ML20126A931

Response by Public Utils Board of City of Brownsville,Tx to Central Power & Light & RW Hardy 800208 Filing.Urges ASLB to Compel RW Hardy Deposition During Wk of 800225.Supporting Documentation Encl

ML20126A931
Person / Time
Site:	South Texas, Comanche Peak
Issue date:	02/15/1980
From:	Poirier M TEXAS, STATE OF
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML20126A936	List: ML20126A931 ML20126A937
References
NUDOCS 8002270103
Download: ML20126A931 (49)

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6 UNITED STATES OF AMERICA e','k NUCLEAR REGULATORY COMMISSION 9

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8 Before The Atomic Safety And Licensing Bo'

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In the Matter of

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HOUSTON LIGHTING AND POWER CO., et al.

) Docket Nos. 50-498A (South Texas Project, Units 1 & 2)

)

50-499A

)

TEXAS UTILITIES GENERATING COMPANY, et al.) Docket Nos. 50-445A (Comanche Peak Steam Electric Station,

)

50-446A Units 1 and 2)

)

REPLY OF THE PUBLIC UTILITIES BOARD OF THE CITY OF BROWNSVILLE, TEXAS AND MOTION FOR LEAVE TO REPLY TO ANSWER OF CENTRAL POWER AND LIGHT COMPANY AND ROFF W.

HARDY The Public Utilities Board of the City of Brownsville, Texas ("Brownsville") hereby files a reply to the Answer of I

Central Power and Light Company and Roff W.

Hardy, filed February 8, 1980.

Brownsville seeks to depose Mr.

R.

W.

i Hardy, formerly Chariman of the board and chief Executive l

Officer of Central Power & Light Company ("CP&L").

CP&L f ails to provide any adequate evidence that Mr. Hardy's health will not permit any form of deposition; its other con-tentions are insubstantial and only serve to further delay the taking of Mr. Hardy's deposition.

As required by 10 C.F.R.S2.730(c) (1979), Brownsville requests leave to file this Reply to CP&L's Answer.

Brownsville first noticed Mr. Hardy's deposition on November 23, 1979, setting a December 13, 1979 date.

As more fully set out in Brownsville's Motion to Compel Deposition, filed February 1, 1980, the deposition was postponed pending a showing by CP&L that Mr. Hardy's health would not permit deposition.

A previous deposition of Mr. Hardy, set for 9002270 [03 g

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( October 1, 1979, pursuant to a subpoena served by Houston Lighting and Power Company ("UL&P") and Texas Utilities Generating Company ("TU"), had also been cancelled, but to Brownsville's knowledge no proof of the state of Mr. Hardy's health was offered to any party at that time.

CP&L claims that Dr. Carl Trusler's December 26, 1979 letter establishes Mr. Hardy cannot appear for deposition.

( Attachment C to Brownsville's February 1, 1980 Motion)

The letter is not even notarized and would be inadequate as a matter of law if offered as the sole proof supporting a motion to quash under 10 C.F.R. 52.740(c) (1979) - in effect the purpose for which CP&L seeks to U5eL*the letter.

Brownsville requested more substantial proof from CP&L; j

most recently, Brownsville's February 1, 1980, motion gave i

CP&L another opportunity to supplement its evidence, but CP&L apparently prefers to use up weeks of time in filing pleadings rather than taking simple steps to make an adequate showing regarding Mr. Hardy's health.

In addition, the letter, written on December 26, 1979 stated Mr. Hardy sho,uld not participate in any depositions "for the time being."

This phrase by no means establishes that Mr. Hardy cannot be deposed at the end of February, 1980.

CP&L has also repeatedly failed to provide any infor-mation to Brownsville about whether a restricted or limited deposition proceeding would accomodate any legitmate concern

.r as to Mr.

Hardy's health.1/

Only CP&L has information about the-state of Mr. Hardy's health, and Brownsville cannot be expected to bear the burden of proving he is not too ill to be deposed or that only a deposition under certain cir-cumstances is appropriate.

CP&L argues that " PUB fails to provide any justification for requiring Mr. Hardy to appear CP&L Answer, p.

3.

Brownsville would have though that this Board 's recent ruling that "[a] party is entitled to explore relevant facts with each

]

person who had knowledge of such facts"2/ would have instructed CP&L as to this fact of the proper scope of disco-i very.

In fact, documentary discovery in this proceeding shows that Mr. Hardy has knowledge of a wide range of CP&L activi-ties, for example, CP&L's interest in taking over service to actual and potential industrial customers the Port of Brownsville.

In this regard, CP&L has been willing to build 1/

CP&L is correct in stating at page 2, note 1 of its Answer that Brownsville's December 12, 1979 letter

( Attachitient' B to the February 1,1980) does not reflect a request for an alternative or limited deposition procedure.

j The' request was, however, made orally to CP&L counsel prior to the draf ting of the December 12, 1979 letter, and again at the deposition of other CP&L officers in January 1980.

Brownsville's motion of February 1, 1980 provided CP&L another opportunity to propose an alternative structure for Mr.

Hardy's deposition.

2/

Order Denying Motion to Quash Notice of Deposition of S.

B.

Phillips, Jr.,

issued January 15, 1980.

In that matter, as here, CP&L sought to persuade this Board that because other people might have knowledge of the facts, it was bur-densome for Brownsville to seek deposition testimony of Chairman of.the Board Phillips.

s new tran.smission facilities to accommodate such customers, although CP&L has refused to improve transmission facilities to Brownsville that would enable Brownsville to serve the same industrial customers.

As a result of this unfair com-petition, CP&L obtained the future business of Union Carbide's Brownsville Plant in 1976.

(Attachments A-F).

Mr.

Hardy also has knowledge of CP&L's 1977 refusal to wheel power for Brownsville, which prevented Brownsville from nego-tiating for purchase of bulk power from suppliers other than CP&L.

(Attachments G-K).

He has general knowledge about competition in the electric industry on Texas, for example, competition for bulk power supply.

(Attachment L).

In par-ticular, he is aware of the arrangements between CP&L and STEC/MEC regarding sale of federal hydroelectric power to CP&L, possibly in isolation of a statutory preference to Brownsville.

(Attachments M-P).

Mr. Hardy has some knowledge of Brownsville's exclusions from TIS and STIS during tha 1968-1979 period, (Attachment 0) as well as the creation by TIS of ERCOT as a weak alter ego to TIS.

(Attachment R-S).

He is also familiar with CP&L's nego-tiating posture during 1978.

CP&L determined that a takeover or lease attempt during 1978 would be inappropriate.

(Attachment T).

It attempted to prevent Brownsville from gaining access to the 138 kv transmission line CP&L had agreed to build to serve Union Carbide.

(Attachment U)

Mr.

Hardy also allegedly stated that CP&L would resist

l V' Brownsville's demands in regulatory agencies and courts because they were precedent-setting, even though Brownsville could eventually get all it asked from CP&L.

(Attachment V)

This alleged CP&L policy would shed light on recent CP&L negotiation tactics, which, by refusing to provide a reaso-nable draft transmission agreement and demanding reneogita-tions of terms of interchange contract originally proposed by CP&L and unquestioned by it for months, amount to a refusal to negotiate in good faith with Brownsville for transmission services and interchange.

Mr. Hardy is subject to the process of this Board.

While Mr. Hardy was Chairman of the Board and Chief Executive Officer of CP&L, HL&P and TU filed their Joint Application for Issuance of Subpoenas in this proceeding in June of 1979, pursuant to which a subpoena was subsequently served on Mr.

Hardy (to the best of Brownsville's knowledge and belief).

Thus, the argument by CP&L that Mr. Hardy was not an employee of CP&L at the time of Brownsville's Notice of Depocition in November, 1979, is beside the point.

(CP&L Answer, p. 2).

CP&L and Mr. Hardy were put on notice of the possibility of deposition while Mr. Hardy was still an employee; and Mr.

Hardy has been subpoenaed.1/

1/

Al te rna tively, the Board may consider that the Joint Application for Issuance of subpoenas was, for parties to this proceeding and their employees, (already under an obli-gation-to cooperate in discovery matters pursuant to 10 C.F.R. 52.740 (1979)), the equivalent of the Notice of Deposition provided for by'10 C.F.R. S2.740a(a) (1979).

o

.g-Moreover, CP&L failed to raise this issue in a timely In obtaining a postponement from the original dep-manner.

l sotion date of December 15, 1979, CP&L did not in any way indicate that it might consider Mr. Hardy had no obligation to comply with the Notice of Deposition because of a tech-nical failure of process.

That objection has thus been effectively waived and should not be heard now.

In any event, should the Board find merit in CP&L's technical objection, Brownsville is filing in the alternative and concurrently with this Reply, an Application for Issuance of Subpoena pursuant to 10 C.F.R. S2.720 (1979).

Given i

CP&L's actual notice, issuance of this subpoena will answer any procedural question raised by CP&L.

CO'NCLUSION For the above reasons, the Public Utilities Board of the City of Brownsville, Texas, respectf ully requests this Board :

1.

To grant Brownsville leave to reply to CP&L's Answer; i

2.

To require Central Power & Light Company to produce Mr.

R.

W.

