ML20126A928

Second Set of Interrogatories & Requests for Production of Documents.Requests Whether Listed Documents Were in Central & Southwest Corp Possession.List of Documents to Be Produced & Certificate of Svc Encl

ML20126A928
Person / Time
Site:	South Texas, Comanche Peak
Issue date:	02/20/1980
From:	Poirier M TEXAS, STATE OF
To:	CENTRAL & SOUTH WEST CORP.
References
NUDOCS 8002270100
Download: ML20126A928 (124)

Text

{{#Wiki_filter:.. l l 4fo i l-l UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before The Atomic Safety And Licensing Board l In the Matter of ) Docket Nos. 50-498A HOUSTON LIGHTING AND POWER CO., et al ) 50-499A (South Texas Project, Units 1 and 2) ) ) TEXAS UTILITIES GENERATING COMPANY, ) Docke t Nos. 50-445A (Comanche Peak Steam Electric Station, ) 50-446A Units 1 and 2) ) SECOND SET OF INTERROGATORIES AND REQUESTS FOR PRODUCTION OF DOCUMENTS ADDRESSED TO CENTRAL AND SOUTH WEST CORPORATION BY THE PUBLIC UTILITIES BOARD OF THE i CITY OF BROWNSVILLE, TEXAS The Public Utilities Board of the City of Brownsville, Texas ("Brownsville" or " PUB") hereby submits additional interrogatories and requests for production of documents to Central and South West Corporation ("C&SW") and its sub-sidiaries. 1. With respect to each document noted on Attachment A please respond to the following questions: a. Is the document now in the files of C&SW? If so, please produce all documents in the file in which the document is located. b. If the document is not in C&SN's ' files, has it ever been in these files? If so, please produce all documents in the file in which the document is located. c. (1) If the document is not now is C&SW's files and once was, please describe what happened to the document (lost, destroyed, etc.) and the date when it ceased to be in the files. i U O O2~o n0 /ct), e ' Q.

T... i 1 (ii) Describe all C&SW policies relating to maintenance of files and other records, including policies pursuant to which the docu-ment is no longer in the files, and provide copies of all such written policies. (iii) Identify all persons in any way respon-sible for removing, destroying, etc., the docu-ment. d. Describe all C&SW policies for maintenance of files and other records in effect as of the date of the docu-ment, and provide copies of all such written policies, e. Has the document been produced to any part'y 'in this or any related proceeding? Identify each such occasion, including the party, the proceeding, and the date of production. 2. Provide all whole or partial indices of the subject matters or headings or titles of C&SW's files and other l documentary records, from 1954 to date. l-3. Identify all persons responsible for the main-tenance of C&SW's files and other documentary records, from-1954 to date. 4.- Please produce all files containing documents referring to the City of Brownsville, or to the Public Utilities Board of the City of Brownsville, including but l

1-3.not limited to all files referring to Brownsville or the PUB in the name, title, or subject matter. 5. Please produce all files containing documents referring to the City of San Antonio, or the City Public 1 Service Board of the City of San Antonio. l 6. Please identify all persons who in any way aided in preparing the previous production of documents to l Brownsville, and describe the extent of each person's knowledge. 7. Please identify each person who in any way par-ticipated in the preparation of responses to this set of interrogatories and document requests, including a description of the extent of each such person's par-ticipation. INSTRUCTIONS AND DEFINITIONS 1. For purposes of this Second Set of Interrogatories and Requests for Document Production only, Central and South West Corporation ("C&SW") shall be defined to include all past and present parent, affiliated, and subsidiary companies of C&SW, including but not limited to CSR Services Co., but shall not include Central Power and Light Company, West Texas Utilities Company, Public Service Company of Oklahoma, and Southwestern Electric Service Company.

L , 2. The period of time for which responses and docu-ments are requested is from January 1,1954 to the pre-sent. 3. In all other respects, the instructions and defini-tions set forth in the Schedule for Production of Documents by Central & South West Corporation (attached) should be followed. Respectfully submitted, MG ofg Marc R. Poirier Attorney for the Public Utilities Board of the City of Brownsville, Texas Law Offices Of:, SPIEGEL & MCDIARMID 2600 Virginia Avenue, N.W. Suite 312 Washington, D.C. 20037 February 20, 1980 l

1 ~' Attachment A LIST OF DOCUMENTS 1. December 18, 1973 letter from P. H. Robinson (HL&P) to T. L. Austin, Jr. (TU), copy to Mr. Si Phillips (C&SW); subjects admission of the public sector to TIS, in connection with nuclear licensing. 2. September 18, 1967, J. M. Wilson (Central Power & Light) to R. McClanahan (Middle West Service Co.), copy to S. B. Phillips and F. J. Herr (C&SW); subject: takeover by purchase of Brownsville municipal electric system. 3. September 15, 1967, E. S. Joslin (CP&L) to Si Phillips (C&SW); subjects memo by B. M. Davis (CP&L) concerning attempt of American Metals Climax to build a plant in Brownsville. 4. September 13, 1967, R. McClanahan (Consultant to CP&L and C&SW) to J. M. Wilson (CP&L), copies to S. B. Phillips and F. J. Herr (C&SW); subject: takeover by purchase or lease of Brownsville municipal system. 5. September 8, 1967, J. M. Wilson (CP&L) to R. McClanahan (Middle. West Service Co.), copy to S. B. Phillips (C&SW); subject: takeover by CP&L of Brownsville municipal electric system. 6. September 7, 1967, Carl Sandeen (Middle West Service Co.) to E. S. Joslin (CP&L), copies to S. B. Phillips and F. J. Herr (C&SW); subject: effect on tax of CP&L takeover of Brownsville municipal electric system. 7. September.5, 1967, R. McClanahan (Middle West Service Co.) to E. S. Joslin (CP&L), copies to S. B. Phillips and F. J. Herr (C&SW); subject: " Purchase Lease Plan" for CP&L takeover of Brownsville municipal electric system; possibility of installing 150 MW plant at Brownsville. 8. July 27, 1967, B. M. Davis (CP&L) to R. L. Johnson (Middle West Service Co.), copy to Mr. S. B. Phillips (C&SW); subject: study for takeover by CP&L of Brownsville municipal electric system. 9. March 2, 1967, R. L. Johnson (Middle West Service Co.) to S. B. Phillips (C&SW); subject: takeover by CP&L of Brownsville municipal electic system. 10. February 9, 1967, R. L. Johnson (Middle West Service Co.) to E. S. Joslin (CP&L), copy to S. B. Phillips, (C&SW); subjects minimum offer for Brownsville property.

t_. e-11. December 27, 1966 B. M. Davis (CP&L) to R. B. Phillips (C&SW); subject: Brownsville citizens' petition for referen-dum to abolish Public Utilities Board. 12. December 6, 1966, R. L. Johnson (Middle West Service Co.) to S. B. Phillips, Jr. (C&SW); subject: different methods for CP&L takeover of Brownsville municipal electric system. 13. September 16, 1966, R. B. Phillips (C&SW) to B. M. Davis (CP&L); subject: generally, acquisition of municipal systems, including lease method; ideas from Edison Electric Institute. 14. September 13, 1966, B. M. Davis (CP&L) to R. B. Phillips (C&SW) enclosing materials; subject: CP&L takeover of Brownsville municipal electric system. 15. September 9, 1966 meeting in memo to B. M. Davis (CP&L), S.B. Phillips, Jr. and R. B. Phillips (C&SW) were present; S. B. Phillips is supposed to have material on CP&L takeover of Brownsville municipal electric system. 16. July 22, 1966, H. E. Nissel (Middle West Service Co.) to E. S. Joslin (CP&L), copy to F. Herr (C&SW); subject: PUB pro-posal for Harvey Aluminum Incorporated. 17. February 7,

1966, E.

S. Joslin (CP&L) to R. B. Phillips ( C& SW) ; subject: takeover of Brownsville municipal system. 18. February 3, 1966, R. B. Phillips (C&SW) to E. S. Joslin (CP&L); subject: meeting on "Brownsville situation" with CP&L. 19. January 31, 1966, R. B. Phillips (C&SW) to E. S. Joslin (CP&L), copy to S. B. Phillips (C&SW); subject: purchase price for acquisition by CP&L of Brownsville municipal electric system [ NOTE: The conclusion is that takeover may not be economically feasible, but nevertheless it has advan-tages to CP&L because Brownsville is growing faster than CP&L, is a natural for industrial development, and because purchase would eliminate a large strategically located muni-cipal operation.] 20. January 28, 1966, R. B. Phillips (C&SW) to E. S. Joslin (CP&L); subjects draft of memo on price for purchase by CP&L of Brownsville municipal electric system. 21. July 2, 1965, E. S. Joslin to Ygnacio Garza (BND), copy to John S. Osborne (C&SW); subject: meeting about CP&L expansion in Port area.

L r 22. June 23, 1965 memo to B. M. Davis (CP&L); subject: CP&L/Brownsville Navigation District meeting about service to Port; John S. Osborne (C&SW) attended. 23. August 28, 1963, J. S. Osborne (C&SW) to J. Harris Ward (Commonwealth Edison); subject: CP&L takeover of service to Union Carbide. 24. August 16, 1963, E. S. Joslin (CP&L) to J. S. Osborne (C&SW); subject: CP&L takeover of service to Union Carbide and other industries served by Brownsville. 25. July 31, 1963, E. S. Joslin (CP&L) to W. P. Barnard (PUB), copy to J. S. Osborne (C&SW); subject: Brownsville service to CP&L customers pursuant to expansion of city limit; new power plan by Brownsville; service to industrial customers in Port of Brownsville. 26. July 20, 1963, E. S. Joslin (CP&L) to J. S. Osborne (C&SW); subject: CP&L takeover of service to Port of Brownsville; CP&L service to Union Carbide. 27. July 3, 1963, W. P. Barnard (PUB) to E. S. Joslin .(CP&L), copy to J.S. Osborne (C&SW) (letter shows Osborne is President of CP&L, obviously an error); subject: Brownsville takeover of CP&L customers pursuant to expansion; new Brownsville power plant; service to industrial customers contract. 28. Oc tober 29, 1962 F. J. Herr (C&SW) to Dwight Carlson (CP&L); subject transfer of Del Rio properties. 29. October 26, 1962 J. L. Bates (CP&L) to Leon W. Hill ( Bureau of Reclamation), copy to J. S. Osborne (C&SW); subject: draf t contract for CP&L purchase of Falcon power. 30. October 26, 1962, J. L. Bates (CP&L) to J. S. Osborne (C&SW); subjects refers to avoiding FPC jurisdiction in contract for purchase of Falcon hydroelectric power. 31. December 5, 1961, J. L. Bates (CP&L) to John C. Thompson (Bureau of Reclamation), blind copy to J. S. Osborne (C&SW); subjects cate for power purchase from Falcon project. 32. December 1, 1961, J. L. Bates (CP&L) to J. S. Osborne (C&SW); subject: rate proposal from Bureau of Reclamation, probably for Amistad power. 33. November 16, 1961, Lon C. Hill (CP&L) to J. S. Osborne (C&SW): subjects possible takeover by CP&L of San Antonio municipal electric system.

l L, e-i 5 _4 ~ 3 4. - November 16, 1961, Lon C. Hill (CP&L) to H. H. Dewa r, blind' copy'toLJ. S. Osborne (C&SW); subject: relating to takeover of San Antonio municipal electric system.

35. ' November 9, 1961, H.

H. Dewar to Lawrence E. Hill (CP&L);' subject: advertising comparing San Antonio municipal i cates to private utility rates (says why don' t you talk this over with John Osborne; "the possibility of redeeming San i 4 Antonio from private ownership is very far from dead."] 36. June 17, 1960, Keith R. Cardey (CP&L?) to J. S. Osborne (C&SW); subject: rate to Brownsville. ) J L 37. June 1, 1960, J. L. Bates (CP&L) to J. S. Osborne I (C&SW);. subject: rates for sale of power to Brownsville. 38. May 9, 1960, J. L. Bates (CP&L) to Reynaldo Garza, copy to J. S. Osborne (C&SW); subject; creation of PUB by amend-ment to City Charter. 39. February 16, 1960, J. M. Wilson (CP&L) to R. D. Stevenson, copy to J. S. Osborne (C&SW); subject: preventing creation of Brownsville Public Utilities Board. 40. February 8, 1960, J. L. Bates (CP&L) to J. S. Osborne (C&SW); subjects effect of creation of Brownsville Public Utilities Board on CP&L service area. a 41. January 9, 1960, J. L. Bates (CP&L) to J. S. Osborne (C&SW); subject: creation of Public Utilities Board in Brownsville. ) 42. June 9, 1959, William C. Cunningham (CP&L) to R. M. Winsborough (Middle West Service Co.), copy to J. S. Osborne ] (C&SW); subject: dissatisfaction of Brownsville citizens with municipal' electric system. 43.- January 29, 1958 f rom Mr. Carlton (CP&L) to Mr. Osborne (C&SW); subject: CP&L purchase of power from Falcon Dam and from Mexican share of Falcon. 44. November 8,

1957, J.

M. Wilson (CP&L) to George E. Bailey, copy to J. S. Osborne (C&SW); subject; acquisition of Brownsville municipal electric system. 45. January 23, 1957, J. L. Bates (CP&L) to William M. Longman (Central Surveys), blind copy to J..S. Osborne (C&SW); subjects survey of citizens of Brownsville on'munici-pal v. private ownership of electric system.

-t

• 46.

January 23, 1957, J. L. Bates (CP&L) to John S. Osborne (C&SW); subject: lease purchase by CP&L of Brownsville muni-cipal electric system; survey of citizens of Brownsville. 47. June 22, 1956, J. L. Bates (CP&L) to J. S. Osborne (C&SW); subject: takeover by purchase by CP&L of Brownsville -municipal electric system. 48. October 1, 1954 contract between United States of America and CP&L (Falcon), copy marked return to John Osborne (C&SW). 49. September 28, 1954, J. L. Bates (CP&L) to Leonardo de Lozanne (CFE), blind copy to J. S. Osborne (C&SW); subject; CP&L purchase of Mexican share of Falcon power. l l l L

8-, Attachment B 'l - - - ~ ' ~ INSTRUCTIONS ~ ~~ Unless otherwise specified the period of time for which documents are requested includes the entire period from January 1,1965 to the date on which documents are made available to Brownsville's representatives for inspection and copy ing. I J

4 J d. ~.-+.--s.. m 4b 1 e sa 4: u-y t o (a)- In the Matter of Houston ' Lighting & Power Co. et l al.-(South Texas. Project, Uni ts 1 and 2 ), NRC Docket Nos. 50-i 498A'and 50-499A; (b) In the Matter of Texas Utilities Generating Company (Comanche Peak Steam Electric Station, Units 1 and 2), NRC Docket Nos. 50-445A and 50-446A; (c). In the Matter of Central and South West Corporation, et al., SEC Administrative Proceeding File No. e-4951; .(d) West Texas Utilities Company, et al. v. Texas ' Electric Service Company, et al., No. CA3-76-0633F, United S tates District Court -(N. D. Texas, Dallas Div.); (e) In the Matter of the Emergency Hearing on f Intrastate and-Interstate Service of Texas Interconnected System, Docket No. 14, Public Utilities Commission of Texas. (f) Central Power & Light, et al._, FERC Docket No. .EL79-8. INSTRUCTIONS Unless otherwise specified the period of time for which documents are requested includes the entire period from January 1,1965 to the date on which documents are made available to Brownsville's. representatives for inspection and copy ing. lb. '

11 - Brownsville requests that the Keeper of the Records identify the specific request or requests to which each docu-C ment is responsive. Where possible, the Keeper of the Records is requested to maintain the integrity of CSW's filing and recordkeeping systems by producing together docu-ments responsive to this Subpoena, which are found together in the Keeper of the Records' files. If you claim that any document requested hereunder is privileged, with respect to each such document, please pro-vide the following: i (a) date; (b) type of document; (c) identity of author and addressee; (d) present location and custodian; 1 (e) any other description necessary to enable the custodian to locate the particular document; (f) the basis for the claimed privilege; and (g) a detailed description of the nature of any judi-cial protection alleged to be necessary to protect the privilege or confidential nature of any such doc ument. DEFINITIONS A. " Documents" mean all writings and records of every type in the actual or constructive possession, control, er custody of CSW, its directors, officers, employees, con-sultants, or agen ts, including but not limited to contracts, memoranda, correspondence, reports, surveys, tab ula tions, charts, books, pamphlets, photographs, maps, bulletins, minu-l- l 1

• j.

tes, notes, diaries, log sheets, ledgers, transcripts, micro-film, computer printouts, vouchers, accounting statements, (' telegrams and telegraphic communications, engineering diagrams (including "one-line diagrams"), mechanical and electrical recordings, records of telephone communications, speeches and all other records, ' written, electrical, mechani-cal, or otherwise. " Documents" shall also mean copies of documents, even though the originals thereof are not in the possession, custody, or control of CSW, and every copy of a document which contains handwritten -or other notations, or which in any other manner does not duplicate the original, or any other copy furnished pursuant to this request. " Communications" 'shall include, without limiting the B. generality of its meaning, all conversations between two or more persons either in person or by tr.lephene, all state-ments, speeches, declarations and comments, and shall include documents as defined in Definition A. above. C. " Person" shall mean any natural person, company, association, firm, corporation, cooperative, rural electric cooperative, municipality, joint stock association, or any political subdivision, agency or instrumentality of the federal, state, or municipal governments, or a lawful asso-clation of any of the foregoing, or any entity that produces, { generates, transmits, distributes, purchases, sells, or fur-nishes electricity. L 7

4 f. D. " Identify," when used with respect to documents, means that the type, author, recipient ( s) of the original, I recipient (s) of copies, date, and subject of the document should be specified. " Identify," when used with respect to communications means that the type of communication, maker of the com-munication, persons communicated to, persons for whom the communication was intended, date and subj ect of the com-munication should be specified. " Identify," when used with reference to any corporation, association, cooperative, or other legal entity, means to state the name and current address of said organization or entity; if the current address is unknown, provide the last known address. i " Identify," when used with respect to any person, means that the person's name, current business address (or current mailing address for persons now retired), current job title, and employer, should be specified. If the current address is unknown, please provide the last known address. Where more than one request in this series asks for identification of a document, communication, legal entity, or person, in response to the second and subsequent requests, please provide the name of a corporation, legal entity or person, or the date and author or maker of a document or ccm-munication, along with a reference to the response in which a full identificacion was provided. ( l

C. E. " Representative" shall be understood to include, without limiting the generality of its meaning, any director, g officer, employee, contractor, or consultant, of any person as defined in Definition C. above, who at a particular formal or informal meeting, or in a particular document or com-munication, appear to participate in the meeting, or in the making of or the receipt of the document or communication, en behalf of or as agent for, said person. Whether or not a representative has actual authority as an agent of the person is irrelevant to his or her status as a representative. F. " Relating to" or " relate" means consisting of, referring to, reflecting, or being in any way legally, logi-cally or factually connected with. Requests " relating to" a subject or item.should be understood to include possible or contemplated actions as to such subject or item. For example, a request for documents relating to interconnection plans would include documents relating to interconnection arrangements that have been considered but rejected. G. " Electric utility" means a private corporation, cooperative, rural electric cooperative, municipality, joint stock association, or any political subdivision, agency or instrumentality of federal, state, or municipal governments, or a lawful association of any of the foregoing that owns, controls, or operates, or proposes or is studying the possi-bility of owning, controlling, or cperating, facilities for the generation, transmission and/or distribution of electricity.

.~. E. " Transmission services" shall mean the undertaking by a utility to transmit power and/or energy for any other electric utility, whether the power and/or energy is generated by the first utility or by any other electric uti-lity. " Transmission services" shall 1so include the sale by a utility of transmission capacity without energy. " Transmission services" include wheeling. I. " Inte rconnec tion" shall mean the physical junction of the electric transmission systems of two or more electric utilities so that electricity may flow over the junction according to location of points of power generation and power usage, in the same manner as electricity flows over the lines of an individual electric system. A junction normally maintained in an epen position is considered an interconnec-tion. A junction by which a lower voltage system is joined to a transmission line through a transformer is considered an interconnection. " Interconnected operation" between two or more electric utilities shall mean a method of operation in which electri-l city flows over interconnections between the electric transmission and/or subtransmission systems of the electric i utilities in the same manner as electricity flows along the lines of an individual electric system, whether or not such flow of electricity occurs pursuant to the terms of an inter-connection agreement. " Interconnected cperation" includ es ( all forms of interchange, including sales, purchases l

L. 4. o exchange of energy or capacity, reserves sharing, firm power, emergency, maintenance, seasonal, economy exchange, spinning i reserves and any similar transactions. " Interconnection agreement" shall mean an agreement governing the rates, metering, and other terms and conditions under which interconnected operation occurs. J. " Central & South West Corporation" or "CSW" shall be understood to include its direct or indirect subsidiary, affiliated, or predecessor companies and any entities pro-viding electric service at wholesale or retail, the proper-ties or assets of whch have been acquired by CSW. K. " Central Power & Light Company" or "CP&L" shall be understood to include its parent, direct or indirect sub-sidiary or predecessor companies and any entities providing electric service at wholesale er retail, the properties or assets of which have been acquired by CP&L. L. " Houston Lighting & Power Company" or "HL&P" shall be understood to include its parent, direct or indirect sub-sidiary, affiliated, or predecessor companies and any enti-ties providing electric service at wholesale or retail, the properties or assets of which have been acquired by EL&P. M. " Texas Power & Light Company" or "TP&L" shall be understood to include its parent, direct or indirect sub-sidiary, affiliated, or predecessor ecmpanies and any enci-ties providing eletric service at wholesale or retail, the ( I

_ 17 -

properties or assets of which - have been acquired by TP&L.

4 LN. " Dallas Power & Light Company" or "DP&L" shall be understood to include its parent, direct or indirect subsidiary affiliated, < or predecesor companies and any entities pro-viding electric service at wholesale or retail, the proper- ' ties cr' assets of which - have been acquired by DP&L. O. " Texas Electric Service Ccmpany" or "TESC0" shall be understood' to include its parent, direct or indirect sub-sidiary, affiliated, or predecessor companies and any enti-ties providing electric service at wholesale or retail, the properties or assets of which have been acquired by TESCO. P. " West Texas Utilities" or "WTU" shall be understood to include its parent, direct or indirect subsidiary, affil-iated, or predecessor companies and any entities providing electric service at wholesale or retail, the properties or assets of which have been acquired by WTU. Q. " Southwestern Electric Power Company" or "SWEPC0" shall be understood to include its parent, direct or ' indirect subsidiary, affiliated, or predecessor companies and any. entities providing electric service at wholesale or retail, the properties or assets of which have been acquired by SWEPCO. R. "Public Service Company of Oklahoma" or "PSO" shall be understood 'to include its parent, direct or indirect sub-sidiary, affiliated, or predecessor companies and any enti-(- ties providing electric service at wholesale or retail, the i 't i ,.l

properties or assets of which have been acquired by Public (. Service Company of'Cklahoma. r S. " Texas Utilities" or "TU" shall mean Texas Utilities Generating Company, its parent, affiliated, direct or indirect subsidiary and all predecessor companies, including, but not limited to, Texas Utilities Company, Dallas Power & Light Company, Texas Electric Service Company and Texas Power & Light Company. T. - " South Texas Units" shall be understood to refer to the nuclear generating units for which applicants in the above-captioned proceeding have obtained a construction per-mit from the Nuclear Regulatory Commission.

w.n-sI //*o '4. d. ),,,. pu, s I s \\ Ecus en L2ca :xc & Pcwra C un.xv /', ' /.-~ M Hous ex,TzxAs root 1I A s' f-. F w

9. n. nooemoon e,..., ~

s.... December 13, 1973 3 "*C CM IC R Mr. T. L. Austin, Jr., President. \\ - v t.- # l'.6 Texas Utilities Ccmpany DEC^'i"" 1506~ Ccomerce Street ~ '"' l Danas, Texas 7szot I. L AUSilN, JR. j-

Dear Lcuis:

This letter is a fenew up cf cur discussien en November 28 relat-ing to anti-trust issues involving licensing nuclear plants. planned by TIS utiuties. I was asked te undertake de preparatica cf a pre-posed revisien te de 1967 TIS Agreement to previde fer admissiv of other public and private entities te membership. I am sending you, si Philups and Barney Davis cut suggested draf which closely paranels the existing agreement. I suggest that you go to werk en this draf: to see if we can ec=e up wid a final draf: that win be acceptable to TU, Central and EL&?. If dis can be accceplished we can den approach the public enti:ies seeking their approval er revision. It is cer:ainly not my intentien to exclude the pubuc sec:cr from par:icipating in the initial s: ages in formulatng a new agreement, but rather dat cur preparatica of a draft win excedite reaching agreement ameng au members cf TIS., Further, invester-cwned ccmpanies are cacying de burden cf licensing, design, construe:1cn and cperation of the nuclear plants and win be mere directly affec:ed by cenditiens centained in a revised TIS Agreement than is the case of de public entities. I have asked Gecrge Cprea and D. E. Simmens to review the preposed , duties of de Administrative Cem=1ttee, Planning Sub-Comminee and Operating Sub-Commi=ee and let me have deir ccament. I sugges: that ycu have ycur cperating people ccHaborate with, my people to the end &at any additien er revisien te eccmittee functions.be censeli-dated. Sincerely ycurs, /Q,. p-s PER:mcc ,Ocv'\\/ M' (- Attach. O1 h y/ e '- v 3 ?

\\

f.r., o.% cc: Mr. 51 Ph1 Hips (At:ach. ) , / , v r_, " 'J Mr. Barney Davis' (At:ach.) / ) d-25S7& ' a 9

.--~ k .Tb 8 .;;;g,ega.g J g \\ $ *.

• 4%g

',Y, -4. 9 4 l t ENTPaL s s7 D OVER A i t,, v y-y IGHI 4 fJ c0Mwe h ~ -e-c =,ri c,:. =..ex 2, 2,. :=..v. c-m to....es Septe=ber 18, 1967 9 4 Mtedle West Se itee CoctpacyMr. R. M w C Chicago, Hitnots 60602 07 ~ ) Ces: Mac: ^ drat of a proposed le=e: to dThanks for your mber 13,1967, e City Offtetals of 3 cwnsvtuecommenttag F: tor to f which ts enciesed.recetving your lecer, I had mad for addtncns to the Systein this last drat I sub ') in ftve years,m ate: acquisttien for the d fe . L. 52,400,000 (- term of the lease of n ttures Fu 2er, in an ace =de power plan: 1.f te is retatand to a plant in de 3:cwnsvtnMr. Cavts, I include e years for ce j, neral and vague com=vid Duncan to a Cev lopment Depar ment assis ,y e e area, and also changed de ttt=ent with regard j (j would be working for the Iccatipersons and o tance to tte it in wtd p endered Area 1 M 5 . W osstbly forestzH rograms et !ccal and cot spectncany to help Browon of indust tes tn d h ~ nsvtue. 4 etytce area idea that the City's accumulattYou wtil nottce al ens for payment of revenue bo da 1(c), Page 3).and would have to be appited to d i e e retirement of said bonds (?an s sh { ( ttems and p;cvtstens solely fAs in previous drats,I ra paph or constderarten.ncluded fc consider 1 My views en de potnts ratsed in us ~

tght of inspection, which(1) As you state, the t==

negotiate. I bav [ , incidentally, wtu tndicate a wtUe tate p:cble hefore de City Commisstene understcod that w and will not be able to get approe win that mtgnt be acceptableCity Commisston fc de ins pcc:t It seems to me cat tf we cut!tecnon w val by te strien and dey aucw will be centattveh

• to ;;cceed mtt5 *- '

us ac ne = -' qutstetce un ,,,,,umee # ,e ee aNE . we ,ma, emp = e4 emp que go N

s a s. d Mr. R. McClanahan Septe =b e r 13, 1967 (2) I have understood dat in order to intere:st them in cepetating we wtli :eed to bold out to de= a debt-free etty. In my draf:I =entioned dat the Ctg would be debt-free only in connec: ton wtd acqut:t::g de entire Syste= and did act mention it tn connection wt:h acquiring de Syste= wideut de power. plant..; iso, de under-M taking to =ake an addttional cash payment to cover other tndebtedness $ ts limited to the ex:ect dat purchase price re=atns to be paid over anc.;- ahove the payment fo r or retire =ent of revenue bonds. C m Obvtously, dere would be a real ;::blem tf ey recats the power planr and t: ts valued at, say, 512,000,0C0 and de =ency required to pay off the revenue bonds, af:e: ustng det: accumu-lations, would amou:t to S16,500,000 and, wid the power pla::t val ue, =ake a total value of thou: 523,500,000 for the entire System, which =tght be a. total valuation figure very ctfficult to reach. Undoubtedly, a=y purchase, with or without de power plan:, will bave to be for en: ugh to retire de revenue bond L::debtedness because: (x (a) The plcat and 1:coce fro = t: w til have to be made debe-free or deposte be made to do so is order to co= ply with our =or: gage. (b) Some revecue. bondholder might step de sale unless such bonds are patd c the =ocey depostted for dat purpose. (c) We can't reasonably expect dat de City will sell de System wtd so=e of the debt against te still to be patd th cugh taxacten or other revenue sources. If dey decide to recatn de power plant, and de fat: value of de re=atnder of de Syste= ts not adecuate to cover de 54,400,000 of other bonds in addt: ton to covering de revenue bonds, den we should be able to persuade dem, ta de teptiation, that dey are get: tag de rent, etc. ,on de recatted plant instead of having de oder :tg boncs paid off. (3) I feel dat ti de 5:cwnsvt11e franchtse ordt:ance dees :ct provide for payment derefor and de cocc:2ct of sale does not spectft: ally (' allocate a por ton of the purchase price to de franchise, den we would not v have a:V t:cuble wid ** favored cations" provtstens in other towns. The I cont:c.c: of sale, I presume, need not allocate any por: ton of de purchase ~ 1 a

_.7 _. _ 4 L ~ Mr. R. McClanahan . September 13, 1967 price to the franchise, and te would be a matter of working out with IRS agents a reasonable aHocation. NormzHy what ts done would not be a matter of pubite infor=ation but E could not gtve any real tssurance dat some other town would cet find out about it, or at leas: fine out that we dealt generously wtch Brownsvtue for de acquisteten of the System, and instst on slmtla: treatment as a prerequtstte to granting a cew franchtse. As a matter of fact, de 3=wnsvtue purchase, tf =ade, ,a probably wtn be used an7.vay in fumre franchise nepetations, particuN 12 :1 wtth de larger cities. In 7 In addition to the obvtous income tax advantage of $ 'anocating part of the purchase p tee to de franchise,. I believe it mtgh; be beneftetal in rate matters tf we ever have companywide regulation, l (4) In connectten with drafting de formula for paytng [ rent on the power plant, if tc is retained, I thought I had seen a stud; by you in which you reached a total figure of 12% Obvtously, some other approach might be better fr:m our stancpotut and =tght even be g preferred 57 d e Clef. . L (5) Although 5fr. Duncan seems to have a good instght into the thinking of de Brownsvine people, I belteve dat we shculd not give up on de tdea of havtng dem apply det: accumulated funds to payment of revenue bonds. Hence, as mentioned abeve, I c ted to sell the tdea and am hopeful that we would be able to sustain this posttten tn any cepttations. (6) I belteve we need to accourage de= to belteve that they wtl1 have a debt-free etty tf $ey wtn seH us e entire System, which is an dat ts said in my draft. I doubt dat we could be any less lucid on this potut and sctu gain the destred result. j i (7) I have u=derstood dac they would require assurance of annual income equivalent to de paymects made by de Public Uttitttes Scard and some basts for increases thereof in de future. Obviously, dts is an unusual hequirement - bu: presumably we ceed to do somedtng along d!s Itse if we are to succeed tn acqut tng the prope:rf. As prevtously mentioned, the revenues to de City from ad valorem taxes and g=ss receipts taxes wtn not ces ly cover dese annual payments from de FUS. I c:ted to come up with something addtttocal to be credited against the FUB payments. Since dey are not seutng thet cash equtey in de System a::d wiu setH have it and de earnings f:cm tt, the sub parag-aph (3) see=ed to be a logical ,n means of butiding up de receipts tn replace =ent of de FCB payments. g g It would be bet er, of course, not to include $ts pr0vtsten but I have under- ~ stood that something Itke'tt win be necesantf to pc dem to enter into cecottatio ns ' If a orovtsten of the klad ts included, tt w til of course have ts ... ~. ~.... _ i 1 ,w

.o. j c. ,Mr. R. McClanahan September 18. 1967 (8) Item 3(a) on Page 4 was changed in de new draf: as mentioned above. (9) I am ::ot sure dat I understand de =emorandu:n prepared by Mr. Carl Sandee but am L:clined to beltove dat he is .j. under a misconception as to taxes discussed. For tsstance, de State g of Texas ad valorem taxes are based on a statewide rate, taking into account tax valuations all over de ec:tre State, and t: ts teconcetvable.' dat the additionf of $10,000,000 or 515,000,000 to de tax rolls at -e S:ownsvtile would have act ::sticeable ef'ec: on de tax bill of anybody. The same would be true, to a much lesser deg:se, wtd :espec: to Cameron County and ce other tutsg age ctes. ?:obably dts is one reason why we have been told that any ad valorem tax payments other than to de City teself will cet be c: edited as being recetved by de Ctry as a result of the sale of the System. This does cot mea::, of course, dat voters who are pa:::cularly interested ts de School Otst:tc: or some oder local taxtsg agency would ot be influenced to some ex:ent - to vote for the sale of de System to, order for det favortte local agency to have more funds. I belteve $aryou =ade an excellent hirder potut to t:dicate dat 1: v wt11 cet be feastble to take title to de System subjec: to de revenue bond tedebtedness.' I hope that =y draft, which to some ex:ect reflects t:for= seton developed here and which has not been made avatlable to you, and =y commen:s wtil be of some' value t: your farder constderations. Sincerely, 3 / JMWtison:AH ..\\l j &,p ) J{.. / E:c. 3 's CC: Mess:s.5. 3.?ht111;s,Jr. A.].

