ML20204J648
| ML20204J648 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 10/21/1988 |
| From: | Counsil W, Woodlan D TEXAS UTILITIES ELECTRIC CO. (TU ELECTRIC) |
| To: | NRC OFFICE OF ADMINISTRATION & RESOURCES MANAGEMENT (ARM) |
| References | |
| CON-#190-9864 A, TXX-88751, NUDOCS 8810250206 | |
| Download: ML20204J648 (150) | |
Text
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Femen.
ll=l" E -Log # TXX-88751 L 2 File # 843~clo C
C-10020 10047 clo 7UELECTRIC Ref. # 10CFR50.33a i
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October 21, 1938 U. S. Nuclear Regulatory Commission Attn: Document Control Desk Washington, D. C. 20555
SUBJECT:
COMANCHE PEAK STEAM ELECTRIC STATION (CPSES) UNITS 1 AND 2 DOCKET N05. 50-445A AND 50-446A ANTITRUST OPERATING LICENSE REVIEW TV ELECTRIC RESPONSE TO COMMENTS OF CAP ROCK ELECTRIC COOPERATIVE. INC. (CAP ROCK).
REF: Filing of August 9, 1988, titled "Comments of Cap Rock Electric Cooperative, Inc. Conc',rning Significant Changes in Licensee's Activity That Warran*. Antitrust Review at the Operating License Stage" Gentlemen:
Enclosed are comments of TV Clectric in response to referenced filing.
Very truly yours, cd.G. W W. G. Counsil By:
D. R. Woodlan Docket Licensing Manager WJH/mlh Enclosure c-Mr. W. M. Lambe, NRR - Planning and Program Analysis Staf f Mr. R. D. Martin, Region IV Resident Inspectors, CPSES (3)
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0810250206 881021 PDR N ADOCM 05000445 PNU
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Enclosure to TXX-88751 October 21, 1988 UNITED STATES OF AMERICA BEFORE THE NUCLEAR REGULATORY COMMISSION TEXAS UTILITIES ELECTRIC ) -
Company, et. al. ) Docket 50-445 A 50-446A Comanche Peak Steam Electric )
Station, Units 1 and 2 )
TU Electric Response to Comments of Cap Rock Electric Cooperative, Inc.
In Augtst,1988 Cap Rock Electric Cooperative Inc. (Cap Rock) filed comments with this Commission in which it claimed that there have been "significant changes in the activities of TUEC"(TU Electric)"which are relevant to whether antitrust review is required at the licensing stage."
Even if taken as true, which they are not, Cap Rock's comments raise no antitrust issue and constitute, at best, a dissatisf action with what it perceives may be TU Electric's wholesale rate (an issue which is or' no concern to this Commission) after the licensing of Comanche Peak Steam Electric Station (CPSES). Cap Rock's claim that TU Electric has denied it access to less costly bulk power sources, while at the same time insisting that Cap Rock purchase all of its regairements from TU Electric, that TU Electric has instituted and maintains a "prico squeeze" significantly harmingits wholesalo customers, and that TU Electric has somehow violated the CPSES License Conditions (License Conditions) by its action in seeking or accapting new retail load in certain dually certified service areas, constitutes nothing more than an attempt on its part, and on the part of Panda Energy Corporation (Panda), to use this Commission's CPSES licensing proceeding to obtain preferential treatment.
Cap Rock is a full requirements customer of TU Electric. Cap Rock's, contract with TU Electric (Attachment 1) provides that
. . . Company (TU Electric]. . . agrees to sell and deliver to Consumer [ Cap Rock], and Consumer agrees to purchase and receive fmm Company, all the electric power and energy that Consumer may require during the term of this agreement for the operation of those portions of its electric system that are or shall be connected to the points of delivery pmvided for herein. Consumer further agrees that none of said power and energy delivered by Company shall be sold to others for resale without express written consent of Company.
The expiration date of the Cap Rock contract is three years imm the time Cap Rock gives the required notice, which to this point in time it has declined to do.
Cap Rock asks this Commission to interfere with the enforcement of this valid contract by permitting Cap Rock to seek power and energy from other sources while continuing to demand the obligation of providing full requirements service by TU Electric under the power purchase agreement, or perhaps by seeking the premature termination of that agreement. Neither the License Conditions nor the antitrust laws require TU Electric to cancel, change or otherwise amend Cap Rock's power purchase agreement. Thus, all of the complaints regarding Cap Rock's inability to purchase power or energy from other sources, including firm capacity fmm Panda and economy energy from llouston Lighting & Power Company,in violation of that agreement are without any merit. Moreover, since all of the rates complained of by Cap Rock are set by a single regulatory authority, namely, the Public Utility Commission of Texas (PUCT), its "price squeeze" argument mtat also fall. Cap Rock is free at any time to seek to change any rate 2-
or rate design previously approved by the PUCT.O -
Cap Rock is also dernanding to know the level of rates and charges which may be imposed in the future for electric service offered by TU Electric to its wholesale customers and the result of future electric planning activities within the Electric Reliability Council of Texas (ERCOT), neither of which is under TU Electric's control. TU Electric intends to offer electric service to all of its customers at retail or at wholesale in accordance with the rates and charges established by the PUCT and to engage in utitity planning activities through ERCOT on a non-discriminatory basis. Cap Rock is in as good a position as TU Electric in speculating what rates and charges the PUCT may establish in the future, and, as a member of ERCOT, Cap Rock has access to its planning information. This, together with the data already on file at the PUCT and the Federal Energy Regulatory Commission and that furnished to Cap Rock by TU Electric, should enable Cap Rock to make its own decision with respect to its future power and energy resources. TU Electric does not intend to make economic decisiom for Cap Rock, plan its future energy resources, provide energy banking or similar services demanded by Cap Rock or to render any electric service which imposes a disproportionate share of TU Electric's costs on its customers for the
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1/ Indeco, on July 29,1988, even prior to the filing of its comments with this Commissioc (but without advising it of having done so), Cap Rock filed an application with the PUCT for a change in its rates (Attachment 2). TU Electric has no intention of opposing any change in Cap Rock's rates or rate structure.
benefit of Panda and Cap Rock.- As indicated, when and if Cap Rock ceases to become a full mquirements customer of TU Electric, TU Electric will treat Cap Rock the same as all other similarly situated entitles and, to the extent then being offered, will schedule short-term economy energy from third-party suppliers on Cap Rock's behalf under terms which will fully compensate TU Electric for it's costs plus a reasonable return on its investment.3I 2/
~ Since Cap Rock does not want to install the necessary telemetry equipment at its variota points of delivery in order to permit it to take delivery of wheeled power or to acquire the capability to dispatch such power,it would have TU Electric purchase power and energy generated by third parties (by crediting such power and energy to its account) to serve a part of its load, while serving the remainder of its load with power and energy supplied by TU Electric on demand. Thus, Cap Rock is insi3 ting that it is entitled to "cherry pick" at rando n for a part of its load requirement while relying on TU Electric to serve the balance of its load on demand. In this specific instance, it would have Panda supply its base load requirements while seeking to require TU Electric to supply all or a part of its peaking power at the wholesale rate. In this manner, Cap Rock would stratify its load by requiring TU Electric to stoply Cap Rock's incremental energy needs (whatever that might be) at TU Electric's average fuel cost. TU Electric '
has no intention of engaging in eny such transaction even if it were to assume that Cap Rock's full requirements contract had come to an end.