Hardy for deposition during the week of February 25, 1980, or at such later date as the 1

Board may find appropriate and consistent with the overall procedural schedule of this proceeding; 3.

To order such further relief as may be appropriate and consistent with the above.

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t Respectfully submitted, MC ch Marc R.

Poirier Att'orney for the Public Utilities Board of the City of Brownsville, Texas i

Law Offices Of:

SPIEGEL & MCDIARMID 2600 Virginia Avenue, N.W.

Suite 312 Washington, D.C.

20037 February'15, 1980 3

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Attachment A, oaga 1 i

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'P lllTEROFFICE SU3 JECT CPL and Brownsville Ncvigation District Meeting Corvus Christi, TEXAS TO R. W. Hardv At Executive January 23, 19 75 cc:

W. G. Siegelin Aaron Autry R. E. Horine W. P. S mi th, Jr.

W. A. Cockburn A meeting was held in the CFL Board Room on January 22, 1975 beginning at 11:00 AM with the following in attendance:

For Brownsville Navigation District:

Al Cisneros, General Manager & Port Director Jim Satsell, Commissioner Fred Rusteberg, Executive Assistant to the General Manager M. J. Tipton, Jr., Commissioner R. C. Noncard, Financial Adviscr E. G. Lant:, Director of Engineering and Planning Ignacio Garza, Chairman, Navigation Dis trict Board For CPL:

Roff W. Hardy W. G. Siegelin Aaron Autry R. E. Horine M. L. Borchelt W. P. Smith, Jr.

W. A. Cockburn Af ter Mr. itardy's greeting and Mr. Cisneros' introduction of the Navigation Distric t delegation, Mr. Cisneros gave n brief summary of the 3rownsville Navigntion Dis tric t his tory. Incilitics and present plans. Some of the points he covered are as follows:

1.

The ::avication District will be 60 years cid in 1976 and pr~ently owns 11,000 acres. All property is out-side Brownsville city limits and by law cennot be taken into the city.

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I Attachment A, page 2 i

R. W. Hardy Page :

January 23. 1975 2.

The BND essentially operates a large industrial park along the present ship channel. They are shooting,for i

a channel depth of 45' in the near future and do not have any aspirations to become a super port.

3.

The BND is highly respected by the Brownsville com= unity leaders, but stays outside the political arena as much as possible, 4

Present emphasis is on diversification to create jobs, develop the area and provide a good return on their inves tmen t.

l 5.

Water and power will provide the keys to adequate growth.

1 The BND is presently in the process of solving their water 1

problem through construction of a creatment plant to process fresh. water from Water District #5 (Already centracted for).

Construction of this facility will take approximately one year af ter permits are obtained.

Present water agreement with the Brownsville Public Utilities board is on a year to year basis.

6.

The BFD would like very much for CFL to assist in their growth plan by providing an adequate long term supply of electric power.

Mr. Nongard, who is also Financial Adviser to the PUB, indicated 1

a concern over the lack of PUB ability to serve any large industrial i

leads or for that matter to continue to serve existing and projected l

community loads. He indicated that the BND could go into the power business but that the Commissioners sre unalterably opposed to this procedure if other methods such as closer ties with CFL could be arranged.

Mr. Hardy indicated that CPL is dedicated to serve all South Texas areas that need service and though CFL is not in a position to declare war on anyone, they are ready to discuss any cooperative alternatives which might be available to serve existing or projected loads in the BND area. He emphasized the need for an adequate return on inves tment if any additional load is to be served.

'In discussing the extension of transmission service to the port area, Mr. Nongard suggested that the BND might be willing to raise the money for such lino construction and lease these facilitics to CPL.

Present lead in the port area is estimated at 12.5 MW with additional l

capability required for backing up the Carbide generation.

After lunch Mr. !!ardy sunnarized the CFL position, covering the following points :

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Attachmnt A, page 3 R. W. Hardy Page 3 January 23, 1975 i

1.

The BND apparently has a desire to develop the port area and needs an adequate electric supply.

2.

CFL is interested in serving load where economically justifiable and developing areas where this is also 1

possible. CFL does want to cooperate and is sympathetic with the BND's cause; however, they do not want nbr intend to s tir up any trouble.

3.

Rerouting transmission lines may not be the only answer to providing adequate electric service to the port area.

However, this should be s tudied as one possibility.

4 CFL could probably have service facilities constructed by the time the need for these facilities has developed.

Mr. Cisneros suggested that he write Mr. Hardy a letter asking for an indication in writing outlining CFL's willingness to assist the BND in development o f the port area.

>&. Hardy agreed to write such a letter upon receiving a. written request.

The meeting adjourned at 2:00 PM.

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Attachment B etnrf R9L PO(.CH AND LIGH T COMPnNY

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February 24, 1975

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Cwmv ud che becuten.

Mr. Al Cisneros General Manager and Port Director Port of Brownsville P. O. Box 3070 Brownsville, TX 78520

Dear Mr. Cisneros:

• Thank you for your letter of January 27 It was indeed a pleasure for a part of the staff of Central Power and Light Company to have the opportunity to meet with you and the Navigation District Com-missioners when you were in Corpus Christi last month.

I apologi:e for not responding to your letter sooner, but in recent weeks I have been spending a considerable amount of time out of the of fice, and I have gotten behind on some of my corresponderce.

As was discussed during your recent visit, Central Power and Light Company is dedicated to assisting in any way possible in the economic developt.ent of the area it serves.

We are also dedicated to furnishing the adecuate electric power requi rements for our service area at the

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lowest possible cost in these inflationary times.

We consider the

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economic development of all of South Texas of substantial importanca to our service area.

As we further discussed, Central Power and Light Company is able and i

ready to provide any power recuirements that may develop in any areas which we can legally and economically serve.

We are aware of the problem which you now face in *.1e develdoment of the Port of Browns-ville, and we want to assist in any way that we can.

As i told you when you were in Corpus Christi, I believe Central Power and Light Comoany has the facilities and can make any extensions necessary to serve any lead anticioated to be developed in South Texas.

Given the opportunity, we would be glad to serve sur.h new loads.

Again, it was a pleasure to meet you and your ccmmissioners, and we extend an invitation for you to again' visit us in Corpus Christi.

Our interests in the development of South. Texas, I believe, are parallel, and we want to be as cooperative as possible in helping in the~ development of this area.

I hope to have the opportunity to call on you when I am visiting in the Valley.

Sincerely, 4823

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a. W. sarey ekh

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Union enrNde -- DImy.nsY.!U.le 76 ci March 19, 39

_,,,JR e f f Nn r_dy AT Aaron Autry Tom Shockley

..Ty er Russell l

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. Bill McManus, Plant Manager of Union Carbide, Brownsville, called

• to advise us of their continuing efforts to secure our power for their Drownsville plant.

Tne Carbide legal department is preparing.a 1cteer to the P.U.B. stating Carbide's position relative, to their need for reliable electric service and the results of their invesdgntion as to possible in this letter Carbide will advise P.U.B. that "they" are j

sourcer, requesting electric service from Central Power and Light.

They feel this will force the P.U.B. to take a position..

including a vote as to whether or not to try to interfere with Carbide's If some such vote is taken, Carbide ' feels request for CPL's service.

' that the P.U.B. will vote not to interfere with CPL providing service Carbide bases this opinion on discussions with Mayor to Carbide.

"Edelstein and certain members of the P.U.B.

Carbide also feels that if P.U.B. ' elects not to take specifje

' action on their letter, this frees Carbide to receive CPL service.

Bill indicated that he would keep us ad41 sed on any progress.

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W. C. Price g9 WCP/fg CP i

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Attachment D, page 1.

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g 2[,h UNION CARBlDE CORPORATION MR 291976

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PUBUC UTIUTIES BOARD.

P. o. Box 3270. SRQwMSVtLLE.TEMAS 78520 March 26,1976 Mr. Israel Lizka, Chairman Public Utilities Board,

'1304 E. Adams Brownsvine, Texas 78520 Last January we informed you that Union Carbide is actively develop-ing plans to e.spand chemical production capacity and improve fuel efficiency at our 3rownsvine Plant. These plans are progressing on schedule and if they prove sufficiently attractive to command the necessary capital funds, the re-sulting project could increase our electric load by as much as 40,000 kilowatts.

After careful study by Union Carbide and its consulting engineers, United Engineers and Constructors, we have decided to implement the plan presented j

in January, and will proceed to purchase this additional electric power require.

ment from Central Power and Light.

As you k=ow we have always generated our own power for ou-stream operation. For our move to dependence we have chosen. Central Power and Light because our electric power must be developed from a strong system capable not only of meeting the large energy requirement but also of starting our large motors without serious voltage dips that would affect our process equipment and disturb ether customers on the utility system. We also require a high level of supply reliability to help assure continuous and safe operation of our facilities. This, in turn, requires a high level of technical support by the power company. Our construction program, if approved, win require that the additional electric supply facilities be operational by late 1978. From our experience at other locations with Central Power and Light we know they have the system reserve capability and the financial, physical and technical resources

'to meet our requirements. Until the new facilities are complete, we plan to continue to. utilize standby power from the PUB as we have done since 1964.