• eri, Jr.

d E.S.Jestin Barney Davts ,m, N T %,e e -...--~.*o~ ~~ ~ ~ ....,..,,...no

...2,\\ k..-., ..t. _. _. ~. . _l. J - \\ %. \\ t-/ N 6. .m 3.3(i) q M s k-k7* e,,cF...eto, io. 10 ostMCY . p%Ch s ~ :4 6 '";,\\6 ~ec npo ; v. S' *- g of g,,00 g-(ges h*k cit OU f, $'U u 5 o ,e.:e ** ggsc fa g.,o9t c b~ tcQ, et . w. v. ;c e unt u pow

• 6%S sc;r.C,'gn G o to D4,td 3 9 S ' f.C
• b i

3 tso0 i 1s, 3ogg,;ct., w,...i. ,,e v\\.43.,cf.ogoc-1 gg ,~ s s-G e s ,,c d a,. tbC ses \\TS* I NtS U gt'.C s4e *gt v.e.g,,c50 se@ b Ugo-: c. to ,;G d ntT* .s\\e,ge\\oSC,,to g co 01 0 q,e.,.jef@ .w - PIES' s McCWi'*wo CC'* l 9 e O e ) 9 0' f 1 9 4 e

/ L f* e MEMO - Brow nsville September 15, 1967 C Jack Ware called W.W. (Bill) Witmer and we both talked to him after Jack introduced wto I was, etc. t i 4 First off I expiated to Mr. Wiccer the tmpor acce of keeping all of this j quier until after October Sch, since that was the date all Clry candidates must be filed for de November 7th election. He was not aware of the City election so I asked him who in Stownsville knows about dis. He has talked to no one. The only contacts made in Brownsvt11e have been by Westinghouse, and they have talked to the airport Authority relattve to insta11atten of a desalination plant. (This bears out the names of Westinghouse Gene McNair showed me de dsy I talked to him) Mr. Witmer says he has been etaployed by both or has a worhtng ar:angement wtth both American Metals Cit =az, which he refers to as Amex, and Inter-national Uttitties Corporatten of which Mr. Howard Butcher 111 ts Chairman. International Utiltetes Corporation has agreed to finance the generation for the American Metals Citmax at a. reducrton plant to be butit on docp water on the - ~~ Sonth Texas coast. Coastal States has been contacted as the gas source. This reduction plant w til use alu=tna, make aluminum pigs to be sh:pped out. The alumina will be brcught in by large ocean gotag ships from Ausern!ta and Nord Africa where day have =tnes. These two plants, in Africa and Austraita,'- are already stockptling the alu=tna. Nord Africa Plant has been operattgg several years, de one in Australia only a year and that was to fulfill lease agreement. i International Uttlities Corporation used to he a holding company but now has its Horne Office in Toronto, Canada, and in 1945 tt becatae exempt from the provisions of the Holdtng Company Act. It has a wtdc dtverstfted field of operations and has an investment company called International Utilities, Inc. in New York. Both Nare and $ttmer refer to this company as I.U. \\Yttmer says I.U. Is interested only in financing this plant and would prefer leasing tt to us. They have quoted 3.6 mtl1 power to Amex and are gotng to charge 11% on their equiry in da plant, wbich amounts to 10% of tha total with 90% debt. Of course their own bonding bcuse will carry the bonds. They figure on a 30 year lease but will go as low as 20 years. Thet: return ts figured on the deprectnted balance, l i They have several such plants now, some in other countries one in Bellingham, Washington. Witmer figuras the plant will cost 587.00 per KW., ,i Og.gg, C G 2441 l l l \\ l

s / Me=o-Brownsvtlle Septe=her 15, 1967 The Amex load will be approximately 360 MW, three por lines at 120 MW each, but they plan on a r,vtn turhtne 550 hr# plant (2 units of l 275 each). Wtt=er mentioned 3r:wn-Bovart untrs due to tha time element. Says botiers are the things he cannot get. He says the plaat wt11 be somewhat substet:ed by the steam operation. This to where Westicghouse cocaes in and he says dey will completely operate the steam part. This is to make distilled water with an outlet to cer:ata drug compantes. Seems they have outlets aircady planned - ::o problem here. Westtughouse had a Mr. Spencer of Houstoa work with them on the desalination process. He to turn had a chemical cetspa::7 (whom dit er says he cannot c mention) to maxe a study of the use of the water. This study is ::ow complete. They also have a commitment from Dow Chemical for the =agnesium resuittug from the process. I.U. ts interested in getting an agreement with us to operate the plant on an operator's agreement for 20 30 years, or better yet, lease us the plant. At the end of the contract CPL could purchase the plant. Actually, Wttmer ceeds a standby - he calls it back-up. Says he needs 360 MW. I asked him if he was tied to Brownsvtile. He satd he'd go anywhere he could get the back up. I mentioned Corpus Christi. He thought the chancei too shallow over cear Inglestde. He says other places betag co..stdered by An2ex and I.U. are: New Orleans, Vicksburg (United Cas), Misstsstppt (REA TVA) j Witmer is going to talk to Amex and I.U. by next week and will call Ware l when he gets back. He's =eeting tue= in New York. \\ I Barney M. Davis l 1 { w.& a i l 2442 s l l t t l ~ ~ - - ~ ~

1 ,.D ,p Middle West Service Cornpany Manegement and Engineenna Con:uitants - ' wM"r l \\.,. 69 West Washington Street / 33rd Floor caese Aser s: wwsse: l Chicago, Illinois 60602 % m. nwno L-wsp. September 13,19t 7 'A N @w Mr. J. M. ',7114on em Centra,1 Power and Light Company C 120 North Chaparral Street s arpus Christi. Texas Dest Jim: This letter is is answer to your letter of September 3,1%7 and enclosures therewith. This wil.1 hit some of the high spots but is not intended to be a, ce=plete coverage of your dra!!.. I thish a nu=ber of thi=gs =nst be crystal 1=ed before we are at that poi =t. .I have the feeling that your draft goes too deeply 1sto the intention P of Central Power and Light Compa=y at this time. We are presently co=-- corsed with the problem ei obtainisg the right to inspect the books, records, and propertf of the Pubile Utility Board. I appreciate that it is necessarf to =ake a good case in order to do that but I think it is a great disadvantage to disclose too much cf our intention as it will only weaken our bid. In other words, the bid bec= =es anti-c11=setic. It appears to us that we should not dise=ss the retire =ent of the $4.4 million of cther debt of the City at this time. We have considerable questier as to whether yen can a.fford to pay $4.4 million or up to $5 =illion is addition to the amon=t to retire the bonds. if you are culy purchasic.g the trams =ission and distribution facilities. Cur tam people are of the opinion that if as a.c:ou=t were assig=ed is the purchase prics as the cost of a franchise then it cecid be a=crti=ed over the ( 11.fe of the fran.:hise and dadseted for tax purposes i=as=nch as there would be no assura-e that the franchise would be renewed. There are several e 4e r T

F 1 . ', helset.1 West s cavic t cea.se ev 4 s c0 m 2-c 'J \\ Mr. J. M. ?/ilsen esses alcug this line one of which is the Clevein=d Rat'.way Company 36 ST.A 203 in which the Internal Reve=ce Service has acquiesced. However, as you i inersase the charges for deductions for ta.x purposes it becc=cs =acess'ary { to book these cha.rges. Since we already have a+ paucity of i=ccc.e it beco=es more difficult to show any income if we are to c=ntinue piling up deferred charges as centrasted with charging amounts off to surplus. The attracion cf i i \\ tax deductions entices us as =uch as anybody, but we believe tha: you "se not bite ints the income of Central Power and Lig'ht Company as now constitut'ed. The questien as to whether the purchase of a franchise would enda=ger your position in other towns when their franchises come up is a busisess question is your' area which you folks are much better able to a=swer thns we are here in the Service Company. We have not at:empted.as yet, to see whether the ic:=ula on page 2 (b) would work out satisfacterily from a cost standpoint. We had stayed away from this approach as if the power plant w' uld be les.aed a=d the trans=.issics o and distribution would be purchased. It seemed to us the amount ever what ' c=cid be classified as fair value for the trans issien and distributics would best be classined as advanced lease rental payments to "ce charged eff ever the futurs and be deductible for tax purposes.. This approach =ade it a necessity to have a round a=ount for the additionallease rentai to be paid an=ually over the ter= cf the lease, as any fermn12 cevering the various itams included is carrying' charges would be diffienit to' justify. Under (c) on page 2, you have (as we did) i=cluded the amou= s set

a. side by the City is the revenue bond fund as a reduction from the pri=cipal amount of debt to be retired thereby committing Central Power and Light 1

L Company. only to the set amount. We notice that during 3ar=ey Davis's 7 o s L dimens sion with Mr. D" m he (Mr. Duncas) said that the City would Icek t ee

5442,

} -~

.!aus wc' s e... : = e -.m r u.:~ w - N m Mr. J. M. Wilson ' e.n

== N upon these funds as being theirs. Tsese fu=ds have been c ' .tted to the l retire===t of debt irrevocably by the City. Tas s e are the. ' un required u= der the Ord1=ance or what we can the Inde ture cw it would be quite intsresti=g to the City to increase the purchi 7 this amount thereby freel=g up these amounts to the City Treasurer after the bends had been retired. This is asother ressca for not bel =g too definite about the amen =t over and above the principal s, mount of bonds and enn pre =1c= to be paid as it reschs in piling amounts upon amou=ts. For ess=ple, if we talk about payi=g 4.4 := inion dollars at least above the pri=cipal of the bonds and enn premium we are then MLW: about adding the a=on=t that is in the redemption fund put up by the Chy. We think we should be less lucid en this poist. Reference is made to your 2 item en page 3. I had something Hke this in the initial draft and Ennis Jostis did not thb k that it would be com-patible with future policy for other towns. I am quite wining to give it =cre {. thought. Reference is made to Item 3 (a) on page 4. We had this a= cunt (or i appr=4-ately the as=e) is our draft.but it was the feeling of Issis Jesus that the a=ount was so insignificant that it shcuid set be used, i t i I am enclosing the memorandum which Carl Sandsen prepared in regard to the effect on a taxpayer by the purchase of the property by Ce= tral Power and Light Compa=y. I have also suggested that ear =sst consideration be given to transferring the 150 MW from San Benito to 3rownsvine. It ~ seems to me that these two points have==ch more se.x appeal, that is; first, the sale of the prepe.-ty puts =cre tax radue en the tax rells a=d thereby l

duces other campayer's ta=es; second, that by 1970 or so $13 - $20 millien l

? { c:f new taz values would f=rther insure the taxpayer of reduction rather thas { l 5449 l L,. D 1 .u. a

l a...... i wiens was, s e...se ea-..

n. e. _.

m....

.i 4-

~ m Mr. J. M. Wilson 49

.a

\\ increase in his taxes. This should go n long ways towards reducing the a=ount of cash that would have to be paid beyond the $19,3 = inion of ' principal and can premin=. It would appear to us that, !! possible, it *culd be highly desirable to get our explorati'on over, make an offer, and try to get on the Novem It is much better to have these veces at a regular election than it is to ave a special election. The reasons are, of course obvious. Ce= test Power and Light Company would set be a single target, and could tie itself to t Council, the City Council could pot =t how they were going to reduc y by the sale a=d for other reasons such as pointed out in Earney Dav me=orandum - a new City Council starts the problem an over again We feel that the question' of whether the City bonds could or coul he assuz=ed by Central Power and Light Company may be academic . Barney Davis's memorandum of the conversation with Mr. Duncan emphas point. s We think what is not being recognized is that a transac: ion betwe two enterprises engaged in profit where the equity is purchased a d th n e debt assumed is an entirely different transaction than the one under dise=ssi Eere there is no equity to be purchased only debt assumed a=d reg on. the credit of Central Power and Light Company and Central and So th s of u est Corporation the City of Brownsville still has the liability in fun for th e debt so long as it is outsta= ding. Any politician that is against the purchase lekse (and there may be one) would certainly be able to { out of this point. a t We stand ready to work here or in Corpus Christi en inrthEr censiderations or studies. -t Sincerely, .s.... P RMcC:JO cc:ISJ, EMD,527 TJE 5450 ..,.. ~.. ,a e-% r, -ma e e mw m_, - - ,p3-- w s-

• -i==t-

~ _. 1 1.2 c ^ _ n._.

.: ^_. x _.2

'.._z.... _ - L.. ~ v ( \\. .t .. -), - .) s l Q Q f ~':' C ,., u-,,._.,...._ . s,m_, tc.., n........ fe;ta=be: 8,1967 p. .s o Mr. 8. McC!snahan, Prustde.t en Middle.est Service Company m - Chicago, tiltnotr.,

Dear Mac:

I have been revtu.vtng =y file in connection with the strempt :o buy the Brownsvtile system in 1958 and have been c:f tng to arrive at somr.; dung that might bc helpful In de present instrasce. Although Article 1118a, Revised Civt! Statutes of 'i exas, authertzas a etry to encumber both the urtitty syste= and de tccome thereof, apparently ce Brownsvtua ravenue bonds are secured only bf de tncome. i his may cet be of any impormece. however, tn determining de amount cd lleo {'- agstnat de p:cper:tes at de ti=e of acquisttton because de City, s= La de case of the st= tis purch:se from F.aritngen in 1923, wt11 undoubec:ly instst on retatetug a tien ag:in=t the proper:tes untti all deferred psy=erts are made. If the pmperty is purchased to the as=e of the Compa::y, I beltc.vi. t that we will have to constder Secrton 10 of Arttele IU, Psge 146. of 2. Compacy's indentu= dated hovemNr 1,1943. '! hts may mes" det the money for r.:de= prion of the outstandtng revenue bonds.111 have :o be i put up in tnst for such rede=ption at de time of taktug ettle. If thte tr the casa, tt may be difficult, if not t=ponstble, fo r the Company :o gut any Nncitt from the fact ttat such beads carry a lo er interest este tan any beads that the Company would tssue at this ttc2c. In the belief det it might h:ve some usefulness, I have prescred a i rougit draf: of a F, resent:Iton to the City in sn strempt to open negotistto s, together.vith an alternate Pangr:ph 1(c). Copt :s thereof a re enc!ce.ed.

l. view of th : Indectum p:cylsto t :ncottoard., de alternate Paragraph 1(c) might be more appropriate. Mr. Josttn and Mr. )avts have not ruviewed

. this draft. b %? 4 u I +w Ae**e,. i een. =- l

• l I,.

e.. COPY Mr.- R. McClanahan 2-September 3,1967 g; CDIT? 4 2CVS ANC _'nHT ~.:MFa. t Wtthout havt=g or displaytng acy price of authorship, I wtil anamot to explain what I have undertaken to bnng up for constdaranon in this den!t. e ;.: Specinc provtstons wtm respect to ducatis, such as da seleenen of

~.a de escrow agent or crustee, de dates and places foe payments, :,:cc.,

c have been omitted in the Inter.:st of stmpitftcarton and because this ( . obytously is a preliminary presentation, and tr goes atthout saytag dat any contract of sale would cover these =artars. ~ F6r tha most part de draf: ts self explanctot/.. If th:.:y r.tain 6 power plant. du purchese pnce pr:bebly atll not be adequate to cover de $4,400,000 of other be. ids to adcttic.: to the revenue bancs. Also,. tf they retain the power plant, day will sttil be realt:tng something f=m tt and-therefore will not be enntied to have the full conenbunon from the Pubite Uttlines Board guaranteed to cem. incidentally, this guarantee of th continuanon of the coctnbutton of the Public Utilities 2 card to de Ctry, togeder wid some provtsto for it to gri,,w, as they wtll prob:bly testst upen, presents a mal problem. The 2% gross reestpts tu per year on 54,000,000 wtl1 be only 580,000, and it { is not rissonable to expect dat ad valorem tuas to de City wLLI be much more can $150,000, =ating a t=tal of only $220,000, wbtle they may contand i and may be able to show annual conentunons by de Pub!!c Unitttes Board tn the se1ghborhoed ef 5400,000. It seems to tne that we can logically claim also, as replacing a pair of the annual contributton of de Puhite Utillnes Scard, the t.terest er. - bonded debt not being paid by de unlity system, which might amount to ' $100,000 to $125,000 per annum. There is danger from free =tsg for the Itfe of 6 franchtsa the payment to supplement the gross receipts and ad valorem ta;c payments dunng the nrst year, because they will have funds from the sale and w til be able to reduce ad valorem taxes for that nrst year below cor=al, which of cours=

• ould build up de size of the necessary supplement.

I think that this draft would leave some problems unsolved, such as how the City would pay interest on the outstandtng bonds, incluctag both any that . may have accrued prior to the conveyance of the properties and any that secrues after the' conveyance and unnl the interest ts stopped by redempuca of the bonds. I hope, however, that dese unsolved pr:blems wtl1 not keep this draft f=m being of semi value to the co sideracon of de =atter. ~ C. Yours ve rf tr.:ly, JMWtison':AH 1 l 22.cs. 3'.k'l. i CCF Mes s rs. S. 3. Phtili;45. LJcalt ,3. E ;C4 // C8//p' ' ' ' "..,\\ qts s/ LI V r. C C 1 i : N.. 4/ =' j 'p,,,(. ame ,e-e aso quemow a e gg-a w ,e, p. e P -e.- ~

a_ ~ k 3.(o g t ~ ~ Middle Wes: Service Company I p\\e% 3fana:: ment and Enynecring Coruultants .1: , "c_5 X 69 west wasnington street / 33ro Fleer cw. aaer. 3: uewasco '~ 3 cnicago, thinois sa602 me. n2. nsano .:a a Septe ber T, 1967 ,j w.r. I. 5. Jes112, ? resident Central ? ver and light Cc=pany 120 !crth Chapar al Street Corpus Christi, Texas 78kC1 Cear Mr. Jes110: Subject - ? ;csed 2r vesvi.'le Acquisitie 'Je have =ade sene father study Of the estinated effect property ta.:t rstes in the 2r:vesv111e Area as a result of C.P.E. Co. acquiring the electric n:111ty properties.. ".'.w.is study is based' upc= hister.' cci tax and assessment data ecstained c pages 70 and Tk of the audit rey:rt of the i City of 3revts? * -- **e ;erted ended June 30, 1966, prepared by Rey L. ? ;e L 5pillers Co., Certified ?nblic Acccu : ants. '.'.'.13 re;cr: vas su;;11ed to us by Mr. 3arney Davis. 1 1 2.e addities of the 3r:vnse a a'e tric proper:1es to the assess t ent rolls of the City is of such mas:10tde that it veuld represent about { 1C$ ef the total ;re fer a aggregate assessed valuations. \\ D.is substantial l addities veuld have the effe : et reducias the ; resent city tax rate fre: $1.60 per $100 of assessed valua:10: to abcut $1.k3 In event. C.?.E. Co. vere to build a $15,CCC,0C0 plant is Ere. sville, the then total assessed values of the city fer the electri: pre;erties %/ c401 1 'L P 2 1 ~

. _...... -,........ ~ ~ ..~._._ . N[ 311cidle Wets Service Corupany ~ _. w s e-(G .t. I. S. Jes1.12, Presties: Septenher 7,1967 u M v6cli. be abcut 1% cf the ;;c f ::a agg egate. assessed valuaticas. "his c <_,n veuld have the effect of fu :her reducing the tax rate to abcut $1 3C N 4 per $100 cf assessed raluatiens. 4 The tax rates levied by the c:her taxing bedies is the 3.revesv111e Area, such as Schec1. District, ccusty, Navigatics Distrie and Stata cf Texas, vculd te s' d ' a-17 reduced. Igis -.e.--d-a '- *ax rates 1: 3rcc.sv111e veuli represent a very 6;cr:as henefit oc the taxpayers. The acec=pacying Schedule A represents a verk cut of the esti.:stad effect en the tax rates levied by the respective taxing tedies. I: Schedule 3 there is shev the theoretical esti:2ted change 1: taxes en a $13,CC0 hc=e in 3revesvd11e due te C.;.&J.,. Cc. acquiri s the electric pre;er:1es. It sheva that if the present electric pre;erties are acquired the total taxes c= the heces veuli te reduced abcut 6 74. In event C.?.E,. Co. huilt a new generating plant in the area the total taxes veuld he reduced about ik.c%. e s d -f D.w::~o d t ,-e

.a; .-.s,. :. : -._.. w : '.;. : *;.:. :.... ~~ .,. g..e y _ gg S!!ddio West Corvico Company y .u ,~ a u ,c ^ Mr. I. 3. Joslin, President Septenher 7, 2.367 r

• s Se calculatic=s ir. the acce=;acying Schedules A and 3, are subject Oc c'ota4 -d g ---* ' 'c.~atic: c: hev "est1=ated f2.11 value" erd " assessed values" are deter ized, and c the accuracy of the ega.licatica facters used.

'.:J N C'"J Yours t: c.17, '.;J Carl I. Sandeen. CIS:cbc ec: 3arsey M. Davis S. 3. Ph44;s, Jr. ?> J..Eerr, Jr. R. McClacaha: h 5 0 \\ =.* t e e e w e. .~~.. I

9 ,. e g.-. g g;,,, Middle Wesc Sci vico Cornpany a, e w, cm u N f w N On"T CF 3RC'.?t37.**!.Z Sct.edula A Istimate of Iffect (:ec eue) en *ax Rates is 3r=vesvi.11s Ares Oue to Adds..g Cat: tris 'aility Properties to Tuacle Assessasent same (in thousands of islis.rs) City of" 3av14stien State Junicr Tstal Brownsvt11s Scheci C unty __ Matrict state _ tollege Tam es Tsar 1965 Assessed valuatices (a )- $65,200 380,200 n20,0cc Sa2,7 o 391, 3 o 45o,no Trtal !aes f.svind ::ar 17i5 a 3 1,04 3 1,203 3 1,6-8 3 213-3 385 4 101 sh,626 Tu Rates ;<r neo a 3 1.6o 1

t. 5o 3 1.ao 3 o.$o 4 c. 2 3 o,lo trenes er e.7. s t. es. Aouirs::=

nesee: n.cen: r e e: 7 - AJaessed 7alues as aeove 365,200 $8o,200 $120,0Co $A2,7 o 391,*C0 35o,70o ad ;rsse=t electric ;roprty(315,5co) 7,3co 7,2co 3,375 2,000 3,375 3,875 Iguall:ation Tacter (b) 1o4 M.2% 2% 13 254 2% Adjusted Aseeeaet valuss $T3,Oco $87, W 3125,375 Sa, -':c 3}J21Q 3h 1Q $ of Trtal Assessed 7alues Aerresented by Ce:tric Preveny 10 5 S.2% 3.15 a.n

a.it 7.15

stal ;u es pequired (as toeve) 4 1,046 4 1,203 3 1,6 78 3 213 3 385 3 101 p.,626 ~

Adjusced t u Race ;.r sloo 3 1.a32 3 1,375 3 1.355 3 c.177 3 c.43 3 c.135 5 Reduction in tu Races ic.55 a.35 3.2g 4.64 a,c5 7,3 Ta.x ?aysole by 0 7.M., Co.. Adjusted Basis 3 112 3 99 3 53 3 10 3 16 3 7 3 297' reet se c.7. r, t ca. Ae_uiri.4 ?rvsest P ecer:y acc cc:st:::t:.::.g ^ ~ ::ev L50,:Co u ' :.S.cco.;co nan: sc 2reves v".ne Assessed 'talues as above $6$,200 480,200 3120,00o $42,700 391,7Co 350,3c Add. ?rssent Cectric Pr:;eri7-Sly,5cc 7,fCo 7,20e 3,375 2,000 3,975 3,$75 New P14ct -315,0cc 7,5cc 6,350 3,750 1,35o 3,75o 3, 75o T4ualization Tactor (b) Sc4 M.2% 2% 13 2% 2% Adjusted Assessed Values 380,500 1 cf 7: cal Assessed 7alues ?eprese=ted 3 M' 3127.625 3 4 650 390,325 358,225 by ;repentes svned by 0.7.M,. :o. 19 04 15.c4 f.cg 3,3 7,73 13,gg 7:tal rues 8equirri (as aeove) 3 1,0k6 3 1,203 3 1,6 78 3 213 3 385 3 101 3k,626 Adjusted "a.x Race per $10e 4 1.299 3 1,275 3 1,315 3 c.h57 3 c.380 3 0.173 % reductics is Ts.x ?ates 18.6% 15.0% 6.11 S.6% 7.64

13. S Tu 7synele by 0.7.1,1. co..

Adjusted ! asis 199 4 iso 3 102 3 13 4 3e 3 13 4 542 t e 4 (a) CaCa.*r:0 (W11 FT;CM Of City Cf 3ru"vC5Y111e for pericd eM * =*.u=e jo, 136f. (b) Igual12stica factor per Oe tral Power and lie..: Cear;acy 9 .a, y g e-. mW 4-M88'S

• 4YW

( e -.F "9

--.? -{' i ,.. )- 9 t. Estinuite of Change in Taxes on a $15,000 llome h d- !'[ i in llrounsville lhie to C.P.LL. Co. Aquiring Electric Proporties 5 .i i i C.P.1 L. Ihiya q C. P. & L, thaya Electric' Prop-g, t At Present, Filectric erty and Iht11ds [ ,o Itatea Property New Plant pI Estualization ' Aeneased Tax Tax Tax Ii i Taxing flody Factor Value llate Tax Ilate . Tax Itate Tax IE a pe .i City of Brounaville 50% $7,500 $1.60 $120 1.432.$107 $1.03 $ 98 [2 jj school l6-1/l%. 6,938 1.50 loli 1.376 95 1.275 ~88 "o i i i i or -b i Cotuity 25% 3,'(50 1.lso 53 1.355 SL 1.3L5 Is9 N x k -Havigation District 13% 1,950 0.50 lo o.le'f( 9 0.1:5'( 9 go ~ State 25% 3,750 0.12 16 0.l03 15 0.388 15 ![, i 4 State.-Junior College 25% 3,750 0.20 8 0.185 7 0.173 6 1 Total Tax. $311 $281 $g 6 Iteduction in Tax froin Present - Amount t $ 2-[8.'[f $ 1,6 Percent 14.8% i .t e bf Vd m i l m

.a , Middle West Servico Cornpc.ny v f'f\\- Mana:ctncut and Enginectin;: Consultants /N a . W (**,/ E 69 West Washington Street / 33rd Floor caci. Anor,m wwtsco Chicago. Illinois 60602 ""* Ju. nsam stc0AtAN %: ><= C,:.AN AM AN Septunber 5,1967 Mr. E. S. Joslin, President Central Power and Light C:mpany 120 North Chaparrs! Street Corpus Chricti, Texas

Dear Ennis:

As I expressed to you over the tetcphone this morning I have censiderable doubt as to whether the Purchase-Lesee Plan. o s Lt is now set up, has sufficient appeal to :ccomplish the acquisition. It seems to me that the Purchase-Lease Plan must have some cash consideration of !mmediate consequence to the City if it is to be compared with the straight cut Purcisse Plan. Our discussions Indicate that your grestest chance of success may b.: in the Purchase,.Lesse Plan. I cannue find any value, short or long pull. to Central Power and LLght Company in a. management contract. Ca several occastons the question has been brought up ci transferring { the 150 megawatt plant fru.n San Eenico to Erownsv!!1e. It would appear to me that if you cculd tell the City Council cf Erownsville that you wculd make en N expenditure of SIS - 020 millien for the 130 megswnst plant sad other addittens In their city limits by 1970 or so you might s*rold a lump sum pnyment to a considerabia extent under either the Purchsee or Perchaso csce Pisa. The taxes are act insignificant when added to the presene annue.1 bene. fits. Is it pecstble to re-explore the tran:ier ci the 150 megswatt unit to Orownoville before we add more cash bait to the Purchase-Lease F1:n' We will, cf ccur:e. proceed to work slenc.11 avanues a s we know that you are faced up with having some fermulaa to talk from. A O "' m "e ' Stacerely. my / AMc C:J C./ '.o..c..-~...,hp, cc: SOP, OML, PJM. a

f e ~ . COPY g CENTRAL POWER AND LIGHT COMPANY July 27,1967 Mr. Richard L. Johnson, Executive Vice President Middle West Service Company 69 W. Washington Chicago, I111acis 60602

Dear Dick:

We have attached hereto copies of three instruments which we feel would be useful in the Brownsville study. All three of these instruments were supplied to us by the Chief Engineer of the Public Utility Board. The first of these is his appraisal of the electric plant in-ciuding depreciation and, also, including the new gas turbine which ' is presently being installed. If you will note, he has also shown the figures as recorded in the last audit report which are near his figures, but at the same etme, they do not show the gas turbine installation. The second report is one on future electrical generation needs which was prepared by the Chief Engineer for Brown & Root who handles most of the engineering study for the Public Utility Board. The third instrument is a copy of the 20-year gas contract made with the Rio Grande Valley Cas Company. As you know, we have to secure copies of the ordinances. authorizing the bond sales, from Austin and these are being processed and we should receive them the latter part of this week, or by Monday, at which time they will be for-warded to you, nQ Ug While talking to Carl Sandeen yesterday, I asked if in the Cash Flow Study to Brownsville, an appeal to such bodies as the school people, the Chamber of Commerce, the Navigation District, and the City would be reflected since I think this is a very important selling point. If you recall, there was some mention relative to the City issuing Industrial Bonds and we advised that in Texas this was not allowed. 1305 .._.1

• l d -

' ' ~ stuc ccTico cin e+ rie a ttu

r.......,.:. i / / Mr. Richard L. Johnson 7/27/67 CENTRAL POWER AND LIGHT COMPANY Page 2. I checked this out and found that Senate Joint Resolution i14 allows the people of Texas to vote on this particular thing in the General Election on November 5,1968. 2 If you need any further information, be sure and let me know. Sincerely, Ba rneyMDavis /fg Encis, cc: Mr. S. B. Phillips, Jr. P. S. Si: As soon as we receive copies of the ordinances referred to, I will send you copies for you to pass on to Mr. Sampsell who had asked for these, also. We enjoyed the visit the other day and want to say thanks again for the interest that is being shown in what I call a very important p roj ect. B. M. D. fM Q vx i e

/ ?h LL-3 Middle West Service Cornpany htanagement and Engineering Consultants \\ wwh b 69 West Washington Street / 33rd Floor caese Aooress (

• • n2. mi Chicago, Illinois 60602 March 2, 1967 R.t JOHNSON n.aon v=. er.w."'