Upon termination of its power purchase agreement with TU Electric, Cep Rock can purchase part of its total requirements (both at peak and off-peak) fmm TU Elcotric at rates established by the PUCT and part of its total requirements (both at peak and off-peak)from others at whatever prices it can obtain; howcVer, Cap Rock is not entitled to "cherry pick" its sources by arbitrarily determining the time of day and the extent to which it wishe to buy its regJirements fmm TU Electric and the time of day and the extent to which it wishes to buy its requirements from othem. To do otherwise would impose a disproportionate share of TU Electric's fuel costs on TU Electric's
{ customers. TU Electric is not required to subsidize Cap Rock or Panda. On '
the other hand, should Cap Rock feel otherwise, it is the DUCT, not the l 3
NRC, where it should vent its complaint. Upon termination of the Cap Rock ;
power stpply agreement, TU Electric will continue to render non- I discriminatory service to Cap Rock in accordance with the requirements of l the PUCT and the License Conditions. See also letter, dated October 20, 1988, from Darrell Bevelhymer of TU Elcetric to Steven E. Collier of C. fl.
Guemsey & Company (Attachment 3).
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- TU Electric is currently scheduling short-term economy energy for Tex-La Electric Cooperative of Texas, Inc. and Rayburn Country Electrio Cooperative, Inc. pursuant to an agreement cancellable by TU Electric on 30 days' notice. Neither of thme cooperatives is an all requirements customer of TU Electric, a 20-year power purchase agreement with each having
] expired in 1987.
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l A more meaningful discussion of Cap Rock's comments $ regarding its effort to purchase power and energy from Panda requires a perspective not apparent on the f ace of its comments. TU Electric is one of the largest purchasers ;
of cogenerated power and energy in the country and the largest purchaser of cogeneration in Texas by a sizable factor. TU Electric has firm contracts with
- cogenerators for 2,000 MW. In 1987, cogeneration provided for approximately 10%
of TU Electric's load during its summer peak demand. Panda, beir.g noncompetitive a
with other cogenerators and having been unsuccessfulin its efforts to sell capacity j to TU Electric,is merely attempting to use Cap Rock to force TU Electric to do indirectly what it could not do directly. Panda's strategy was discussed in a recent -
issue of the Dallas Business Journal
. Panda's inability to sell power to the most likely buyer, TU ,
Electric, forced (Dob] Carter (Chief Executive Officer of Pandal to try a new strategy, one that may pay big dividends.
In May of 1988, Panda announced a 15-year agreement to sell strpim power from the Oscar Mayer facility to Cap Rock Electric Cooperative. * *
- A Panda spokesman said Cap Rock is the first rural electric coop. . . in Texas, and perhaps in the nation to buy power directly from a cogenerator.
f/ Cap Rock and Panda are represented by the same consultant, despite the conflict inherent in such representation. Mr. Steven Collier is Cap Rock's .
consultant in negotiating the Panda agreement. Mr. Collier is also a '
partner of C. !!. Guermey & Company. Mr. Collier has also been identified -
by Panda as its agent in all cogeneration proposals which Panda has made to l TU Electric since 1985. These f acts give rise to the question of whose Interests are sought to be protected -- Panda's or Cap Rock's? In any case,
- neither raises any antitrust concerns.
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See "Panda Energy Looks to Cogeneration to Fuel Future Growth," Dallas Business Journal, September 26,1988 (Attachment 4). See also letter, dated March 2,1987, ,
from Panda to TU Electric (Attachment 5). Thus, the real issue here is whether the Nuclear Regulatory Commission can be tsed to aid in achieving the profit-centered goals of Panda. Obviously, the answer to that ouestion is no. -
in Texas, utilities, subject to PUCT oversight, are permitted to negotiate ;
both price and non-price factors with cogenerators and other Qualifying Facilities '
(QF's) to obtain the most favorable pn,posals available in the marketplace in the interest of the utilities' customers. Utilities are not required to contract with a i
particular QF for capacity purchases if capacity is not needed or if needed j capacity can be obtained from another QF at lower costs or upon more favorable terms. TU Electric has, over a period of several years, negotiated with Panda on several cogeneration options. Panda simply has not been competitive with other l
offers received by TU Electric (See Attachments 5, 6, and 7.) Af ter having been turned down the last time, Panda filed a petition with the PUCT in which it asked i the PUCT to order TU Electric to purchase cogeneration from Panda's Rock-Tenn ,
project. The PUCT dismissed the petition (Attachment 8). After that loss, TU ;
Electric was informed of Panda's intent to seek the aid of this Commisdon and ,
4, anyone else who it perceived might pressure TU Electric into a preferential power i
l purchase arrangement for the purpose of galning an unfair advantage in the salo of t
its power. For example, see Cap Rock's testimony (written and presented by i Panda's Steve Collier) filed on August 8,1988, with the Select Committee on a i
Statewide Energy Plan (Attachment 9). One need not look far to see that such a
comments are a near mirror image of its comments here and expose Panda as the real force behind Cap Rock's effort 1.o avoid its contractual obligations in order to !
force the sale of otherwise noncompetitive cogenerated power.
I TV Electric has treated Cap Rock eminently fair. A brief summary of the material developments of TU Electric's discussons with Cap Rock may be helpfuh
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On February 27,1987, Cap Rock wrote TU Electric (Attachment 10) requestinginformation related to wheel!ng of power and energy from cogeneration faellities in the Dallas and Stanton, Texas, areas. TU Electric responded on March 27,1987 (Attachment 11), describing the need for additional Information and pointing out that the current (
t wholesale power purchase agreement does not permit the transaction Cap RTk was considering. A draf t agreement similar to that already executed with Texas-New Mexico Power Company (TNP) was .for- ;
warded as a possible framework for a successor agreement. A copy ,,
of the appropnate wheeling tariff was also supplied and certain 4 technicalissues were discussed with possible solutions noted, a
On April 15,1987, a meeting was held between TU Electric and Cap Rock to further discuss facilitating wheeling of the cogeneration s@ ply. At that time Cap Rock noted that such s@ ply was being proposed by Panda. TU Electric again pointed out that Cap Rock's full reglirements contract would have to be replaced (Attachment 12).
On May 26,1987 (Attachment 13), Cap Rock noted in a conversation with TU Electric that Cap Rock was "in the process of crunching some more numbers" on the cogeneration options and would probably be coming back in the near future to discuss wheeling. The attachment also notes that the Cap Rock Manager had resigned. !
j On October 29, 1987, Mr. David Pruitt, Cap Rock's now General ;
Manager, in a letter to Mr. Jerry Farrington, Chairman and Chief I l
Executive of Texas Utilitis Company (Attachment 14), noted that "only recently" had Cap Rock entered into a letter contract with a cogenerator utilizing a Dallas area host, presumably the Panda Rock-Tenn facility, lie also noted that Cap Rock would formally in 7 l l
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the near future give notice of termination of its wholesale power contract. No such notice has yet been given.
By letter dated November 11,1987 (Attachment 15), TU Electric forwarded to Cap Rock, pursuant to Mr. Pruitt's request, the same information that had been furnished on March 27,1987 to Cap Rock's-former General Manager. In that letter TU Electric acknowledged Cap Rock's stated intent to Mr. Farrington to formally terminate its current contract as a full requirements customer and also agreed to a meeting on Cap Rock's cogeneration plan.
By the spring of 1988, the cooperetive and businesslike process l between Cap Rock and TU Electric turned into an adversarial, ,
posturing attitude on the part of Cap Rock. By letter dated April 8, 1988 (Attachment 16), Mr. David Pruitt, General Manager of Cap Rock, began to ignore the provisions of Cap Rock's contract with TU Electric and TU Electric's offer to renegotiate that contract to convert Cap flock to a partial regairements status. Without any mention of the provisions and effect of Cap Rock 1 current contract with TU Electric, he asserted, among other things, Cap Rock's "rights" to "generate, manufacture, purchase, acquire, transmit, distribute, ftrnish, sell and dispose of such electricity."
A meeting was held on Augtst 2,1988, between TU Electric and Cap f Rock, including Steven Collier of C.11. Guernsey & Company. In this ,
meeting, as in a meeting following the April 8 letter, Cap Rock demanded proposals and projectiom for future rates and charges. ,
Two days af ter the foregoing meeting an inaccurate posturing letter (Attachment 17) was deilvered to TU Electric and three days later,
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without waiting for a reply, Cap Rock filed its comments with this Commission.