We highly value our long term mutually beneficial relationship with the PUB. Our proposed project coupled.with a firm supply of adequate, reliabic power win permit continued economic and ebmpetitive operation of our Browns-vine Plant. We regret that our standby arrangement with PUB will no longer

. be necessary after this instanation, and that the PU3 system does not lend itself to a load of the size and reliability of our need.

(,,,,,

We feel that this decision is in the best interests of the PUB, the citizens of Brownsville and Union Carbide. I believe we have kept you f tlly

. informed of our plans but if any additional information on the basis for our i

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.I Mr. Israel Lir.ka 2-3-26-76 e

decision to use CPkL would be helpful to you we shall be glad to provide it.

We would appreciate a written reply from you indicating that the PUB will support Union Carbide and Central Power and Light in this arrangement.

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W. W. Mcknus Plant Manage:

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Cc: Public C:ility Board Members:

Mayor Ruben Edelstein Mr. Paul Y. Cuaningham, Jr.

W. Vergil Fredieu Mr. Marcelo Hernandez Mr. Mario Y=aguirre City Commissieners:

.W. Justo 3arriences, Jr.

Mr. R. I. Cardenas Mr. R. M. Duffey Mr. A. J. Mosher Mr. H. E. Hastings '

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..P.O. BOX 3070 / 6ACv%ui TE.xAS 78420 / AC $12 83Ms92 i

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Apr:.1 13, 1976

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City of 3rovusville y..

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P. O. Box 911 Brownsville, Tanas 78520 Mr. Israel-Lizka, Chairman g.g Public Utilities Board

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1304 E. Adams 3rosusvine, Texas 73520

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We hareYeIEIadvifed* bt the*lUdlou Carbide Corporation through their letter i

dated', April 3,1976~~(attached)' of their plans f or planc e:epansion and exten'sivs~cchversi6h of i.heif energy utilitatien. They have cade the deteridination that'che Public Chilities Soard cannot provide the depend-able and ample capacity to satisfy their new electrical load demands.

They. state that only Central ?:ver and Light Ccepany can =eet these require-nents.

It is our intent to continue honoring the ter=s of our Utilities Agreement dated October 30, 1963 with the City of Brownsville and the PU3.' k'e are hereby requesting the vricten ecusent of both the City and the PU3 to anow l

CP&L Co=pany co sell electric current to the Union Carbide Corporation plant at the Port of 3revnsvine in accordance with Paragraph III of the Section on Electric Power of our. Utilities Agree =ent.

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We have reviewed Union Carbide's power situation and cencur that their

- request for a solutten is valid and shculd be acted on.

, - We also see this Union CI; bide request as an excellent opportunity for the City of 3rcunsv111e and the PU3 to negotiate a new agreenent with CPSL Company to begin sciving se=e of 'the long range power needs of this ec== unity.

The 3rownsvine Navigation District also believes that this proble= should be acted upon and resolved by the elected and appointed leaders of this cc=-

. aunity.

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- We are preparing a subsequent letter with a possible solutien to this pro-bles. The 3rownsvine Navigation District has given serious censideration to this solutica 'and ve f eel that it v1H be of benefit to all parties cencerned.-

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Attachnent E, page 2

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P.:vor Ruben Edcistein Mr'. Israel Ii:ka April 13, 1976 - Page 2 We are t.-illing to meec with your respective Bostds and discuss this catter.,

Perhsps frc= chesc =estings a satisfsetery answer can be found, chereby resolving the probic= without coscly legal anc court action which can only be har=ful to everrone.

Since prospc action is i=portant in this maccer, we ask,that you respond l

to this request as soon as possible.

Sincerely yours, l

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Ygnacio Gar:a, Jr.

Chairman YGJ:js Eccl.

I cc: ' Brows..ville City Cc==issioners Mr. Jesse Sloss, City Manager Mr. E. E. Esseings,lia ager, PU3'.

i Public Utilities Ecard I:e=bers i

Mr. W. W. Mc!!asus, Union Carbide I

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B"O..W.. b5Vil.!.E April 22,1976 m

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Mr. R. W. Hardy if 3l7 Chairman of the Board

..y 7y Central Power and Light Ccmpany

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',b g P. O. Box 2121

,5... %{. @w Corpus Christi, Texas 78403

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Dear Mr. Hardy:

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Q y The BrownsviHe Navigation District has requested by letter dated

.,;,J.y April 13,1976 that the Public Utilities Scard furnish it by May 12, if, pg 1976 evidence of PUB's specific plans to satisfy the electric power

' ' - P' needs of the Union Carbide plant at the Port of Brewnsvine. This e -5 3.

letter was prompted by a letter to the Navigation District from Union

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Carbide dated April 8,1976 in which Union Carbide stated that only e

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Central Power and Light could meet their electric power requirements.

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I am enclosing a ecpy of the letter to the Scard from the Navigation l

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District, a.t weH as a letter which the Navigation District received M-1 from Union Carbide.

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The let:ar from the Navigation District to the Public Utilities Board l

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[.ib places in Issue PUB's ability to satisfy the terms of its contract with "i R the District. A part of PUB's resources to meet the electric power 9 h. '

needs of its present and future customers is the centract for firm power

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between Central Power and Light and the Public Utilities Scard. A 3.'

letter dated March 25, 1976 from Mr. Aaron Autry, president of Central Power and Light, advised the Public Utuities 3 card, "until these 8.' j discussions (with Union Carbide) are completed, we wiu not know how much power we have ava!!able to help meet pour requirements."

'i This statement raises a question of whether Cental Pcwer and Light can deliver the maximum firm power afforded PUB in its contract with Central Power and Light and the availability cf electric power beyond l

the maximum firm power requirement which might otherwise he available j

to the Public Utultles Board.

b In order to timely respond to the Navigation District request, which was I

l triggered by the publicly announced plans of Central Power and Light and l

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Attachment F, page 2 a

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Mr. R. W. Hardy Page 2

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April 22,1976 Union Carbide to sign a long term electric power contract, it is imperative that representatives of the Pubile Utilities Board, including myself, meet with you at the earliest vssible time to discuss the following topics:

1.

CP&L's ability to supply the maximum firm power afforded PUB under the terms of our present contract 2.

CP&L's ability to supply firm power in excess of the maximum firm power afforded PUB under the terms of our present contract,

3.

.The possibility of extension or renewal of our present contract with an increase in firm power i

from Central Power and Light 4.

CP&L's five year forecast of demand charges, as adjusted, set out in Anicle VI, 'Section IE, of our present contract '

5.

Necessary joint effort between Central Power and Light and the Public Utilities Beard to expand transmission facilities in the San Benito-Brownsville, Brownsville-Navigation District areas The above deadline is such that we must meet with you as early

'as possible next week. If you are agreeable, please immediately advise me by phone or letter of the date, time, and location of the mee ting.

Yours truly, Israel LI:ka Chairman v

Il[CN Enclosure s

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Attachment G D

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E R C W 0 5 VII.I.2 July 15,1977 I

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Mr. Aaren E. Aut.~/

President l

Central ?cwer and I!;ht Cc=;any 120 Ncrth Chaparra! Street Ccepus Christ!, Texas 73403 i

Dear Mr. Aut /:

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j At eur request, representattves cf de City Public Service Ecard (C?S) =e: wt:h us and cur censul:an:s, C'Erlen & Gere Engineers,

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l be.,enJ'ene 29, 1977, in San Ant:nic at which time CPS indicated dat excess capac!:y wecid be available for purchase Sr 3rewnsvt11e i

I and. ccher in:erested u:111 ties !cliewing the c mmer !al c; erat!cn i

!I cf CPS's new ::al-fired units. Lace

%* day we else mec wth I,

Mr. Gar st Merris, Chatr=an cf te Public Utility Cc==!s sten cf i

Texas, te asce.~in de Ccmmissten's ;ciley vis-e-vts ;cwer s

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wheellag at:angement.s between u:llities regulated by de Cc==tssten.

l We request at $1s time that ycu provide us with ;cesent and an:!cipated

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wheellag ca;ac!!!es cf presen: ahd planned transmiss!ca fact 11:!es cennecting c de Brownsvt!!e system as well as :: ycut San Bernadt:0

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i switching statten which wculd he invcived wid be wheeling cf any CPS ;cwer := 3rewnsville. We also request dat you prev!de us

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with antic!;ated wheellag intes fer dese facilities.

1 Very t uly &ycurs,

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.I. Eastings T

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General Manager i

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Mr. T. R. $;ruce, C?S

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Contral PO'.:er and Lic.,ht Com.oanv.

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Corpus Christi, Texas 73403 T e =...'.'..

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We have received a copy of a letter from :tr.

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Hastings, General :'anager of the Brownsville Public Utilities Scard,

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concernine croposed power and enercy from City Public Service of San Ant nio.

As the letter states, 3rownsville's staff and consultants made che request for a t.ower and enerev.

proposal from C?S, and we in no way solicited this cus:cmer or an.y other customer not.clanning on locating in our service

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As you probably knew there has been another lar e customer in your service area, a chemical processor en the coast that has been askin7 for Orce.osals.

Also sc=e of i

the cooperatives immediately adjacent to the CPS systen have as.< e

.or and received proposals. rom time to t'..te.

Concernine. the "wheelin9" which Brownsville suc.c.es s it would r

be our feeling that this is a subject probably best treated in a forun such as the Texas Interconnected S.vstems.