Mr. S. 3. P417 4ps, Jr., President Central and S uth West Corporation 20 North Wacker Drive ,., Chicago, m 4,ois 60606

Dear 51:

Over the telephone today I discussed the status en Brcwns-ville with 32rney Davis. He expects to cc::plete his review of the material ve sent during the next week. Then, after asking us further questions - if any - on the pra'd"4e/ repcrt and supple =ent, Earney vould be in-terested in havir6 enother necting vith us. Such a =eeting probably could not be before the latter part of March. The main purpose of such a neetin6 vould be to lay the guide-lines for a vritten presentation for Mr. Joslin to hand to City repre-sentatives. sincere w yours, TL/,rl/. ~ RIJ:cjf cc IMDavia anc,.,. m e g 7,) c i. 13G0 E rA ".11

.i. n Middle West Service Cornpa.ny ~ r hiana;:cntent and En;;inct rin; Consteliants / N!1/ 69 West Washington Street / 33rd Floor c w o 4 e ess: wwt:co lh Chicato. lilinois 60602 Mia' n2 72c-st:o \\ N LJonn;oM teerenve bice heudent 9 February 1967 Mr. Ennic S. Joslin, President Central Power and Light Company 120 trorth Chaparral Street Corpus Christi, Texas 70401 Dece Ennis: Enclosed hercuith are fifteen (15) copics of an addendem to our preliminary report pertaining to a minimum offer for the*Brownsville property. Presented in this adden-dum is an of fer of $20,500,000, which is derived for both Plans A and B. Thi: offer is designed to provide a cash ficu equal to that c::pected by the City prior to their alleu-ance for reinvest =cnt in plant. Also precented in the addca-duct to the preliminary report is a Lease Plan (Plan C) uhich contemplates an annual payment of $2,400,000. Relating to Plan A in which the Company uould accume responsibility for pitying of f the intere:t and the prin-cipal on the debt in accordance with present schedules, uc arc concerned 'as to whether or not the interest on such bondo vould continue to be ta:: deductible for the bondholder. Uc are look-ing into this aspect and it may be that the most decirable cource 1 would be to get a ruling from the Internal itevenue Service. I i 1 - more -

b. &

l 6 A l f., <,.~.., a~ 4

7._ I5)(Ot*818ttlOttttl hlI(f(IIO WOMt SOf*VICU CotHlti4Ily gg , ( - c-~. N lir. Ennis S. Joclin 2-2/3/67 Also, uc are procccding it::medictcly to mske an analysis of the holders of.the Brounsville utility bonde. With best rescrds, Sincerely, /' ' ' j..n.g y / p.- / .e cncis. (15) RIJ/vh l'ir. S. D. Phillips, Jr. - Central and South Ucst Corporation cc: Mr. L. McCabe - Isham, Lincoln & Beslo Mr. H. }!cClanahan "**.-)s l l s,/ r'.. l 1 l A OS239 ~"

.{,..W Q ~ 4 OENTRAL ^ V d ;30WER [ J ccuwwy IGHT-e~ c =rri eu.. :..=x = > : i. := ..a : ...fi. exa..r.<= h 7 Dece=her 27, 1966 Vigg Aet31cgNT ANC east 3fANY metalCCNT' y N cm a e m . Mr. R 3. Phillips Central and South West Cor; oration Chicago, Illtro ts Ce' Dtc.'c a f' , Attached ts copy of de petition we understand is being et:culated in 3 cwns rt11e. Each petitten 15 reportedly betng et culated with sheets attached for appresimately 200 names. We have also reard dat the petitica is receiving considerable Inte:est. We will keep you 1 fored on any news we get relative to dis or any other activity in 3 cwns-ville. Stccerely, 3MDavis:.GI e^ k.I G Enc. 1 CC: Mr.S.S.Fht111p s,Jr. Mr.R.L. Johnson. v e en ~.. ~. L e, a e o s-. ~ [.

=a a - ~ ~ ~ Decancer 1966 w i To :Me Konorabts. Mayor and j City Cosmission, City of 3rownset11e, Texas Centlemen: w y 'Je the urEtersigned, :ensti:uc1=g at taas can per canc (LCT.) m.of .m-the qualifiad votars of the City of 3rownsv111a, T4xas, :sspectfcy pectrion :hac you, :he gover:1:3 body of this Ci:7, succi: to the spalified voters of this C1.7, ac an electica :s be called for sucs i ( purpose, the followi:3 Acend=act :s :se Chartar of :he Ci:7 of 3rownsa vills: That the Chartar of the Ci:7 of Irownsville de amended by daleciss Article 7*. - Ut111:14s 3 card. l 1 i h 5 4 { 1 i I e-m

• e n +

7 t^ I

'Qg;, FJiddUe Wep( NT=vtee Comparty r um e a em e. v-I 1oJ. PROGRISS ?.E?CE" KE-3RCWN5VT.LLE DECIF m 6, 1966 To:

5. 3. ?KILLI?S, JR.

TRCM: R. L. JCHNSON Presented herein is a summary of our. observations on the status of this mattar and a reconsnandation as to the next and finalN e stap in preparing for further discussion with cartain Brownsvilla .e Citi2 ens. l Our purpose is to provide the C&SW representative to Browns - ville with adequata Company direction as to the most feasible nethod and as to an offering price for obta1=ing operation of the Brownsville property. To data, several aspects of the study have been covered separately as fo11ews: 1. The eccaH-* of operating the property have been studied and found not to supper a nacas-sary offaring prica. This is so since it is i impossible to quantify many of the benefits which will probabiy result from integrating the operatic.n of Brownsvilla into C7&L. 2. Tha legal aspects have been investigated and opinions renderad some years ago have been reviewed. j 3. The tax aspects have been reviewed and a pre-l l-sentation relating to tha =ost favorable nethod i g of obtaising operation of 3 ownsvilla tax-wise has been updatad. 77!~ p -.s 1 I ~~. -mr-a -^

'.. G'Nd.... ^ MIdGIO Wem Serwtc, Cemparty -- a s - - =

• 1 w

N 4. Cash flow to the city has been reviewed { for various methods of obtaining opera-N, tion of Brownsville and we are now in-formed as to what minimum payments muse be.. t what now remains is the financial analysis from which we can make conclusions as to the most feasible method and as to the

• m=

offering price. The criteria must include the following: A. The restrictions covered in th's most re-cant Brownsv111a bondi=g ordinance. 3. The probable reactions of the 3rownsv111e bond holdars. C. The effect on surplus of either writing 1 off a considerable part of the purchase price, or of writing off the sweetener in l 'a leasing or contract purchase arrangement. D. The effect en C&SW* earnings of the various. i methods of obtaining the operation.. We propose that this concluding aspect of the study now proceed under the i=mediata direction of-)fr. Tellon with one or more financial analysts such as Sandaan, Lawler er Stevenson working on the project. (. '1 .c m-L. - i

.g, 0 M1gdlo West Ser-wtoo Company u _ :ame 3-s Among other consideracions, our study would include the .following: 1. Study of all outstanding deb: ordinances c.a with reference to redemption provisions, s t .m , current premiums payable, noncallable issues, .=- CoC21 cost to retire, etc. W 2.. Dete. h, to the extent possible, names of institucional and other holders of debe issues. 3. Review through contacts,with investment bankars who placed bond issues and wi:h i=scitucional holda=s, difficulties im retiring neceA11able debe due to r.arket condi: ions.' d G Kulvh 9 e S 4 5f76

,p a I 1,

v. 0

}Q CElfrILU..um SOUTH WEST CORPORATION l 1 CHICAGO CFFICE ao NomTN wACutm omsvg RICH AMO B. PMtLLIPs CMICAOO,ikkiNOIS 40404 1 Assas7Asef TO TMC PeCS60$NT September 16, 1966 l. Mr. B. M. Davis, Vice President I Central Power and Light Company 120 N. Chaparral Street Corpus Christi, Texas 78403 l

Dear Barney:

i My visit to the EEI concerning various acquisitions of j municipals and REA's by investor owned companies was not really very fruitful; however, I think perhaps we have added a few new ideas to our stable. I cannot locate my memo reviewing various lease acquisi- [ tions which I prepared for John Osborne, I think, about two years ago; therefore, I have asked Middle West (Elmer Gates) { to collect copies of whatever leases they have in their files, which I will again review and report to you later. I Sincerely yours, t t O l r RBP:ds i cc-S. B. Phillips, Jr. F. J. Herr, Jr. E. S. Joslin G J q,% e- -P+

e fENTRAL [ OWER if)JCoMPANY IGHT n NaNeo,,,ce:.. .ox,,,,.co,,,.u. cN,,,,,,,,,x..,..co September 13, 1966 1 vict persiotNT AND ASSISTANT To PRESIDENT Mr. R. B. Phtlltps, Assistant to the President Central and South West Corporatton Chicago, !!1tnots

Dear Dick:

Attached is a memo of our meeting in Chtcago, listing the twelve items that outline the procedure to follow this far. We are sendtag to your office the following, which comply with these items: No. 7 - Two coptes of the PUB and City of Brownsville audits dated June 30, 1966 - to be sent under separate cover. No. 8 - Attached to this letter ts a narrative and breakdown on the generatton at Brownsville, showing the stze of units and dates placed in service. No.10 - Two rather good reports (under separate cover): a. I.ower Rio Grande Valley of Texas Economic Resources and Growth Prospects to 1984, made by Bureau of Bustness Research of Universtty of Texas in 1966.

b. Brownsville-Crossroads of the Hemtrphere made by Homer A. Hunter Associates in connection with Urban Renewal.

] l These are the only coptes of these reports that I have, so when you are through with them I would Itke to have them back. O M_. n/o. v t Y A C 2".'3 2. w

.a t o Mr. R. B. Phillips 2-September 13, 1966 No.11 - Two coptes of the latest engineering study made by Brown & Root. This was dated July 1965 Also, a copy of the Texas Muntetpal Report on the City of Brownsville that will give some addtttonal tuformation I thought Mtddle West Service might use. I enjoyed the visit to your office and certainly apprectate the time given us. Sincerely, BMDavts:AH Enes. CC: Messrs.S.B.PhillIps, J r. F.R. Lane R. L. Johnson t 9 4 5 g t

,f p, e mjg

4,j (c;

-([

l MEMO . Date of Meeting: - September 9,:1966

Subject:

' Acquisttton of Brownsvtlle Muntetpal Electric System Attendtng: ' Mr.S.B.Philltps, Jr., Central and South West Corporation Mr. R. B.Phillips, Central and South West Corporation Mr.Rtchard Johnson, Middle West Service Company Mr.. Frank R. Lane, Central Power and Ltght Company Mr.Barney M.Dayts, Central Power and Light Company The purpose of this meeting was to begin a study toward the acquisttton of the ' Brownsville properties. A short resume of past history on the subject was given. Then a pro forma statement that had been prepared by CPL was discussed. These figures were In four parts to show. FIRST:. What the Ctty of Brownsville might expect from their system based on the 1965 audited report and using the same percentage of revenue growth for a 10 year period. SECOND: The figures were to show what CFL could expect to do should ] we be operating the properties. These figures were based upon the same audte report. - THIRD: The figures were to show the results if the properties were leased from Brownsville. FOURTH: To show the effect of purchase of the properties at three dtMerent purchase prices----$20 million, $26 million, and $32 million. The pros and cons of leastng the properties were discussed as well as the problems of financtug and regulatory approval of purchase price. Dick Johnson presented a itst of recent acquisition approvals,' showing the ratto of purchased price to customers served and to dollar of revenue. The results of this list showed a purchase price below the figures that had been presented, i In concluston it was decided that the following would be done: _1) Dick Johnson would revtew the lease file of Middle West Servtce Co. ( . (2);S.B.Phillips, Jr. will contact the law firm and present the matertal accumulated to date. Also he Wtil have the law firm (Leo McCabe) check SEC staff for Informal discusston on acquisteton price ranges, and have the law firm review methods of acquisteton with emphasts on betterments and maintenance of leased property. g 9 19 i v l, n 1 l . ~..........

.4y MEMO on Brownsville - Page 2 (3) Dick Johnson will have Middle West Service check the economtes of the pro forma statements presented at this meeting. (4) S.B.Pht11tps,Jr. will check with EEL while in New York on methods of acquistttons they might have in their files. (5) It was agreed that Middle West Service, the law firm, and Central and South West will study means of financing acquisttion-- either/or bonds and stocks--should the acquisttton be approved. (6) Middle West Servtce, Central and South West, and CFL will review plans of presenting the proposal to Brownsville should it receive approval. (7) CPL will send two coptes of the PUB and City of Brownsville audits dated June 30, 1966. (8) CPL will determine the amount of total plant that is generation. (9) Central and South West wtil check their files for a itst of the B rownsville bondholders. (10) CPL will supply a report on the economic future of the Brownsville area. (11) CPL will supply two coptes of the latest engineering study made by Brown & Root. (12) Finally, it was decided that all Information on the study would clear through the Central and South West office. 9/12/66 Barney M. Davts - r{ 1Q f D 21,- gSD a cm

d,3 C)) MIDDLE WEST SETsVICE COMPANY r ,.c TQk COMPANY SUSINESS ONLY Mr.1rr F.'.:.= Pre;.cced 27 the City of Ir:.t:cidi July 22, 1966 g uvan i

u 2.2. :cau=,.wed==

\\ -..w.- + w. - w.c;:.u u:..iti, 2:r. s E. E. His:cl raa m = gg 'te htwe e--d- >d te _f sc.1 cf the ?:.blic CW'dtias 2ct-i cf tm Citf j of 3rc.. :rrd '= f: F.:. - ey A"'--' -- I:, g.ed i'-4.et ' d ' ' ' = to e--- =~., as I fe".:s. w 1. I6 in de g-- - 2 1:3 r'--t is m 'dati:. N i ca 1 2. Gas ted--s cf 100 !!1 h:.re bee = t -"t==d 125 Ci is fassitid l e i N 3 c a 233 IIIA ;c:=r t:c.:s.La dcea ct 3rceide s :=i br at. 2: d=11rerf e=d cf ths 11==. I:.wyer, &..,,11:2010: w d +4' hs c --- 1% to the intes e st. } h. The ecst cf de line e---~ te checked be---we ve do k=ct 'c.:r. the j 18:Eth. 5 Stctie --~.es c=d kcces sw to be ccc:~'.ble. P

6.

• e heat rata E 3 12 vi*'d-the bc11.:=rk en.: ce==1d. 1:3 o

cc-a a d --* ' cmti== cf the p.s tt=bi=e shid ".a.s of cet=ce a ec=sida:-ey Sd f-heat nt=. 7 Fuel ecat armi e'atics appear to be '" ri@. S. Sc=d i=terest cf 3 5% a;; ears rather 11te:.1 fer ts:c = - ;ts. Rece=t issues of Isa r=ted ele =tric c'dt7 tends,rith 30 yer.ro i rat::rity en.r:7 h.3%. I ~

9. Th= debt se: tice =te cf 0.C623 fcr a 30 yecr 5 5ioc d is ="

( e w -o.-- i 10. Ma1='rs~ = a=1 supplies at 0.CC57 -d "

• per h'.3 a;;es.r to te t-too icv. At the rate cf o,1 L" ;cr b3 a= a==

t cf $150,c.x) vculd be :::=re r-* etic, espe '""y h c=e cf d= d se u=1*s l. L -CCgC n dp g

.....,..... ~.. 's r ..a a_s,, s.._ .e r s- .t. C.'. ^a..'."'.' '. *_' =....'..'.* '.*.u do - * ~ ~u ~ ~ ~. ~ b e ' -- -- d -- k ' a ,3 w.,w, ;;h +w, n,

v'/c.,.,..-... j

..s.na,7.L.-.-,...c.s.a.uss w - o

• ha $473,500 at:.rn.

t T'"*T/4h /w~ cc:-

7. 'm l

l l 1 ) I e.e j .N. C a i i 4 I ' k j I fi s . {. '

==e %%6D \\ '. m<m.mo appe

• ' ^

1< s C'ENTRAL. '7 JOWER . \\,Ar " IG u co HT so, =rnot:.. =...a-,,=,. c= .u.,,,,,,. . m February 7,1966 ' cener e> vue ..csiocut Mr. R. B. Phillips 4 Central and South West Corporation Chicago, Illinois 'O N

-)

Dear Dick:

.=

Thank you for your letter,of February 3 commenting N on the Brownsvt11e situation. The information which you and Hans provided is most helpful, however I am at somewhat of a loss as to how to p:oceed. My visit in Brownsville with "the man" was most cordial and I am sure that 51 will tell you about it. i One thing that bothers me is the requirement for SEC to approve any purchase by us of these properties. 'Ile i timing gets around to the o'id problem--which is first, the chicken or the egg 7 Jim Wtison has written to Judge Stevenson i for help on determining what sort of formula the SEC might approve. I appreciate all the help you have given me in the past and state again that I realized all along it was tnest dif'icult to supply comprehensive figures concerning the value of the Brownsville p:foperties. Best regards,

r ESJoslin

AH CC: Mr.S.S.Fht111ps,Jr.

Mr.Sarney M. Davis esse EP

-e 9.U \\... Fahrua:/ 3,19 65 1 ~ ~ Mr. E. S. Icslin, President N Cant.al ?cwer and Iight Cc=;:any 12" N. Chaparra! Street c= Ccrpus Christi, Ta:,:as 78403 c Cear Innis: his is just a cces to 3:q:rsss Hans's and =y appreciatien tc ycu fer the cpportuni:7 to ;rasent cur views and wha: kncwledge we have gainad en the Erewnsvilla situatien. I hope that we have net fur.her confused the ;rchle=. Cur intant is to help in any way pcssible, especially in presenting the prcblem in perspective. If either cr heth cf us can help in any way, please fee! free.to call upcn us. I must ape!cgica fer my hasty depar:ure: hewever, 31 and I became 1::velved in a discussien-cf cr.e cf cur pechle=s and I nag!actad to keep proper track of my :ime. With Mate's assistanca,I made tne airper a few minutas early. Banks again. Sincerely, ycur friend, REF:ds cc Mr. S. 3. Phillips, Jr. Mr. B. M. Davis ) l l f: l ~s e 9* C6u* m w e ,a

im m s - c,. s. D.?f%tt hD Soern wz:T conronArzos n.dC, [ Q ~ qws.vry neerx waczza sim e exicAso -T" 4(: jp a '/ ( 1 c, Janumr/ 01, l'i65 Mt. E. S. Icslin, ?rcsids.t eq Cactral Power snd I.ight Cc=r:any N 120 N. Chaparral Strsat-Cer;u: Christi, Tar.ss. 73403 Daar Innis:

Subject:

Ccnsiderstiens in Octur=iaatica cf Prico 6: P.urchas cf Brewncvilla Picese v ~ ?.r:v nsvi11 n!setric ravenues ars esti=sted at the prasent ti=a to be apptc;:Imetsiy S3,000,000 annustly. La rs= ntly pres:nd E=wn and. lect ;:rejectica indic:tes a gt:.vth rata cf appr:xi=ately M in ki!cwatts an=cally, sed if wo sesu=c ne enaw22 in eva=ll !csd facter, tnis means 9'.1 in iGV:i. Sines rata st==turas srs de:igned 2: tney ars, this =enns a sc=cehat Icwer percsntago in :vsnus g=wth - 2:5 prcbably is rancenable kr the near futura. Ur=wnsvilla ratos are cur cid (dG3) ratas. 01:ce== t cf cut 1964 rats adjustment v.T.s in the ests avaltahl-s te isr73 uns ratidantis! cust==ars, the a= cunt of reductice. in Erewnsvi!12 revenus which wc.cid rsault fre= applicstica cf cur cu.rrent r:t: has hasn ignerud as net baing signifi= sat. A rac!1sti: appresch is first t= t: / te view any possible purchase !== the view cint cf the City 'cf 3rewnsvi!1e. If tne repcrtsd finan=ial statacants, as estti!!cd tt: b/ Fest, Marwi=k, Mitchell 6 Cc., anywhers near rei!:ct the trus ::st cf the atact. cperatica en an ac= ual basis, this utility p=ducas sc=cwners batween Si00,000 sad 31,000,000 snnually in profits and free ssrvicas f:r ths etty. It ts.t:us that 2,.:r2 cre sc=e rastricticas en uss of th: s pr fits by tne city.. If the s!c=trt: :yst:= ses privately cwned, it is pr=bable that abcut $2.00,000 per year in pre;2rty c:um weals ~ bo paid and Icesi franchisa and ethat taxes, foes, etc. could easily a= cunt te enctner $100,000 per annu=. In additien, the city's bcndad debt which is new'ersantissly self-lictuidsting, wculd havs t: ba paid cff, pr:bably in full, and th8 -"-antly c= cunt.: to ahcut $15,000,000. With the et.ar utilities, vatar and cower, daht fres, t!:ey 2heutd gacersta abcut $200,000 per year in pr: fits. D1: $200,000 is appr:x1=st:!y tho amcune cf intartst currsntly charged against enese opsretic:ss.

[the cheve'

3200,000 in ta:ces plus the $200,000 r2ducti n in interact cest: te t!O Water and N

k. wer Depart = ant.s is deductsd fr:m tho tctal utility in c=a acw pr:du=cd, the bsicu=c l .LL ,_r --m. b e -cer r,-- v s-~r=, w-s- -e--- w e--~em w

..=. .o n. crJtTnAI, A.ND socTs wr$7 CORPORATION mmr nmr neus um. cmc.n g Mr L 3. Jesli.* Pago 2 Janusr/ 31, 6' e cf fr== $400-000,000, at 3%, is wcrth betweda ST, sr.d $12 clllien te tac city. 21s tu the s=cu.: vt.1=h wculd Itava te 'ca lavest.ad at 5,5 t prcduce the ss=a inec==. c:a ba Ter purpe: tr cf perspectivo, we havs assumed that the purchesa c=st v.culd _C3 paid with 603 dabe (at 5%) and 40% equity. Currst.t:y Cent s! ?cv.er and Liv.-{ Company ratics Indicsta that cppecximat.aty 37% cf th2ir revenue del'.sr is ovMahia fcr Fad.aral taxes and all =cney ecsts. Le a= cunt avs11sblo to p.sy fcr tha r cuired capital, befers ts:ss, aesuming ?.rewnsvilla cpersting ccets wculd be typical cf the Cent.nl Pcwar ar.d 1.ight syctam as a whe!c, wcu:d be appreniinsca!y Si,110,000 nr.nually. Eis is 37% cf tha $3,000,000 gr:ss vavenus which is ovm'.abic fer daht servi:, esturn en equity, and Fadarsi ts==s. If ws as:c=s s pur=hsse prica cf $23 t: $27 millien, and if we use the $1,110,000 availaula fer Federsl ts:res and mency ecsts, a..d assc=c tant it L: finan=ad with G0% debt ($13,000,000 t: S16,200,000) thi: wcuid toave caly S200,000 te S420,000 (ofter $690,000 t 3010,000 in debt ec:t) bef:rs Fed:rsl taxas, cr $150,000 te $213,000 cit 2r taxas fer tha rsquired c==cn squity. 2: indicstad not return c.. c== men en this basis wculd be apprcxi==taly 1.43 to 2.4%. If $20,000,000 wst: paid, the return en ce= men wculd ba abcut $255,000 er 3.3%. At revenues cr:w i this wculd gradually pr:duca =c.s cet fer ecuity.. If =cuti.:usnca cf t.tz same 374 cperating ratic and 5% ruvenue grcwtn is accu =ed, then h/ the and cf the first yact there wculd be abcut $240,000 in revenuo grevich and ca nat avullstic fcr debt scetics, Federnl t=xss, and equity weu!d hsve incr:ssad spprcx1=ataly SM,OC. A: a genars11:stien, it has t: ha assu=cd thst this gr:Y,th wcu:d peceu== a full return cu the investment required te 'suppcrt tbst growth. Cur avarngs tsvonue det!st is suppcrtsd by appr==1=ately $3.50 in net plant invectment. Sc=c.grcwt:1cf c=urse can bs had at much less invsst=2nt; hcwever, in the icng run the invest: ant must ba =cda st apprcxi=stsly the overa!! rats. We pret: ably weuld chtsin en 1:111:1 f.:w years advantaga en-an incrs= ental invest =2nt basis. As revenus incrosses, sc must invest =ent; hc==c, r alizatien cf a full r turn f== such a pur=hase, standing alcan, wculd be ver/ remets indeed, if ever. It must be kept in mind that tho' purchase cf this businass f r anything nser its apparent value tc the city, er even k between that and daprecistsd criginal cc:t, 3.1.culd rssult in a vsry si:sabia accuisition adjust =ent, in tha =sgnituda of $10,000,000 j er mers. Depreciatzd criginst ecs: appects t be abcut $10-11 =1111:n. na en cs: ( ever dapreciatad criginal c=st wculd have t: hs writtan-cf! t= surpius in a lu=p su= L cr a=crti od ever a pericd cf ':1=a (perhaps 10-15 years). 7 r tats-maki..g pur;c ss tha writs-cif cf acquisiti n adjustments is al==st always "be:cw the line '. Acquist- .. - Ocn adjust =ents ara viewed as a chcrge squinst the ec.uity cf the c =en shatch:.ci:.r.

d..*cr Tadarsi ince=a tax purpenas the'hara f:r depractatica wculd be fair valus s..d tha l

EP p y r

CINT2AL AND $gUTE TEST CORPORATION $M ecorn wAcus arm t cxic.tcs

• r :.. J. Jcs11n,*.