Contemporaneously with the filing of this reply, TU Elee:rie responded to Cap Rock's letter of August 4,1988 (Attachment 3).
4 Cap Rock's complaints do not relate to the satisfaction of Cap Rock's futwe energy needs; the real issue is Panda. Ilaving failed to compete in the market for sale of cogeneration to TU Electric, Panda, as previously noted, has turned its attention to a TU Electric customer who not only is unt, alc te take delivery of the power, but is prohibited fmm &f ng so by a valid entract.
Then, Cap Rock alleges that TU Electric is subjecting its own wholesale cooperative customers, including Cap Rock, to a "prico squeeze." The claim made h the.t the primary catse of this "squeeze" is the impact of summer-wintes differentiated rates for TU Electric's retail customers which are not also available to wholesale customers. As'de from the fact that this is not true, the dear implication of Cap Rock's comments is that TU Electric is free to discriminate in pricing and the application of pricing to customer classes. In filing for any rate changes, TU Electric -- as well as all other Texas jurisdictional utilities -- mtst follow very precise and regulated procesics. All aspects of rato application, i.e.,
rate levels, rato classes, cost of service studim, rate designs, etc., are reviewed by the PUCT staff and intervenors, are subjected to extensive and intensivo public hearing and are ultimately determined by the PUCT. Interested partics are pmvided full opportunity to intervono arid peticipato in the hearing process and, if disse ^isfied with the PUCT's determination, may appeal to the state com or instituto a separato proceeding at a later date. Both Cap Rock's rates anu (U l i
Electric's rates are set by a single regulatory agency, thus msking the traditional j "prico squeeze" cases inapplicable. As indicated earlier, Cap Rock now seeks, in '
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the proper forum, to change its rate design.N Cap Rock's application and the I respome (Attachment 18) should be sufficient to lay to rest completely this price i
s@eeze "straw man" invented by Cao Rock and Panda.
Cap Rock also complains to this Commission about TU Electric's advertising l In certain dually certified areas of its service territory (which, at this time, does not include any Cap Rock certified area). While Cap Rock claims that it does not i
seek protection from such action by TU Electric or allege that any such action or ,
the acceptance of any new load by TU Electric is unfair, the clear implication is s
that TU 81ectric should declin: to serve new customers in dually certified areas or at least agree not to advertise its services. To refme such service would violate the law and to agree (directly or indirectly) not to seek load in such areas would be of more than passinginterest to others, including any affected retall customer and this Commission. ,
In summary, there clearly is no issue in Cap Rock's complaint of jtris-dictional interest to this Commission. Cap Rock seeks exactly what it denics seeking -- special treatment; i.e., revision or termination of a lawful contract,
! obtaining some sort of rate advantage and the elimination of any choice electric i customers may have to take service from TU Electric in areas dually certified to f it, capped off by a demand to permit this cooperative to "cherry pick" for its J energy regelrements, the resulting cost for which is passed on to other TU Electric !
customers.
- TU Electric believes it has repeatedly demonstrated full compliance with l the License Conditions and has furthar demonstrated that Cap Rock's comments, j when put into proper perspective, add stoport, rather than q1cstion, to its 5/ See Petition of Cap Rock Electric Coolwrative, Inc. to Change General i Service Rato, Statement of Intent and Direct Testimonics of David Pruitt and Carl N. Stover, Jr., filed September 6,1988, with the Public Utility Commission of Texas, Docket No. 8283 (Attachment 2).
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treatment of that customer.
Therefore, TU Electric asks this Commission to reject Cap Rock's com-plaints and, by considering its long history of compliance to both the letter and spirit of the CPSES License Conditions, to close the current ing21ry.
Dated: Oc? %r 21,1988 e
ATTAcilMENT 1 i
-AttachmentItoTXX-88I51 '(
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,0ctober 21, 1988 I
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L AGRIDG3T PGt PURCIAST. OF POWER PRG(
TEXAS 112C"JtIC EERVI7 COMPANT l PGl RESA12 Nr CAP BOCK ElacTR2C 000PERAZITE, 15:.
i Parties i 1. THIS AGREEMLYr ande and entered into this > day of / ,
1963, by and between EXAS IIZC2IC SERVZCE COMPANY, hereinafte ferred to as "Compat/," a corporation organized and existing under and by virtue of the laws of the Sta*.e of Texas, and _._ CAP totX EIEC1F.1C COWERATITE, II:. __,
hereinatter referred to as "Consumer,". a corporation organized and existing under !
t and by virtue of the laws of the State of Texas.
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VITNESSETH:
2 hat in consideration of the mutual covenants and agreement herein contained, ;
) the parties hereto contract and agree with each other as follovst
- Kamely,
- 2. Ccapany agrees to sell and deliver to Consumer, and Consumer agrees to purchase.and receive Jrom Company, all the electric power and anergy that j Consumer any*Teiguire during the tars of this agreement for the operation of i
i those portf6E of its slectric systen that are or shall be contected to the 1 '
] ;oints of delivery provided for herein. Consimer further agrees that none of said power and energy delivea.d by Company shall be sold to othere for 1
resale without express written consent of Company.
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l Points of Delivery b
3 'ihe electric power and energy to be supplied by Capany hereundee shall be alternating current of approximately sixty (60) eycles por second and shall be delivered at the Points of Delivery shown in "Exhibit A" attached hereto and made a part of this agreement.
It is understood and agreed by the parties hereto that this agreement ,
contemplates supplying a continuing service, and not the sale of e. Product or consedity. t l
Physical Seps. ration of Facilities I
- 4. Consumer agrees that it vill operate its system so that no portion i 1 .
! of its system being supplied through any particular connection vill at any time be electricany interconnected or operated in parallel with any part i or parts of its distribution system being supplied through other connections i
O with Ccarpasy or any other supplier of electric energy.
Equiinnent j'. Consumer shal.1 own and maintain the necessary switching and I
protective equ1 Ment which may be reasonably necessary to enable Consmer l to take and use the electric power and energy hereundar and to protect the system of Company. Capany shal.1 instau, own and maintain the necessary J
aeters,and metering equipent and make all final connections to its systssa at the Points of Delivery. Consumer agrees to construct its distribution lines in accordance with specifications at least equal to those providad by the National Electric Sv .tv Code of the United States Bu.reau of Standards.
1 A suitable Incation for ne'i.ers and metering equipment shall be provided by l
,- Consumer at the Poists of Metering. *
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Pac 3 Fayment of 3111s
- 6. Consumer hereby agrees to pay Courpny monthly, for each month W.ng I
' 1 the ters of this agreement and every nneval thereof, for electric power and !
l energy delivered to Censumer by Capacy at the rates and under the terms and I l
conditions set forth in the schedule at+. ached hereto, marked "Exhibit 3" and made a part of this agreement by such attachment and this reference thereto.
Each Point of Delivery v'in be metend and bil. led separately.
Ccur;4ny may require, as security to guarantee the faithful performance by Consw er of an its obligations hereunder, and particularly the payment of au bi.us for electric power and energy delivend pursuant to the terms hereof, a deposit in an amount equivalent to Company's estimate of two (2) sonths' bius, except that such deposit aban not be requested unless and until Consumer shan have first defaulted in payment of a bill.
C Metering of Service 7 mters shan be read by s. npresentative of Conf =y at regular monthly intervals and as nearly as practical on the last day of each calendar acuth, and bills for electric power and energy fumished hereundar shan be I
rendered by capa.y to Consu=ar monthly. Payment for an electric power and l 1
energy which shan be delivered under the provisions of this agreement abs 11 be made at the office of Capany in Fort Worth, State of Texas, vithin !
I fi.fteen (15) days e fter the blu therefor shall have been mailed to Consumer.
If such due date faus on a Sunday or holiday, the bin shan be due on the next day folleving :meh Sunday or holiday.