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Attacl e nt I, page 1 T U" -

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CITY PUBUC SERVICE BOARD

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SAN ANT NIO, TEXAS

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8 c. Sea 1 FN July 25,1977

" "TyN"i Mr. H. E. Eastings General Manager Public Utilities Board P.O. Box 3270 Brownsville, Texas 78520

Dear Mr. Eastings:

In response to your letter of June 23, 1977 and oral conversation in

)

the neering of Tuesday, June 28, 1977, as to availability and price of 1

Jower from CPS, the following specifics are noted.

City Public Service will have capacity available from our gas /cil fired plants once the new coal fired plants become fully operational this

, ear. This capacity will result in total availability in excess of City y

Public Service Board's 1 ediate requirenents.

From discussions with you, h

1 appears that City Public Service would have no problem providing as much of your current require-ants as desired.

However, City Public Service Board does not wish to infringe on any other utility's operating territory, and, therefore, will request that you make the necessary arrange ants with any of your cutrent suppliers and the appropriate regulatory bodies before entering into any agreenent.

The rate that City Public Service is proposing to charge for gas /cil capac1ty would be:

$1.50 per r4 of contracted capacity 50.001 per rJE of energy consuned plus appropriate costs of fuel including allowance for transmission losses and required indenture pay =ents to the City of San Antonio (total of 17.11*:)

The energy consu=ed would be =etered at City Public Service system boundaries, and any other costs or arrangenents for transmitting the energy would have to be borne by the Public Utilities Board.

The costs of fuel would be equal to the average costs experienced at the CPS gas /cil generating facilities on line during the period of generation.

However, during those periods when all of CPS 's existing cuscc=ers ' require-(

=ents can be met with coal generation, the custoners on the above rate schedule U

will be allowed a pro-rata share in these cheaper coal costs to the extent available.

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Attachment I, page 2

.Mr. H. E. Hastings July 25,.1977 In regard to your request to enter in as a firm customer of CPS, arrangements could be made to meet this desire.

The rates that would apply in that eventuality would be the Board's standard rates which pro-vide for the fully allocated cost sharing of the planned generation and other costs of doing business.

As in the provision of excess capacity, necessary arrangements with other affected parries would have to be made prior to bec nning a fi:m customer.

I hope that the above general guidelines will provide the data neces-sary for you to properly evaluate the availability and price of power and energy from CPS.

Should you have any other questions concerning this matter, please feel free to contact me at your convenience and, as we discussed, City Public Service is agreeable and anticipates that the j

Public Utilities Board will notify other affected utilities and regula-cory bodies of this request and response.

Sincerely, f

-v W Donald S. Thomas

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Manager Information Services System DST:jpk

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Attachment J CENTAAl. PCWER AND UGHT cc"*ANY Meme CWics: P. O. som tit 1 11* 88c ts :1 corous christi. Tuas is403 s.

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7 1977,

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P.USUC (HILITIES BOARD August 8, 1s77 BRDww'n c TU.

Cffice of to hn:rerf t Mr. H. E. Hastings, General Manager Pub!!c Utilities Board of the City of Brcwnsville P.O. Box 3270 Brownsville, TX 73520

Dear Mr. Hastings:

Ve have received your letter requesting Infer =atien in regard te wheeling capacities ard wheeling rates.

Since we have never pa rticipa ted in wheeling arrangements, we do not' have the anticipated wheeling rates which you request.

in regard to wheeling capacicles, we do. net have any su rplus j

e l

transmission cacacity to the scuthern part of our system and, there fo re,

do not presently have any capacity wnien would be available for wneeling power fer third parties. Furthermore, we,do not have any plans for future transmissien ccnst ruction which would include su rplus transmi ssien capaci ty fer wheel ing powe r.... v.

Sincerely, h

Aaren Autry M/fg cc: Mayor P.uben Ed el stein R. V. Ha rdy V. C. Price Aw/

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-J.**.~" u~u August 3, 1977 m as l.: :" *i 3 11 20*?

Mr. J. B. Poston, Assistan: General Manager for Operations Ci:y ?ublic Service Zoard of San Antonio P.O. Sox 1771 San An::nio, TX 73296 Oca r' Mr. 7: sten:

Thank you for your letter of July 20, 1977 regarding the contac: made by :he 3rewnsville Public utili:les Board, in resconse Oo. a reque s: by Mr. ldast ings, we have Informed :he ?ublic Utili:les I

!ca rd tha we are willing to begin negotiations to consider the 12 renewal ar.d ex:ension of cur contrae: with : hem.

'Je have a l so informed : hem the; we do no:

which would be ava ? latte fer. heeling ;cwe r forhave any surplus :rarsmission ca;aci:y'

hi rd ;4r:les.

Ve rf :,cu ly your s,

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/A.- L Aaeen Autry AA/f; bec:

R. 'J. Hardy

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"[RITEROFFfCE O.

s MEC-STEC Contract Extension Information Corpus Chris ti

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SUBRCT R. W. Hardy

' hecutive October-28' 7&.

TO AT pp

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Aaren Autry - E[ecuerve J

D., Jones - Admin. Services'

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Glen, Churchill - Executive R'. 0. Forbus - Planning-Wayne-Siegelin. - Execu tive

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Q~. Campbell - Eng i neering W' P. Sm i th,. J r. - Eng i nee r ing:

W. A.' Ba l l, J r. - Eng ineering B". C./ Kindel - Executive Joe Taylor - Admin. Services M. L Forcheit - Executive.

4 C. A'. Mast - Engineering I-

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,a Recent information regarding the subject contract extension '

" "";E indicates, that the following points should. be taken into consideration

, y.3;l during. our discussfon,of this extension.

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Medina- (L. E Gross) desires to postpone thei r invotve-3 ment' In-One San Miguei generation as,long as. possible.

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.".~I2 initial San Miguel generation may be delayed beyond.1880.

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Hr Gross. has been requested to furnish detailed infor-(g4 marion as to the terms and conditions anticipated by Meding-STEC to satisfy contractual ari%ngements for transportation of Amistad and. Falcon power througn i

consummation of a " Transmission and Operating Agreement."

This information should be available early next week.

~

Medina has completed negotiations wi th San Antonio CPS for a s trong.138 KV tie at their Hondo Substation, which

'will be in service. In earl.y 1978. Though Mr. Gross has not mentioned the possibility, Medina could take con-tract power from CPS in substantial quantitles over this 138 KV interconnection without paying a transportation

%. charge to CPL.

/

4. ' CPS has indicated a willingness to supply CPt. power at

$1,15 per kilowatt per menth and energy at their average gene'ation cost plus.144 to satisfy Ci ty of San Antonio tax requirements. Our contract. extens ion wi th MEC-STEC l

shculd probably keep this in mind under the assumption that Medina could probably negotiate power and energy for similcr or slightly higher prices f rom CPS.

9 A

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f AttachmentLT~p6ef'f

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3 R. W. Ha rdy-October 13,'1976 l

Page 1 n.'

5 Since the original MEC-STEC request for a-contract ex-tension is approximately one year old and since their agreement for Amistad power must be consummated before

~

..S I Decameer 1,1976, MEC-STEC mus t have deif tni tive contract 5; l extensierr and, transmission agreement information as soon

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CPL - MEC - STEC Meeting Corpus Christi.

TEXA!

SUBJECT TO W. C. Sieeelin AT Executive July 2 t*,

19 75 e

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R. W. Hardy

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Aaron Autry R. E. Horine

.W.

P. Smith, Jr.>

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S. 3. Denton i

A meeting was held in the CFL Board Room at 10:0'O AM July 22,1975 with the following in attendance:

. For CPL:

R. W. Hardy

[..

Aaron Autry (?ar: time)

R. E. Horine C

W. C. Siegeiin.

O M. L. Borchele M

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For STEC:

Riggs Shepperd N

For MEC:

L. E. (Red) Cross The following i:e=s were discussed:

1.

Mr. Shepperd reviewed progress of th' e studies being made regarding installation of power generacion at A=iscad Dam.

Excerpts from these studies were passed out for discussion and consideration. Basically

)

they indicate the planned installation of two generating uni s at Amis tad, each with a nominal capacity of. about 16 FM and a maximum capability a: maximum head of approximat,ely 30 W.

The I3WC is desirous of signing. a contract covering the joinc. operation of Amistad and Falcon.

MEC - STEC intends to work out the details of such a contrae: with 13WC and to work out the sale of this power and energy to CFL on. some mutually equitable basis for an initial period of five to ten or more years. The IBWC is insisting that complete amortization of Falcon and Amistad gen-eration investment (including C6M charg(s) plus interes: charges not previously paid on Falcon investment be. completely covered by such a contract. A draft contrac: has been sub'mitted to MEC - STEC but is not in sufficient form for re. view by CPL.

Af ter considerable discussion of :he al:ernatives regarding this possiqble power purchase by CPL, our position was,su=arized by Mr. Hardy as follows:

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Attachment M, page 2 v-d c3 W. C. Siegelin C5!

Face 2

,Il July 24, 1975

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co Assuming that the McMullen lignite gene' ration is in service by'1980 and that the Amis tad generating units are likewise ins talled by 1980, the MIC - STEC would not need anything from CFL for five to ten years and CFL could purchase the entire Amistad - Falcon output

~3, and be responsible for remote operation of both generating f acilities.