Q ) .4 e 3 .\\ J J.2;.us:/ 31, l'E 3 1 ciffet.anca, if any, ".culd 23 s. cn-daprc=tsble ir.t =gible. Th: i=;act cf a 13 ,yur writs-cif cf a $10,000,0v0 scquisitic:, cdju:t= ant.tculd depand upcn nsv =uch c! tha ourc. ha:a prics ws: trsat.2d fcr Todcrsi bc:=2 ts:: purse ?s c: b~e-tangible,. A 10 year a=citi stien eculd redu=a annual inec=s (cr surstus).dyn 0!,000,000 so:: the Fed.:rst ince=a tax en whstever scr:ica shove er:ginst etst that is d:Fr2e'# Is. Tda whelo adju:t==nt c uld be written-cif sti se enca earn 2d :urplun=== u.:t ceuid abscrb it and lasve a sofa =:rgin fer ethsr ce@ ths As c' terr,sts apptcsch t: lump surs pur.-hc's2 wcu!d be to =ska 1stger annual psycent: t0 the city. Tr.1: might 10 war &c c quisitica adjust =0nt, but cculd wall ral:2 C:c' prehta= cf cthcr cc==unitic: =a':ir.g grcater demand: becanza cf tha e:ts=plc =ct by cur tr==:=3nt cf Erown: villa; j:cn c, it cculd be 'nr/ cert!/ in th: !cnc run. ] Ancthat sit.:rnstiva might be to as:u=e da city's utility dal.t; hcwevar' in view :!

vonant: rnd a changed =ency =arkat, it is et 1:c:t qucet:cmshic li bendhelder wo uld cen=act. E=w much difficultr wce!d be invc!ved because ci untappy bc.d-heldars has h t baen c== sider d. It pt:bsbly wculd be t: da bcndhclder': dvantsgo to get hi: =cccy back ned reinvent in sc=cthing s!se. Ri:te.g int:::st rate: esu:e d:clining b=nd pricss; han==, th:re 1: incontive t: got cut cf en invest =ent at ga.-

er bettst Lf given the cppertunity. Fsasibility 1: a legal c:stt:r to bo're:cived with ccunsel. D.: city's interest :sta aversges abcut 1% is:s than cur probable ec:t cf nCW =ct.3y. 1 ilegerd. ass of the app =r nt ccenc=i= hc;c;c:encs cf the r,ituatien, the d::Imien need net rest horn Ocne. C$st cc=:iduraticn: =sy wetl cutweigh $c presant ccen =ic : 9 1. Brown:v11!c apparantly is grcwi:7 Inster than CP 6 L as 1 s whc!a, a:d this new huminc:s would be captured. We would spend a great deal cf cffert and =ency :: chtsin thi: gr=wth elsewhers is cur Systs=. 2. Brevenevilla 1: a nat:.::s! fcr industrist develep==nt with its gced deep-sea harter and godersi locati n, but te sell prespective industries es tne !cestien :2 quires =cro l rallable servi =e than the municipal cperstien c;p ars to he capabla cf supplying, 3. Brcwnsvills has ne hu.*=c 1 sursn=2 pectretien - t: obesin it==uld be very ecstly - pa.6aps several h.:ndred thousand dellsrs per yeer. A burricans preparty !c:s wculd have to be abscrbed by tha city and ceuld be _( ttiscus. Our Sy:ta= wenid t ka such a le:s in stride. This could be a gecd basis fer reducing the velus cf da present systa= to tha ci:/ E,- t \\ o M g \\ 3._..,. l ]

CIMT3AL AND SCf7TH TEST CORPORATION rwc#r.wsern ncara sem e extc.u:s Q .,; r. t. c. J cs !1n. ,( pag.3.; Jar.ucr/ 31, 1 4. The eliminatica cf a lar;c Lt.sts;1ccaly i cated. unicipal cperstien hcs valus tc us La reducing many fut to prcbloms. It wculd ell 1.ata risk ci a joint G cnd T with ccc. 3 and/cr a tic in wit.h Ma:: ice. It wculd cu=inat: a scurca cf sgitatics *.dlich Ot:.tc up ct:ars, i 5. Much of the ecst cf purcha s sbcyo deprecistad criginc1 w ccst eculd ba caccuped by growth ctherwi:s unattsiashte.N 1 .h3.aps accia reduc +ns in prc=ctice.s1 c::pc..ditures, -~ etc. might alsc be in cedar fcr consideratic.1. y .=- i 5. Any pecpeccic that at: mnda tc the cit / prei.:sh!'/ will hs /.a l tc be en a basis that will leave their utilit/ cperst.cn debt fram as wou as previding them with a scurcs cf laccma. D.a doct free ergument c:n be usad tc censidsr:blo ad-vsntsge in nogetisticas. l Sincereiy ycurs, ..4' .,/ IGP:ds \\ cc-Mr S. ::. Phillips, Jr. Mr. R. Steve:sen 4 u -. s. J. ..e.tT, ;r i i 1 '~ / (- HP 4-i

K.,~.',*.A]nf~ T Draft #3 - Page 41 - 1/28/56 f G,) To: Mr. ?,. S. Joslin, President, Centrai ?cwer and Iight Ccmpany r- . rem: Mr. R. 3. Phillips

Subject:

Censiderations in Ceterminatien of ? rice for Furchase of 3rewnsville Precer v e.o 10 N Brownsville elece.c revenues are estimated at apprcx:=ately 53,000,00C_ m cn cnnualiy, at te present time. The recen: 3rewn and ?.cct projection indicates a grewd mte of appecximately 9% in kilewa:s annua!!y, and if we assume no change in everall f l lead fac:ct, tis means 9% in TNH and a somewhat icwer percent in revenue grewth - S% is pecbably reasenable fer de near future. Brownsville rates are cur cid (1963) rates. ,9nce = cst of cur 1964 rate adjustment was in large use residential cus:ccers, de ( accunt of redue:1on in Brownsville revenue which would result from application cf our current rates has been ignored. A realistic approach is to t y.:o first view any possible purchase frem de viewpcint cf Erewnsville....l! ce repersed financial statements, as certified to by Peat, Marick LU.tchell & Co., anywhere near ccrrectly reflect the' r. rue accrual cost of de elect: c operation, this utiliry produces semewhere between $800,000 and S.1,000,000 annually in pref.its and f se services for de city. It is t ce that dere are some reste: :1cns en1*s V use by the city. If de electric system were privately owned, it is probable dat about c'

• v o l Pat

{r .O v e

.f Draf: 43 - Page s2 -'l/23/56 5100,000 peryear in'; roper y taxes would be paid and !ccal franchise and Other taxes -,. - ~ 4 and fees, etc. cculd easily a= cunt :c another $100,000 per annu=. If this 5200,000 3 is deducted, de balance clic= $600-300,000, at 5% is werd her.veen 312 and.a$16 N C"). =1111cn dollars to te city (this much would have to be invested a: 5% to pr ducC.he same en C.t'. ince=e), b additien, de ci:y's ber.ded debt which is new essentially self-!!quidating, wculd have :c be paid and tis currently e.= cunts :c about $15,000,000. 1 i Fce purposes of perspective, we have assumed da: de ecsc of. purchase would be paid wid 50% debt (a: 5%) and 40% equity. Curren:17 Cen tral ?cwer and 1.igh: Cc=pany C es adica:e eat me===etelv 37% cf em revenue ecuer a ave 11m. fer Feeer=1 l trxes and all =eney costs. The a= cunt available to pay fer de capital, assuming Brownsville operating ccsts would be typical cf te Cent al ?cwer and 1.ight syste= as a whole, would be apprcximately 31,110,000 annually. This is 3 7% cf de 53,000,.000 gross revenue which is available for deb service, return en equity, and Federal : axes.- i If we :ake de $1,110,000 available fer Federal : axes and =eney ces:s, and cssume 60% debt ($15,200,000 :0 $18,500,000) this would leave only $180-300,000 (af.er 5810,000 to $930,000 in debt cest) before Federal : axes, er $94-156 000 af:ar y. 1 M. ggas

==.tas.e

• emse,
• Me.
  • gumesme -

=*-se oe

• • m
• ~ we f

,s 1 a.. 1

Crti: 43 - ?cge #3 - 1/23/56

xes fer oc= men equirf. Tne indica:ed net return en ccmmen en $1s basis would be

~. cpprcximately 0.9 :c !.5?6.,/As revenues grew 51s wculd pradually preduce =cre net fer equirf. If we assume centinuance Of te same cperating ace and !?6 revenue grew;h, tis would mean $ac by de end of de first year we wculd have abou: $240,000 in revenue growth and $e net available fer debt serr.ce, Federa! :ax, and equir/ wculd have in-

c. >

N = creased appre:c=c:ely 589,000. As a generalica::en, i: must be assumed.ta:.nis-cn-cn grewd wculd preduce a full ree; n ca de investment required :c supper: de grewd. Cur average revenue de!!ar is supper ed by appecximately $3.50 in net plan: investment, f me grewd of ccurse can be had at much less inves:=ent; however, in de icnq run the investment must be =ade at approx =ately de cverall ra:e. We ;rchably wculd cbtain an initial few years advantage cn an incremental investmen: basis. As revenue increases, sc mus: investment and hence, a full return frem such a purchase, standing alone, would be very remete indeed, if ever. It must be kept in =ind dat a purchase of dis business fer anycing near its l l cpparent value to de cirl, er even in between dat and depreciated cr ginal cest, would resul: in a very siceable acquis1:1cn adjus =en:, in de magnitude of perhaps $10 to a i $20,000,000. Ceprecia:ed criginal cos: appears te be abou: $10-11 millien. Tnis would l u D.,. C '7 t CN s ~ 1 - = = = = = = - '*

Y. Draft 43 - Pago 44 - !/2 3/55 have : he wnt:en-cif ever a pened of time (pernaps 10-15 years). ?cr rate-making n s ' purposes me wnte-effs cf acquisiten adjus =ents are al=cs: always "below te !!ne". ?ce Federal inccme.ax purgeses de base fer depreciaten would be fai value and te w N difference, if any, woulc be a non-depreciable intangible. ne impac: ci a 10 Tear ~~ i en N wnte-eff ef a 510,000,000 acquisiten adjust =en: would depend upen how much cf te purchase ;cca was reated fcr Federal inccme tax purposes as. intangible. It wculd i reduce inceme (cr surplus) by $L,000,000 less de Federal inccme e.x en whatever perten above enginal ces da: is depreciable. 1 An al:ernate apprcach :o lump sum purchase would be to make larger annual payments te de city. Tais might !cwer the acquisimen acjustment, but ceuld well.aise de pechtem cf other ecmmunities =aking greater demands because Of de example set by cur meatmen cf Erewnsville; hence, it could be very costly in 2e lcng ran. ?egardless of de apparent ecenemic hopelessness of te situation, de decision need ac res: here alene. Cter censideratens may well cutweigh de ecenemics as we new see 1:: a hue. e me.. e

1 Craic #3 - ? age #5 - 1/23/65 1.- 3rewnsv111e apparently is growing faster can CP & L as a whole, and dis l I c l new business wculd be captured. We would spend a let of effer: and' money 1 e.o .I N i

c obtain this growth elsewhere in cur System.

m \\ ~~ e, c: \\ 2. 3rewnsv111e is a naturalfor industrial development wit its pecd deep-sea harber and general locaten, buc to sell prospective indust:tes en te Lccaten 1 requires mere reliable service dan te municipal appears to he' capable of supp Vfing. 3rownsville has no bur::carminsurance pectaction - te cbtain it ceutd be very cestly - perhaps several hundred $cusand. dellars per year. A hurr. cane property icss would have to be atscrtedby de city and could be ruincus. Cur System would take such a less in stride. His could be a gced basis fer reducing the value of de present system :c te city. 4. ne elimination of a large strategically iccated municipal operation has value to us in reducing future problems. It would eliminate risk cf a join: G and T -with cecps and/cr tie in uth Mexico. It would eliminate a source of agitanen i n.. M Which stirs up c2ers, 1 i m 4

r S I b). COPY C. 3., CENTRAL POWER AND LIGHT COMPANY M { 3,3 (j)] / - July 2,1965 N Mr. Ygoncio Carza, Jr. Chairmaa Brownsville Navigation 01 strict Brown.vytile. Texas Cear Mr. Car =a: I want to personally thank the Navigation District Board for the privilege of meett::g with you last week. There was evidence of mutual interest and cooperattoa, although much rematus to be resolved. It is our understandtag that the Navigation District Board is to tell the Public Utilities Boarti of the meeting Q and suggest they call ou us for a meettog at a later date. s,r. As we stated at the meeting, we are in the electric power business and are receptive to heartag any reasonable proposaic. There is much potentialin Brownsville and with such excellent port fact 11ttes the area should expertence continuous growth. 1 It was tedeed a pleasure to meet with the members of the Board as individuals ara as a group. I will appreciate your sitencing our regards. Sincarely, President. ES]oslin:AH CC: Messrs.R. L. Schultz Russell Rentfro ') 2. John S.Osbo rne b BCC: :.' Mr. R.C.Nongard - 4 g 4158 i LIVE BETTER...E/ectrica//y og., """"IW4 I

Nu.'< }, "") I af a 3.t ~ ~ ~ ~ .5 lf) (' 'n. 4 =. *

• e
• a

" ~ ~ ~ (y } N i Date. June 23,1965 N Flace Bayvtew Clubhouse l s s I Attending: R. A. Ewing R.C.Norgerd g Gen. Robt. Harper John 5.Caborne Xeith Stone E.S.Jos'.tn Barney Davis. Mr. Nongard gave the group his ideas on ene Brownsville simation and explained the meeting to be held next alternoon with ce Navtgation Dtstrict. I i Hofmoksi He brougns out how long be had worked wteh the late Frit: and bow-Fritz was ready to tell the PUB chat the Navigation District must have 3 CFL power to grow. He explained that he has been working wtth the current Navtgation Otscrter Board to assts mem in arrivtog at some plan for CPL to serve the For: area. } He said the Board was ready fbr us to take over the area. He did say that though he did not know what propositions would be offered be felt sure some would be ridiculous l But he did think that part of he proposteten would be that from our point of vtew. FUB would draw a territorial boundary which they would not penetrate and we would O be required to move bach to chts line. M His discueston was quite lengthy and discussed some personaltt!y on the l l PUB and Navtgation District Boat:1s, to bring out ways in which we mignt be [ l . approached or to prepare our own approach. Actually, the memo on Stewasvt11e copy of which ts attached covered most a i of what he satd be had told me Navigation Distrtet. j . l. I l l Barney M. Dayts I I 1 y CP. l 4 04243 4135 -n.. . s r. 4. P 1:y t?,2, ge n .:tr2 1c.d iv@.:..;r.

• ' 1 '.^. n 1.

p -- l.- : m:t

• n ~ 7. : tor + u ?.a *
• ' * ~ * *. ' 1.d 1:

her D ~ v :n.1 ' 4.F.',. ' *. f i, ke m. ". ; ' a f. P. t ri. ' " *. : *. h. . * .iN th*t in , tes t'.m O.- per--r, n-.. '

• a ? i t ;'.' f.*3 t'1hb C."
• I. ?.*')

'. I 0 *. s 'a d.

i. !' ". t d il

• l *W. J 9

- '.i' ~

C,***.'",,* *." '& .,4., . M.r; a n.. C- \\ ', W:.c. *." C t* t g 4,. q 3,.,.,,..g ......u,. ~ -~.. ~ ' ' '

~~T ~ .h CENTRAL AND SOUTH WEST CORPORATION .o w O A3 August 28, 1963 Mr. J. Harris Ward Chairman and President Commonwealth Edison Company 72 West Adams Street Chicago, Elinois

Dear Harris:

As I mentioned to you yesterday, one of our subsidiary companies, Central Power and Light Company, has had several meetings with officials of Union Carbide concern-ing the furnishing of power to the plant of its subsidiary, the Union Carbide Chemical Company located at the Port of Brownsvine, Texas. Since the plant was acquired by Union Carbide in 1958, its power requirements have been met bt tWo small turbines in the plant. It is our understanding that the capacity of i this plant will be gradually enlarged, and that it will soon j require an outside power supply of extreme reliability. The City of Brownsvine has a municipal electric system with a generating capability of somewhere over 35,000 kilowatts, which includes one relatively new unit of 25,000 kilowatts. Central Power and Light Company ties into their system and provides emergency standby service to the City. Naturally, we do not feel it is right for the City to expect us to back up their service to an industrial customer at the Port. HP cogogg While the Port of Brownsville and the Union Carbide plant are not within the City limits, the City sella power to the Port Authority and is anxious to serve the Union Carbide plant. In previous situations, the City has had the persua-sive tool in that it furnishes the water requirements of the Port, and has threatened discontinuance of service to customers wno do not take their electric service. @4 A 20091

q .i / CENTRAL AND SOUTH TEST CORPORATION rwsm nerx wacus a:=

• cmcas Q +

Mr. J. Harris Ward August 28, 1963 Our engineers feel that the local management of Union Carbide, for obvious reasons, does not want to oppose the City officials, but that the head office engineers who have met with our people have indicated that they favor use of our company in this connection. We are pretty well convinced that if Union Carbide requested our service the City would accept that decision and not carry out their threat concerning the water supply. For your information, this same company -- Central Power and Ligh. Company - is serving the Carbide and Carbon plant at Seadrift, Texas. In 1962, this' plant had a peak demand of about 23,500 kilowatts and purchased over 181 million kilowatt-hours. It is my understanding that our relativas with that plant are of the best. I shall certainly appreciate anything you may be able to do in this connection. With kind regards. Sincerely yours, ISO:r cc: Ennis S. Joslin, V.P." Central Power and Light Co. 4 ~ ~ CP

~ i l 8-o ~ ,, p COPY N6Ld$c {. CENTRAL POWER AND LIGHT COMPANY i d g' I i \\ August 16, 1963 Mr. John S. Osborne 8 Chicap,111tnots

Dear John:

As requested in your telephone cal! last Tue:: day morning. I asked Bill Price to prepare the enclosed report of our contacts with Union Carbide Chemical Company in Brownsville. Also enclosed are copies of letters and reports covering our nepetations with this customer covering additional power servtce to their Seadrift Plant as well as a proposed new plant which will have a connected load of some 20,000 to 40,000 KW. 4 You have some of this information; however ! am enclosing a complete file and also sending copies to Bobb Winsborough. By this time you have probah!7 received copy of Mr. R. C Nongard's letter to me datsd August 15. Your advice and guidanca are needed a plan our contact with the City Utilities Board of Brownsville. I think wo ebould emphasize our destre to serve Carbide and other industries in the Port of Brownsville area. Do you agroe7 Sincarely, 25]oslin:AH Encs. CC: Mr. R.M.Winsborough CP se occ20sa .A 20107 i \\ UVE BETT2R...E/ ectr /cs//y ~

--- - ~ --. ___.., _,, j s, ,i CENTRAL PDWER AND LIGH' T COMPANY a E ) f SERVING SOUTH TEX AS WITH Et.acrRICITY 7 ( k Mowc crries i sc N. cwananaAs. errics cr Tuc ccRPUS CH RIST1. ?tXA5 vics pRealcENT ANO QCNCMAL. MANAcEM July 31,1963 Mr. Wm. P. Barnard, Chief Utility Engineer Pubite Ucutties Board, City of BrownsviUe {} Brownsville, Texas \\' Dear Mr. Bacart \\j@/ Since receiving your letter of July 3, Mr. Ewing and other q[ /p,i,4 j members of our Vaney organt::ation have been in contact with you. It is my u=derstanding dat arrangements have been made to inventory j q j\\ the facilities owned by Central Power and Light Company and useful to i hl/ you in serving tose customers whom you propose to take over by t : j / 4,.1 December 31, 1963.

jl You had previously famished us with a record of kilowatt i

hours exchanged between de two systems for de period April 15, (- 1963 through June 15, 1963. Our check meters indicate that not more than 50% of the kilowatt hours were accounted for. Therefore we have installed a graphic recording watt meter which wtH provide an accurate hour-by-hour record of power dehvered to and received from your A full month's results w'11 be available around August 15. system. When the group met at Bayview on May 25, 1963, we discussed, among other things, de fonowing subjects: (1) Power contract. (2) CPL customers within the city ilmits of Brownsvine. (3) Easements or franchise needed by CFL to maintain our high voltage system. (4) Service to industrial customers in de Port area. (5) Brownsville's proposal for a joint-use power plant. It was agreed that the power contract would be reviewed after August 1, which Central Power and Light Company is ready and wtiling to do as soon as power flow data is available. 40s4 CP A 04046 ,,g,,,,,...... c, w,e 4 mer ,,ne-

.s j i 7 July 31,1963 Mr. Wm. P. Barnard ('- We smted that we made no legal claim to customers wh o were s We also discussed what we within the city limits for ten years or more. considered unfair t employees in soliciting our customers whom we have a legal right to It Mention was made that water sertice was widhel It is our customers outside the city limits has been or will be approved. understanding also that it is not the policy of either Board to solicit our customers. We also discussed de possibility of exchanging some of o customers whom we now legally serve for customers in territory not of within the city limits. We received the impression dat de matter l i f r more taking over the customers who had been within de city im ts o resolved; than ten years would be delayed until some other matters were however your letter and actions prior to it indicate that you wish to move ahead. Of major importance to Central Power and Light Company is sideration of the matter of service to industrial customers and the cen B,rownsville's proposal to furnish us with whole ~~ your people to cooperate with us in developing large power load have not received any indication as to de formula you would use a I am sure you realize that dere is a developing cost of service to us. great advantage to having our major plants near load centers are unable to develop industrial loads around the proposed plant area, or do not receive a very favorable power cost proposal, there is very little incentive for Central Power and Light Company to participate in any power plant program. It is agreed that we should meet again at a mutually satisfacto time, which I suggest be after August 15 so that w l s to,present a more definite power cost proposal. Sincerely yours, Vice President and General Manager. CC: Messrs.R.Edelstein H. Eugene McNair Jno.S.Osborne R.C.Nongard @N R. A. Ewing D A 04047

• W

-mas

== e,

• • • • • • • ===4a

-a

• ^

w.

. ;_ w - w . 2 -.~. x-3 q 1 r.. CITY,0F BROWNSVILLE 3 i 1. Power Sales Contracr (a) Present contract expires August 1,1965. ) I (b) Review at end of third contract year or 3/1/63. t i 2. Customers within city limits since April 1950. l f

t 3.

Customers within city limits since Aprt11960. l y 4. Franchise for 69 KV lines through present city limits ? and future extensions. i ~ 'r F f. p E 1 5. Service to Union Carbide Chemical Co. In Port of Brownsville ( and policy regarding future power loads in the Port area. 6. Proposal by City of Brownsville to construct 150,000 KW s gen erating planc. {. { Ea + ,e

f. ';'

e g K. v. l 't.l. .h 4036 .?b ~ j-t I A 04048 v* I '+-,a...% r. -.n -. ~, -,,

+ _ -.L, _== _ ~w _ _= L = 3}y- . r= u a -... c - vc an _m A

j

~.g; y f -. MC %y w . M -t W ?,x .., lJ,% _ i. su;ig gi. lls j '*Y j , g. 4 ..... _ _... ~ m Tg5=E:%f?CW""Ei'T5?]WiC@ariM 'RM22u"Mh?~'3ll :.%;;s 17,"

26 copy CENTRAL POWER AND LIGHT COMPANY i

UNION CARE 1DE CHEMICALS CO.-Brownsville Corpus Christi, / MR.JNO.S.OSBO RNE CHICAGO July 20, 63' I I am attaching copy o' a report by Bill Price of a contact with Mr. Frit:: Hedmokel, Port Director at Brownsville, which you [ will find interesting reading. l We have not sent a formal answer to Mr. Barnard's CD letter of July 3, although we have been in contact with him and - A have sent the engineertug representatives to inventory distrthu-tion materials and equipment. Mr. Bates reported to you that he saw Mr. Nongard on { his trip to Chicago and did not get much encouragement from him. It is my impression that representatives of the Pub!!c Utttttles Board, the City, and Mr. Nongard are hoping to talk us into all of the concessions and benefits for them and leave very few, if any, advantnges to us. From Mr. Hofmokel's statements to Bill and other indications it appears to me that we are not going to be able to serve the Port area unless customers such as Union Carbide insist on our service. This being the case, I cannot but!d up much enthusiasm for their proposal to butid a large plant to be substdtzed by CPL. I expect to be in Laredo on Monday and Tuesday and in ) the # toter Gard.:n on Wednesday, and can be reached by telephone A at either place. If I do not hear from you I will attempt to contact you by phone next Thureday. ESJos!!r AH w

. j~, 3, I (I) & '> h. 7 . %- u.- '/ ,.y

,Io)

/14 ".' 2 7-@ l r i.. l l,; l-l [,; l }( ),gltj)

• '.W.,A,.*,*,"."*,".".

s. y,, e. m. '...L. ~~~* m e n i.i r e.on,4c. . c.,w

s :r i c n

.. - -..s,. sc., -ut.**** July 3, 1963 .nc=4e . c

m..

M ' 5 Mr. 2 S. Joslin, Vice President & General ltanager Central Potter t. Light Company Box 2121 Corpus Christi. Taxns Deat Mr. Joslin: 4 As you knc's, she Public Utilities Beard is extremely '+ interested in counceting to itc lines all CPtL customers that. have been within dic corporate limits of the city of Browns- .g*. ville for ton yr4arti or over. It was agreed as the Bayview meeting thai

• CPM,.:cul0 turn thoso. accounts over to us, we would in fact Ii.hn to have all' these customers on our lines not later than Decembar 31, 1963.

A connection schedulo per week or mens cPould be set up and agreed upon. Yesterday he undersigned myt'with Messrs. Ewing and Stone, of. CP&L ciel 'vith l'.r. !!cngard, of tiongard, Showers and Murray, to fur.her discuss the above matter. A goncral dis-cussion develop,"i regarding (a) the delivery of CP&L customers i as above noted,and (h) the possiile purchach by the PUB of,* .[ cert).tn primary ' sice.:ndgry lincs, poles, t rnns formors, Y meters, ' me teir 1 cx n. e t e'. As n result of th.. r!iscuscion the following was em is tilcred a reasonal.le plan of approach: O y, (1) Check 1in.= and cervices with n CPr.L reprosentativo ...J: and decide wha!. -- eiittien will 1,o purchased an.d sales price of sarnc. k. (2) As senn oc ponsibic atid around August let have a meeting to deci,'- tTon the actual nutter of citetomcra to be { turned over ..o v:: rnd the rato of customer chango-out. At .,, ] = ~ I ~ \\ 39?f6t1 h. k k .,,,m e. eeh e

• .9

~

.. _. ~.... _ _ _. _ 3 2, Mr. E. S. Joolin, rago 2 July 3, 1963 f. .: 3 - c.'. - g;. i. this meeting wo would also discuss: .A. ,.e.m .,e Power interchango betwen PUD and CP&L., '.M,,. '..,p ,lInhI 'an g 1JJ***'J.'.*- ,,,,"g' (A)

r..

(B) Power contract'. J.i,

s. -

(C) Neu generation facilities at Brewnsvilly and4. 42,. or the port area, . S' ' ;~ a : q..c ) f. 4 t :;.. q, .ut. ,,.,u ..., m c.p,. g 2. In connection with (C) and a possible cooperative, effort.... J '..;". '. between Central Powe. r & Light and the City of Brownsville, '.15.".'3..'.*'. N3 r J.. 7' Mr.'Nongard ctated that he had talkod on th,s long distance h .p one w ti h Mr. Taylor, President and Mr. Tigges, vice President-of. Jackson & Moreland. While in Chicago Mr. Nongard had a,'~ j personal visit wi'.:.h Mossrs. Manson and Karzos, who reported.in, . p' 1961 on the Brownsvillo utility situation. ." b >;.i.C + ' ll.kr W .f. nb,.?ht. n.d' be some interesting possibilities: ling. 5 M Thero would seem ter g gf,t . l, i building a municipsi plant, if CP&L could join tho venturs aa 1. -. ~p? c- ~ .i a wholesale customer, ' '-Q'y.' n. -..,a '. u * . j.- [ When itomo (A) and (B) above have been disposed of,.i we'" .. [ ' bellove it would be well to request a representative of.My

• WP' Jackson & Moreland join in an informal mceting with CPtJ.[

' ' [..

. J-officials and PUD membors.

Your observations will be appre . f,' '.'jf;' .t.s.. ciated.

• V,.%.L.Wr ->'... :n.; Y.T-.

t' m ',,,, yq... .. 1 At the earliest.possible opportunity wo will appreciat'o'!N.'* g r ..' l2, your sending a representative to go over with us those,./, 'G..,..'.g':. y,,,,,,.,,,,, facilities that.wo may wish to purchases We appreciate the.. g... m a 'j' g w ,, opportdnity of meting with. your pcepic'yoctordsy? ~T, 7 ~ 4 ?M, y.n.e. .a. - .n. - .y i..* . 'f. ;.. ( Cordially yours, ,.. - v. < .g 9 ... %.,.O,,.. ,. u.23.% S. .. m..,r, 1 n. .~ Chief Utility Engin.eer.M...k,;,.b. Y,,'< W. P. Barnard, ?.'

1.,,

w NFBskv '.r. a:E.. i'tw..p d f.s%huf . D. ' t .c ..e. cc -PUB Members c y: 4 .-City Commiosion !! ambers ,F N1/. ,-Mr. John S. Osborno, Pros., CPt1 ' p'iD h. .... cQ:I

• • # "-}te.. R. C. Nongard

• ", I (,'i'5,('f6 M?T

-Mr. R. A.. Ewing , W.g.%y@, ?. !.'.,, e. '.O 4,'d e.p. 9.. 'ev,:.wM i ..,n l, .,&c GGQ.Wff(, .n. t T u,.gr' gai, ; , 7.'r** ,M ') v' ,'e.

'. ;..,gl'/ h C '.V

a,. p*if.W' 7 . -. ph '., r.'. .m . i mm.... .e. ..i...