The electric power (Contract Kv) shau ?>e dr. ermined by curve-drawing vattasters or other type of recordi.ng vattasters acceptable to both parties j hereto, and the amount of electric energy supp1ted to Consumer shall be ,
deternised by means of integrating vatthour meters of standard approved type,
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Page 4 Pult*1l ha Terms of Agreeuwnt r '
L 8. Whenever Consmer has violated any of the terms of this agrensent or has failed to pay any bill accruing under %is agreessent on or before the fifteenth day after the due date of such billing, Cearpany may discontinue the supply of electric power and energy, provided at least fifteen days' vritten notice has been given of such intention to discontinue the services, unless Consumer shall correct such violation or shall pay such bill before the expiration of such fifteen days' notice.
Duri.ng any such default, and after ninety (90) days' notic 1, Courpany may, at its option, by written notice to Consumer, terminate, itJ obligations hereunder, unless during such ninety (90) day period Consumer shall have cured such default or defaults.
Meter Adjustments
- i O 9 Each meter used in determining the Contract Dr, or sacunt of electric
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1 energy supplied hereunder shall, by comparison with accurate standards, be tested and calibrated by Cem at intervals et not to exceed twelve (12) month;. If a meter shall be found incorrect or inaccurate, it shall be l
restored to an accurate condition or a new meter shall be substituted. l Consumer shall have the 'right to request that a specisa meter test be ,
d made at may time. If any test made at Consmer's request discloses that the meter teste?. is registering correctly, or within 2% of normal, Consu:.ar shall
- bear the expense of such test. The expense of all other tests shall be borne
- by Ocsp w , -
i Tae result of all such tests sad c-librations shall be open to e_=4-= tion by Censu=er, and a report of every test shall be furnished promptly to Consumer.
I Aty meter tested and focad to be not sore than 2% above or below normal shall D
be wonato.ered to be correct And accurate insofs.r sa correction of billing is l
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I r- concerned. In the 7 tent that any routine or special test of any causpany b meter shows everage redistration of su'ch aster to be in error by acre than the limit set forth above, then all bina affected by such error of regis.
tration and which ven rendered for service supplied during the previous thne acnths vi.M be suitably adjusted, pravided, however, that such adjustaant shall i'
not be carried back for mon than one hal.f of the alapsed time since the last test.
For any period that a meter is found to have failed to register, it shall ,
{ be assumed that the Contract Ev established, or electric energy dalivend, as the case may be, during said period is the same as that for a period of like
] I operatier.3 to be agreed upon by the parties hereto, during which such meter I
was in service and operating.
g Right of Access 1
] 10. Each party vill give all necessary permission to the other to enable the agents of the other party to carry out this agreement, and vin give the 1 i other the right of their duly authorized agents and employees to enter the '
premises of the other at all nasonable times for the purposes of nading
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or checking meters; for inspecting, testing, repairing, reneving or exchanging i
any or 111 of its equijument which may be located on the property of the other; i
or performing any other work incident to rsadering the service hereby contracted 1
4 i for.
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It is agreed, havever, that neither party hereto assumes the duty of ,
inspecting the viring or apparatus of the other and shall act be responsible thenfor.
- j. - Continuity of Service M. In the event Ca ey is delayed in the delivery of electfic power
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Page 6 0v beyond its control, the time fixed for the comunencannent of delivery of electric power and energy hereunder shall be correspondingly extended. Courpany shall not be liable to Consamer hereunder, nor shall Consumer be liable to Courpany hereunder, by reason of failure of Ccarpany to deliver, or Consumer to receive, electric pover and energy as the result of fire, strike, riot, explosion, ficod, accident, breakdsvn, act of God or the public enemy, or any other acts beyond the control of the party affected, it being the intention of each party to relieve the other of the obligation to supply electric power and energy or to receive or pay for electric power and energy when, as a result of any of the above mentioned causes, either party may be unable to deliver, or use in whole or in part the electric power and energy herein contracted to be delivend or received. Both parties shall be prcmpt and diligent in removing and over-ccurJ.ng the cause or cause,s of said interruption, but nothing herein contained
] shall be construed as per:r.itting Company to refuse to deliver, or Consumer to i l
i
) refuse to receive, electric power and energy after the cause of interruption !
has been re. moved.
Cmpa::y does not guarantee that the supply of electric power and energy hereeder vill be free frces interruption, sad it is agreed that interruption of Ccurpany's service, occasioned by any of the causes mentioned in the fort- i 1
l going paragraph, shall not constitute a breach of this agreement on the part of Ccuspany, and Cour;a::y shall not be liable to Consumer or to any of Consumer's customers ter daages resulting theretrca. In the event of interzuytion to service, Cca:pany vill restore the service as soon as it can reasonably do so, I
I and vill at all times exeri itself toward the e'nd of supplying as nearly constant service as is reasonably practicable. In case of impaired or defective
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V service Consumer shall issr.ediately give notice to the nes.res+, office of Ces pa=y by telephone, coonrning such notice 1.n yriting.
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Interstate Commeroe b *
.2. The parties hereto agree that no power or energy transmitted, purchased, sold, delivered or received hereunder by either party hereto, is to be trans=1sted, ;urchased, sold, delivered or received in interstate -
comer.arce and the parties hereto agrec at any time, and frcan time to time, to l open au the line connections and switches necessary to prevent such trans. !
l mission or delivery by either party to the other in interstate ccumerce. The i
parties further agree that no power or anergy win be delivered by either of then to the other under this agreement except power and energy genersted within the State of Texas, and that neither party viu tremmit any power
- or energy delivered to it hereunder beyond the limits of the State of Texas 1
or seu any such pcver or energy for transmission or consumption beyond the
- limits of the state.
Providad, however, that in the event the Federal Power Commission grants an exasgtion to the parties hereto frca the application of the Fedarsi Power Act under the rules and regulation of said Cmaission, than and in such event the provisions of this Section 12 shall not 6pply during the period of such !
j exe=ption to the extent that such exemption applies.
l 4 ;
Liability for Dame J
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13 The electric power and energy supplied under this agreement is j supplied upon the expnes condition that after it passes the meterizy; equi;aent of Company, or other Point of Delivery, it becomes the responsi.
1 bility of Consumer, and Courpany shau not, in any event, be liable for loss or dama6e to any person or property whatsoever resulting directly or inii-i rectly frena the use, misuse, or pnsence of the said electric power and l T i
Y , energy on Consuser's premises, or elsevhert, after it passes the Point of 1 l Delivery to Consuaar, except where such loss or dar. age shall be shown to have been ocean toned by the neslizence cf Ccuanyj
- l l
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m Pac 8 Tem of Agressent l
,, N l 1h. 21s apeement shall become effect1ye at each Point of Delivery on the first regular monthly meter reeding date after approval by the Administrator of the Rural Electrification Administration of the United States of America, and i suNect to the provisions of Section 15. hereof shall continue in effect for a i period of 5 years thereafter. % /Unless written notice is given by either party I3 hert:to to the other net less than one year before the expiration of this spee- /D, ment, it shall be continued thereafter until cancelled by either party hereto giving to the iM.ur one (1) year's cancellation notice in writingh i 1 Ap;roval 15 This agreement vill not be binding on either party unless it is approved by the Administrator of the Rural Electrification Administration within three months after July 18 , 1963 s It is further understood and agreed that no promises, representations, or d speements made by Company's, officials or agents shall be binding on Company, l except as the same may be set forth herein, and the terza of this agreement shall bind and inure to the benefits of the successors or assigns of the parties ,
hereto, but neither Cwnsumer nor Consumer's assigr.s shall assign their right hereunder without the written consent of Company, except that Consumer may assign to the United States Govermient. No modification of any provision of this agres=ent shall be binding unless reduced to writing and signed by the f
)
i parties hereto, and e dification of acy one or more provisions of this agree- l 1
j ment by autual consent of the parties hereto shall not affect any of the '
re=aining provisions hereof not so modified.