At the end of this initial period MEC - STEC would want to begin picking up the power and energy from thIse facilities.

Continued remote operation by CFL at that time would depend on the then existing conditions. Other interconnection arrangements would continue. MEC -

ls STEC does not intend to become involved in power purchase from IEWC until Amistad generation is completed.

2.

Extension of the CFL - b2C - STIC cont:det which expires January 1, 1978 was discussed.

12. Shepperd again requested extension of the contract to cover their requirements for.1978 'and 1979 and possibly for 1980 if the lignite unit is delayed until 1981 in'stallation.

Mr.

Siegelin indicated that CFL is working on an appropriate. rate to charge for this service and that the figures should be available in the near f u ture. He indicated that this rate will be substantially higher than presencly being charged due to higher co'sts.

He also indicated that our figures showed a loss on this business in 1974 3.

Transmission associated with construction of the McMullen County lignite plant was discussed.

Mr. Shepperd presented a copy of a letter from Branos Electric Cooperative to representatives of San Antonio

?ublic Service Board, City of Austin, LCRA and Texas Power and Light reques ting representative load flow stu. dies regarding the transmission.

Mr. Cross indicated that CFL and MEC - STEC had gone as far with their joint studies as progress would allow without knowledge of the Brazos

. transmission configuration.

Mr. Siegelin pointed out some of the operat-ing problems which need to be overcome to allow the type of installation which Bra:cs has in mind.

4.

Mr. Shepperd requested that CFL vrite hic a letter of our intent to proceed with purchasing the Amis tad - Fdicen generation as soon as possible. ' This letter was promis.ed within the next rwo weeks.

5.

In order for CFL to complete their studies relative to continued service to MEC - STEC beyong 1977, Mr. Shepperd wa's requested to furnish power and energy requirements by months for the years 1978, 1979 and 1980.

He agreed to furnish this infor=ation ad.spon as it can be nade available.

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EP.

L-Mr. R.

W.

Ilardy, CF irman cf the Board Attachment N Cent:a1 Power & Lis.: Company R )5 Page Two Augus t 26, 1975

,~

1)

We undorscand CPsL is willing co sell power and energy to STEC-HEC in 1978/1980 - ac cost or cost plus scme percentage?

2) Also STSC and MEC a:e willing to contracc power and energy to CPGL from Amistad and Falcon generation -at cost or cost plus l

the same percentage.

3) CPGL can cont:act for cotal hydro generation for five years, and longer, if STEC and MEC determine that they can :elease che power and snergy.

4) By the da te of expi:acion of the p:imary or extsnded term of the STEC-MEC-CP&L Amiscad-Falcon contract, CPEL should be able to utili:e both !!::t and dump energy ' f:cm che hydro generators in the western portion of its system in an advancageous manner to

'save transmission costs. Z! this is true, then the displaced ene:gy should noc be cha:ged for on a, wheeling basis.

5)

If energy cannce he used on an a:ea basis, then STEC and MEC will pay wheeling cha:ge based on c.ost of average c:ansmission coscs of CPGL.

An unde: standing and agreement of these poines will be conducive to finalizing both agreemencs.

It is cho incent of STEC-MEC to work with CP&L in any way which is mutually

~

beneficial. We feel that it is in the best ince:est of all parties as well as ou: :espective consumers.

Very truly yours,

/

A.N cs ) < Nf

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Riggs S.epperd, General Manager L. E. Gross, Jr., Manager South Texas Electric Medina Electric RS/ LEG:ve Please indicate your understanding and agreement by returning two signed copies.

i Cencral Power & Light Company 0

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c.edina-STEC Meeting Corpus Christi, i

'8 N TEXAS R. V. Hardy Executive g

November J; 76 3

Aaron Autry - Executive

/

cc:

M. L. borchelt - Executive Glen Churchill - Executive J. D. Jones - Admin. Services V. G. Siegelin - Executive Joe Taylor - Admin. Services W. P. Smith, Jr. - Engineering l

As a result of our meeting on Friday, October 29, concerning several matters including the extension of the present STEC-Medina contract and the posslbility of purchasing power at Amistad Dam, it was decided a meeting between companies would be advisable.

On November 9, at 8:30 A.M., there will be a meeting in the Board -Room wi th Mr. L. E.

Gross of Medina and Mr. Bill Robson of STEC for the purpose of discuss-In greater detail the above matters.

All the addressed are. re-vested to be present, if convenient.

(

R. S. Jinnette 4

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08"f76

.s 3?6 c/77

Attachnent P, page 1

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July 26, 1977 tir. R. W. Hardy Central Power & Light Co.

i Pos: Office Box 2121

" Corpus Christi, Texas 78403

Dear Mr. Hardy:

and South Tenas atThis letter will confirm the understandings general of Cices.

a meeting held Monday, June 6, 1977, reached by C?SL, Medin in the CPSL Tne understandings covered two areas, and are d escribed as follows:

1. Tranctission and utilization of the Amistad/F l and energy.

The baci a con itydropowar should contain the following essential icems:STEC-MEC-CPL Am A. As transmission agent Power Plant, designated points of delivery at Amistad Pofor G under BuRec Contractthe pcwcr and energy made available to STEC/

us:

No h;C N.

power and energy (or equ. 7-07-50-P0890, and will tre.nsmit STEC/MEC. transmission system to the points of iivalent power and e the participate in the utilizatica of said power a din cons

, C?il will providad below.

n energy as B. STEC/MEC will install, pay for, own and kv transmission line to interconnect maintain a ne 133

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CPit will install within said substation suchbus to substation.

s facilities as may be required, e.dditional STEC/MEC will reimburse CP&L.

for which installation costs C. CPiL will continue to own E.d maintain s facilities as are necessary to connect uch t ansnission bds to the existing switching station of CPiL ithe Fakon switchyard of Falcon Dam.

n the vicinity A

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Attachment P, page 2 Mr. P.. W. !!:c.!y Pa;;c 2 July 26, 1%7 t

D. STEChiEC tvill install, pay for, own and maintain the nc ces 4ary m

equipment and telematering of the facilitiesto pruvide remote control of, c '=munic to be inctalled at Ami u:.u Powar Plant.

It is provided, however, that if CPLL desir-2s such equiprunt to interf ace with CPSL's existing equipment, CP&L may elect such facilities.itself to install, pay for, own and maintain E. The Annual Combined Cost will include: (i) the annual fixed costs plus the annual operatir.3 and maintenance costs of the facilic'ies dcccribed in cubparagrephs B, C, and D abo e, plus (ii) the annual payments to be made by STEC/y.EC und. : Sullec Contrac t No.

7-07-50-P0390 above referenced, plus (iii) direct incurred by CP&L in dispatching the Amistad/Palcon hydropower expcases F. The parties will share in the Annual Combined Cost above described each year and in the power and ense;y provided at Amistad/ Falcon in the proportiens of 65f; to STEC/MEC and 35%

to CPSL.

~

G. CP&L will deliver Amistad/ Falcon power and energy, as may' bo desired by STEC/MEC, at exis between the CP&L and STEC/ML., systoc.a and/or ating points of interc points of interconnection, if any, as may be established in such additional the future.

H. If, in the opinion of STEC/MEC, impractical for STEC/MCC to be nornally in synchronirm bothit may with the CP&L system and with the San M1 uel 1 Maite-fired generating plant 3

STEC/MEC may, on or before July 1, 1978, notify CP5L in writing that STEC/MEC elects to defer utili:ation of Amistad/

Falcon power and ener37 In such an event, throughou: the defarral period, CP&L will be responsible for all the Annual Combined Coce and will be entitled to utilite 100% of the Amistad/ Falcon powar and energy.

It is provided, however, that upon five years notice in writing to CPSL, STEC/MEC may terminate the deferral period and recapture the 65% entitlement share, becoming simultaneously responsible therea f ter for 65%

of the Annual Ccmbined Cost.

pl s en.3rgy available out of its s

Citl men st re, upon such surplus as-her party will have the first caj i economv ene-' " "-

the Agreement bec een CPri

this purpose' all the Annual Combined Cosc allocable to :he s

surplus energy will be considered to be c he " uc r =::n e a l c.> :

of such energy.

w g

g vi

Attachment P, page 3

'.r. R. W. Hudr Pasa 3 July 26, ;977 J. If, after kaistau compJetion, the hydro units are not generating, it energy to the United States Section of thewill be neccc Boundary and Watar Commission for the oper International uill deliver such IE;l0 requirc. Tents to IEUC ation of es.

CPSL with the terms of BuRec Contract No.conststent Paragraph 10.