. ) : b* l i), ' ' ' 9 -A (qv \\ C 18 l i Octcher 29,135 2. t l 1 Mr. Dwight Carlsen, Vice President <o Central Power and L!sht Company ]~ 120.Ncrd Chaparral Street s Cer;us Christi, Ta::ss. ce c.c

Dear Dwight:

I have s;cken to Ove Dendtler ab;ut the pcssibility M a closin7 en the Del Rio properties in Del Rio on ')ecember 15th "e feels that this can he dene as I 4:. simultanec usaction, and will go aheut de- 'armin1..; the mechanics as seen as you provide me with the name of the bank in Del Rio where the closing will take place. Ova will then he in teuch with the First National here and find out whether they censider this bank adequate fer such a transaction. XLudest regards. Sincerely yours, "7E:r ec: O. Dendtler 4033 u. 4 f i

- q , +n .. fa. 's wv..g.r... ;3 a _r.~n:r.e . -. g:.A.< T.W.".?.n:..d, ~' .,44M.. _, r.'c.. v...~ (-~'.. r- .,e ** ,. L.;- g w. s~~o z:n~ _....,.,...,.m; ..w- ,,P .. ~-._. s.r.,=e n.e.-s:,.C.: ai.h. .s.~ m.2,%, : ::: ..-..~.s........;. w - ww o

(

n,r.===. m .aw. c. - -P* 7.,,. b...-. s.._ wee. e -~** .. M... ;, #".,.. ..,a. ..~. % -.. .......m ....-t

• i

..e -..%.-s.e=...=* ...3**2 ......,,,.%.w..."...-.. m '.e.s _. u ,r,. .c* ~, - c:r._.,, %..,.~x. ,_m.-s ._,~....an. ~. .;:.c,.m...... - ., m; c. ::.. y..s m.;:,.w.,,,..x, r,:.,..,~,,._.r.,.... - - u w ..,;..,.,, ~.. _..,...,...e. n. , a,.g.,..,s_m, ... c +=,,~. u 0 __~. ..r..

n.._.n.. r... -...

w. .---w gYy, ~... g.mc.,:. -~y s_A..u,.,, ~.. v., .... ;o. .r r ..m s.n. ~..~~ ;;:~. m, a ~... r., . ~c uw s.- eman py**:. ..:,..--;,. -. c:~ -;.--- '~s. =, s v ?. u :5.* -- = :.. : s c.*~.=4. =.q~a.~~.t.?,, ?'q@~ ;. 4_J. C.b.f S.c. f. -M':', . Aga =HL... .s vg;;r,y 3 C *~?Cu L .e4< -.'.e~>......., =.. v. i.r w.w...-.-.:..,y. W. w 1.~ . p n ns -.,~.

s a-

.c ,u ~. ~.y 7..,. +. :,3.q. 3.,c.,,., ~..~, g...,.~ <~., w. n_,,

y,o

2. k.~:...:. g - - ~.. x i

-,, w - ~ sw w. .. u mr e. i tt"" w _., -r.v... ;; ;. ' - ;.... i.w.p. w.<.s2. . e. - ..a,.....,- ,. w.. -,c rg --.,-- m

.:-M. - ; -v.c = :~, 3,.,..w.,;...m...g... [w*

• ~.(*g*== 1.."4 t=='.*V: s,, p*..,.,.

,:.,w..,. .. 1 ~4_.2, --arx.a . ~ - <e '.r.'.~..re 2 c,..- - -~% . e...;-; . v - -.,. ;..,.. e,, m,,.-,.. ,,,. ~, 4 .m ra g.4+ at.M..1.,,ps~J, xw~n.y,. , =. ,c.=z T 3 w._ m /;."'"y. /.t * ;,; e...... " ** 1.h*,3 ~.2 .s. e.e 4.%.<, / 4.,-* .m %,...x,. w.,. .. y ,- 4...a. ,. =.. q.. ~. a - m ,.,,. q ~., f.., . N-~~~.J w. qr. :;.. .r.w 4 s :,,.. g,, _ m.. - ..._-,..,se:.:2,,,.,.,,.,.,.,,,.,,.,,, r,.,., e4 -w>.. ,.,s =

q?rt.,'(.*f +,.

1 .S.'""# 3 .. w 4,.,gf &.g.m.j g%,w~g-,,. e .,.+ d...,4 %, M,m% y*%,y g>.,,c,.; -g g: pJt_. m,.,,.,.tr e wv~e.,. <.?.w-.e,.u 3 w % rc.x ~w.-E c m .Am.. e. .5...ca, m...,m .a.+"s4 T a.F". mv.. g* s d b' a M *. 4 !, .t .e M -.*m og ' ' S 4 e. . se$.e e &.fn :.t y.m. ~.w-c-- 4.% .'4 J.6 i 0 t, M. V3f. 6.' La E o F; ~"O'% J.'?rls e 4; d p M"* d la's.,., 46 s m.i,,, o ::.$, .. " V -r - '%,4.# '*:::h.-+ i. " ' ' - -. _. -"' "--""S-- .M e e.se

• ?-r eW**

w

• m e rs

. : 1. -3.,.

m. s %,,,,,,c., y s%

,y .,,,,. -:4 m_ ~~ _.,r,=.% %..g.. - J.e. - ,c.w -~n.

• * * * * *-_.g.s.g 29'rva u w eus m,

,,.,.,,,y,,-- .,,.aw...-*p... 'm q.- 2,- ---u .-,7, .TaeC&elitS7 air:'r'ow,,%*ks-. ^^ : ;'- ;:' *"%

• w p.

-m* ee -*me.r7. <v r.a _. y .,h==....'p- ~,., =.s.6.f,=, ' e

• ms a.,

2.t -^---4 A- - -. %.b - i f, ,. M.crm.n,,,-. __, c,,.p __r. .*==s aa=% -- en c - w -, ar..% u - --+*--r,,,-47,,,,. tamomunesar" E r CI m.,mu. a Cl'd.C,:-C.e.gi O,s,,. .N,..,s

• s

+ 4 r a.cr. .fw :r.r.;r y,. g _ - p- - - g' or.=u, sy m hw,.sg - - - ,, Y.m#,,,., :.,,.a..m,.,g.-),,,,,,,c .;=,..arw,,g;g*, ge.,q M.m=== s e am g- -e =-cz.w.r- _ ;%'p ._1 e;. - -__ e p J , c..mpaQ w ,dr. we ;-- --

-g

• L,t;_m.a 1 as s,

=,r i amm ~ - @~M,gC.,N..T. m _ z, g ;. gm,;es%m. J rMUii. 7.rhm carw-WfaiUbT_.o,e,.*'f"** j'1"@4M*"*4 U;T"_((_si=# '"# ~. _.'.=. : ~[.5E ',h' _I,s'I'__~ M,- T~ %., .--- _=_ w c. ~ _ * - e n. .""iD N *'b I,-.-.. r -r.=

n

-~ n yI.1U . C.O*. [..*5 g J i -"a -5h G.fl. i w Ca~.W,*i-,.-- -- w-=e a a-=== - - u =w-..c.-. _74. -7"4" N"]"~r**L 'd-ma- $m.w=5'a~~ "*~e

m

:: :,.3.id:s:- ; '-@:Of.-

'W. h'*es@M:"s".I.t:.r.",".4. "^; *". yes.p"'* '*ms $ p + r,-***"-'* ** :* l,;;., -'**re--dw;c_w-s --4p a d' ~,M m --'; -w - - - -. -- e5.2 ---- =",r --.. - WE.: 1 - _.- -- - := ,-*fy,, ;g*(q ',-_..J..,,,h., %g%, - " e..d w ~ " "'.Os.. W '#M* r "J,"" M,... w;v S,..

• y],_.-

s.,g, -** ".q,%- OO cr"' L v .m eir. __.---c .uam.. +. w. u-. a j.'r":SM. .... -..,, g.. _ =D' '_ T Y. *=e' s:.'.::",a..q-w..~,,p.,., ') ' V+; P m.,. ... _-,,;g,:pa.,;,,y -.,,- g,,,,7..,,~.g,y,:,,3,,y , 7,, ;.n,7,,. s. g,74,,,.,,7,,,,.,~,r,Et' ,-"M!-C M t . ; 3. - a .c,,,- 4.,,jp, g. m- .= w.----E7'g,- .r--- .r..,,.,._ ,,,.-..r - r.. u%wH=w :::=. _ _3 Li m./.,. -..... - e ' " W.::: 46,c - a.%r = y

rm ;

r = -,.,.

hi; ~..-.m.=,

,- 4,

meae.,_wa J 21u,,

,.cw +-.+a rc.c,, ;w_a.., J... ; _u., 4..,. 7 -- sa .-s A . -.m. WJin,e- =e sts- '----w"---e... v :,-g3,.g'a. :. +- --w.. ._z.-.- - em e. m "'"*N f"'b.a. '. 'Wi#'hE "'M8,,.te..M, a suh"JanT.2h.<y --=NhE ? ".-"*s-,** **'/s * #- *M.' 'N'.K;./ MO; + '*."T**f M. UJ' ' --r M inv 5 l'_(('E -W3 D "*O*f*:: X T-'.** =*"G"/e*w'*">** m:".eswsC a %;.J.R "J'.i.g,.,*8(% ;. It". *.m' *:'I.".l"e.ll"&N. *T'**""'!*J'..MQ:i"4., - =cR.rma; G ".'";a,,77.'.M* --,.y. _ = .*:. e mo aa."UU 40 r M 7F .M"Pf*'--" 4 r.qc..e:m.?'.:i---aa-~..p e .--e= =-==. -<e::s,.ar-=r;'p-aa..=-i=-,>--. - - - : *: - - .:=

=:w: ca

-==m m%.,r re - - ur sur,. 2

1. ""Ir.bg t s '?'8'%* *^*

.m p .< s m *. j ' - = - - E r.4 ;,#2Qg ;. % & -- -- we.-s :. : 6-- rar cm - ~ = - ~. f.,c.a. O =#$' 2'M u.r2 % @.,s. gq= g;pggg.',=g;g.g m"N=.'"O.234 *'"*M:W**""'-"9'"a'"7 hm. =C!*ta M ' Q y' ' * ~=8 ;we J. r ~~ h"Z!C'%'"~-- ** - "."""P '. ' m. rM e.ge;*"* r h.: b "^" WM'

n m=.E.W., -.ec- ~

u u r- ~ 4 - - ~ --.. - - *2 ^-* H ' S,.,--G ,*:. 9 1,c. g.tTR a " .. r*a..T'*""*~.... m - -- m .= ~ : :...-r.-- r,, = -.7.': f!p..dl~ M.%.;t"s".kir.3.Cf ye"aW%' ~'W- - M' OF.2. - d::f ' 'Cf",. E'"?- -'s===:==.= w: w r

• 't.n: s":% r.* ' ';-r--M.e.

.~r". ~ ,, [ k p=, [ .. = 2 m-C

k. p*==4-egggg a w.-

~ ,,OT,, gy f at ~" "N $. h l;{.jj', ' u.,.- c. a., N En. aM~ h~:r.=,=,1,{.: fem.n. :..rir+- a..n.,....'* r,,,..--- - -^'::'Ind""7.*t":( w ' h, : W w.a...

.w

?':'.. g~. M,,,... =.g'%"we Q y..- x ..,edegt M,52;,,.;. .~~... ; ; 4 u- .neye.'.,v$"'-#.E r ,J'p:;,=ne.*Q,*.,s,7.a.. . 3. ' r W. g.jf. ~, -- w ym s f.c 7.v.:p. e,. j ;,;.;.W wp..w- .e, -. . cm ,,_,1: - w; w,. ...,.e.,.,,n.n ~%g. ;.,. - .,:.u.7.::s .. n.e..,.,.. A..,,,.u. y ,..,..,,v,,,,. .Aur P, " W"-" L1r"*N- ?/ ' * * ..... ~ ..... r.,. w.m. a aw.-a a,""" r%"CZ?*WW d F..dy$, C".lMC.,"w.O..~d..h...7:=*=*r== w *-p A.b4.rs. e =L

m. w.M.I..C.e"""t"c.c":.!w" '.e#.C""w? *.g

.v. + T 99 .i"" .e a.- .a. J .~ frW 5 df M.E. e 03 C2 fch2.$. G 5 ""g. u *** k. :.e**w** T.m*,Mg,,;..*'.".v..px= :. m. ?..; - ; ;m M t g.21 R'*wa r.TE"./.D,li. *.*.-2.%";".,.6 ~ M /I. M~ x.. e IYM:Will ~,~..4./, .,s.~. .v w .. a r~.w c..=.: -r=.s w. .-w .=- .'j,,'I s ,n#r.b. ,gf,4.~,Q... g:p e. e.,,Q...,h,. mt.;.:#.7s,.+,,.. ;r. ..,. w s. '* * - *2q,apM, m,.9..~.g:'** %ry"e,'.,,.. Q.a .. m..... ..r 4.a 1 r,. .%..p.,.. ,.,w;;m_ _",S.2s. M.._M.,..~'%. [.. ' i.gg'J. -..s _..........=r a:s a... m...,,.,. ge wt_

• • % t, M 4-WM.1315CATuiklin.*75,.2,.-ah7d.'f~-Eg.N

..ame

• C,

..."s:i%.a. 2.",*.t.".~atW.

h..,h*-3 *

~... s, .1..x ... +.a...,... %.4 bC. ..u.- f.

===.,,. =_. e.,.i.,.,% 1* s6 ...,e .m M.gg. h,.'er b,g=~=M..,,,, l,',.s.~ynem,e$2 ' Es.,g.p..*L:. J. 1 s,-e .n. v. 7s=. -=+. ,"..m.1.j?"482 4 M-V" .. " ;.f. i ~3M.,... f.[.'EN.,,. ..w.- ...r 3 6 F -. D _ r.,.,..- ,,~tuf.;.-:-~ : :r. =hgv.4..;. =n

• • 8 ET.g4 r.,

M. ..t' ..l.S:3n. ID 4' e-ur.:.2.w ~ = -.., a- . c.,r.azay w jy;>.,.y,F.."".w*'.m- _.c., a.mydeH.m.et,y,,e M.c......yn . z c ar.rc;w ; --.- u n :. .m. re - v. .s y ? ~- . - m L,.,y -.,i._ o's% ..... - e. ..r._...,. -a j*. .>--**=~a eL.... --.er .. w.1. -,.... + d.: I e..,, + g h ** .., <. n,,...f.** ..,,M %;.,g.s. -., -........ m d" e +. -.r or --..*. v i.a. W.%_...'."e =.m*..-*". =.'.-.;-w = a. W,.e4T T ~re eyv r. n. =".~ ,<4,.a Sm. .rA,e:.er.N. ~ a.k.s. w. wn .a., y.y*s ,9% .4n .e 2 rA. ..r -*ernww. . M 4". C" . 7a.. -. .W. -ee.wm.e,4. s.. w.v,.o. .,,,o a rw sr..e:.p.n, u,e.- m n e ne.q,.

t..

a,, a, e.=.u. P. *C.o. :r.. ga ;.. ~e_oce.

.r.s,e.,.:e - - 7..n.%w..,,,m. ;, g ;qc.a m.

2, w-w r.c. n.a - = h+re.=v r.... N,4...< +%..r. d, ._.m.e s <n,g.g.t, g.,wv,.,;.. +r M.e as. g.,, A.,;,<,.> a n._ e r- ..-_ _ u- -. -m ; ;+ sf-g g,-A M.?1*. *DE.%,. t E : M,,["T" C C #* q* .t. _._ m_g,.., .d**[;.MW2*.N'*"D C Tbi; - 4 ED, h-c g_. ..r.:L,... t ,nsd.., g ~:& .Deu, :.:s :t;e La.%. I'E:7"'O' M *4i U" I Mid. i

• .., J/P 2.,.u.%.m. *

zy m--.r.- %, -. r Er W.' ;.g - r- ,,"' = 2; s :.,-. ,.g"4.3. ~-

a

.,,,:r,,s *ce R-n ~- g * *** . h. X.rM. _:*- '" _ g W' -% 4=*="-'; ..*,r f::. M;M;3uMA 7.; s*H.,'X~ w.9 4"~W",;W~'w'....a .n~.< - .v.~. - ::-:a-W.u. p. m.,= -Q.:n-?.~ _: / e=:.::::=: . t m... w=

^

h :: ~.

w. w"...'imar *.+...,

w. a,.- 4s.- .cr ..4 .~ M..~ .,c.,.ma. cgy.wa. - Mh I ..c:r:.9. 3*.*Mscamur.m s, ;.m. "- CZ 4Z ,... g ? *em d. w'[ao,.2 %*,,.: Q...[..gqh.se V# ~* ". N M.-- M. [ *9 7. 6.,,c, d G ? Q'h,% -.k [h M h 2 'C; e e...W-A, an...,c.9., r N. _ JettM. _n =. ][..."M h M_I'.*,W N, # _ M* [ 0-MWTW- # Y

m. _'

r%.t .c. ;g-em'::messa.w.x M."*,.wf w:::: m.,~.m. M sh,,. t

• • • *
• h"*"*****5.'" b.s.

g.u g g# p' =s..b. m.y.. ,,%,u.%. a. ..~..--'26'. . m- .Q ~4 =.4 m I . gT.,,M.ws,."-:1..G.g i"~~_,,_"."'" ""**,".g*1 w'* %C C" '.' '.". *=='.1pda: t(.Js ysm c.a.m.g,. MA.::. ' ' = . $. --M !* . -P"a.u - A

y. c,j.;"""f',# *= -M.A_"-'""i,.~m-ypk k,M' 2'*r'E:*.d 3r'd.d

.*. m, ~%jA__ - - Ja~ + 7 r s6 w~ 2 ,-m , M.m-m.mva _p'.5 .. = J 4E*i, '-' ~.n = g *'bew.ve w -.r- , ~.-.. -.. _v. A 1 ;..p- - ..-.,"* * * ",,, * - y M,.o r.y ("",,7mT Q g *M. @g,p*" + -=e .s.. m -a r y 7f " ~.~:( ~ 9 J., =..p & l'~.E.3 /.A,w*. * ; ",""."C~., m@u.,."w"..s.,,*,,*".b'Q'."% -g,,..,;..y,,;,; .s,,, f_ A;.* =A, . +.. - ,, - m. -.a. r,,,,,,,,,,gT C'.1 -. 132.,,,. we.,.w,c.- .a 1 :.:- _ 4. 2. p.3 .- g ~%. m, &,~., .~ * *","...~4.. 6..s. a uc::1.2; con c.W.lc.t &. .r... m ,s.~ ,. 9:r,,

c..

wp.- i . m..c.... w: - a..,,..": .x iu 1~:,. .s w -+..s.s......... ..+-...,,.m. s -= - .. t .. M. ..,~.L. ~. w~.<.. w , - ~ 1 c.*t t. ., % sam

4. ce

• • • • • 'r**.- *.*7a#.=== =..a 4 p T w-

m. -.

....a w- .n u . C" e.,s.,.,., y. . n.m u.1.a.,3,,.:p;.,.,:. g n., - m .+ .a u .. e ~.,. ~.=. -..~_ u, m.~. .m i... e ~~ Jew *3.Q p-eM~* &*< &.. -(.1 ....d w,,.. =~.:7.. %c C:'3.~. .p w c.:..e-- . r... w m.- ~..

r

..2 - _ c m %w.. c.s. ,..n.,.. m. s. ...w -.; v. ' '.~~.-'?=u: M...'" v,,-Wn. w.. .. ~.. a'- ., c[.%,..c a.i,bg~ ~. &. --.~. e & jf. Cy ., L m,

s. b Qi. ".'2'". +

C. :. M..'.E....:.-- = r s... %w -. ~3 ~. -. +.. .e.

:.-:.=

.m..... . *~* ' c :-. :. y. .... ~..... ~,~. ~rA I * '.*

• 2.c ".E";' " M

- u F I*.: g.C*. g d 3.2 Ld. c o d tic c ). u.:.:a,,: M v.- " n::.w2:. c ... ;.O.' - ?.~. Qy'J.,' *, ..= x.;:-*-- l y-e.% r '.;.,,, r:~ ~ .-v..,.. --.,:;y r..u.a -.h r O:c c r..gg,-. i;:..v~4 4,,;.,g g g.73. g M,.~ :..- .. 5 :r - ~ .. :w, .~, ~::u.;.;..,..e

=y &g c,f suc.W. - o..

e..e,,e,.-u-. O: ~J

* *~...;

J --,,gg*

.m. . r. ,.w p.,-. .. ~. mr -r -+ < -- g.G., p %. t. ,,.:.=. u w=

• s,*

, s o,.g i r ,cden.= .........@. 7 _ 2 r.,,,

a....-- - ~.

r"1... . :.g.:r..:.--... n .e + ....s.......a.~-- :., f , t.e.. 7; r.: r.y v. .e e-. . - + W s.. .u-r M 3. - -. ~ \\ ..:.'sW...g,*.,:.::?.. r-t M.." a.. _. _.. ~..

s..,

i .y .-,....~..er---'.- sV.'.,m.e4, Je.'t...-. *. 4++>$.~. 6 w L..'I. "" M~4 p4 -. ~ g,c,,,4f;;,.. -.n."._si.pp y*:' tWE~t*:.*:aT : ;;;' **L~'l, ...- M-:....e.a ~ y;~g . e t .. ~... M,== ur+.e.r.,'.D4 * %:. u ;. m ..g......,,.,... .g ; ; ...g.;., ; ;,,,,.- ' " ~ * * - ~ ~.. L~? MJ

• 'W.

. ; -f n.n.. f

• r. n.:. 9!LtWf.c.:e.

=c.'e. **.*.'

z... M. . :~. s W 't-2- Py,....:..... .5 ::,..,n.m m..u.-.. n.y s....- ... :: s.a ...~ n e... ~ -. r a.w w a..,..v

• ys.:.w e.....

..n. .c. ,.-...-,.e:- . _ ~. - - .g,... ............/ ~ -. v.- r.-*.::r, ;... - w.s.e:, w3,e .r..; e. g-

n.

-~ -v% w=: u. a

• . *.>..r =.a r,cw.
  • .f *p.

4%p. e. .e .e-.,r. a.~ eaPM..=.., :.:m:r.r- %. .-. r. z- - -" 4.*.,,..:..-.- c-- 3 r.=-. ..m.ar. e,..*. mene( .-'y. -M = -.e

s. -

...u.*;y.w --.=*..w. .u. -Ja*.i.,e...

• * =. *.,

-a.. T *-.mm a 8 l e { *'..ja,"..[ *'l"/21-(.

f. {

.P ../ w.. ..g.,.{a.f.h.$[ e g o. I b .q, .g W I . i a Q 7, D _' *,. 3","M. g4 9.gh. m y / h e_......*..* 1. o. ~=.*2....- E. F '(E-

M_ _.,_y~ u.".~,T W.V~C. ~:2.,% ~~~~ ~ '~ ",, W;O^ 2 '.A E ~~ W % % 2'"s". M 'D D *IT.%ur'"6 m W W n m_ ~,. --%,:A $, 5 f.5.- ...-e_.. %-., 4 ;- " + ?$ !=M.. o 1.,~ :c.as.r.. ~, s rs :.n _me r.--m.-%.uJ ,-o r.m.,=. - _---- ~ P C m '~.+ L* ~.7....,-..,'A~~-~'-T. -es.-ag br--; z. -: '.~rs as".;;r1%.'.p"3-*TN ='M:== E :.%~-",,r* Ir:*...).::"-U/*=**M5'5. =-/"M.- . _..W.W N;c7;;*%fL. W A ".- 5- "-a* a % ..., %.. m,.a.h=:=.C.r .";-l.[_4 ic.w .m...~ > m - - -.T:;.WZPEO..,cl.*'2 ':*J."M.,:.m.Kf W _.: U~ 7.E .s.: .. =,s r. =c.~-,.. u_ -=.:L. s. ? s.. v ,u.- a n a.. n._._..c.- ..~:n___..- s.- --y a v. A.- s n. - - e. .-u_... wm .~~.w <r: n o_ _ _a. ., _w,..a. - _ - -.m m-.a.._;....r, o_ y..y, m- -- _ _. .e...m._.,_.,._.,.,,.r.._,,...,y,,, ,,.,,. m a;, z..., g ... -w s se.Wm-^. - air-5,e..e s. w2=.: ~.-......_ ~ . w. m.,-. r.r---r ~

• s www rea.e-rec.d <=.e e. v. m,v v.v. J.my'. L M.-.-('*.

T-., ..a__.-. m w., aran, =~~-s. e m./_.er-- r". *....:=,m. m. a.~ n..n.-.. 9.u.. e.c. ar.n.,. -.--.,e.r.-m...n,=.r..-._---m,-. .e , m.n ~.:x_-.n.;-. .~...._rG.Y. (:"'.K..'.AN_D. _.Q.,Tm'. C-},r=, NY m... =. =c.m-v... m.. a. n~+ -- w .o.. s ~-.. -- _ ~-. o.. . m;;....w..,m. - - 4 e.,. u ir%c1 h-y M. -, -.e x.,hg; {.TJiIT ?:sJi:'""ag ;Jr"wafa _ - _ ~ _..: n. -q emner."*

• N. v*.*.t' r.e"=e.o.g c r.w?""w%=e*

'=r.===..'v'=...,: ;,. c. _ m _ a..___ 'Wpp

• V"

= * * * * ..r ; - ;...,ia.m.- = ***= 4n -."<:.~~- ~ - w. c e ne-w .v _. = = --r - - :. ~ or-- - - - r.t -. ' ac C3:a. --===,~ Cc w.,.e., I L.#., +uk: *. c3 r f -= e L.c. ..w~m. -..-....r.~. ;.e;::::2 v..- .. -... _..,.- _-e-w.- w e.. -- .~ ~. .wz= .- -. m %<. n = -. ..-.x.- .;a.m.m_ __=_ F. *.2 w_ _ x._=v.e.r... r_ :.n. C._...r. w_ ;_c._v.r..= n. . _.. eme. Is. r. c= e.=.. c es w-e r .,b.t**+<

• tr a-_.u.C._

.... g.w _. 4...%.w. .,. ~u--_ : .c

• Tzasc ar--T ar%. *.,*="rsure uk.rysut s..= runs.t.*t-" Tic 29 - *-= -.m.arman et.. dt!'.J.a.M

~.. - - -,

a. _...:; _ -t-~..... -,.

=_. uw s- = ._,._m..--.~,.~~-2',.wu =

r.w w --- -s w --.m e

a,.. t r- - ~ m e.e, a .~~r~.._.___'""p_- - __.- x d=. ~D.lLM ' 'ww_ _ % JC4,.7,= :::d - - -'M-M.~. <.. ~ ~ .a_.w.cu s eet..' rx-"f m.rme:w. .a.... wa-A. -,a' wear:--mesW;"it:1."- Dea. ~ni..awa Q JupA4*4-r..as - -'"' r f*#~ ~~ ~~ .R5:7s-s.s,-_aser.s. ~ P key.was.~ncy- ~. - &,.o.,n.._c_ ~ _._.O 4;J,,,r_ _- =...c.3.s m.sh=tmow-+.,,, w- - -

• me.y.,- - - -- _ -.,.

s==.s- _ ", __..__n.......,.,,,,~,.g, m_.. , a, ~, y..ng,,,~.,. h ,._.. - - w ..n,. - u.... _ =. - -..=.: - -,, - mm i,.-=-,.- . = .p. g ~w nyan,...._ m. _.op ~-- .:... a m .,r.-.m.- - ~ _, n.,.. -n- _. z1i. t .. m -. m.,. nm2.,-~.s" .r t=.:"a... e, ae xre w- __.u,, pv v. ..,,.a qo._.e.,.4 _ ~ ~ ~..a-. 9+ny_-;".v.r;- %.1..x-. _ - ~. - .a e-,n.. cswe

y4- %e.c x.r Iv".h w.h.<

u 3p ~. m, a r :.e :~ r. c_m,._ _.*, =. *.=%-.-. : w _g-J m g

n. _...

- ~- ~ w .: u e =---,~ ..=. u- -+ ~. :. -.r.g,,., g,., w ~en=m.pnt ~'r?==. ky= 7 wp== y o M ;ttm. W_ -~*,: p -___.' -.uew LL % t.x.;.ra-.g " A - --~ -+ t 'R' * ----- -

.;r f.d,, c' %.

m m s.- 4% M 6'.z 4 t > W. 4 n - C _::*.:.a_ ,,.= ^2 _..

1. 2,.

_ a- -. _.s -.a.w. _ + s,_,,,,,f' w a^ .--- :.er--.c - ,7-x. -. e-r .c mn - _ _w m.._.-. m....-. m=.v. --- = n.-. w.. T- = -.... 5 --- a'N'N* A.' ' *r **_,# m# -men *=eM. J - - M me'*=ae-"- _ #_ s.ex.r t..r=.;=4*9 - - =:m.. _.. _ ._-. q=-. _.. __w_,._%,,_. - 'g-. c + ;_q3acwcr ; -.-- -

• • in 2'

f.,.:e---- wg ::xm. w m. - - ~__. _ - -. _..__ ~__.. ~ _. _.

g.,e_,;-- A.;- e-w e.

m a - v __ __ .,.. _. _ _ ~ _, _.. o.,.m = _ mm. -~ % E,'.*,,*'?PRf-~'.7 ~<~.?' i'.u ~. ' T.'.""_i""".".**"~, *~**'*"*--. ' _. wSFmEM~ ~*"'"N:3. bed'a'.L'7..J. =fr. '.Otl,*s '*.f.W%'.=4 :%. "*n*M..8_'* 6 e4f. ~. - We _--W~ l.m. _ e= 4,,, _.7 w :r.J::~.+-C=.."'me'M_re _s__ _ _h. pe==1 vm _ r.:.,. r_m -_n'# * "- L. _ _ -. _. r, ., ~-._,. rr .c .r_, .w,_ . _... %.-., m.__.. r : %.e e. m. w- ._,,,p.,.,,_._.g., .,y .z. .a g -., - ~. - 4.,.C. = a, g...yJ. C.a,! *. *2*. Q=c=y.g b. o = u .y,., 5c=*.r 3"% ,%.:=m _.,.u.. e m. :.,f $ a .,,,,,,,,,,7,,y,.,, ! ,3,wrn,.,e. c.v mem.z m.eq ~- .y, p g~.1 , h,_ 4" p,wWse*m Cre."a ., g g.. 4- .em s.*M~%___ ~ ..n ,'~C. 4 W.E h - c s.7'.3.e a.ac < '. 4'3S CO. -... '.~ @ '"# ".- ' ' 'r h

e..

,-- :-.; ~~~

1. • "* t. '..

.y "" f.'4' M.*..*.".' b'z.,, - e ~6 T. .,. ~ J. r " PWT1 i*4Fi2..*-'. 7 ^~"../#. g~ n' m %' ., _ =~ ~==w-;,. ne

• w. u=,~_.*;;".= =.u.e : w ; a.n c~; r-i. n.A = ' -.~. ~ ~ *,.n., ' ~-" ~..,n._.... -.. _ _ _. -. -.