If any portion of this agreement is changed or invalidated by any court or other goverr.nental body having cozytent jurisdiction, any such change or invalidati; ,
so ordered shall affect only that portion of this agreement specifically ordered to be changed or invalidated, all other portions remaining in full force and effect.
l f Qevent, however, tM*" for :lectru ::,11e0 ;--vid*4 *Sr herein in
- action of acy court or cDA.r--tu b_ady l I
r
rage 9
(.
( ving jurisdiction in the yrsuaises, Company v1.H give itten not,1ce within freus the date Capany n advised of such action and Consu=er sna u have the to temina te this agreement by giving Compasy written n
- hin 30 days from the date of Cm'parq . '
.T it t er re* * *Qo
..s um e r .
IN hTI.NT,SS VEDIOT, the parties hereto have caused this instrument to be i executed by their respective authorised officia,1s.
CAP 20 2 ElactP.IC C00rERAT1TE, Esc.
Attest: -
By
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$2/ - / Title W' -.#
Secretary y' t
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' TEXAS ZI2.C':RIC SE4VICE CCHP e
Attest: By -m
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- h. W . Us Prestynt g ,gg,5ecretary
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i Aom.ee at to we II* NAUII. 'M AV:M! $ $*.*,1g tQg;)q l
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Snaes h* ansvise W i PQIWC W ELITERT W ELECS2C ERTICE t's CAlr AOCK ELE.W.C 000FmaggyL, IK .
._ tyre er servLee Appraman te h Br i
Point of Deliver; g Delts, et 7twer 1
i the fa.:te. hidland Point &a the 21/4 of Cectico 26,11ock 39, .
i h* P.' C . . I' .::s e,* , tYP P -0, 4
Ed.lat4 Cut; , tu.res 3 M ,b70 2)CD tbc Clave amit head Paint in the m.' 1. L of C4 etina E, ,
i Rbet 3'., Te E Co. su:wy, i
tu 1. r. Ed.ima County, Texas 3 12,47C 8500 i
h h . heart tilani hint 1:- '
, s2r. E 1 4 o. Scctiac 94, !
' 31ocr. 3), tT&P PA Co. Survey, -
t'..P 1-C, 11diarsi Ca a v , 9mmes 3 12,470 SXO i
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the &auth Ctant.sc Point la !
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' the 21/4 or fectico 27, h bcu 3G, T M N. Co. Survey, I r.T 14, leutin County, Saans 3 12,b70 63c0 1
the 5.r th ttast.s. Potat in W
' n. 1/k a 1+:t2:. IC, Abct 30, i
tu N.c.,.ttvey,tw 1-c, t
- m.-tts cer.; sty, M ac 3 12,47o b3co 1 i
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the Ea:%' west 9tanton Point la I l the a 1/4 or section 30, ,
i Ebck 36, TtP E Co. Survey, j TVF 14, mutta County, 9aans 31,600 j
3 4000 Ibe South Acherly Point la I the SW 1/h of Section 13, I
Riock 3k, TM E Co. Survur,
- h7 34, A-tin Comty, 9saas 3 12,470 3500 1
! the Cauble School Point la the i
EV 1/k of Section 7, R1oet 33, TnP u Co. urvey, 5714, f h -c Cou.ty, te m
- 3 12,b70 350 D
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M t A* w a tyme er suretae h int or Delt w -- g hate et pm.er Ibc lames 4. 54A.sy hint Lc
{ th. a 1/4 or section so,
- i sisch 33. TE 2 Co. aurwy, i Tb71-r,, Amrt cauny, haec 3 M ,h70 1500
/ h Leo byrings Point in I
th. m. 1/4 or see1. ton 45, Riacc 31, MP M Co. 6urwy, i TVP 14, Eard Cmmy, taans 3 M,43 2000 Ibt. M;d2.1.r! hint in ttv. l
- / a 1/4 c' scstis
- r;, miock 31, nP 4 Cc. turvey, IVP 54, i
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, Uptx. cxnt; , te ae 3 u ,470 apoo
! nr. Ur.r. ca.:.t. bim in the j r f a ' 1ll+ of tec t ix. k , L . L. & M 4
Su vey, Ustr. Caucty, tem 1 7,acc 1C l
) the on:4es City Point la Ge !
l south 1/4 or section 30, 31ock 34, s
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tvP 4 south, MP E Co. harvey, j n' m 2 county, Tunas 3 M ,470 e500 4
the Ear 2.ect Midland Point in the j t r 1/4 at h,Atac 27, alacA 40, .
14-1-I, TV E ca. turwy, Midwe. cau.v.y, tu:ac 3 u ,h70 1500
.l e CW:cx!. CoAny Point in Oc
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11 1;'k of mtLor.14, & lor.k 36, i T-5-r ThP M Co. Durvey, Slassesek j Cou:ny, Tcaec 3 M,470 h l h es. nan point la the center er
] c th: Eauth Edge of asetian St,
- & lock 37, T-@ sorth, Mar't,La l C*unty, f*ana 3 32,c00 3 coo j
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MIAS II2C"JLIC SDtVICI C;MPAIT g RAR IRC VB012SA12 SERVICE TO NON-PROTIT RtRAL COOPERAMTE ASSOCI)JICES APFUCATION Applicable to electric service for redistribution and resale by Rural Cooperative Associations to their ultimate consumers.
Senice at each point of delivery is setered and b1Med separately.
Not applicable to auxiliary, standby or bres'.down service.
Senice is single or three phs.se, approximately 60 <:ycles, and as any one J
of Capany's standard pr?. mary voltsges.
$137 50 for first 50 Contract kv, or less,
$2 75 per kv for an addittocal Contract kv, 8 5 mills per ).vh for all kvb Mini =um Bill: The Contract kv charge but not le's s than $137 50.
Plus or minus an snount equivalent to 0.003d per kvb for each 0.25# by which the average cost of fuel used, deliverea at Co=pany's generating stations, during the calendar month ngxt wheny preceding the current biMiss period, shan have exceeded 25;Op or shall have been less than 19.Op per 1,000,000 Etu; plus an amount equiva. lent to the proportionate part of any new tax, or increased rate of tax, or governmental i= post-tion or charge (except state, county, city and special district ad valorem taxes and any taxes on met income) levied or assessed against the Company or upon its electric business, as the result of any any ;
- or smended laws or ordheces, after January 1,1963 Company at its option may forego the application of any adjustment if such adjustment l vould result in an increase is the net monthly biM; however, failure l of Co=pany to apply any adjust =ent shau not constitute a vaiver of 1 Cc=pany's right, from time to time or at any time, to make any adJcat-ment in whole or in part, in any subsequent current net monthly bill that may be applicable to such bin under the provisions of the fore-going adjustaants.
C0!CRACT XW l
Che average kv rupplied during the 15-minute period of maximum use during l
- the month but not less than 50 kv. )
PAYE.Y:'
l 31Ms are due when rendered, and bece=e past due if not paid within 15 days
! from date of b1M . When service is discontinued on account of non-pay =ent of bills, as additional charge of $5 00 vin be =ade before service is restored. The Co=pany may refuse to serve anyone who is in debt to the Cc=pany.
r Q NOTICZ This established rate is subject to any chssge authori:ed by law.
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Tmm ELECTRIO SERVICE COMPANY
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Post WonTun, Tactse !
En t , 1,*Q .