7-07-50-P0890, Except during any deferral period as per Paragraph H above, 65% of such power and energy will be repaid in kind to CP5L by STEC/MEC K. The STEC/MEC/ CPL Amistad/ Falcon Transmi endure for a term coiacident ssion Agreencat shcil P0890 above referenced.

to DuRac Contract No. 7-07 2. The Agreement between CPSL and STEC/MEC of J modified cr a new Agreccent will be executed coune 3,1967 will be up to Dececber 31, 1988 itess:

to include among othe vering the period rs the follouing

. A. CPSL will commit to sell, and STEC certain quantities of firm power an/MEC will commit to buy, for a period commencing January 1 d required associated en:rgy froc the San Miguel Project.1930, and thereafter until ng power and energy will be mutually agreed upon and/or subjRates for such power and appropriate regulatory authority.

ect to approval of B. Contract shall provide for equal opportunities fer bprov other:

o and froci and shall be subject oth parties to applicable regulatory authority C. Additional interconnections will be standpoint and that will avoid the duplicatineces an engineering facilities.

The sharing of cost on of transmission be outually agreeable with considerationof such interconnections shall received, such facilities and associated costsgiven to benafits subject to appropriate regulatory authority shall be D. Power and energy available to STEC/MEC f Generating Plant of the San Miguel Olectrom the San Miguel will be addressed in the Agreement ric Cocperative, Inc.

generated by STEC/MEC.

and will he considered as E. Section 6.06 of the present Agreement follows:

will be revised as s

Delete: "Nothing herein shall be construed a party to buy or sell economy cuergy unless th s requiring each agree thereto."

e parties nutuall.y M

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Attachment P, page 4 July 26, 1977 "The par t ta.111 buy f rom anel/or s :11 t Add:

o cach other i

econ.:ay energy ulienrier fo.cible, but only to the ex:ent that each party can d:7 cos econcaically, without detriment to reliability, in confocity wit.h prescutly existin;;

contractual obligationa, and uithout foregoing opportunitien for more advantageous purchase or sale 5thich may arise in the future "

If you find the foregoing a satisfactory summary of our understanding you kindly countersign and return one copy of this letter to STEC and another

,.could copy to MEC.

SOUTil TEU.S ELECTRIC C00PEIL\\TIVE, INC.

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W. S. Roli{ san,,Ceneral Manager liECIIIA ELECTBIC CCOFERATIVI., INC..

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L. t. Cross;.fr., Ceneral [M :':

4 gar CENTRAL P00.'ER A:C LICHT CCMPA N

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R. W. Hardy, Chairman.6 Chiopf'.

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Executive Off!.c r

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Ara 9 PUBLIc UTILmES BOARD u-or THE

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CITY OF BROWNSVILLE. TEXAS SaowNSVILLE. TTXAS 78520 A/C 512 LJa.cosse 4 22 41 e

P. O. 802 1832 e

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CAT ceRRicAu November t

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-C ae.e.m.M A. 3. CU CM R A. JR.

1970 I

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F A4J STO YTU R RI A. JR.

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Mr. Barney M. Davis President A=TeuiO couzALg=

Central Power and Light Company

.=a aca~cm w. =cacAa Post Office Box 2121

" ' ' " ' " ' ~ ' ' "

Corpus Christi, Texas 78403

Dear Mr. Davis:

In October 1968, the former General Manager of the Browns-ville Public Utilities Board in a letter to each member of the South Texas Interconnected System requested membership.in the pdoling operations of that organization. Responses were received from some of the entities addressed which said effectively that no such pooling functions existed.

Since that date, we have become better informed regarding the organizational s tructure and the functioning thereof. As a re-sult of our having secured addi'tional information, the Public Utilities Board is desirous of becoming a member of the Texas Inter-connected System and hereby requests recognition as a member of that group. We would, of course, expect to assume an equitable sharo of the responsibilities of the group and participate in the functions,of the same.

It is our understanding that the South Texas Interconnected System is simply a geographical division of the Texas Interconnect-ed System and if the Public Utilities Board were to become a mem-ber of the Texas Interconnected System, it would obvi'ously be in that geographical area designated as the South Texas Interconnected System.

As some of y,ou may know, we are presently attempting to

' formulate specific plans through which we hope to identify our re-00

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1 Mr. Barney M. Davis i

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' November 3,1970 t

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Page 2 a

sources for our immediate future. It wouId be greatly appre-ciated, therefore, if we could be favored with a prompt re-sponse to our request for membership,in the Texas Interconnect-ed System.

Very truly yours, Kenneth W. Morgan General Manager J

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KWM/rr.a cc: PUB C. B. Garcia Mark Stenson

.,.. File 4

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..l 3s,., s THE ATTACHED LETTER SENT TO THE FOLLOWING:

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',/Mr. O. W. Sommers se :./ }.l l

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's Manager Gas and Electric City Public Service Board.

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Post Office Box 9066

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San Antonio, Texas 78204

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.i Mr. P. H. Robinson

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• j Houston Lighting & Power Company j

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Houston, Texas 4

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• . A. Sim Gideon

... General Manager

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Lower Colcrado River Authority i

,a 3700 Lake Austin Boulevard

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Aus tin, Texa s

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l Mr. Dexter Kinney 4

/ General Manager

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r Electric System City of Austin

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Post Office Box 1088

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Austin, Texas 78767 l

Mr. L. S. Turner, Jr.,

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Vice-Chairman J

Dallas Power and Light Company 1506 Commerce Street

.s. Dallas, Taxas

' Mr. Buri Hulsey l

w' Texas Electric Service Company I;[ Fort Worth, Texas p' t

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Mr. Raff Hardy c, P/ West Texas Utilitics Company

' -- k. 1 Abileno, Texas 1

Mr. Louis Austin, Jr.,

Texas Powcr and Light Company i

TidcHty Union Life Guilding Dallas, Texa s j

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$..u n,ed LOWER COLORADO RIVER AUTHORITY tuumur Aus!!N, ftXA3 7470

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May 18,1970 Mr. Sarney M. Davis, Pr e sident Mr. P. H. Robinson, Chairman Central Power & Ligh: Company and Chief Executive Officer P. O. Box 2 }%1 Houston Lighting & Power Company Corpus Chrisu, Texas 78403 P. O. Box 1700 Houston, Texas 77001 Mr. Dexter Kinney, Director of Electric Utilities Mr. Burl Hulsey, Jr., Pre sident City of Austin Texas Electric Service Company P. O. Box 1088 P. O. Box 970 Austin. Texas 73767 Fort Worth, Texas 76101 Mr. O. W. Sommers, Genera.1 Mg'r.

Mr. Louis Austin, Jr., Pre sident i

City Public Service Board Texas Power & Light Company P. O. Box 1771 P. O. Box 63 31 San Antenio, Texas 78206 Dallas, Texas 75222

\\ Mr. L. S. Turner, Jr., President Mr. Roff Hardy, President Dallas Power and Light Company W e st Texas Utili:ie s Company-1506 Commerce P. O. Box 841

- l Dallas, Texas 73201 Abilene, Texas 79640 Centleme n:

. Louis Austin was.in my office'.today and stated dat I had been

" elected" to head the movement :o e stablish the Elect:!c Reliability.

Council of Texas. We agreed to the following procedure:

(1) I would forward to each member of TIS a copy of de draf: of 3-23-70 of agreement :o form Electric Reliability Council of Texas. Each member of TIS will notify me as soon as convenient (preferably by no:later than Friday, May 29) as to whether it is satisfac:ory to proceed relying on the draft of 3-23-70. If there are any suggested change s or objec: ions, please notify me and I will see da: 2ey are circula:ed to de oder me=bers in an endeavor :o reach a c==en understand-ing. I realize that the time fixed above '.3 short, bu: we have heret fore been discus sing ne ma::er ant. I believe we all i

agree we need :o get de organ::1: ton established and in opera: ion before September, 1970. If dis is to be accom-l' S.I!.lDSR plished den we do not have much :ime lef:.

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D PMAY 2 01970

Attachment R, page 2

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hh hh Fase I*e May 18, 1970 (2) If the members of T!S are in agreement then I will contact the head of the Texas Electric Cooperatives, Inc.

(Jimmy Cobb) a.nd the head of the Texas League of Munici-palitie s (Steve Matthews) who live here in Austin and will outline de proposed organiza. tion and seek their guidance insolar as contacting de members of their respective o r ganizations. I feel it would be better if Jimmy Cobb would agree to contact his members and Steve Ma: thews would agree to contac: the = embers of the Texas League of Municipalities who own and operate electric facill:ie s.

After the conference wid Cobb and Matthews I will advise de members of T!S.

(3) If it appears tha: de organization can be formed along te lines outlined in the draft of 3-23-70 den we can procee.d wi:h the formal organization. I would dink once

he idea has been presented to each possible member the for=ali:7 of crea:ing the organi:a: ion could be accom-plished by a few repre sentatives of de various groups.

After $e form.11 organiza: ion a formal invi:stion :o join could den be sent to every possible member.

. No one ha s. any t~;.xe d po sition. i.ns.o..fa...r...a s....t.h..e.. d r af: o f 3 -2 3 - 7 0 iJ.. concerned, but it is felt that we need to get the organi:ation formefi._....

and I have be en "electedi'.lo contac:._ta.ch of. y.o_u_,iq ac co rdanc e_wi31,tt.is

_l e tt e r s o da t, w_e_c a_n.d e c i d e wh e th e r to fpy,,p card

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/ General Manar,e SO:n.n Inclo s ur e T)i

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C.. f.:xecut.i v e O r... ricer.

C.ncir.-en en:.

nie Central Fewer & Light C:mpenY

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120 No.th Cheperr:I Street i

C:rpus Christi, l'e.x:s 7M03 a.