=r. - -*r +.<-. &. .~ ~

M:3*. __ -

-;._.-~9%.,.v.T"':"_ ss**'"W3 QW.lir^f., 2.'vW'.7 .w. " n..rs,e.g.~ cow.v-v.w M-u "n.. ' s aw w%... .e. w._.. w_. r. _.m y. m.m. v,.a.,.. - > o.m. ' '-*"***~'g'....* * **' ."".**LP s *- ; -ea,,e*$,.,..M..e e.- _a. m_ _2 - < ; v -- p-a ; e. v p, m c-.- .s a -e w..... '~" C'- w .p W I~ o --*'9. 'yw.D. .T.g.7.II""M Oi,4L'V 8~ 2 i e ,,.2.T. X

• r
• r.*= =~e=v % D.,, t M..' 4' k*"d. '

,,a,, * - 4 t.h_u_;.u T--== r -... ecQ $g A --o.... N== e "

• J J

.._O,N'.%.".*. .... =. ,m w.:-- . c.bA. A,,,,,. b... *=...., +*= r +%. s. = ~. ---n w._.-_%..-.#----n '."n )"*m- .,.._W"W----- "ew-aw -...,. Y,<=.. L L,.,.,..6,-==*=.===i, a v%- t~,, $g.. : e.. g.,. ~~~dM.;d.-1.M va."tJ. M:;pr _ =t.TFAW-,, ?" - 7M.=.e.,,._r,,..,.,.;# ' '. - E%.% %*pf. w A. g.. g er o=. -==~*4,,,3._.,._._ %9 %.i.e -w"Y.. '..U %, ~ -,,,,ga~ M.'M O h." 9. M # UM. w . S& -&-.S-5w* *I'5n.n&,, 3, 1~ - & S.W VL W. Den =&*+~8 ts s .n W %.;5..,.4 T.l**'"Q*h'*r~TYM',.M. r.-.ed & ga;, j - - -.- r 3;q. d ?&~~I~C' ' 3 =m.W . ";$5 ,,, -. - / T u,,i -_.jw -.. C - = ...wm 7., ..,'%, y _ -~_--p_,_ -~%g'jg= D - g tg. =i.p.g

2:; ym---gau.,

% L.~.r,,g,,g:. s. _ e- _- ~ %.2,. .-... w?J.eme-o.,--n-e ~- c-e g u s

-.= g m s.,

u e ,..-o.m .- m.. . u. a ,..r- .em:;- :;u.n:. - -- -- : ~ r.rrw y. e --%.+, _ A._._.>,.c n P m,, n _.-- ,. _._..g.a...r c. e.e..: e. e v. .s-.,,, _ m, --_..u. n . =r x.9, m .c, s "=c,.~--.w.-...,.u,--.. ~ c -m ._.ayw .,._:. a._ _..,a...._- f .r. 1 '=-a.

• m.- e, y- -

._.m.,:_.,-e._. 6 2 a 2. 7 y m ~ n* gg,,erhe.r.. + ~-.-...-,-~,y.. -r - .ra,r f-f.,,.,._._-. _ yw a..c. .,., sa.e.,,... a-.. - ~ . - =,sy~ 2.-

• - = '

-y ,g y r----e.u,_..,,. s=.a.,,,,

• DM. m. Ass,en,E. **=.eas.*~ ~J,~JMsI%:'uW8.M. rNrae.,

e"**;.brUs.M_usm+edi.47a b/,,,, A.staures e , m. .c . wmessumma.mL.aer.*.s&*..---~mw7 ,. r-"w,. u - -. Iw ik m h. -..e -vs.v'.r w"an>,,4. a,.,.a..-,M Mhs. *,".h Maha M'

• .,h. ~ h[
  • "*9 IM_W h'F"

_~3../.~. --- _- - _.._m_._ "k w .v e_r.w m.w. m..m.r.. .w.am v r-- _ ~. r .n.. *.a._ _:o..m., _.; = ns, %,.. .,,J.'w...+,

• * -.nmasy."rm-seeM.ame.se..aum.

- A w,. p . - #..c -..Y_ _,... - ~

• J

~.4. I t b M" l*M.. + _ -.J..E%, ;,~. ~--n --.n*".Y *'.._.nr *bar ? w ". * # "Wa W. " -*:*.,___.'*.~.,-~~-._.__~;x%:.,"$'_ N -

• s

. wy L. g,g - - ~ u. y., m w.. r - .,.,,.,,;.g. o _ g. ..g w.m.::7i:.W,.C PC b3 Y .e c4".4.T.e'*'..~%M _ m-

.., '#'",'UMa.

.',*~,u~~,.".*

== W# '""f"'~ W"".wwt.y F.m' '.!. Ju'%'- - - "--- 9 +j* ... xF;;; T-. .,. -- r,,. m_.- . n ~.' a ' M^,, %gt. 9,.. ?.q"*'~. M,=_n'.f' W,. M U.wn . yr '~'-**#"f"#-#'- surr,., ; x;.g y._. ...n.n..,,,-__-.-. ' --...v_. .a_w n. ..<r -_1. - _ = _ - - - 2 ._...,..n*.'."*.,,f',M'% .,_--...,.~~.........:..M*"""'***"*?.- ~. + - - -. _ - ~. -......

.~'%""***

~- e ,n. n cs.. w.,.n.mm..m" e...n.n. - p.$'****.?*-*. kIfN-b

• 9s k*m k

f_h ;k.'"*"_""".'*Nb. hJ .w.- b r nn=-rm.... w.,g. --.--,.~-+n ,Y " - ~..... _ _* * *,uy : D~R*6C'.-*f m. A.. - - n *' h.,M*"},(,eng er --A. r - - * . -. * ' - =. ~ .. - ' ' ' = -.a

• ',Q;,'.y',***__~~'.*.*~.,,--mme"*

z.c ag ek.'.'",- 1?* ~ ~ ~ ~ ~. ._c ' u - s.a r p.two== a'u'.%ee

. s

-**M.'.., ' ..mc9r e n.o?t"?':::rdreiftsh. - -- -- --1%+=='sm** --MMW:%.^ ,.r, -~..-- e ~=.= --. .~,cr.m, :'N" *r.A ,J 2.,,,

m. u s.o.n n

-.-.a~---- .s mr.e,.4., '.e..,,,.es wr-,~w i : wmm., u._ e f U"b,. i ssi A"sne.,,y -. -,,,,,.,,. %, r.. rm. C; %, fA r rmee r.-: .y _.a.= ' g t a. "."D.... aa.m ews.m,= 1-= s m'" e. .. -.-.,~. J:.1st p au= w *** jf. '*?"'** ha'"

• • .e f*3*. WX3.- d.ine.a,..*M

.- ;. -. sah. - 4 a.w r s p ...,..mm.a.m.*.*.*- ~ - ':. m ..ar. 7.,., + _,e.. Js %.5'"Ri ** men. j '8E,%=3T *.% p"f. .I==.'m'2 %"F-ree;P*.', m*'L 's.s.ET*4' 4:~r' - 1.. ...,,**kd'~~4eaL.-- ~ ' .r* =.CG7 r.==*.=-Mt, *'h* af,y_- . aw s a* *"".7"*-** ** *. * *~** **%FM*"'M9"*'.tTM*""Le.s a: =;r"*,,,.- J

• 4r*T: f*P *.t..

yg %=;.yye/T,.dE'M *4.J"*pQ',.'.'.,_

=== *gi. -**-eum..*. ",'F"- ,2" F.:.:." "*" '*"gg.*'ri :"J:"chfeaQs,.r "... T 4 ".l*3ya a.g c.c.n, h.asi

==or meannem. -- --.eenes._.,,.-,

• • • • • "y*,*7.**"'""*

,s'4.^,, ,g,, gr*.m n g. e = = =., + ? --.. @ m, r-ay..%g.,,,y.e. J v. a '..t ~ s.,, =s.n nana.v. ar u us.4.,;,.g.;.~...

e. w r.,.;.:

=. ~x-,,,.~_,-a_m 2. f..:- G, _..... - ~ ',.y me-. w.c.r.,4 ;.:: 2.. m . m. " r 3r r- '.a,....aa.4 egr r* .... ' a a.=~.O:;.. - . =. r.~ f* . :hc---s -P==:' r. -.r y-n:-. ' e5r Ze8uR84* i'=.*."' "' d

• • . --i~. 'M*!**

. E *T "."*%4r8'M6 J 9.:"3 ME r * ~~#* C**Md * . ** *,a,.,..".m,rev. ye.s.s ta.w.'".4 ram . *W= e.c '- ""./- @"'. * :-C~*.f '"'*** '** * - ~... -.'.# - [ 9'**'" d. 'M C' 7 V.'"A 'e'2* '* * * 'F""""*"." ah

• [
  • YI*'*M *F 4,

p

e. 4.; '*";

• s u wim a'.*'Og, ; "" C., =.i..,..

. e ;.,,,,,,, m"'*~'?,'". ". :."*,l*.* '"""L,.,;i.g,q7,f.i - -an mn... ..s'"."."".?... m.e s as. -

• • 7"L

"*T ': 1e "E

m.e=e'w m,p,q iae, r-.R.,.,,:Fu 'k','"m*, ~ ~ '2" a. .e.a s . f g .,,;3 g. n v. i... -- :. ~ w c e--....- *in rwo .m.. .s qi

mur,

. v. m_ g e s si j a .,.8) *3 t t'**

• P * *P
• 1r'**'"9ssW FT-

,,"-*"*'.'*"**,',3*'J".,.;*"**h*l*,#.*"*d,. ..1*" '=**er*"*L. ..,=sq**'l='*=o h a, s-. 'G*

1. f.2 h'**'O'"*****#*

b%* ~. " aa._.e "h"!,, M '8"' 7.:r U"" " 4 ,a.# -t*s:g f"#.'i. ,- ',;g.. W" :.**.. u ar.-. c. :. e.cu.a. r.: . ' 'I % ~.J;.:* ~~- ~- ~ - ' - * ~,""%...L***~~~~~ i.iw:- w:n :...u -.3:- " * ~ :.e..:=.w ,=. :: :- '.<.. a. Msb* er,'.' '.'pa,t, ~~ ***,.peert;ts.m,a.t.m.-su. d* bw'- '._gmmoeu=7g.s -t * * ".".'* ~e* *

• a e-s - ** ' '.', ' ft".J~ -- * ~ * '

%"J : ;

• '";'s i7 J:::;;"

..<.-e n ag 4-s aww. ~~~".".J;*.'--~~' u.-m::.u.r. ,ar._ x -. ./'r.: r f * '.. - XMgi: en.r - a4.%e.*.'s A~. s..'...#. E=rio g.,, 3% .st.-- = 7.;,.t.a**;*, *. '.g 'ene. * = a t,==,7,q g,.. anuss -., ~ - 4. w __, g, S .,%e..f.. m.a,; r..,;,4 . es,,, e 7. , n. g .y .g 7 ,.sg ej,,,;.,7,,,, - q =ama%. m... o- ..,.,yg... _. ~~ ' ' * '

• i

.$ m *.. n s.Ameh eS I$s7 '*.-e *F# 4 M. '. % * ' J'"ma.J 848 de'# aim f"*. 'a! [9.En.m em, 1*.#.

1. ~

-' ' * " ~ _ ~ ' ' ...' E.~.Y Y ~

===e

• I.. Nads' ='m"=ne.

-,..'.--..,.... 7. "a'. -. - - " ' Er +8 ~- .. =. =. ..nn. -.L.. .~. .. - -.~- n n-,, ~.z -.- c. : ... [ Ma '" M2 1*d . :.". =~~.,~'-l. ...:.,,,me up E'.!...,a .* aat. k. s. $ ~.4 e a s ' rs +. l. /[/,.,$$. VaCJ a,j,.*** ".5 *i msuj d: " ' -,=a

• 1 [.4 M

,,,,..... =...... ' '.. .. ~.* A.. r...'.9.. .1.s **119"*T**: 1.*.*.,l: %.. e% .,gy.r*"...&.P.e.t.*.*.*9.**".t.*.'*t9L.".*.""***_,,,,..s,aws m .,p.. ~.**!"'""1..:!"*""**".,'* ., s..,i m 'f*** *r.ata- *.* ..-;.,c.. r a4 -. _.-. g sa**, .... -ns.r e.< n r c.p.y.,; m: s.a..,..m-,i,,.-- ~ _ ---*--i- - ha .s.e e ._ w a a s. - -- - ~. -. : ~r M r <.- l L--'r.;.-*:~.2 G-~ ~."'JJ.. - * * *. - ' *~!***' (") K.:<*A".--J a. * - - s.g y ~1!.'.*

• i
• T v

-3% '.3. "a.2 w'*c ,i W! '. '***.J*.!**.4'

• T.O.4 -d"'t*,. '.,.<"e... + :: i * ""'".'L **4*l, sa.

8 . &J. jt.. 4. rs 5 .e***~~ + ./,.' ..d**a'* - '.'**s . c y ,,q-=

7.,,, m,, utY.t./ f... =.: *.s tw.'sy.;,* s #'".

...sO..... - * ;,pf s 'e. a, +

• -'** ?"** ** f.. r-r*i.__.t..ec'm::pm

,+, -.NJ Ns*.*.* . *t E.g.~ ,.-4 .*e. g-g m-=.g.... w g,-.,.,. g.y 2::;, s-.-- .srera e - :rs.; t-'r*** - e sM' ~~

....at.:o w %,;.:: %.

w c ::x..- .a'=_..---~': L t

• .?.=, : :a rs. ~.: m.'.. ;

, + " ' ~.::. .;,...=. -3..,.,._ g c..- ...g..p.~. ..".-.t;. K..**.a=* *.. f f.

• 4,.. "'.;a

- --.*=e :.:.,, -7..,,. m.,;,2... r- %.' Q..;,;r :.r"'m* -s ~. - . r;;,.; 7. *r.J < 's

* ~,.

;... ' _.. -. -

w,r ",co w.h-~. .-ae.e. w .-. 7 .a..r.e.w,.r 4 . Tb. 4"' -..-..3.r.. m. ;g *j:.7 se.' -s e q. %..rg?'a.; >q."..d"...,- b...- n.. - e m, n.av ' 2-

e..a,.e

' r~...-- '.. ~ ' " + - _.. .. w -maams.aa.,.,. A ?ts.,,.n*~; V.;ja..

p*.,'%.'*..,,a.~..,...r*

r . u..~ - 1.'. .zu', .::~~ ~ 4n -.. -~,h . X. -- ~ ~. w' ;. ~.-. s.'~; :... * '.. -. .w w: a. ,as se s.. .-r--* 4 s ~, .4 iui+. .~,,-- /u,,e*...~...,.r-~.~. 1 g 9'* N==, - - - ~ - * - ~x.m a.~... v.. sr w.mm es= --.t - Q ' ~+ J""-i J,5 0%.. '. ^ *L *Q4?.'".'".*-'.". 'g g,. C M,l M I h+ ~."-m-. ?I. 4.Le s..".-...,j;u.C '8 4.3" ".J U *7' - '.'.P s

4..

s -- = *. * - - ~. -.. .r. ^ 7. .. w " -. ' s. ;,. M. 3 L= W"I :MllI.r.=s. r c.eM.s--:.w..fi,,.~ .. a da==.#8ms**f.'.; #s"h". <ht*.3r%*-N' auwea' k N. -* w- .s ~ ~ -- - a.e=m.em. , s s.,,.=amar"Ww. =%a..*:. f"r=-a.c.ast

..~.. .~ ,,. ~. + ~ -- m CENTRAL:P0HER AND LIGHT COMPANY s SERVINd SOUTH TEXAS WITH El.Ec RfCITY '~- Y~'94 M/ k' 2 ( of Namt OrrtCE 4 O rrt C E 0," rH E. 12 C N. CMAP& A AA4. n=cssocar h4.td connus =saisri. reus c2 October 26, 1962 j / " .a I(Q ', 'l's l* - Mr. John S. Osborne V F \\g\\gl[ g L* Chicago, Illinois f ^,[.., p) ri

Dear John:

h To a copy of our letter to the Director of the Bureau of Reclamation at Amarillo referring to our conference yesterday, I am attaching proposed contract they brought down, l N} a suggested FPC escape clause, and a study of the Falcon power costs over the past several years and as proposed under the present contract. The gentlemen yesterday were quite anxious to get the $300,000 limit removed, but since this had been discussed and agreed upon previously we left it in. They are going to draw up a contract based on our discussions with the necessary additions suggested and send it to us sometime next week, we

hope, i

The thing that bothers me about this whole matter is that it is likely Inost of the energy will be delivered at a time of year that we don't need it, and of course the cost is i high. In reality this is a two year contract if you will read i Provision F of the General Provisions made a part of the j . contract by reference. t I Sincerely yours, JLBates:AH ~ Enes, i-CC: Messrs.E.S.Joslin l . M. H. Lovelady -

(.

J.M. Wilson 40&$ (([ O e'e' a

93,3cn-- gp/ COPY n CECnAL ?0VE AND LIGHT L.0MPANY ~ m L O1 ~J ? m ~ c: Cecember 5,1961 Mr. John C.' Thompson, Act.=g Regional OI:ne:o. Sureau of Rechmation P.O. Box 1609 Ama:1llo,. Texas - Cear Mr; Thcmpson: This will act::cwledge receiptof your ler:ar of November 23,1961, advising us dat there will be some delay !n developing a cew :ste for the sale of power f::cm te Falcen P:cject. Ycu also adybe us car you will ecusequently be delayed is opening negotint.ons for de re=ewalcf ourpower purchsae c=ct: set at Falces. 'We feel dar application of the expiring :s:= for peaking c pccity, R5-S2. to such an interi=1 ar=uge=estis not equitable and ca=ot accept me decla:mdcu of 15,000 K7/ in peaki g capacity for =sscus i:cindi=g: ,(1) Peaking capaci:7 !s =ct r,or= ally purchased ech ta=pors:7 asts h except is emerg=ccies. (2) During the probable te=n of tis te=;e:2:7 agree =ent (Janua:7 th cash Jure), Central Fewer and Light Compey has excess capacity, and peaking capact:7 is cet required. Our peaki::g i requirements occur during de = ends of Ju=e, July and Au;;ust. It, there!cre,~ would be dL*ficult to prc=:e any capact:7 char;;e in an equitable ma=er. (3)- You' have adytsed us that peaki g capacity f=m the Falcon Project will not be offered 2r sale underyour ew rate sched:les to be . uldmately app cved for use after Cece=ber 23,1961 ,4g, We fully rec =g= ire dat timi=g ts i=pertac: is c=fer e avoid ope =dou of the Falcon P*oject without agrai=ect on a coct:ne: :2:n. ',Ve ruggest that a =re 1= de fo:= cf an en-peak and off peak :=er;;y charge be umilized in this propcsed i:terim centrza:: for - Falcen P:cject ;cwer. This would be similar m vh at was done in 1954 under like ci.-c== stances. We will he glad to meet with you at your conveelenes either here or in A=arillo m

discuss such a te=porary

:: dat will be equitshle to both par:tes.

You very trulyi / y. . fgy* ~ JL3ates:AH t/? esident.. 4071 - CC: Mr. k.P.Joces c .- ~ - ' SCC: O NAE' _eyg. n-a -w, .-e., --,r ,r -,e - mr n n.-

9.i: i h h,/lL WQ CENTRAL P0yl.ER AND LIGHT COMPANY 1 s, ( SEMVtNC SOUTH TEX As wl?H ELZe?RICIT'Y N,fS-g/ ~ ~ 1 54,., ...=.-.. =rrier er twe w% i m e ~ :...m.

==cs acur =cnnus =waisri,erx. . Decemcer 1,1961

a M

D Mr. John.5.. Osborne .v Chicago, Illl=cis o Cear John: At: ached is copy of let:er received from de IJ.S. Depar: ment of Interior, Sureau of Reclamation, whien I mentioned over de phone today. i As Iindicated to you, dis !s a =osr di$ cult problem in darwe know should we agree to de rate situation later Amistad power would be availabie upon completion of the dam. It probably will be anyhow. I have asked Mr. Levelady to mail to you a copy of de Har:1 repor: and de appraisalof the land in regard to Amistad. It may be dat Mr. Cook will want to look this over if he is avattade at an early date, or Mac =ay have some ideas dat would be wordwhile. Sincerely yours, / / JLBates:AH Esc. . CC: Mr. M.H. Lovelady i. i 4065 , 'O .$C D 6

== + e sf y e 9 _-__-__a

. m., 33 CENTRAL P0 VIER AND LIGHT COMPANY s% T sEMYING SCUTH TEXAS WIT 54 ELZe:RICl?r ( WM n-P' N woma Cntes 133 Ne CHAJBARNA4.37. N CCamus chats 71. Texas Nove=ber 16,1961 Mr. John 5. Osborne Chicago, Illinois Dear Johm When Hal Dewarwas down here about two weeks ago he phoned me and wanted to kmw if you were still interested in de San Antonio elect !c property. I told him I though.: that you still had an interest in this stenation. He wondered if the p !vate utilities couldn't help do someding about ge=ing infa= nation about the operation of the San Antonio propeny to the public. I told him that offhand I couldn't see how they could but if he had any ideas to send them to me. Enclosed is the le=e:1 received f:om him. The other day I saw one of de attorneys f:om Austin who represents United Gas Company, which compa=y now has a suit against Ala=o Gas Corporation and the San Antonio Public Se:vice Boa:d, t:-r.ng to set aside the 20 yez: contract that the P"Wic Se: rice Soard made with Alamo Gas Co:poration. He thinks they have a good chance to win de law sutt. He also told me he had been spending a lot of ti=e in San Antonio and in talking to quite a - few businessmen it see=s they are very much in. favor of the City ' of San Antonio get:ing out of de utility business, both electric and i gas. I You will note dat Hat asks dat this macer be discussed wits you. If you have any thoughts about it, let us have dem. i I hope you ulcers are under cont:o1 by now. I am feeling fine a=d the doctor is pleased with the progress I have made. Have been at the office a week.' With ve:7 best wishes, ) 1.cnc.?T' T AH ( &! k, ; 'Encs.

• NE

M. COPY 34 . g.l CENTRAL F0WER AND UGHT COMPANY

.e -

1 x. .y a n"1 .N cll3 J November 16,.1961 Mr:. H. H. Dewar Dewar, Robertson L Panecast 1100 Milam Build 1=g " Sac. Antento 5, Texas ^ DearHah. ,Ihave yourletter ef Nove=ber 9 and just don't see how the private utilities cculd run an ad in the San Antonic sewspapers comparing rates with Houstou and Dauas and give othar pertinent infor=a:ica ragarding San Antonio electric rates.. I am afraid that the people nC of San Antonio would nor appreciate outsiders coming in and talling them bow to en their business But we could furnish the L:for:narien to a San Antonio gr::up and let them r.m the ad. This is something we will. kick a=und, and if anyone comes up with some ideas I will letyou k::ow. With very best wishes, j S u,, ,4 r S-unc.sm.. ECC: JSO e \\ ~ r- ,IC. 410e. ., m. s d .... ~..,,. ,..,__i-_,

g,f. .,....w n e.scr5 0N Sr PA.NeoAST .=p.stee =e=<<*= stoes cas 4 es -e_ saar A.trorro s.TaxAa neo ws - essa. 3C c.ne.vas e. n s Ncvember 3,1961. Mr. Len C. Eul, Central Power & Light Co. 120 Ner h Chaparral St. N n Corpus Christi, Texas en DearLore \\ ~ Thanks fer yourletter. to how the priva a utiuty industry can answer mYo u. asked is so frequently made around here to the effect mat e statement that ship results in. higher rates. private cwner-I de have ene thought abcut this. The private t.'.tility industry has been doing a fine job advertising in shcwing what a cemendous factor it has be i cf national { 2e councy's natienal g:cwth. en in do some advertising showing that any Icwer rates offIt seems t the whole citizenship the difference through tapcw ered 'cy puhuc rec-J.y cost time such advertising could cite certain comm xes. At the same tenic where the rates are just as high as theyunities uke San An-communities of the same regien. are in other =ajor C San Antonio newspapers. would be bound to attract a iSuch an i statements so tequently made about highe ct of attentien i ~ ase t g. get the proper nationalbody to do somethin aps he could I deeming San Antonio for private ownership is s une. As l ty of re-cialistic cend in the councy that I know of anyw r cm dead. To-esent so-ceraching puhuc power. course, also be a cemendous bocn to y It would, of g t ng en-I hope we. will have a. visit seen.

• Sincerely yours,

-s. a.

ewa, HED:dp.

.SRC.. -A 4 i i n. ~,. y

• 8*

e = ( 7. ] ) ,, o.m

• ~-

i

2/;.,^), b 6 $ <\\ ,l 9 -i l i N .=~ Juna-17, 1963 s, Mr. J. $~. Oshc=e, Precident Central and Sout2L '*'est. Cer;c= tic =1 20 ITor:h Vacker D:tre 1 Chicage 6,. '" ' ' cia Casr }d.r.. Oshc==r A Re: Rate to 3reveev111e. Ce.:se, as -er letter dcted June 1,1960. At. your reque:re, the fc11cving c _.- _r=I l cade en the s.de-quac/ cf the rater attached to the ebeve letter. Ve have a. ver/ ' d -d ted u=t of.=fc=ntica c= the eccditices u= der whic2L serrice *d 1' be. tde. Our review cf the le'reL of the C wo >=resed =ta= > -= s the c= t=e= h== a =r - 1 N a fi.xed cc- N 69 El deliver /, '. cetreet de:nnd and a=ual. usage-equaltoaSC$'h b\\ facter. These rstas, when c=;arrd with t2.a aver-a6s rata ". mrr. "* - any, produce the fat ' ~.ing results: Rate [c. l'- 67p of C=;any's sve.- yie rate cf retu= ]d. 2 -1.L%. of' Cc=pany's aversge rate of returs l Este Attached a= ita:s that the c=,.n=y =ay vant to censider during pr*L4-d" / discussics en sert 1=g this lead. 'whersever a ; rice is indicated, it is fer 4 7'"atra 1cs ;urpose c=17 l 1 l l " If we can be of further assistance, please advise. l Ver/ :=17 f:urs, D W.C \\ I3C/j;= Kaith R. Cardey cc: 2. Cates .~ ~ V. Ca ' ~

.- =.. o' 7,.4 GOi PT l'7:f TMr. PD"IEN AI"1 IIGM t' 8:l:'i3:!Y June 1,1960 Mr. John 5. Ccborne Chi /.aga, Illlauls

DearJohn:

Attached is a rate we have-been considertng in connection with the sale of power to Brownsville on a short time bants. You mayIn interested to know that they con-template tatiing down their largest machine, and Mr. Sheffey requested that we furnish them power during this period of about ten to fifteen days. Of course it will be furnished on the present rate as we have not discussed the orte attached. Sincerely, JLDates:AH Enc. I 1 -a 0033"> C? 4 .r- .y-.,

,_ }rs ' -e e-s ?.ates attached to letter to i Mr. J. S.. Osber:e, dated June 1, 1960 4 N n ?4m Cr Rata No. L - Mcash.17 d-*-4 c2.s p,e $1.25/U Mon *

• y e=s.g cha:gs 3 1-d */.' m Este-lTo. 2 -

Month.ly d--*d += ;;;w $2. 27/W Mocthly ecer;;;.r ci:e e-First.100,C00 L7. ' k.0 zil.ls/L7. C. s.2e ace,cco 3.o= cts /:m \\ Ia 3co, coo 2 5 =< " /:m 1 211LS 2 ::il.ls Wheelig c!:JLT,3 1 i 1 l i I i e S 9 0 h: e q D4E PEE 4 4 ese= m essme e.=, me, . - =. e wem.., ew*

• ,e=

e=( ww*. - - * * - = = = - - * * * - ~ * * - A

^ .,.r, .( Cc AL PC'.II3 ACD Ca; CO:UA:rt .a Items that =sy be censidered 1: Sale et 10,CCO ? 7 ef ?i= :?' se:- e 0 c -de C1,y of 3:e.tcyra.11e, Za.us o.) C c>

1. Gere m i ?revisiets:

a) Custc=er shall, =ct se1L cr ctheritsa. dispece ef'. electri:21 energy to any eths.- electric utility er distribut1=;; age:cy unless such actf-" is e::;ressly pe=itted in vritig by the Ccapaa7 b)- Custcmer shD cet purchase enar;;7 frc:2: any cther scu=s than utilit7 c) Custen:er vid.1 previde aed. maintai: all. facilities, trans-fer=ars, and niated equi;===: to utilize serrice. Q.. d) Cc=pacy =ar : ster en the. Icv side cf transfc=stics, the=: compensated fer icsses. 2. 10,000 El L 4d cet reguls:17 used is ?srsliel Ocerstiens, ne 7c11cw1:3 ite=s could be censidered: a) Custc=er has chcice cf regular er staedby use. b) Custe:ner =ay be pes '.tted ;arullal c;ersticus, ucder c-w's ccatrol, for shifting of iced. Custccer evn a=d mals sis all necessarf ;rctactite equ1;=ent. c) Custccer state ec= tract d--d a=d where re.c.11 red, iss*d a circuit breaker set at 110-11 $ et ec=trsets. d) Charges:

1. Me scathly b4 C charges veuld be spelled cut, with o

b ,.w d

1 l s 4 - *1 ths =1-d.:= cf ^2.CO';cr r of ccetract de===d, er hi.; test l 15 =1:ute de===d du 1:.2 the ;;1=:/ te= cf the cent:c.ct.

• is shculd be set hip, encug to be acsured of M - 50,4 Iced factor.

2. Tuel. Ad,just=ent

3. Ir seek. a=1'

= de;nc12-ic= f c= stu.d1es =cv *.u:de: ar e- : e 3 1 cest,;;crisic s ceu.Li he ::sde fer thic. c.o N l 'n W k -id tf cr Labor Clauses. c::: 7.. Ts= Clause-3.10,000 U 71:= L::ad Psmileled with Utility.-

• e fc11c i=g ite=s could be censiderea:

l l a) The ccetsc*. =1 g t ;;cvide for erm' icad facters c: cuccc=er ge antic =. equi----t --d 7:.hssei ;cuer,

• -d if ir a=y =ce:h, a

the ' ~ d factc= c tuo ;urchased ;cver is less than the lead facter of the total. city lead, the additic:m. '<d '.att.heurs shall, he added. to the actusi usage to equalise the lead factc s. m

• vculd be at 315 ;crties of the :ste, vithcut.^.:e1 adjust-1 ze=t.