1 Cag. Each Llectru Co }erativt, Inc.
9%ecr%1r., teano i
Gentlemen This letter, executed s1=ultaneously with that certain agreement with you, dated 7 *2 , 1963, covering electric service for resale is to l supple =ent and modi.ty said agree =ent to the extent hereinafter set fozth. '
i
- 1. As an immediate aid to the extension of the benefits of '
electric service to those rural and farm areas not yet .
receiving such service, but including those being served l at the time of the ext cution of this agreement, we agree ;
- to allev you each month during the ters of this agreement '
a discount of 55% on each monthly bill exclusive of fuel l and tax adjustments. -
l
- 2. It is understood and agreed that the Cairpany vill main- l 1
tain the same voltage regulation with respect to the i
service rendared under this agreement as it does for servie>r rendated to other similar wholesale customers
- and substantially in accordance with , system voltage regulation. i
! l
] If this is in accordance with your understanding and is acceptable to i you, please so indicate as provided belov and thus make it effective.
l Very truly yours, TEXAS IIM::RIC EERVICE CCEPA.Tf
- Accepted
- -
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,h v , 1963 4 '
- c-Fresident
! CAP MCE E12c1RIC C:ortr.AYITE, IEC.
i I Aspreved As to forg j D_/ b ?21 # : r
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- CAWTD. MA%;tt.
RAv(9 & $0AtS:sta.*31 1 r V
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ELECTRIC SECUICE l COMPART .
L
. . . E . 7. . ." .'.'.". '.'." . December 5,1972 .
Cap Rock Electric Cooperative, Inc.
Box 153 Stanton, Texas 79752 Gentlemen:
1 This letter refers to our agreement with you dated July 2,1963, as amended. ,
Effective July 1,1973, it is agreed that the following sections of said agreenent will be r.odified as follows:
Section 6 - !s modified to read:
- 6. Consumer agrees to pay Company monthly according to Rate LRC, attached hereto and made a part hereof, for each month during the tertn of this agreement, and each renewal thereof, for electric power and
, energy delivered to Consumer by Company. Each Point of Delivery will
- h. be metered and billed separately. .
j Consumer understands and agrees that said Rate LRC is subject i to change from time to time by regulatory authorities having jurisdiction i
thereof, or by Company, to such rate as may in the future be establishad for application to the class of service provided under this agreement.
)'
Company agrees that any future change in said Rate LRC will not beceme effective under this agreement until it has beccee effective under all similar agrescents with the class of service provided hereur.dct.
If any regulatory authority or other governmental body having l jurisdiction changes Rate LRC, Company agrees to give Consumer witten l , notice within 30 days from the.date Company has been advised of such ,
1 action and Consumer may cancel this agreement by giving to company written l notice of the desired cancellation date, such cancellation date to be no
- later than three years from the effective date of such '"ate change, and .
j such written notice to be given to Company within 120 days after the :
) effective date of such rate change. .
l If Company changes Rate LRC as provided herein, Company agrees to l give Consumer not less then 180 days' written' notice of the effective date
! of such change. In the event of a change by Company in Rate LRC at any tire or times during the term of this agreement Consumer may cancel this '
agreement by giving to Company written notice of the desired cancellation date, such cancellation date to be no later than three years frem the
{
{ effective date of such rate change, and such written notice to be given to Company within 120 days after the effective date of such rate change.
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- Company may require, as security to guarantee the faithful performance by Conswer of all its obligations bereunder, and parti-cularly the parent of all bills for electric power and energy l delivered pursuant to the terms hereof, a deposit in an amount <
equivalent to company's estimate of two (2) months' bills, except. '
! that such deposit shall not be requested unless and until Consumer '
shall have first defaulted in parent of a bill.
Section 14 - The second sentence is modified to read:
l t
Unless written notice is given by either party hereto to the I other not less than three years before the expiration of this agreement, it shall be continued thereafter until cancelled by either party hereto giving to the other three (3) years' cancellation notice in writing.
Section 15 - Remains the same except that the following paragraph is removed:
In the event, however, the price for electric service provided for herein is increased by the action of any court or other governmental :'
body having jurisdiction in the premises, Company will give Consumer witten notice within 30 days frcrm the date Company has been advised of l i such action and Consumer shall have the right to terminate this agreement
] by giving Company written notice within 30 days from the date of Company's :
! written notice to Consumer. , ,
l Q All other terms and conditions of the above mentioned agreement and supplements thereto remain in full force and effect except as expressly mcdified L
- in this supplemental letter.
If this is in accordance with your understanding and is acceptable to you, j please so indicate in the space provided below.
t Very truly yours, i j
TEXA5 ELECTRIC SERVICE CCMPANY l
Accepted: sy vb.e -
~
,.,., . Vice Fres14ent - Operations 1972
- CAP ROCK E!.ECTRIC COOPERATIVE, INC.
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Title *
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s t.TrACitMENT 2 1
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'c,tachment 2 to TXX-88751 O tober 21, 1980 L g
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BROWN MARONEY Rose BARBER & Ch E Arvo=~cvs A~o cov~seto=s
)b ooo ocauveve v aA ,,','... 'S 3M O' 'N i *C AUST1N, TCxAS 74Foi s.4 472-tae4 l
July 29, 1988 **"""*'*"""
479-7741 ,
Public Utility Commission '
7600 Shoal Creek Suite 400-N 5 Austin, Texas 78757
) ltcAN* N j Attn: Central Filing Clerk '
Ret Amendment to Tariff of !
Cap Rock Electric Coope ative, Inc.
l Gentlemen: i 1
five Enclosed for filing herewith please find an original and copies of a proposed amendment to i Cap Rock Cooperative, Inc., Tariff Section No. II, sheet Nos.' 2 Electric and 3.
Submitted in conjunction with and in support of the proposed !
tariff and amendment is a statement from Carl Stover regarding ;
the revenue neutrality of the proposed amendment together with l documentation supporting his position in that regard, t t
Please call if you have any questions, !
i i
Sincerely, l
)
Mic ael S. Hull MSH:vc/0662M i
l
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(APROCKELECTRICCOOPERAT!YE,h.
SECTION T1712:
Section No. 11 RATES AND CHARCES Sheet No. 2 Effective Date Revision No. 1 APPLICA31LITY:
Page 1 of 2 ALL AREAS SERVED .
202. Rate Schedules.
202.1 Ceneral Service . Rate Codes 10 and 15.
A. Availability.
General Service . Single Phase is available to Members having 50 kVA or less of installed transformer capacity in accordance with the Cooperative's Service Rules and Regulations for all domestic, farming, ranching, and public uses other than crop irrigation, and commercial uses.
B. Type of Servlee.
Single or Three Phase Service at the Cooperative's standard distribution voltages, where available.
C. Monthly Rate.
Each billing period the Member shall be obligated to pay ;
the following charges: t 5
(1) Customer Charge $8,50 per meter This charge is an availability charge f r,r providing i electric distribution service. It does not include any (
kVh; and t (2) Energy Charge May through October: $0.071 per kVh j November through April: (
First 600 kVh $0.071 per kWh N i over 600 kVh $0.044 per kVh. l l
^ 1 1
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( C SECTION TITU :
Section No. II RATES AND OLARGES Sheet No. 3 Effective Date _
Revision No. 1 APPLICA31LITY:
Page 2 og 2 ALL AREAS SER\'ED D. Minimurn Charre.
Each biling period the Member shall be obligated to pay the folloivng charges as a miniaws, whether or not any energy is actually used: .
(1) The customer charge plus $1.00 per kVA of installed transformer capacity in excess of 10 kVA; or (2) The amount stated in any agreement with the Men,be r ,
whichever is greater.
E. Billing Adjusteents.
This rate is subject to all applicable billing adjustments.
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C. H. GUEHNSEY & COMPANY Coxsnrixo Esoixerns & AncHirrets u . . . . . v. . . . . m . , e m . . . .
n a~e.......se. s,...,
Ont.4Hox4 Cary toisa.4ne a o s> G .ssis June 29. 1988 TEDERAL EXPRESS Mr. Michael Hull Brown, Maroney, Rose, Barber & Dye Suite 1300 333 Cuadalupe
- Austin, Texas 78701
SUBJECT:
Cap Rock Residentist Rate .
Dear Michael:
i Enclosed is supporting information regarding the proposed change in the Cap R'ock Ceneral Service rate applicable to the residential customers.
The purpose _of_the.chAns,a_is_to improve the concetitive relationship !