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I be*/e 'eVi*'Ned Ibe rel{uesI by Ibe (:mm!IIee On ?:WerIer i

I the ~:uthwest t: re::rt en their ::tivities to the ERCUT i

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g th e N A EC E:ced,'.te e tin,; in Y.'es,ing re n n t' e scene d:y.

n Neverthete:s, I will !!e. my c:m.ents.

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C:r,missien wculd cle:ely cre:te c:ndis..icn wnien is cet cc. s: sten., w.t, cur gccls. in eir cet..t.ivi ies cre cime: er i n pt:metir.g Odditice.cl gerer: tion end se.a/ing leeds in direct ut.l.ty ::m, en.

0:n perit.i:n wi t.n tne invest:r-cwne:.

ii ies.

?;r this rees n I d= net see ther ther grew: c:vid centribute

nything c nsrivetive t: the ERCOT meeting. There is s:me vclue iti ::sessing the deter--Ir.: tion, the chility, :nd the p!::'s IthisergenII ric' O 'd i th t dagec'e It m y he veluchle

?: re:siv e s:.e !!r:rk:r d i::ur it:m th em in the i:.--. :* :

r e:: r t. '.'!e =:y e sen find th:t there is s::.e limited vclue to c::p e':ri..; with I.'".em CS ert:I n Eu !'.;r e " r * * : t s.

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3., 7 MEMO - SP.0W5ViLLE Corpus Chrisei 75xg3 Rof8 Wardv A7 Fe b rua ry 27 19 78 cc

Bill Price Mayor Edlestein of Brownsville called last Thursday, Feb rua ry 23 for you.

In your absence he talked to me and asked me to relay his coments to you.

Mayce idlestein appreci ates very much and thanks you for the coeperatico between CPL and Bob Roundtree end.Is encouraged by Mr.

Roundtree's report of progress.

The Mayer, sees the most important need now is for a long term contract for an electric power supply. He recalls that ten years ago Barney and Mr. Joslin made a study and an offer to lease the electric system in Brownsville.

Sob Duffey wants CPL to make a new offer but the Mayor is opposed to Ouffey's positten. He is certain, also, that a majority of the City CounctI supports the Mayor's posieion in opposi:icn to'Ouffey.

~

i They expect to propose a $22,000,000 bond. Issue to prov.de the

'needs of the three systems - electric, water, and sewer.

These bonds would be revenue bonds and would have to be supported for the most part by the

/

electric system. Mayor Edlestein believes that Mr. Roundtree can solve the'

't problems related to the. electric system and should be given a chance to do so.

An offer by CPL to lease or purQiase the 3rownsville system would make problems for Mr. Roundtree.

~

The members of the PUB would not support a CPL study and proposal now since they want to support Mr. Roundtree in his efforts, and would actually be hostile to any CPL initiative. The Mayor emphasized that at this time he would not be in favor of, nor supportjand would actually work against, any proposal to have CPL make a study leading to any kind of offer to lease or purchase.

.l The Mayor at r.o time indicated any hostility towards CPL nor anyching that we have done.

He emphasited that the position which he-stated,

that he asked me to relay to ynu, was his cosition at this tima.

I told him I would pass these c:ments on to ycu and reminded him Teat %u have told

~

him and cthers on the City Council, the PUB, and the Navigation District, that C.'L bas no intentien of taking any Initiative to move into Erewnsville and that you had repeatedly stated CPL's position of being willing to help,

/

if requested,in any way that we can in Brownsville when asked to do so by

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the leaders in Brownsville.

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,,r October 23, 1978 Mr. F.cbert C. P.cundtree General Manager

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Public Utilities Board of the City of Brownsville P. O. Box 3270 Brownsville, Texas 78520

Dear Mr. P.oundtree:

Mr. Hardy has handed me your letter of October 11, 1978, for response.

I would like to take this opportunity to clear up sece of the misconceptions and misstatement:

contained in your letter.

Ycu state that we have, fer nearly a year now, negotiated for a " simple interchange agreement." As you are aware, this is simply not the case.

More than a year ago at a discussion between Mayor Edeistein, Mr. Hardy, and r,yself, CPL was infor :Md shat Srcwnsville desired that CFL soil to PUB a firm pcwar supply adequate 'to :. set PUS's future needs.

We have responded to Brownsville's expressed desire.

An interchange type of agree.wnt was not even discussed until shortly before the close of cur August 9,1978, meeting in San Benito, at which time I indicated I d.id net feel an interchange type agreement would be appropriate under the cire'.sastances.

M+ ~~iving ycur initial draft of a proposed agreement, which we receive 1 in mid-Just, I egain recephasized to you, at the August 31, 1978, meeting in Beyview that CPL did not think such an agreecent was appropriate; It is obvious that, centrary to the.i::: plication-in your letter, CPL has cdnsistently agreed that it would be willing to cr,ter. into a.pcwer sales contreet, and has just es consistently refused to enter into a full interchange agreement.

It has been, and still is, our belief that PUB does net have any excess capacity and does nct have any pians to instali such capacity, and would therefore not be able to offer CPL any of the benefits which are custew.rily available under an interchange agreer,ent.

' ' ~ ~

As far as CFL senrica to Union Carbide at the Port of B wnsyille is concerned, PUS was inferred a,t least as early as the February 9,1978, meeting of CPL's plans to serve Union Carbide frem the Port Isabel line, with a second feed frcm Los Fresnes.

Mcwever, when it appeared this spring that CPL and PUS would be able to reach-agrescent en a new powcr sales contract, CFL ag ead to study the feasibiiit vr a single 1 cop serving. both PL'S and Union Car',rida.

But, due to your lat e stand, and apparent intractability, on the question of the type of agrem.,*., and becaus:-

cf.our present cennit: tent to serve Lt.icn Cartide, we have elect:/ cc proceed with our original ~ design in' crder to prcvide timly ser. ice to Un... Carbide, as this e

design 'is the most ccst effective given our cdtrent cerc a anticipatior, for the j

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Face Two Ocisber 23, 1978

.u.r. ?.cbert E. Roundtree future.

Since we don't have a c:::ntract with FUS. extending beyond ~1981, and since u conticue.to discuss.and investigate nurer::us other avenues for obtaining ycur

,.ar requirecents, w+,1ch avenues may or may not involve CFL, we are presently unable to accurately include PUS in cur current forecasts, and therefere are unable to design or construct facilities to serve PUS.

When any new centractusi a-angernent is made beteen CFL and PUB and approved by the FEFC, CFL will deter =ine te facilities necessary to provide full ser/ ice under the ter:'.s of stech centr::cc and will construct such facilities.

As you knew, CFL is willing to continue to nesetf ate with you concerning a power sales agreement, and a draf t cf a preposed agreemen: is enc 1csed.

As far as negotiating a transmissicn agreecient is concerned, as e have teid ycu on ntriercus cecesiens in the past, w will be happy to discuss such an agreecent with y:u as soon as you can tell us the quantity, time schedule and point of crigir.ation of the power.

Yours very truly,

%.d.,4rae W. C. Price.

nh Enclosures cc:

The Hencrable R. E. Edelstein Mr. Xermi t Crc.:ack, Chsic:an, PUS

~

Mr. R. W. Hardy, Chair :an & Chief Executive, CFL

• (

Attachment V, page 1 Memo to Tile %.-~ k m N l rmb.

Meeting with W. W. M Manus 11-16-73 At his_ request, W. W. McManus, Plant Manager, Union Car *:ide, Irevnsville and I met and talked on Gladys Porter Zoo greunds, folleving a budget ccrmittee =eeting there (he is a cember and I am Chairnan of the Committee).

Zoo meeting at 4:00, our private meeting at 5:00.

We talked until 6:00 pm.

The tone of the talk was relaxad and pleasant.

McManus said he had sought the meeting because ho

..ctarned with CP&L's

..o and Union Carbide's propcsed 138 KV tic (the redu?. dant tie) which he felt could get enneshed in CPL-?U3 centract difficultics and thero =ight be a dolty or other problems.

He said he as a good citizen had spent =uch eine recently en the problem including a two hour or so reeting with Rolf Hardy, Ch:5:an, Frice, President, and Tyler Russell, Disc. Manager, CPL, in their Corpus Christi office on 11-10-78.

rhare he was informed by Mr. Har fy - (1) Public Utilities Commissien of Texas has no jurisdiction over co.'struction of the linas to UC.

(2) FU3 can eventually get all they ask f<r from CPL, but CFL cr.n resist in regu-latory agency hearings and the ce res and final accession to our contract damands vill be fully delayed S, ears.

(3) That what ?U3 asks is unique

~

and precedent-setting and CPL must resist.

I inferned McManus that just today (11-15), af ter lunch, Mr. Price had finally returned Robert Roundtree's (GM for PCE) call and a sceting was set up betucen Price and his engineers and Roundtree and Larry Cavlik,

?US engineer, December 6,1978, in Corpus Christi.

llo lawyers or others to be present.

N Manus appar0ncly was aware of the ceating.

McM:nus said ha had finally met with Roandtree and Caulik and found them personable and very intelligent.