"is veuld ~ for defd d : Lead facter, and syecif q hev f to measure custcc:er's de=ards. assinst b) To ;;ctect/ seascesi variatics, the b4  ; de= sed vculd ever be less than 75% c$l' the ecst :ct d- -d. C:ds sh.ccid be deter-d +1 frc= the city's lead charseteristics. c) To esecursge off yesk usage, the rate eculd en11 for sc=ethim.g l like this: 8@. W d 1

==-*e a**. e - =.., . - = -.... - > .,,m,-

1. us'8'84-gy

, hga

I e s.- 9 - -a m. 4.,.,i..; \\ m-i her J~ Char:2 d I:.P i en ama or W'N-e * * * * ' * " ' ' ' *

• m

.= a. CENTRAL POWER'AND UGHT COMPANY SCHEDULE Ll Page 1 t 9 U LARGE INDUSTRIAL POWER (Minimum Centreet 9,000 KW) AVAILABILITY This schedults is ovcilable for primary voltoge service et c point of delivery to be cgreed upon, provided customer executes a five yeer. service contreet with a mini-mum billing demand of 9,000 kilowetts er more. i 1 Ihis schedule is not evcilable for temporcry, rescle, or stendby service, excepr in conjunction with copliccble rider. TYPE OF SERVICE Three phese, 60 cycle, citerncting current at cpproximetely 12,000 volts will be supplied to the' entire premises. In ecse customer requires duplicate supply lines end/or trcnsformer cepecity over and cbove that which is normelly~ required to furnish scrisicefory service, there will be en cdditienci chcrge of 1% per month of the Company's investment in such duplicete fccilities. NET MONTHLY RATE Demend Cherge $1.75 ecch fer the first 9,000 kilowetts of billing demend $1.25 each for cil edditienci kilowcrts of billing demend 3 Plus Energy Cherge 5 Mills ecch for the first 250 kwh per kw of billing demend 4 Mills ecch for the next 250 kwh per kw of billing demend 3 Mills ecch for all cdditienci kwh used. Minimum Bill .- The Minimum bill will be the demend chcrge. . DETERMINATION OF BILUNG DEMAND The billing demand shall be the highest 15 minute meesured demend during the month but not less then 80% of the centract ecpccity nor less then 9,000 kw. If the mecsured demand exceeds the contract cepecify for three or more sepcrate dcys during any month, the everage of the three highest demends becomes the new contract ccpccity. A 53S38 G, CP i - ~ -

a

. _ __.., 2. m.

a e CENTRAL POWER ANO UGHT COMPANY SCHEDULE U Pege 2 FUEL COST ADJUSTMENT The ner energy chcrge per kilowett hour will be increcsed or decrecsed.07 mill fer ecch full one-hcif cent by which the everese delivered cest cf fuel to the Compeny during the immediately preceding month exceeds 10 cents or is less then 8 cents for ther qucntity of fuel used contcining one millien B.T.U. POWER FACTOR CLAUSE Should the everage legging power fecter during the month be above 90%, the num-ber of kilowetts furnished to Customer will be cdjusted for billing purpcses by multi-plying the mcximum mecsured kilewetts by 90% end dividing by the everese legging power fcctor. Should the everege legging power fecter during the month be below 80%, the kilowetts supplied to customer will be cdjusted for billing purposes by multiplying the mcximum mecsured kilowetts by 80% end dividing by the cverese legging power fcctor. Fer determining the Icgging power fccter, e recctive meter of stenderd mcke retchered se es to prevent reverse operction shall be instelled necr the metering point by Compcny. The eperction of this cicuse shcIl net serve te re-duce the minimum billing demend stipulcred herein. TRANSMISSION VOLTAGc SERVICE CREDIT If customer tekes service et trensmission voltese (69,000 velts or more) cnd also owns, operctes, cod meintcins all service fccilities, including trcnsformers, re-quired to tcke service et trcnsmis.sion voltage, e credit of 10 cents per month per. kilowett of centreet ecoccity will be ellowed. When trcnsmission voltege. service is metered en the Iow voltese side of trensfermers, the mecsured kilowett hours will be increesed one percent to cover lesses. TERMS OF PAYMENT All bills cre due when rendered end cre payeble within ten days thereciter. TERMS AND CONDITIONS Service will be furnished under Cempeny's Stenderd Terms end Cenditions. ^~ 53330 C? ~ ~ .~ ~ ~ l

b.G - ^ '. y g rm CmW F0WER AND UGhT COMPANY ./ ~ May 9,1960 Mr. Repaldo Car =a w Cmmingham, Car =2, Yr=aga Tc Gree.-apan N h.mys at I.zw ,( Brownsnrtile, Texas em

==

Dear Reynaldo:

Thank you foryour letter of April 29 to which yeu amhed pr= posed amendment to the charmr of the City of Lcwnsville, Article VI, which wculd creat= a s-pma and distinct agency to be known as the Pnhlic dtilities Board of the City of Brownsville. 9 As your letter pointed out, and as you mentioned over the phone this morning, if this -Mest does go throu5, de City, in our h opinion, could not give us the n ecessary protec: ion we would need if we were to serve the Port. I tried to make this clear to the City Commission while ther= last Wednesday and again in my letter to the Mayor last week, copy of which you received. The acdon on de part of the City, as you related over the phone, calling this electon without giving consideration to amendL=g the e'-== so tt would permit the p.4g of a limited M"r5 4se gives f::rder t*** Mon to me'that 6ey do not tusend for us to provide a=y serrica to the Port or to any other portion of Br:wnsville. I am somewhat surprised that - they took this se at a special meeting on Samrday, but I do not feel that we can do anything to make our position clearer than we have done hereofore. If you can think of any way in which we should approach the ph, I will appreciate your keeping me advised. Sincerely yours, JLaates Aa CC: Messzz.7mo.S. Caberne gg 7 J.M. Wilson R.A. Ewing l v W. A. h grat i s '...y~. .. 533": 1 .t ".. ..o . =. .= w-

~'

3. s COPY

((s u CENTF.AL POWER AND LIGHT COMPANY 'A ~ +

39 February 16, 1960 Mr. Ralph D. Stevensen-Stevensen, Dendtler, Ea11ey is McCabe 20 North Wacker Drive Chicago 6, I111scis

Dear Mr. Stevensen:

. Reference is made to your letter of February 10, 1960. concerning the Cit 7 cf 3rownsv111e 's plan to finance and build additional generating and other utility system facilities by using a ncn-prefit corperatien known as "3rewnard1'e Municipal Utd7ity Corporatien". Additional information abcut matters discussed in your said letter, using the same paragraph numbers, is as follows:

1. We obtained a certified copy cf the Articles of Inecr;cratica of Brewnsville Municipal Utility Corpora -

tien filed in the office of the Secretary cf State at Austin en January 7, 1960 to effect incerporatien. I a:s encicaing a typed copy of said Articles of Incorperatico but not, including the certificate which is en cur copy. When the new. Texas Business Corporatien Act was enacted by the 54th Legislature at its Regular sessico in 1955, it did not cover but excluded acn-prefit eerporations. The Texas Non-Frefit Ccrperatica Act was then in process of preparation and it was centemplated that it would be enacted later.,. ...t lThe Texas Ncn-Prefit Corporatice Act wcs enacted by the 56th Legislature (Acts of 1959, Chapter 152) and became effective 90 days after adjeur= ment of the Legis-lature en May 12. 1959 er about August 12, 1959. This Act is new included in the 1959 cumulative annual pccket part to Tolume 3A, Zusiness Corporatica Act, Vernen's Annocated . Revised Civil Statttes of Texas. .( ';.I believe that with the above citatien ycu will be able to review this Texas Hen-Prefit Corporatica Act, if you

i -s

.,.x,,.,

= UVE B ETTER...Bedn'cEHy $p.

.~

5M . g.. y, c;.. ;. ., 2 !;p. y..y

c.o 7, N c, N .w Mr. Eniph D. Stevensen y February 16, 1960 Page 2 l need to do se, without any undue difficulty. The purposes for which a ncn-profit carperation may be crganised are stated in Article 2.01 and include "any lawful purpose or purposes" with the excepticas stated under subdivision 3. 2. I agree that probably the new non pectit cer-peratica would collect only enough frem the city to break even and it is not particularly significant whether said corporatien wculd be liable for Federal.inecme tax. We had in mind, however, that the price and salability of the revenue bcuds cf said non-profit corporation would be affected by whether er not the interest received on said bends would be subject to inecme tax or be exempt frem inecme tax as State and municipal bends. An I mentioned in my letter, a friend of Mr. E112s in the bcud business has told him that the revenue service treats i=terest en revenue bends issued by ncn profit ccrporations in situations of this kind as being exempt from ince=e taxes. This, of course, is only hearsay and I do not have any familiarity wi.th the questien. 3 The point raised by ycu had not occurred to me. It might be pessible to establish that the deal, frem the standpoint of the City, vicistes the State Censtitutien, par-ticularly if it develops, as is,not unlikely, that the nen~ prcfit corporation has to charge for energy supplied to the City a price which clearly is higher than the =arket value thereof. 4 I$ seems to me that the City wculd be doing thrcush the non-profit corporatien something that is pro-h1bited in varicus aspects by provisicas of the Cit 7 Charter which I supplied with my letter of February 2, 1960 and prohibited in addition by similar provisicas of the varicus cutstanding revenue bond issues. 5. Probably it would net be feasible to 'have 1ccal taxpayers institute litigatics to step the proposed plan. As a matter of f act,. if Central Pcwer and Light company in-stigates er finances litigaticn it is nec 1: probable that . it would never be able to get any advantage f;cc the 11tiga-tion succeeding. Cu the other hand, holders of pr-sently cutstanding revenue bends, acting as a matter cf self-interest, g. 53M _l ~ *,.. _ - _. _, ;.=. Q *. - ;

~ s,..,.,,, N 'n N Mr. Ral;:h D. Stevenson -=- February 16, 1960 ca Pass 3 wculd be the preferable litign=ts, and I believe that they would have a reasonably goed chance of preva111c5 in the litigatica. Ycu23 ver7 truly, l ( \\ m /sla yh11 IQ)% f \\ ,i' cc: Mr. Jchn S. Osborne y Mr. Len C. Hill Mr. J. L, Eates -( 53 s . -, L) .s l

w i < ~ ~ CENTRAL P0.WER AND LIGHT COMPANY 4i L Y 1 x 3 SERVING SCUTH YEXAs WITN C.ECvMICITY (* Y

• i; mcMC art 1cz emct er THE tcc M.CHAmammALsT.

p at ts t e TNT AN c s tN cxAb M AN Aa tn ccmpus cMaisT1. Ttx.As Feb :ua:7 8,1960 ca ~ \\ Q l Mr. John S. Osbo=e N Chicago, Illinois 'J

c. :

Dear Joh:

ne acached clippin'gs from the BROWN 5VTT T IEF i f n would indicate that everything is moving smoothly for the non-profit corporation. - The Feb:uary 5th a=icle is ce=2 inly slanted, in my opinion. nought you should have it. Also enclosed is a sum =ary of our offer which was prepared by Easter a=d oders. I sent this to our acorneys and local people in B:cwnsville, a=d asked dem to give me a call this mo::ing. Our aco::ey called first and told me of a conversaden he had Sam day cight with one of the City Commissioners at a social gathering. He said de Commission is quite dism: bed over ser:e things dat have ecme up duzi=g the conferences recently. He will acend the meeting 2n sday to see whether er net they ll=it de char:e amend-ment to the creadon of this Board. 'The Mayor and ne Cor ::asstw2: - aco=ey talked to had understood that de plant was tv L. *:

• . an addition to their present plant, and that CFL would be asked to serve de arsa outside the City, including the Po::. He Ccm=issioner advised Sam: day that they are :u=:inginto some legal obstacles and it now appears dat de pla:t, i.f const:ncred, would be built at de Port, which of course would elimi= ate our oppo =nity to se:ve this industrial area.

The Mayor and others on the Cor= mission were disappointed in the Commicee's recor==endations in regard to dis and state dat bey stil hope to have that queston, that is, of an exclusive franchise voted upon also. Both Mr. Puteg ar and Mr. Ga=a recot: mend dat we do ( not purchase adve=ising space nor give discibution at dis d=n to de data which we sent to the=. UQ .d.6 St=cerely, 5334 JL3ates:1.E .u 1:- .-T'.

^. -. ... ' -~ N~~. -- -- ~ - W w l. l

• • m *

/' O 7 w: CENTRAL PC.WER AND LIGH,T COMPANY e' b / $EMVING SCUTH TEXAS WITM C1.Ze*RIC17Y 1 y ~ g s' WCMC CretCC CrrtCE Cr ?WC f20 N. CMasaJtmas 31. setSICCMT AN C 3CN CMA4 MAN A4CM C C M pus CM 8tlST1. f tx48 January 9,1960

.a AJ

r NJ

==. ~. M.r. Johs 5. Csboce-Chicap, U.11:cis. Dea: Job: As related ove: the ;;hene, thi=p is Brewes-ville are =ovtsg in a adverse direction. T~r.is ewspaper ca=ies the story of whar li=le I ' ew when I talked with you. c C ne City Ace =ey of Brownsville says he was =ct.ccesulted and cat this was larply the work of the Naviption Dist=c: Ma=ap: with invest =ent bankers fret: Chicap.- Flease read the editorial. Sincerely yeu:s, 1 JL5ates:AH Ecc. CC: Mr. Lon C. E li g s b352 4 . m c, m. w s ; w s n w - + c,: m z x c...s w n u., ws. e.+....a m m c, g n - - + s ; g

.,/ C .,.D ..s. I .s. .h CENTRAL POWER AN2 UGHT COMPANY ,1959 .e. a. x. n=.dercuh une n ..m ,w ..a. ~ ~ ~.. riefly, in summary, I believe that the issue is far frca ... -,.. -a, f.7 ' '. ' ' f0M. jP h*'." - --- - dead and. I f eel that by varicus CFL persainel making frequcnt. ~4.. c=ntacts around the O!.t7 we can held. their interest. Th '.s ,W ecming fall would seen to be the cruedal. ti:me frem al.t I can gather. .,y. 1 O:. If anything further develope I will keep you posted. 4 ,: s.. i,y ',;y %..,,l,.-G... '., Sincere 17o .,.$.g.;p.g.... ~ * ...- lv s R 4,,,. j.a.; e .<Ayy c '.k,. WCC:AH '41LLI.AHS C. CUNN.T' HAM ~ * ' "(.? Executive Assistant -g,. W,

w...

i.7.si/M.

CCt Mr. John S. Caboms ..:.;> 9.. .... *4.r. J. L.. kte s .:;..c. ; ; Q..? p,j.;fi%,. .,=.::' ,....,..3.. ,y .. s : .... 4,.. J.4.m 4 ~. t.:;.e.s ~ 4 ... p ~...s .v,. Ja. '.. G.;,:. g.. ..s.. ...s.. - .c. ..,+:. . g.c_9,..gg;,.;..p:$. yll*:. re- Va.y;-**'ny. ng, Y^ .'y; , ' &,+.. s v W Qs.]=* .~ r ;. ( -p_. ~.'4.... . 4. 9, .. ; p. .t. .,t.' i 't'..N'- 4 .1 -... a '. 5.

• a 4

9 5.q w

..y. .. t,.y g m.4 m %.g p,, =%

. s.e-

.' f. 3 p?, W.'. .4 %r** ;<c i. m a vn . -r.t. .. 's.. .. + -. k* r.dC,.;,.'.:*'.'??L: h f &g , j k ... s - ... ~. .... s ::,w,, ;.., M..e.,w. s . n.,. . y.....

• c'

. ' m,'l.4,iW-A 52i"79 .s,- .J ,ug-, ' ' '.(. ' {'.). w. ~. v.- ..x.........np. ._--___.-.-_---______-_--.--.____--.a

e v C Y* '/ 7 . i. 7 CENTRAL POWER AND LIGHT COMPANY w -

a.

a... :.....,,.f.*.

p.....

,~; June 9,1959 4 ..L Middle West 3errice Company ........fd Mr. R. M. Winsborough, Vice President ,j. "F ' Chicago,. Illinois ,.1 ^ g,F- [.?,di9,.' .~ w.. . T

Dear ?,

cb: ,a .V Since 7 cur last risit to Corpus Christi I have.ade three trips to Drawnsville and have talked to a great nt=ber of pecple there. I thou6ht. ye:u si.;ht like to have a brie't suc=iary of their appraisal of the current situation. m i <. '- Q W M It is the generel consensus cf crinicn that our position has.~~ /' WC v. grown strenger steadily in the last few =ceths. With one exceptten, j,. ever7ene felt that the apparent apath7 of the city fathers has 0 .Mni caused a great deal of dissatisfacticn with the electric service. a . ';,-? 7 and the ap;srent lack of interest in rate reduction and system improv =ent. 3ers ha s been a definita increase in the nu=ber of s8,. influential people who have apparently chacged their =inda about,.. dy44 ~ ~ - the sale of the plant.

• ', : ' - 4. ' ' *

........i At the present ti:re the Cit 7 la experiencing a great deal of'N.'& f. l financial difficulty and this has helped to point out. the poor *r~re vr J,- 5 fiscal policies applied to the electric system. 2, c, g,. I have found two er three people there who might be the enes ~ we are 1 coking for to form a rallying point to carry our bsener. i However it docen't see= that we are quite ready to take thia step as ye t.. The City Council is very much up in the air as ther N.r: f-appointed a new Councilcan and just a ceuple of hours befcre he was to take office he wrote a letter stating he could not accept.. 2".. ?"

• i

'; *7:.: <6 : \\ If things continue along the present lines, it would seem that .. q.y.' e i -d. i g by next fall's election we will havs a prett7 streng fclieving. We .f.,3 have been told that the Council needs to call a bend electicn to help the City cut of its present financial dils==a but are afraid 1,'*. 'r to do so, for they know it vill be defeated b7.the people.... :.,,w. y,;,y .> t c ' '.* a r,.. .3

-Q

...,.,...a..., 4 d pm,.,?8 p N *"y62'- e 1 CP of l ..J- ~ h*.:.' 2 --

2. = = --

- - - - - ~ - -

.. ~ _. - - -. - - . - - - = 4p i.%% 12 e..' FALCON DAM . p.(.[,. ~ . ~}, k n k. ' r. - w -;.' ' Q

• kgh. 'c,'?Q.t&.......

V r-s-. 'F .. - :. i. Falcon Dam, on the Rio Grande, is primarily an irrs,gation A. sit - and flood control project which was built by the Republic of Mexico. and the United States of America. The incidental electric power pro-L. duced at Falcon Dam has been purchased since 1954 by Central Power s *s g,.. and Light Company on. a temporary basis. ., a.. :.w ..,. y'f. -94Rf;' In 1957 Central Power and Light Company entered into five#.%. e@Q,. + r '.'. year centracts with the Department. cf. Interior and with the Republic ='C-y, of Mexiec to buy all of the United States share of the power produced ,7 at Falcon Dam and all of the Mexican share of the power not utilized in Mexico. d-si. Central Power and Light. Company also entered into another 'b-Odd five-year contract in 1957 with.the Republic of Mexico in _which the. Company. agreed to sell limited amounts of fir = power to Mexico at.ge^ '... ./ 'm

• 2,:.:e -

Falcon Dam for use by Mexico 3 n Monterrey and surrounding.arsa :w.Q#.<f.et-ef 1

n.. ~

^- .~...3 .s ;,& .%L &:1,qh- - During 1957 Central Power and Light Company purchased. Ry 61,578,250 kilowatt-hours of power produced at Falcen Dam for which ,1 ~ ';3: it paid $226,979. 87. In 1957 the Company sold 16,987,450 kilowatt-j ^ hours of power to Mexico at Falcon Dam for which it received $191,757.90."- . >,.5;;a 3.i,.

c..,a.a,+m.

c,... A.... .uv ux'C. ' Infomatien sent to Mr. Caber::e by Mr. y, d_. I Carlsen 1/29/58. o. I4tter of transmittal ,l '. O.. e'M .l v'u da File 111-10 Central & Southwest 'g I 'F? st l ^ e '..' h' le;;., s Corpointion - Ceneral i 7,g;...

e..

1. .w t

A. 10057 9 i ,o,A,.

• • d. *: s' IM'.". -

(N b 1 ) O 3 8 ', Ni~ 'l.', J f*fj- ...., - c....,., y g. e .. M.,1 J.". OP " J't els m en e. ' I.' ~ ~ ~ ~ 1

.o 4 COPY l \\ u n[l\\p\\ CENTRAL POWER AND LIGHT COMPANY V Lju November 8, 1957 l l ) i Stevenson, Dendtler, Bailey 2: McCabe 20 North Wacker Drive Chicago 6, Tincis w ATTENTION: Mr. George E. Sailey y. . r-Gentlemen 1 w w Reference is'made to my letters of September.25, 1957 and october 7,1957 concerning and forwarding cer-tain infor=atien in cennection with the possible acquisition of the City of. Brownsville electric system.. 1 As you may have been advi$ed, the election of new City officials has been held in Brownsville and, with the exception of one City commissioner, all of those elected were frem the ticket more favorable (or less unfavorable) to the sale of the electric system. It follows that we will need to make an offer or alternate offers for the system within the near future and we would like to have the benefit of your studies and suggsstions.. .I a::C.Burenthat you have noticed that in connection with the Refunding Bonds Series 1945, w(hich are combination tax and revenue bonds, it is provided in Section 20 of the Ordinance) that "'the bonds of this issue shall not consti-atute a lien upon.the physical properties of said utility systems, and the holders of such bonds shall have no right to require a sale of such systems to enforce the pledge of the revenues securing said, bonds". The revenues of the systems (including the electric system), however, are pledged to secure the bonds. Also the.other issues, being the 1947, the 1948, the 1949, the 1951, the 1 E2A, the 19523, and the 1953 series, are revenue bonds with the provision (allcwed by statute) that the holder shall never ( have the right to demand payment out of funds raised or to ~ be raised. cut.of taxation. They are, however, secured by pledges;of the revenues of the systems, including the elec-tric system. J3[ _ 9s4 s .x.- t l a

4 g ea Stevenson Dendtler, Bailey & McCabe 1 N November d, 1957 ~ Page 2 w C.0 I will mention some of the thoughts and un-certainties that I have in mind in connection with each of the possible types of offer as follows: (1) PURCHASE FOR CASH: Assuming SEC approval, a deal of this kind would not present any particular difficulty. The Cit 7 could not sell and thereby relinquish all revenue from the else-1 tric system without retiring the revenue bonds (or t guaranteeing payment, probably by a deposit of funds). Although it might be possible to buy a substantial part of the outstanding bonds, even at a discount in view of gesent money conditions, it would no doubt be necessary to call and pay the required premium on some of them. This type of deal might not be desirable because of unfavorable conditions for raising the purchase money. Also, our income tax people probably can suggest a deal that would.be more favorable from a tax standpoint. (2) PURCEASE AND TAZE TITLE TO THE SYSTL'd PAYING PART CASH AND FART BY DEFERRED PAYMENTS:' This was done in the acquisition of the Harlingen electric and water systems at the end of 1928. In that situation the deferred payments were related to servicing and paying off outstanding bonds and the. deferred purchase money obligation (a vendor's lien note) could be reduced by buying bonds on the market and turning them over to the . City for. cancellation. This, of course, would afford an opportunity '/or saving on the purchase price in the Brownsville situation particul.arly in view of the present money condition. I believe, however, that this type of deal, even I assuming SIC approval would be violative of Section 10, g Article III (Page 1M ) of the Company's Indenture dated November 1,1943. In addition, the City would be giving up all revenue on the system (pledged to secure the bonds) i I and the revenue bondholders might ecmplain and possibly they oculd require that these bonds be called,and retired. QL. 3 5055

L

t. -

.t ~ e N November $,Dendtler,BaileyI.eMcCabe Stevenson 1957 N Page 3 W Y (3) TAIZ POSSESSICN UNDER A CCHTRACT OF PURCHASE UNDER WHICH TITLE WOULD BE TRANSFERRED WHEN TEE CONSIDERATION IS PAID IN FULL: l ia The contract of sale could provide for deferrad payments as and when needed to service and pay off the bonds and also allow credits as and when outstanding bcnds could be purchased by us and surrendered for cancellation. Uncertainties and possible obstacles to this type of deal include: (a) This might be an " acquisition" within the meaning of the Indenture provision mentioned above and not be allowed because, in effect, the properties would be encumbered more than permitted by said In-- ( denture provision. (b) The payments under the contract would be purchase money and such contract =1ght amount to the City aliena W g its right to revenues on the system in violation of the r1ghts of the holders of the revenue bonds and make it necessary to retire these bonds unless we would protect these bondholders satisfactorily.. not b(e) favorable.From a tax standpgint this type of deal would c (4) 2ASE THE SYSTEM UNDER AN AGREEMENT WITH A FIEM - . CELIGATION TO BUY AND TAKE TITLE AT A FUTURE DATE:

,... Frobatily this would necessitate rental related to and adequate to service and retire the outstanding revenue bonds.

Such rental would not likely equal the fair rental value of the prope:ty that, together with the firm obliga-tion to buy, would' prevent.the payments being treated as rental for tax purposes. ( ' (5) LEASE THE SYSTEM VITH AN OFTION TO BUT AND TAZE TITG ,.: AT SOME FUTURE DATE OR VITHIN SCME SPECI7IED TIME: ... Difficulties are that in crder to have tax advantages ... f d .l - 5055 ,r ., v. m .t~ W .m.

i .'J Stevensoni Dendtler, Bailey 8: McCabe .y November 8, 1957 =- Page 4 m a c> the lease would have to provide rental that can be justi-fied as being rental and set up an option to buy which does l not patently assure that the property will be bought under j it. Since the City likely would have to have pay =ents l adequate to service and retire as.they mature their out-standing bonds, it might be difficult to provide for " rent". .Also, we would have to consider whether a lease (as mentioned here and as is nentioned in subdivision (4) above) would constitute a relinquishnent of revenue in. r s violation of the rights of the holders of revenue bonds. ( Probably the rent would be the necessary revenues from the l system and, if adequate to service the bonds and held for that purpose,. afford the bondholders their rights.. l Under either type of deal as mentiened above, we { would have to have, of course, a. franchise for the operation I of an electric system in Brownsville and I. am sure that the City officials would want to include a provisien for it to terminate if our possession of the system under the contract of sale or lease, as the case may be, should ter-minate without our acquisition of the ' property being con-cluded. - ~. .There are various problems and points that need consideration by parties other than the lasyers. In par-( ticular, I feel that our accountants should' anticipate how, j under each type cf acquisitioni they would record expenditures for. repairs and maintanance, and erpenditures for extensions .or other better=ents If we havatthis advice, it is probable that. we. can incorporate any needed. language in the offer and ensuing contract., ' E It. N111 be appreciated if you x111 utiline the advice of Mr. Osborne and others there and promptly give us the benefit of your suggestions.because it may develop that the opportune time to move.on this matter is in the immediate future. sI.. ? .,. Yours.ve.- y trul'7, (~ JMW/ gin ? ',, ~ W Sc. :. Mr.' ' John S. Osborne f-Mr. Len C, Hill p^ p Mr. J. L. Batas a .. Mr;, G. Menger- ~. - ->.5057 -- 1 x

4 a. a yg c5a ,Id /y u.s. j copy sm.:0WER /ED tdt C"M. ANY ~ N x w ~ Jac:ar7 23, 1?57 ) i s Mr. winia= x. Leng.an Exwitive Ties Frasident t CentreL Surre7u, be. Shenandesh, Icwa

Dear Xr. Lceg=an:

With hrther reference to the st. rv7 7cu recentl7 sade en ~m.sville, I balia re h wculd be beneficial to 'm if w could havs inelnded the transcripts cf me individual i isterrisws. I +M 'e this win be hel-#r to us is appreach-- is ing, thr= ugh other cha==els,1:d1Md:s13 veo =1.e, t assist getti 3 this before the citizens of 3rocsville. it this ti=s, due to their political < :$ile, it is i deuhthi if either of the facticas will m- this to a ref.a but ;eesibly we can,r,;et this done by prescurs fr r s cae of the ;eeple ec we k=cw are 6 faver of a change. Ve bate fm.d the re;crt =est interesting and .l op+d d ati=,1:x! while it cay ts.ks s c=e ,2: *c get the = attar cut 1.s the open ctr efforts vill be d.rected tcwrd l that e=d. 1 Siucors17 7:urs., i Y/, / ] ."L2ates:M 6,pid ent. 7 S l _=w : .=c c neso = 1 A

k..

h 6 e I ( l RP. l ~ sac

n (.r. y + s.= +' CENTRAL POWFJi AND LIGHT COMPANY ~ s 3 sERVlNG SOUTH TEX AS WITM al.ZC"MtCl*Y ,j. MGML CrvtCC OFF9C3 CF *NC 120 *(. CN APAARAI. 57 3 massonar ano s e s m.uana.sa c=Reus cumen, w JanuarT D> 1957 I Er. Jcen S. Osect.e Chicage, Illheis

Dear Jchn:

Attached is ecpy of Ce= tral Surreys rspcrt made for :s 6 November and Dece:bar en the 3rsetsv111e ca::,er. The situatien down thers has sc. change <1 an7 hsofar as the politicsl si.naticr. is calcorned but this report cer.ai:17 is enecuragirg, Someti=e ago Sob '41nsbereugh fur =ished ze with seme Icase pureba se centrsets, era covering an ~ 4 cis situaci= and ( ance her 6 Xbsissippi ar.d 6 New Mexicc. I wenier 15 rou could j get. fred Herr er See to lock into the suggested plan of lease purchase a. gree =en: 6 a little =crs detail acd :=e up with seme form of propesaL wnbh would ccver the 3 roms 7111e situacic:i. m I casually =ent!ened such an idea to the newspaper s=sti=s ago and they seemed to thhk it =ight have sec;e : erit. '#ca t I 1 have in =ind, of course, is to reach an agree =ent c. the presec va1us of the ;reperty, take an optic: to purchase it at stipulac ed hter/als, say, every five years er at the excirstien cf tve=7 years, -hichever see=s best, and pay them sufficient in rental to

eet their bend require =ents plus a reascnable pertien of the profits agresi to be put in the new facilities necessary to seet the grewth of the preper:7 durbg the life of the lease.