.between Cap Rock and WEC residential service. Cap Rock has found~that
[
the current residential rate is not competitive with the TUEC rate during the winter months for usage in excess of 1500 kVh. The problem occurs '
because of the WEC rate design in which TUEC offers a substantial
}
differential during the winter months for usage in excess of 600 kWh. i Cap Rock's graposed rate channe reflects the the same rate structure
=as found-in__the E EC rata _ WEC has .a customer charge and an energy .
charge during the summer months. The energy charge during the winter {
months for the first 600 kVh is exactly the same as the energy charge during the summer months. For usage f.n excess of 600 kVh, the WEC rate is approximately 2.7 cents per kVh less than the rate for the first block.
- C_ap Rock in not trv W ed uatify the_diffarantini in the winter rate -
based on cost of service; the iustification is based solely on competitive g
-D 1tsT1tions. -
~
The attachments include the following: . !
r (1) A copy of the proposed tariff. I have indicated a code "N" in the right hand column next to the rates. Whereas there is a change in the unit rate, which will cause some increases and some decreases, the overall class revenue remains the same. You might want to check and make sure this is the proper code i designation. "
t (2) Schedules A.1.0 and A.2.0 compare thJ existing WEC and Cap Rock (
rates. The comparison shows billing at different usage levels !
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_-~_____m.esco.___,
- A I --
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Mr. Michael Hull Page 2 May 29, 1988 l
j for both summer and vinter usage. For usage of 2000 kVh during the winter months, the Cap Rock rate is 18.7% greater than TUEC's, and at 3000 kVh it is 25n greater.
(3) Schedules B 1.0 and B.2.0 compare the existing TUEC and the proposed Cap Rock rate. Schedule B 2.0 shows the extent to which the competitive disadvantage is reduced for Cap Rock during the vinter months for usage above 1000 kWh. Even with this change, the Cap Rock rate is higher than TUEC's.
(4) Schedules C 1.0 and C.2.0 compare billing under the existing and proposed rates. Two different usage periods were used.
Schedule C 1.0 uses the twelve months ending. tune 1985 and is consistent with the data presented in Docket No. 6778. In that proceeding, the total revenue under the final order rates was
$7.118,020, and the total revenue under the proposed rates is
$7,113,991. When the PCRF that is common to both is subtracted, the base rate revenue under the final order rate is $7,170,)?9, and the base rate revenue under the proposed rate would be
$7,166,550. In either case, the difference is only $4,029,00 Schedule C 2.0 is a proof of revenue using data for the twelve months ending April 30, 1988. This analysis was performed to d3 tnrmine any major shifts in revenue caused by changes in usage. You will note that even with the revised usage data the gregosed rate is within $10,000 of beine revenue neutral; the
' propose 3~ rate produces revenues of $9 338 less chan the existing rate.
(5) Schedules D 1.0 and D 2.0 provide a comparison showing the change in the existing and proposed Cap Rock rates. During the summer months, the change does not have any material impaet; the billing under the proposed rates is generally within in of billing under the existing rates. There is a change during the vinter months. The billing to customers with usage in the 207' k D kVh range vill increase, whereas billin gto customers with usage in excess of 2000 kVh will decrease. The decrease occuis because of the intent to make the Cap Rock rate more competitive with the (UEC rate. All customers on the Cap Rock system with usage less than 600 kVh will pay the same rate during both the vinter and sunner months.
I hope the en21osed information is sufficient. If you require any additional data, please let me knov.
O Qm
i Mr. Michael Hull Pa r,e 3 May 29, 1988 Sincerely, C. H. CUEPSSEY & COMPANY
$- (),,fi Carl N. S tover, Jr. , P.E.
';NS/csh Enclosures cc: David Pruitt (w/ enc 1)
Steve Collier (w/eiic1) 4 0
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( ( Schedule A-1.0 TUEC RESIDENTIAL SUMMER .
First*******+ kWh/ Month eS 0415CO/kWh Minimum =S 6.00. I n c l u.i e s 00 kWh Customer Charge s 6 00 CAP ROCK EXISTING OEN SERVICE SUMMER First++****** kWh/ Month eS 070237/kWh Minimum =$ 0.50. Includes 00 kWh Customer Charge $ O. 50 COMPARISON OF RATE SCHEDULES kWh TUEC CAP ROCK INCREASE USAGE s S $ %
50 9.27 12.02 2.75 29.67 100 12.53 15.54 3.01 24.02 200 19.06 22.59 3.53 10.52 400 32.12 36.66 4.54 14.13 600 45.10 50.75 5. 57 12.33 000 50.24 64.03 6.59 11.32 1000 71.30 70.92 7.62 10.69 2000 136.60 149.33 12.73 9.32 3000 201.90 219.75 17.3* 0.04 5000 332.50 360.50 20.00 0.45 Fuel /PCA 0230000 .0001790 . S/kWh l
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( ( Schedule A-2.0 TUEC RESIDENT!AL WINTER f
First 600 kb:n/ Month ts .041500/kWh l, Over 600 kWh/ Month tt .014300/kWh i
I Minimum =S 6,00. Includes .00 kWh Customer Charge s 6.00 -
?
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CAP ROCK EXISTING GEN SEPV!CE WINTLR i
Firstes****** kWh/ Month t4 .053500/kWh i
Minimum =6 S. 50, Includes .00 kWh Customer Charge s 9. 50 1 .
I 4
COMPARISON OF RATE SCHEDULES j kWh TUEC CAP ROCK INCREASE USAGE $ $ $ %
- 50 9.27 11.23 1.96 d
21.14 100 12.53 13.93 .40
) 11.17 4
200 19.06 19.36 0.30 J
1.57 J
400 32.12 30.20 -1.92 1 -5.98 1
600 45.18 41.05 -4.13 3 -9.14 j B00 52.80 51.90 -0.90 -1.70 1
1000 60.42 62.75 2.33
- 3.86
) 2000 98.52 116.98 4 18.46 18.74 i
3000 136.62 171.22 34.60 1 25.33
] 5000 212.82 279.69 66.97 31.42 l Fuel /PCA .0230000 .0012635 . S/kWh I
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f f s A Schedule B-100 TUEC RESIDENTIAL SUMMER First******** kWh/ Month Qs .0415CO/kWh Minimum =S 6.00. Includes .00 kWh Customer Charge S 6.00 CAP ROCK PRCPOSED GEN SERVICE SUhMER First******** kWh/ Month G $ .071000/kWh Minimum *$ 8. 50. Includes .00 kWh Customer Charge
- 8. " O -
COMPARISON CF RATE SCHEDULES kWh TUEC CAP ROCK INCREASE USAGE $ $ 5 %
50 9.27 12.06 2.79 30.10 100 12.53 15,62 3.09 24.66 I
200 19.06 22.74 3.69 19.31 400 32.12 36,97 4.55 15.10 600 45.18 51. 21 6.03 13.35 000 58.24 63.44 7.20 12.36 1000 71.30 79.69 8.38 4 11.75 2000 136.60 150.06 14.26 10.44 3 COO ,,201.90 222.04 20.14 9.90 5000 332.5'O 364.40 31.90 9. 59 Fuel /PCA .0230000 .0001790 . s/kWh 4
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( Schedule 3-2.0 !
TUEC RESIDENTIAL WINTER l '
First 600 kWh/ Month tt .041500/kWh Over 600 kWh/ Month tt .014300/kWh Minimum =$ 6.00, Includes .00 kWh Customer Charge s 6.00 -
l ?
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CAP ROCK PROPOSED OEN SERVICE WINTER' i First 600 kWh/ Month tt .071000/kWh Over 600 kWh/ Month e e .044000/kWh :
Minimum =$ B. 50. Includes .00 kWh !
Customer Charge s 8.50 ?
l COMPARISON OF RATE SCHEDULES !
kWh TUEC CAP ROCK INCREASE !
USAGE s e s 's l
50 9.27 12.00 2.73 29.45 !
i t
100 12.53 15 48 2. 95 23.54 !
