERC Docket No. EL93-35-000-
Dear Ms. Cashell:
This proceeding involves a complaint filed by the City of Cleveland, Ohio (the " City")'against The Cleveland Electric Illuminating Company ("CEI" or the " Company") in which the City alleged, inter alia, that CEI was obligated by certain agreements into which it had entered to establish a fourth physical interconnection between the CEI electric system and the
, City's municipal electric system. In an order Directing Interconnection and Denying Complaint issued June 9, 1995 (the
. June 9 order"), the Commission agreed with the city's i
allegation.
It therefore directed CEI to provide a fourth l
interconnection with the City and "to file with the Commission j
its proposed charge for making the fourth interconnection within 120 days of the date of this order."
i on July 7, 1995, CEI filed a timely application for i
rehearing of the June 9 order in which it noted that the 4
documents relied upon by the cousaission in its June 9 order failed to delineate many essential engineering details that are pertinent to establishment of an additional point of i
interconnection.
Among the issues that must be resolved before j
an additional point of interconnection can be established and j
before the charges for the establishment of the interconnection l
can be determined are the location of the interconnection, the voltage at which the interconnection will operate, the facilities to be installed by each of the parties, and the i
modification or reinforcement of existing facilities that may become necessary as a result of the interconnection.
The June 9 order also left unresolved issues relating to ocupensation.
CEI i
j advised the Commission that until these issues were resolved, it could not make a compliance filing with confidence that it complied with the Commission's mandate.
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Dockot N3. ELs3-35-000 Octobar 9, less i
4 On August 1, 1995, the Commission granted rehearing of the June 9 Order for the purpose of affording itself additional time in which to consider the issues raised in CEI's application for rehearing.
No further action has been taken by the Commission since that time.
Accordingly, the issues identified in CEI's application for rehearing of the June 9 Order remain unresolved.
Without further clarification from the Commission rege.rding the issues identified in CEI's application for rehearing of the June 9 Order, CEI cannot be expected to develop a proposed charge for making the FERC-directed fourth interconnection or otherwise prepare a compliance filing with confidence that it conforms with the mandate of that order.
While awaiting clarification and instruction from the Commission, on June 30, 1995,. CEI suggested to the City that it would be more practical and efficient to incorporate an evaluation of a potential fourth interconnection into another closely related study which CEI was already performing for the City to evaluate their request for transmission service for the period 1996 through 2003.
On July 13, the City requested CEI to prepara an Engineering Studies Agreement to evaluate a fourth point of interconnection as recently proposed by the City and instructed CEI to perform this study separately and distinct from the transmission service study which was underway.
Although CEI was somewhat surprised by the City's reluctance to merge the studies, CEI issued an Engineering Studies Agreement to the City on' July 21, 1995 under which Centerior, as the agent for CEI, would perform the studies requested by the City that may be appropriate to evaluate the construction of a proposed fourth interconnection.
At this opportunity, the Company also requested electrical diagrams showing the City's desired point of interconnection with the CEI transmission system and detailed power flow data for the City's existing transmission system in order to update CEI's engineering databases.
To date, the parties have entered into an Engineering Studies Agreement pursuant to which CEI is evaluating the engineering feasibility of a fourth point of interconnection as proposed by the City at CEI's Fox substation.
As requested by CEI, the City has provided CEI with electrical diagrams and power flow data which are necessary to enable CEI to model the electrical characteristics of the City's proposed expanded system.
CEI has also presented the City with two supplemental requests for data.
The City has responded to the first supplemental request and CEI anticipates the City's response to the second request in the near-term to support timely continuation of the study.
CEI has informed the City that a meeting between the parties to discuss the technical aspects of the proposed interconnection would be productive once CEI has prepared its model of the City's system.
CEI has also informed _.
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