X7 epinics is that the lease should be for twenty years because of bced :stu-ities, thcush scce previsien shculd be =ade to aegirs the prcperty if the pecple veted to sell it prier to the time. The City, I am sure, would want to retain ths optica te purcha s the facilities we weuld install during the life cf the Icase. But 5.:7 opinien, due to the g:cwth of ths preper:7 and surely if a ste cessful cperation is maintahed, they would nce -ant to bu7 at the end cf thz term but would want to sell. Icu will note thst I have written to Central Su-reys for trsns-cripts wtsich ca7 give us a ke7 to getti.q; this = ster activa ted ea rlier than new see=s pcesible. r-S heere17 7 curs, V / J134tes:AE f mu. / D1.U4 CC: Of4 o l' ~... , ~. . as ga a p l. 1 -

f n n .-,c + yu m -. I 1 4,. 3 x 3 - H 3q CENTRAL POWER AND LIGHT COMPANY \\ v 4 _( s scaviNet scuru Texas was et tc7mieny i \\. %*~f g MCMC OFFtC2 CFPtCE Cfr TNE 120 N. Q4 AP A A RAI. $7. P9tESICENT ANO GENERA 1. W ArtACCA CSAPUS CN A1571. *EXAS June 22, 1956 Yz. John S. Osborne. Centrsi an:i Scuch West Ccrperatics c.o Chicago, m ".cis N .a~

Dear Jr ns:

N cro As related to you ever the phene, things in 3r-tensvine have* developed this week mere rapidly than I anticipated. The attached clipping of June 19 pretty well cutlines the latest tnere. Iqbave told you that they had sece pretty bad pclitics devu there and fi:al17 the ex-cayer sas decided to have been re-elected. ~ b November. This is being appealed as you will acte frem the attsched clipping cf June 13. In the same issue, underneath the picture, there is an article cut 11ning that the City gave letters of intent to certain.mufacturers for a sev 22,000 r4 turbine generater with auxiliary egrip= ant. This ar.scusce ent is vnat occasiened the blast of June 19. Fre: talki:g to seversi i:dividuals in 3rewnsvine 7esterday it appears that any beni issue preposed there vill have really rcugh sledding. Today repceters frec both the McAnen MONITCR e.r4 the 7Alll! MCF.NING STAR of Farlingen, which are se:bers of the sa:s newspape organication which cperates the Erewnsville h~".?JL".D, went to cur local offices i: the respective cities to c'etain infer:atien abcut taxes ~ad valores and ccher-caid to the cities, schools, etc. in these localities. This infer:atien is being cade available to the and I l'* sure it is part of the campais: ef the Brownsvine h~~'.ALD as anscunced in the editorial.

• We have finally decided that we shculd have 1ccal counsel in Browtuville an:! both len Hill and I have cet with Mr. Paul Cunningha=,

whom we have know for gr.ite a while, he being a =e ber of the fir = cf - Sharpe, Cunningham & Garca in 3rewnsv111e. Testerda7 I visited briefly with all three of these gentle es en a special :atter and an asking Jim Wilsen to go dcwn there at his earliesticonvenience to arrange for - their for.. ally being retained as local ecu=sel.

(

v t ~* ' + emum e eumm m + e,. ..._,,.ew .w. wa w

.. ' :-~

3 o e Mr. Jchn S. Osborne June 22, 19 % L i I dc net have all :he hfor=ation that will be needed to censider the vahe cf the 3rw.sville,:reperty. In =7 cpinien they nay not even held a bend election. Sc e weetes ago the Cit 7 Manager told ne he as dcubtful that an electhn would carr;- l and I. think the caly reason the7 teck this actien teurd a egd.rkg j equipe=t was because of the ceu t decisica 5 the Stekely natter. I also think that the si;ning ef' the letters of heent, when ther \\ were in an optinistic need ever the election centest, caused the Brcwnsville EEAI.D and citicens generally to fi'rs the first blast. ( 1s'I said, this was an ene:cpected develep=ent but if I P..cw anything abcut the situatica down there it will net 'ce too lcng until we v.11 he asked to lock into the situatics to see if we wi2.1 be hterested b acid sg the property. Sincerely 7 curs, {, 4 ~ 4 JL3ates:AE Encs. CCr LOH JWI N .Ju* N C3 N i. 9 I L 5, u-. r I .{ ,+ - anamen.smov>- _. ,em... ..w..gr ..,+.eam.

• . +

ees - ge==ee we 4 b -o<

i g

---

--~~~~

r0 g 1 . !1. 1 :4.... g .. ~ \\, l _a h (.,6% L./ .e CA/-*'- t e5/* s N g >< / (1sw e t,e s t' f t-w W e.o e em ,r~ i t COLZAC7 OA C CC K n L, L95L . :eps:rd/ 'V My /,Mf'T C.M / J 3 f. NCE STA'."7".S C7 M2. 0A L'O Ow NC f OZ:2.A!. FC'-U M '2ic 00:2A.'.T re FCR 0:29.Of ?'2 F.A7.I 07 PT..E AT j TA!.00.', 'O I:OLufA7JRI.OT.S. ~ 9 I l i 1 i / 4074 L gh_ 'd l s "-, 2.0 e .',..vw..- . [ U'

• l' E-- D '.';;,"'?+';fJ @$ ?J',,g; ;; g, ;;g;.g;a,'b'i

,..,,4,., 47di f,, Ja ~,e e 1 3 g3-g _.. n,., ,~* -- ~ ~ ~

4 A O ~ ~ - - - - = 1 C.7.11.DI2. O *ES C#dA.TI i i w N i Octceer 21,19% W w j Mr. 3

1. Iu m ett, Acti:g P.egu na.i Oirector

{. ) United States spartment of the *.:terior logicu $ Amarillo, Texas Cear."z. 'urnetts !cu will please fird attached the five tc#.es of the temporar, :entract for ;ower ar4 ocergy ;r:duced at Tsl:en 41: havs teen executed by the writer. *:ssmuen as this is a ta=;orary agree-i i

eet, we a. ave sig.e4 it, althougn thers are several :stters W.:n snouM to recog.ued, as they wi.11 sg:1.re u::cerstarding ar.: =:tual.

cooperatian is operattg u:dse this agree =sct. Paragrath (6) prevides that :catractor agrees to take l hto its system all of the ;ower and er. erg 7 ;r:r.nced a: Iassursrm are s ure that with the existing single tie ta u g used curing tse test perted, it wuld be is;cssible to taxe uso sur system the total ca;- acity of 7. 5. ard Mensen ;cwor ;1ar.ts, without blocx: rg out ;rotec-tire es:1;=ect nor: ant used. ilso in 'Jiis connection, thers la a ;ossibility, even thougn is=ote, t:At hur:1: ace or other damags to our tv-~ asics lines wuli =ake it 2;:ossible to take this power tr4 enerr untif. the da: age ::t:.ld be n;ai.sd. he to the snost *.sngth of tan cen-tract a:4 ta=a ng:irst to octa2 og:1;sent to ::rrset these :=n-ditiens, it wuM =ct he feasible to ;. lace tne sacerr. iine to the

1 acts or reir. forte the inter cetr.ectics to overter.e this. W.sn

er=acent arrange

ssts ars =ade for distribution of this ;ower, suca I

facilities wuM se batalled to albinate these situatices. Tr.e prosect : ster records energ ::m2g uto our systes and a=7 energy f2 vi:3 f 0.1 our ryttes towards the Cover:..ent facil-ities is autecaticaL7 su trasted by the : ster, resultug is a :st LiR to us. The cperators of the ;1 acts d.11:avs seme ;r:cles 2 deter: Ming the use on tae Maf.:an side a:d oc tas A:erhan side of the : ster curi..g thes that the tw 2remnt ;1 ants ars act beist c;erated; but I as surs *. hah with c operatics et all coc:e:ted ;ro-per records cas ce cautaised. j Ve will rsly on the ",over:: ent to -Wah the neced l of energ hterchanged, and it see:s to us that we snocid agree at thiJ tt e that, ecsrg7 delivered t.s tr.e Govemnt duri..; ;eri:ds of 1 snut-dowr. wni:n is deducted fres energy delivered b7 the Govert=ent during operati:3 periods be den:ed 6tertrange acergy without further ";rict agrsementa. 'A are =t suggssting that the ec::tra:t to a:s::d-ed to covsr these points, but mere 17 ;oint cut these c;erathg ;r:- tiets that ancul.t be rscegnized. Of c=urse, if, ard d en a term cen. tract iJ prepared, suca :stters wt11 have to be gene 2:a M detail. { T snall ap;rsciate 7:ur furnisni:g :.s witn one siged ce;7 ard several, cont:r=e4 := pies, after they have been executed by the 2ve,=e=t. I i t \\ Sincerely yours, r3atesteo (S) J. f 3ates hels. President ar.d General Manager l 4075

• g[.

t' t (, ,..-.b,..... * *. g L ,s a M:'. y.. .m ;%l r e e , g e eM f. '.4

- ~, 8-8 ,r = i t r i "NI1"2 STx:':3

r.mme:r: er ra: :::r::a u

302LW CT IICa' vr# N w Regica 3 As:ardi;o, Tens Sox 1609 ] Ocir. 2r, 19 A Addns: all :m--"atices Air. ail u to the Be61cC&L Oirector $~c00 lir. J. L. 3ates, Pres 1:se. Oectral ?:ver ard List Oc=;a=7 123 Norta cer;uscar!,ctaparralJtreet sti, Texas Ose.e Mr Satse: I as returnirg herewita ona siped :=pr a:d five ten-for=ed ser rt:e c=;1es of Centract. No.11-S5CC-lia ter tec:perarr electrie, sent=e from the Tal:en ower,.lant. Adaitional se: rise copias are availabla in this offi:a a=1 will,.be supulled ;;ces n-quest. With nspect to c=== acts centated 2 7ev letter of October 21,19%, w of c=cse apte tr.at pc aci2t7 to accept. li:1ted b7 the capac12 combined deliveries fr=:t the United States an.1 Me21:o is :ece 7 of the i=teri: :::.nection. A.lso, twir.g emerger.cies en the systect of Centn.L ?:wr ar4 List Cecpa=7, re-sulting fr=n u= cent.rollamle ! crees, pr.: celigation to ac:s;t de-I Everies :=:cer the ecclased ccetract vili et corse te li:1ted to per ability. i It is neognized that presetzt : steri:3 dill recire adjuscor:t to ::=;er. sate for Star:r.arge dalivertes my you ::cpacy to the Ur.d.ted States and Y. ext:e He1.vver, ; as vite :=nfident that adosata a:d pts;er roccets :ar. be :aistained for tnis ;urpcse. also crace in Tec pre;csal that all energy deliveries by pr ces-We

&c7 tr. the ' nited $tates inculd be cesidend as 2terenarge teli7-J eries '.o be dedr.cted fr

s Cc1*,ed States deliverias to yee cc=;any witf otr. the necessity of further ;: rice apeements, j

7er7 tt-C.7 7ces, (S) 3. S. BristcI R. S. 3ristol Actics Regiccal incter Inclosce Oc;7 to: Mr. if. L. Hewitt, Oc==1ssioner(w/o encic':ter:ati:nal Ecundary k Water Conn., Il Paso, Tans aev) l e 4076 go

• t 4

5.?...;*)' p - {;:: $~ %.&, ek. l**

• a a?.

,,~.,,5p ' ***** % f ..F*"'7 .=!* '?

• ='. = l$ 's f"" *,* M %.
• Ot's 1.c '
• b,* W '

g,Y a' s T!*

• a' ","** ** ? * * ~ ~ ~ '

.e we m ,p, y e.w' n. 1

y L P t l l Qntnet No. L-06-5CC-1.:J .I i i '.'C"!O $*A"."".3 "IFET CT *.'C 01""""*** 3LF AG CT. C IAT*~tt w N Talcen m* Project, Tans W w N vvrs .e V Less rws-n., n S< L. a5 <c 4. A PT*. ---.as.-.

$tt.y. 'T.372 ~3

<a 7 ; '.~.y

a. *{

$.. 7, ) ? A. , ] e_ 'O

• h

.....%.c i ) s M h ?sre %. A 1 Prva=als 1 24 Pre 1

• d -* v ncita.ls............. L 5-7
• eliver7 of elec*ri: ;cwor ud ener 1

?. ate................ g7.... 8 ...... 2 9 S i' " r _a:d ;ay= acts. 2- '.0 herge==7 snutac.c.. 2 t 'l

• e m cf :cet nct' 3

'2 Officials :st to becefit... .. 3 l I l 1 I i. 4077 L 8 F ,.. ' +.. -.... ; :; - -~.- . r,.. , g,, ~a ..i. .2 y,n.c... - c. _..r,.,,,,.. = =.eu.* ?s. i L

~ \\

• .q a.

2 a -- - - ~. - - i Ocetract 'fo. 1l.46-500-1..3 i a Uhw 3TMI.$ L'I?.Ut:"CT 07 **2 2"~"-' N i SWM CT EC'.M.ACCN 'd TALCON CAM ?C'aZ3 w IJ'ZE'23C ACEIhPff TC3 %3?CSI*2N OF ILIC*12 I:'I%Z TRECID C TAICCN OA3 CN !*i'i ?.*.3 GAC Sis e::srgen=7 ::stra:t, :ada :n Cet. L 1M M ;urr.:ance of the Act of kepese a;;revec Jens 13, im, (4 5 tat. 255) betwen its Ocitad states of A: sri:a.tersuafter i l tailed the Ccited Statas, is;rssected br*he effhsr executi.4

• his ::ctract, or his 2:17 a;;ci:.ac sucessace, or :is ::17 autacri:ed repnsectati7e, herein :allad *.no : r. ra:*hg offi:er, ard Cac*.ral ?:ver a:d Lir. Ces;a:7, a or;:rati:n 1'17 orgarf:ed, crsated ar4 ersting ur4er and by vtrtue of the law of tas State of *exas, hereir. :alled. tan centracter, ar.1 its su=:essors and.

1 assists. VC!ES."TZ TFE, I i 2.. WIFIA3, Se Seentarr of tae-Starier 27 the said Act of h:e 19,19%, has been tuttori:ed is itspose :( power ard energ7 genersted at Tsices "a:a unich is availa:la to tas-United Statas uder tae rsat7 of Teoruary 3,1M, betwen tas Ucted States ard Met c, to tuo exter:t said ;cwr is c=t istai.sd in the operation of the Sterr.atiscal Prefect, a n as detar=:.:ed b7 the Oc:=rss1:cer of tco Cr.ited Statas Sectics, hter=atisca13ou=dar and Watar C =- =1ssion ar4, L 'am, te hreau of Escla=ation hersis taMad the Survait has been desig.ated as =arreting agent :r tne U=itad States' ;orties of ;cwr a:d energy pr:cuced at Tale:c 0a= and is "rrertasing str.aias to dotar::be tne classes of ;ower that /O be availabla for :arrsting, a defi:1ta plan of :trxeti g, ar4 a;;;:-

riata rata sc

sdules for power a:d ensrg7 sales e4 tosins to dis;ose of tae ; owr ar4 energ w:1:h '#2 be. precuesd turing the tasting ;eriod aM the period cf tise nq.:1 red I:r :: ;1stien.sf its plan to ulti:ste ;cwr disposal, and, l..

vie?IAS, 2e ::ctractor =mv has a 138-kr utar-acenection 1:to the svite..-2.-d at Tahen ?cwr;1 ant a:d c.as udicated its desire ard C'.g.ess to ; Arc ase sue ;cwsr ar4 energ; as is =ade available t7 the c ctracti.ng efficer. TW TPIRIFCPI, 2e ;.arties hersto apse as folhwat 3. B e contract 1=g efficer will cau.se to be ts117ersd to the ccetrseter at the ;eist of htertecrection of *.he :strtractor's 136-k7 line to the facilitier of the United Statas at Tahen !wite - 7ard, the ;over ar4 energ =ade availatie f:r. arreti g 57 the 3ursas. "he power ar4 energ will be teliterri as b9aasa, -0 7:le alter.ating cu:rset at a r.=-* = ' voltage of 138-k7 a:d will to etared at said 'rcitags. l 6. Se ccetracter apees to take 1:to its syster. all of su:a ;ower* ad ecarg7 e u 407S - ~.. m ,,f, p.e-..

v., 4 g." *

. -..-.....- ~ r m.-.e ,.;..'".3, O, .,g ..-....s. s6 . 3

• i..

e. .g* p,, g,,

• s.
  • • T"*

\\ es 4 dQ l l l w Nu 1 M N ?. The :cate cting :ffuer vtli :coperste 4th tas :en. " tractor 6 arrsnging to tel17ery of ;cwr ans energ, v121s tse i ) lidts of generstug ca;a:Liities ans.ater availaais for geceratun i j of powr as caterr.:..e4 b7 tse Oc@siccer of the Ccited States i 5ecten, is a :ar. car wi:n all neun a 1 uver7 of ;ewr ad ecarg7 La gr.astitias Mea wil, best = set tas Oc=;ar7's *. mad ;atters.. 3. Se scutractor w11'. ;sy =c:217 to tae Uni *ed States for the ;cwe ad energ7.^.Tnisned at ce rate of 2.7 -4" a

se icilo-wttacur (30.0027).

9. Se Ucited States wt 1 su =1t bills to ine ter. setor i on or before the tecta day st esca =nc for elect:1= ser" ce fur - ished curug the ;reese.u.g =nts, aM ;s7:ects 411 to =a t=c ;ar-(, tale b7 the ice.rsctor in *.te first 147 of *.no

c*.h i::=eciatal7 i

succeeding the case eacs sil'. is suedited- ) 10e (a) :: the event of e=segen 7 shutdsw. of the Tais n Oan gecersthg facilities er etter cir::: star.ces nsultist i.: a tes-

orar7 kr!.ffi

1en=7 of ; owr' a:d energy required is the operatus of the 1:ter:: stun:1 ?r:*ect, the United States =ar is arter to cetai necessar7 ;over ar4. energ7 for such pur;cse, rec,est surehs or =. sed ecerg of the contre,ctor, ar4 the :entractor :ay, a: its sola discre-tion, deliver sucs er. erg to tae 7 cite <1 States. Suca acerg7 :: ail be credited to the conti : tor is a: hier:hargo energy accoust. A re cord of scorg7 Mter: ar.ges sn li be * *-* *d

- ?ed b7 esca ; art 7, sta Oc scorg deliveries b7 the centractar to tae staer ;e.rt7 saali te tes ed to be inter:nacge energ7 unless ;rict agte ect for sucs :eliver7 i*.as been :ade betwer. We 4"17 autnordovi npresectatives of the partise hereto. ..e, (b) Interes=ge energ7 deMvered b7 the centracter to the United States urter-tte ter=s of tnis Arti:le stall be returs-et 'd.levattheur for 'cticuatthour at the ecstug ;o1=t sf inter:cc-tecten at thee arc at rates of deliver-to be :"t*** *'7 apted u;ca by the du17 autacrh ed representatives of tte ;artiss hereto. (c) It is the 6 tent of the ;4r.tes herits 2st ce inter:nlege energy ac:cu::t saali be beLeced by recurr. of acerg as preept17 ts etr:u= stances er::it; ;-atded, Sat 4;cn ter:bati:n of this contrset, are by :stur.1 spes:sct 34 the parties nereto at a=7 ti e turing the terr. 2 erect, the ces calance is the uter na=ge ac. count shall be settled by,.47:ent to the creditor party at the :st value ;er 'd.lowtthour stated in section (d) of this Article. (d) For settle: ens ;ur;cass as provided f:r in Sec-tion (c) of this Article, Mtertaange energy shall have a net Ta12e of 2.7 :111s ;er Ulowatthour. Sills submitted by the crediter to the debtor enail becoc:a paya le 4this 30 da7s fres date of esca bili, i 11

• his c:nttact shall becc:a effective on the date =f its l

l exscution ar4 snali re=ai.a M effer. u: 11 h-* " ' 9 8 9, h* =a7 b e tershated 47 the United States at ser ; rice tate spos JC-4738 ad-nace noti:s. ) 2 l 4079 v .c-I ,,,a.=.=~a = ,'.n.": 8 t i h l ._ ~.

l , - 4 A A ,..e I t .I 12. No Me=:er et er "41egate *o 0:ngress er ?.astr.en-0:missiccer sna.L'. to ac=1t:4c to a. 7 snars :r ;m et this centrset or to a.v benefit that =ay arise herst..~., :ut this restri:t*Ja scall act be constnec, to extent to this centract if.xis wita o : r;mr *i:n er ec=pacy f:r its gecarai tenefit. IV 'C233 W.c.c J, the ;arstes norste have executec this l contract as of tus 1.27 am 7 ear fi.st above wittaa. h w STATIS CF m2.".A 3r I s) *. 3. ?-tstel 1 Title tett.r 8edet.s.1 :t gete.- i . M *eff E. O. Ie? 1$00 A::ar Lic, suas 1 i CINI?.Al ?GE.2 AE *.*~

• 00'.PA.T 2

l 3r (3)

t. htas J. L. Jatas Titia b rieve Ad:irssa S E AT A. r::

(s) v. c. we o

d. a. acone, sece,tary (a

N w l l i .i 3

terier - - ruplicati:s sectten, wascu.coe, 3. c.

j ,1 I i i 1 l l 40S0 I t. i i I ( \\/

---

*===..==.g...

e eeg, 8 4.I'. 9me 4 .m e me k j 6 i

~ se va i 1 W COPY CENTF.AL POWZFt AND LIGHT COMPANY ..?- Septe=ber 28,19%

r..vtc4.7

• :M.

'-grgg y _g. 3y;.w;. ; - - >.SV 3 3.':. u.- - Ccrision Federal de D.eetricidad . s. - 4 Ecxiano 14 ~

• l O.k.k Hexico, D.F.

.. ;$Y5 ATTDikIC3: Mr. Leccardo de Lozanne Gentlemen: We wish to. acknowledge your letter of Sept en-ber 27th relative to the' Mexican share of the power + to be generated at Faleen Project. We accept your offer to sell this pcwer to us for the temporary period on rates to be agreed upon with the agencias of the United States of A= erica. It is contemplated that these rates will be established in the very near future at a ecnference in *.fashington and that the details of an interim contract will be 'Then such an interim agreed upon at that conference. contract is drawn up, we will comply with your reonest and furnish you with a copy of it in order that we ::ay enter into an interim c:ntract with your offica. We appreciated very much the opportunity to confer with ycu and Messrs. Villanueva and Butt in our office here in Corpus Christi and particularly the premptness with which the conference was arranged. f Yo'2rs ve:7 truly, N JL&tes:AH Presid6at and Gaaral Man 35er. .) CC: Mr.C.M.Villanueva .i ,i BCC: J30 LCH !a'. MHL JM,i AMS .. c

. 7 l l

k;. 1 (G. J, j 3.. 3,, y %Aade heg

ys a f 'l UNITED STATES <OF AMERICA i BEFORE THE NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY LICENSING BOARD In the Matter of ) ) HOUSTON LIGHTING & POWER COMPANY, ) Docket Nos. 50-498A et al. ) and 50-499A j ) (South Texas Project, Unit Nos. ) 1 and 2) ) ) ) ) In the Matter of ) j ) TEXAS UTILITIES GENERATING COMPANY, ) Docket Nos. 50-445A et al. ) and 50-446A ) (Comanche Peak Steam Electric ) Station, Unit Nos. 1 and 2) ) ) l CERTIFICATE OF SERVICE i I hereby certify that I have caused copies of the Loregoing SECOND SET OF INTERROGATORIES AND REQUESTS FOR PRODUCTTON OF DOCUMENTS ADDRESSED TO CENTRAL AND SOUTH WEST-CORPORATION BY. THE PUBLIC UTILITIES BOARD OF THE CITY OF BROWNSVILLE, TIXAS j i to be served on the following by deposit in the United States mail, first class, postage paid, or, as indicated by an asterisk (*), by hand this 20th day of February,1980. i l Marshall'E. Miller, Chairman Sheldon J. Wolfe, Esquire Atomic Safety & Licensing Board Atomic Safety & Licensing Board Panel Panel ~ ' Nuclear Regulatory Commission Nuclear Regulatory Commission Washington, D. C. 20555 Washing ton, D. C. 20555 Michael L. Glaser, Esquire Joseph Rutberg, Esquire 1150 17th Street, N. W. Antitrust Counsel - Washington, D. C. 20036 Nuclear Regulatory Commission Washington, D. C. 20555 Roy P. Lessy, Esquire ' R. Gordon Gooch, Esquire Michael B. Blume, Esquire John P. Mathis, Esquire Nuclear Regulatory Commission Baker & Botts. Washington, D. C. 20555' 1701 Pennsylvania Avenue, N. W. ~ 1 Washington, D. C. 20006 l i

OS v Jerome Saltzman, Chief Antitrust & Indemnity Group Robert Lowenstein, Esquire Nuclear Regulatory Commission J. A. Bouknight, Jr., Esquire Washing ton, D. C. 20555 William J. Franklin, Esquire Lowenstein, Newman, Reis, Chase R. Stephens, Chief Axelrad & Toll Docketing & Service Section 1025 Connecticut Avnue, N. W. Office of the Secretary Washington, D. C. 20036 Nuclear Regulatory Commission Washington, D. C. 20555 Frederick H. Ritts, Esquire Law Offices of Northcutt Ely Joseph R. Saunders, Esquire Watergate 600 Building Chief, Public Counsel & Washington, D. C. 20037 Legislative Section Antitrust Division Wheatley & Wolleson Department of Justice 1112 Watergate Office Building P. O. Box 14141 2600 Virginia Avenue, N. W. Washington, D. C. 20444 Washington, D. C. 20037 Joseph Gallo, Esquire Roff Hardy, Chairman and Robert H. Loef fler, Esquire Chief Executive Officer

• David M.

Stahl, Esquire Central Power & Light Company Isham, Lincoln & Beale P. O. Box 2121 1050 17th Street, N. W. Corpus Christi, Texas 78403 Suite 701 Washington, D. C. 20036 G. K. Spruce, General Manager City Public Service Board Susan B. Cyphert, Esquire P. O. Box 1771 Antitrust Division San Antonio, Texas 78201 Destetment of Justice P. O. Box 14141 Jon C. Wood, Esquire Wanhing ton, D.C. 20444 W. Roger Wilson, Esquire Matthews, Nowlin, Macfarlane Joseph Knotts, Esquire & Barrett Nicholas S. Reynolds, Esquire 1500 Alamo National Building Debevoise & Libe rman San Antonio, Texas 78205 1200 17th Street, N. W. Washington, D. C. 20036 Perry G. Brittain, President Texas Utilities Generating Co. Douglas F. John, Esquire 2001 Bryan Tower i Akin, Gump, Hauer & Feld Dallas, Texas 75201 1333 New Hampshire Avenue, N. W. Suite 400 Joseph I. Worsham, Esquire Washington, D. C. 20036 Merlyn D. Sampels, Esquire Spencer C. Relyea, Esquire Worsham, Forsythe & Sampels 2001 Bryan Tower Suite 2500 j Dallas, Texas 75201 l l l

> s w R. L. Hancock, Director G. W. Oprea, Jr. City of Austin Electric Utility Executive Vice President Department Houston Lighting & Power Co. P. O. Box 1088 P. O. Box 1700 Austin, Texas 78767 Houston, Texas 77001 Jerry L. Harris, Esquire W. S. Robson, General Manager Richard C. Balough, Esquire South Texas Electric Coop., Inc. City of Austin Route 6, Building 102 P. O. Box 1088 Victoria Regional Airport Austin, Texas 78767 Victoria, Texas 77901 Dan H. Davidson Michael I. Miller, Esquire City Manager Isham, Lincoln & Beale ) City of Austin One First National Plaza P. O. Box 1088 Chicago, Illinois 60603 Austin, Texas 78767 Donald Clements, Esquire Don R. Butler, Esq. Gulf States Utilities Co. Sneed, Vine, Wilkerson, Selman P. O. Box 2951 & Perry Beaumont, Texas 77074 P. O. Box 1409 Austin, Texas 78767 Knoland J. Plucknett j Executive Director Morgan Hunter, Esquire Committee on Power for the McGinnis, Lochridge & Kilgore Southwest, Inc. 900 Congress Avenue 5541 Skelly Drive Austin, Texas 78701 Tulsa, Oklahoma 74135 Kevin B. Pratt, Esquire Jay M. Galt, Esquire Linda Aker, Esquire Looney, Nichols, Johnson & Hayes P. O. Box 12548 219 Couch Drive Capital Station Oklahoma City, Oklahoma 73101 Austin, Texas 78767 John E. Mathews, Jr., Esquire E. W. Barnett, Esquire Mathews, Osborne, Ehrlich, McNatt, Charles G. Thrash, Jr., Esquire Gobelman & Cobb J. Gregory Copeland, Esquire 1500 American Heritage Life Bldg. Theodore F. Weiss, Jr., Esquire Jacksonville, Florida 32202 Baker & Botts 3000 One Shell Plaza Robert E. Bathen Houston, Texas 77002 R. W. Beck & Associates P. O. Box 6817 Orlando, Florida 82803

g,y Somervell County Public Library P.. O. - Box 417 Glen Rose, Texas 76403 Maynard Human, General Manager Western -Farmers Electric Coop.

P. O. Box 429 Anadarko, Oklahoma 73005 l James E. Monahan Executive Vice-President and General Manager Brazos Electric Power Coop., Inc. P. O. Box 6296 Waco, Texas 76706 Robert M. Rader, Esquire Conner, Moore & Corber 1747 Pennsylvania Avenue, N. W. Washington, D. C. 20006 W. N. Woolsey, Esquire Dyer and Redford 1030 Petroleum Tower Corpus Christi, Texas 78474 s Mr. G. Holman King West Texas Utilities Co. P. O. Box 841 Abilene, Texas 79604 .-) !l 6

1. IA./

{ Marc R. Poir.Ler Attorney for the Public Utilities Board of the City of Brownsville, Texas February 20, 1980 T' ,}}