He had checked en Roundtree with the head of Florida Fever and Light C:spany, who gave full cenpliments to E.nund t r e e. McManus said it was donc in tene of a persen appraising his opposing general, and not as though he agreed with ?0.:c d t ree.

I said I did not appreciate Rudy Theisen, UC elec. engicaer, 3ro., having described C:vlik as arregant in his presentation to Theisen at a recent eeeting in 3rc-nsv111e ::avigation District ef fice

<t which FU3 sought to explain and advise UC of our desire fer a tic with C?L at the Port and of cur various pecbable rights and recidies sheald CPL not assume its public responsibility for service to this area.

Me.".m u s s a i d The t # # n f el t Cawlik was patronizing and treated the varicus elements he was discu8 sing en a level far bel v Theisen's capacity.

I peinted cut there vore ethers pro 8ent

.ho had to be sdfreesed in elemental ter s,

-d ;crhers ~.etsan was u;<+.t locause Cavlik 4.ppeared to be better cua!ified as an. ngf r.o+r.

c.

Attachment V, page 2 Tn u 2 c

Maeting with W. W. Me".snus We had begun our visit to3 ether today with my sentenant that we needed "c"snus' ccoperation.sich CPL on 2 basic points, one odr't.ced for a distribution substation site on UC property adjacent to prcsonc ?C3 tite and also our need to tie to C?L redundant 138 KV line to UC st Fort, running back to Les Tresnos and Las Palmas ststion, which UC is soing to pay $2,000,000 for, out of rates, i.e... ::y understanding was that C?L vould build the line (redundsnt) and reimburse itself by char; tag UC~

slightly higher rates per KW until the $2,090,000 w:s paid through the rates.

I assured Mc:! anus over and over sgsin that ?tB had no desire to delay UC in its expansion program nor to cause any friction between C?L i UC.

That the Theisen attanded meeting was solely due to our feeling va had an obligation to UC to tell them what we needed and -cnted frca CPL but

hat we itere awcre this might cause UC to believe ve vers undert.' king se=eching which could cause UC a delay.

That perhaps we were mistaken in trying to inform UC and to be fully f rank and open to UC, but we felt it was the correct and courteous thing to do.

That if we..ere wrong, I was sorry.

McManus said he was afraid that in a collision between CFL 5 ?U3, UC ceuld be hurt.

That evidently something had to be worked out and he was prepared to help do so.

~ I pointed out there was no point in McManus trying to talk separately to various me:Scrs of the Board; that the Scard sculd eperate as such and use its esnagement people to do the negotiating.

He said he felt he could only talk to,a few Scard members at the ef e, that I was a nite f ell ow, but entirely too tough in pushing PU3's positten.

He said the last eine we had talked (at a privste party) I had leet:d dr.m ever ey glasses and had told him what PU3 enuld and would do.

(This is not pre-cisely an se: urate representation of what I said but I admit I rather forcefully rejectad his cents ptuous remark that PU3 ought to get out of business and sell or Icase to CPL.) Teday (11-15) Mc" anus said if we did not agree to go alen5 en his ideas of dealing with CPL he was pre-pargd to go public and state ?"B vas trying to drive LC oct of c:wn si:h its $12,000,000 annual payroll and that t'.e Crew:.svil.le Herald wculd ba: k him up.

(He said "psper" -- not Hersid.)

I did not react to this threat of his in any way, except to point eut his pesition ould be better if "nion Carbide paid either City or School taxes; that while Port :ssbel kept building new schools, 3rownsv111e residents were hard put te r.31,e funds.

+

Attachment V, page 3 Page 3 M.icting with W. W. McM nus He replied UC could not be in City limits and that he had always thought it wrong UC was not in 3rownsville School District.

All of the above ccnversation shout confrontation and threats was said without heat or unpleasantness.

McManus said he did not agree with me philesophically on private power (his choice) versus public power (my choice), but he was prepared to put that aside and work en the CPL /PU3 estter.

I said he was entitled to his opinion; that 3revusv111e citi:sns had es?.ed and operated their electric system for 70 years, took pride in it, had voted many times to improve and continue our.ing it, and that as their repressntative, I would work and fight to carry cut their uishes.

I appealed to his pride as a citi:an to help us icprece our system, get adequate rates f rom CFL and a proper tie, none of which would or could conflict with his price concern as Manager of Union Carbide.

He said he had suggested to Roundtree and Cawlik that forgetting the I

rate catter, va should appreach the 13S KV. tie mattar and.that Ecunderee reacted favorably.

'li t hou t giving an cutright committeent, I indicated I saw no rossen why 1

j the transmission and rates cculd not be separated. McManus said PU3-CPL contrset ran to 1931 and if the 135 KV tie and rates were both in the same agreement, wa migh: still be arguing until 1981 or past to the detri-

=ent of a 13S KV tie, I said that PUB had clusys suggested that the negotiatiens could go en parallel, and that the 138 KV line estters, as well as all other technics 1 2tters needed could easily be werked out.

The rate.citter was simply a estter of ?"3 setting a r.unicipal or utility rate, which w0uld be icwer than an industrial rate because we had 70,000 pe:ple to serve.

Thap we had no present intention of wanting to be anything except CFL's largest.

custener.

They were our neighbor and we wanted to work with them.

(At the very close of Our cenversstion, as we were 30ttin; into our csrs, I asked McManus if it would be echstrs2=ing to his if US got a'l wer rate than l'C.

He said, "No.")

j "c" anus gave ce a copy of CFL rates for Unien C.srbide and indicated we j

should be happy to have the same, but no better.

He also sdmitted later in cur talk that the 3rrwnsv111e rate by CPL to CC included the S2,000,000 redundant line which esns when that line is paid fer O'." anus said).UC will get a icwer rate than 33 and 40 nills (3.Sc 5 'c).

He said UC iced factor he thought would be better (55-900), but if.ce *:ssc-:cadad with C?L pever, obviously that vould not be the ccee.

Attrchment V, page 4

?n;c i Macting with W.

k*.- McManus He said his electric people in 'ev York had sdvised him that what ?t3 was 4aying was correct.

That utility regulations had changed in the past 2 ysars and that it was s new ball 3:ce.

lie deplored using reguistery bodies to force private business, but admitted that CPL ceuld be forced by regu-1stion to do much of what we ask for.

I said that we had no wish to get~ into long and cxpensive litiEstion, but it seared caly 1 sical that if, in the end, eer position is correct, that it would be easier if this was recognized now.

I also pointed cut it was sry, very unlikely that Mr. Hardy veuld be head of CPL 3 years from new, that Contral and Southwest had had a change in top ranager.cnt and that whan the time ca e, CPL would cove a new can in to succeed Hardy.

He ("cManus) strongly criticized Paul Cunninghse and I asked if he knew why Cunningham and C?L had differed so sharply.

He said that he did not kn:w, but felt it was LI ka who had csused the problem.

I said this was

ast and that I knew nothing of the natter.

McManus said he believod UC could save $1,000,000 by working with us an the 133 KV line and while this was no great su considering what the Irownsville ?!sne of UC would ske ($1,000,000 per conth), it was worth-while.

I pointed out we could not use UC people to, negotiate for us and told him the story of Irish neutrality in World War I (2 Irish fisharten picked up l

a Certsn Sub in their nets and one said. co ict it so because Ireland was

..aucral and the other said, yes, but who are we neutral assinst?) McManus, laughed and said he felt UC could help and wanted to be sure all was worked cut per7erly and that while UC was his price consideration, he intended to 1

retire here and had a resi interest in 3rewnsv111e.

I reitersted PUB would

nly negotiate threugh its canagement.

At se e point he said Hardy sad Frice & Russell, particularly Hardy, thought we were setting on well until Roundtree's letter and the remarks in the press.

I replied that on September 13, we cet with Hsrdy et al after negoti'ations -

which had baan going well - suddenly ceased with no progress.

That the meet-ing September 13 had gene well cad that Hardy had assured us negotiations truld go en after they had studied eur offer :. ore carefully.

3ut, that ene wack, two weeks, three vecks, than s nench d nt by and no word frem CPL.

They were not available to us by telephone and that we could only be very upset by this.

I said I would have said ju.at what 7.cunderne had said in the letter, but veuld have_tonsd devr. the rhetoric.

That there ceuld be n: more of this.

That we also had a problem, sineo we could not 4ct behind

10 sed doors,and obviously the press vould wish to emphasire all we said in public which seemed strong or harsh, because this made good stories.

That we would set the tone of the meetings and it v.suld be picssant and lew key.

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Attachment V, page 5

!' age 5

" eating vith 11

!(, :tcManus I aAcd if 'JC sad CPL were dealia; on a centract and had agreed. to contit:ue and that ene, two, three, four weeks h.id gone by and CFL answered 'no calls

, and were unavailable, then, under those circumstances voidd not 1lC rer.sen-ably cunclude that CPL did not want to do business with them?

The conversation was picasant and I am pleased at the shift in position on the 133 KV tie.

This should allow us to proceed, but va shall sce.

'!d' anus gave four reasons for his actions - (1) dasire to avoid scing before regulatory bedies, (2) save coney ($1,000,000), (3) Carbide is a good cor-porate cici:en, and (1) McManus is a good Erownsv111e cici:en.

{(hzeh.(. ev.u A. -

7 Kermit Cromack I

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