200 19.06 22.46 3.40 17.84 400 32.12 35.40 4.28 13.33
)
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CAP ROCK EXISTING GEN SERVICE SUMMER .
First******** kWh/ Month 8s .070237/kWh
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I Minimum =$ 8 30. Includes .00 kWh j
Customer Charge S 8. 50 I
\ , ;
CAP ROCK PROPOSED GEN SERV!CE SUMMER 1
First******** kWh/ Month 86 .071000/kWh l l
) Minimum =S 8.50. Includes .00 kWh !
) Customer Charge s 8.50 l i
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4 COMPARISON OF RAYE SCHEDULES !
l LWh EXISTING PROPOSED INCREASE l USAGE s l o s X l I
J 50 12.02 12.06 0.04 0.33 l {
- 100 15.54 14.62 0.08
' 0. 51 !
i 200 22.59 20.74 0.15 0.66
- 400 36.66 36.97 0.31 0.80 600 50.75 51. 21 0.46
] 0.91 [
BOO 64.03 65.44 0. 61 ,
- 0. 94 [
1000 78.92 79.68 0.76 i 0.96 1
) (
7000 149.33 150.86 1, 53
! 1.02 !
} 3000 219.75 222.04 2.29 1.04 .
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5000 360.58 364.40 3.82 1.06 !
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i CAP ROCK EXISTING CEN SERVICE WINTER L First******** kWh/ Month tS .055500/kWh i i
1 Minimum =9 8. 50, Includes . 00 kWh Customer Charge $ B. 50 CAP ROCK PROPOSED GEN SCRV!CE WINTCet First 600 kWh/ Month 4 S .071000/kWh
! Over 600 kWh/ Month eS .044000/kWh 3 Minimum =S 8. 50, Includes . 00 kWh >
} Customer Charge t 8.50 '
1 . ..
COMPARISON CF RATE SCHEDULES i
'; kWh EXISTING CAP ROCK INCREASE
] USAGE s s e % ,
i q 50 11.23 12.00 0. "'7 6. .f 6 I i :
! 100 13.93 15.49 1.55 11.13
- I 200 19,36 22.46 3.10 16.01 l !
4 !
400 30.20 36.40 6.20 20 53 i (
- 600 41.05 50.35 9.30 i
22.66 t
/ t
, 000 51. 90 53.90 7.00
- 13.49 '
1000 62.75 67.45 4.70 -
7.49 l
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i 2000 116.98 110.18 -6.80 -5.81 l i
3000 171.22 152.92 -18.30 -10.69 i
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5000 279.6'# 230.39 -41. . D -14.77 r
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DOCKET No. 6283 Pj . . ', , . ,. , ? , 2 !:4 PETITION OF CAP ROCK ELECTRIC $ * " SETORE THL' !
- COOPERATIVE, INC. TO CHANGE $ PUBLIC UTILITY COMMISSION r j GENERAL SERVICE RATE $ OF TEXAS
- i t l PETITION FOR AUTHO*tITY TO CHANGE RATES [
t NOW COMES Cap Rock Electric Cooperative, Inc. ("Petitioner"),
and files this its Petition for Authority to Change its General I i Stevice and in support thereof would respectfully shew the I l following:
1 1
(
) I. !
l' Petitioner files herewith and incorporates herein for all l l
t
] purposes its Statement of Intent to change its General Service !
r 6
Rate in all areas to which it provides ele.tric utility service. !
l Petitioner hereby requests the Commission to approve implementa- t 1 -
tion of the proposed change in all areas not within the incor-porated limits of a municipality. Jurisdiction of the Cormission ,
l i
arises under Section 17(e) of the Public Utility Regulatory Act, i Article 1446c of the Texas Revised Civil Statutes. i 1
i '
4 II.
l
) As a result of competition with Texas Utilities Electric !
Company in dually certified areas, Petitioner's present General j l Service Rate schedule sitould be mod 1*1ed. The GeneraA Service f
j rate proposed in Petitioner's Statement of Intent are just and a 1
1 reasonable, l 4
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III.
Because i test is g or a rate slightly lower than revenue neutrt. 3
.tange and because implementation is desired l right away the '. ......i.ssion' is respectfully requested to waive any filing requirements not met by_this application.
IV.
Inquiries concerning this Petition for Authority to Change Rates nay be directed to the undersigned, Attorney for Petitioner, '
McGinnis, Lochridge & Kilgore, 1300 Capitol Center, 919 Congress ,
Avenue, Austin, Texas 78701, telephone number (512) 476-6982. L l
- j. WHEREFORE, Petitioner respectfully requests the Commission to issue notice to the public of a hearing to be field on Petitioner's
- Statement of Intent and, upon final hearing, to approve its imple- i q
mentation in areas within the original jurisdiction of the Commis- '
i sion. I i
e Respectfully submitted,
, McGINNIS, LOCHRIDGE & KILGORE 1300 Capitol Center ,
919 Congress Avenue
- Austin, Texas 78701 ,
(512) 476-6982 l
[,
By [ / h I EARNEST CASSTEVENS
, State Bar No. 03980400 ,
i i
ATTORNFYS FOR CAP ROCK ELECTRIC COOPERATIVE, INC. ,
Post Office Box 700 r Stanton, Texas 79782 i
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STATEMENT OF INTENT p,7 , , .
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- . . ; *i TO THE PUBLIC UTILITY COMMISSION OF TEXAS AND THE GOVERNING BODIES OF THE INCORPORATED MUNICIPALITIES OF ACKERLY, BIG SPRING, COAHOMA, STANTON, AND MIDLAND.
Cap Rock Electric Cooperative, Inc. (the "Utility") files this its Statement of Intent to revise its tariffs and schedules pursuant to the requirements of Section 43(a) of the Public Util-ity Regulatory Act of Texas (A.~t. 1446c, V.A.C.S.).
I.
4 The Utility intends to modify the rate charged to the General ,
Service class effective as soon as may be permitted by law.
4 Exhibit 1 is a copy of the General Service tariff presently in ,
effect. The modification embodied in the proposed tariff hanges is to change the per kilowatt hour charge applicable dur!ng the months of May through October from 7.0237e per kilowatt hour to 7.le per kilowatt hcur and to change the per kilowatt hour rate applicable during the months of November through April from 5.55c I
per kilowatt hours for all kilowatt hours to 7.le per kilowatt hour for the first 600 kilowatt hours and 4.4e per kilowatt hour ;
) for all kilowatt hours over 600 kilowatt hours.
The attachments contained in the attached Exhibit 2 include l
the following:
(1) A copy of the proposed tariff. The code "N" in the right-hand column next to the new rates. Whereas there is a change in the unit rate, which will cause some increases and some decreases, the overall class revenue remains the same. I
- (2) Schedules A-1.0 and A-2.0 compare the existing TUEC and
- Cap Rock rates. The comparison shows billing at differ-j .. X _. . .}i.T._r .'
- ' C;TL'. .:.:TD 2L "i . _
_ _ , , _ _ _ . &._ _ ]TI'[.' .
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- . - . , ,m.-. - , . _ - _ . _ - _ r , _ _ _ - - . - - _ - - . - - - - - . . - - - - _ - . .--- -.47-
O ent usage levels for both summer and winter usage. For usage of 2000 kwh during the winter months, the Cap Rock rate is 18.7% greater than TUEC's, and at 3000 kWh it is 25% greater. ,
(3) Schedules B-1.0 and B-2.0 compare the existing TUEC and the proposed Cap Rock rate. Schedule B-2.0 shows the extent to which the competitive disadvantage is reduced for Cap Rock during the winter months for usage above 1000 kWn. Even with this change, the Cap Rock rate is higher than TUEC's.
(4) Schedules C-1.0 and C-2.0 compare billing under the existing and proposed rates. Two different usage periods were used. Schedule C-1.0 uses the twelve months ending June, 1985 and is consistent with the data presented in Docket No. 6778. In that proceeding, the total revenue under the final order rates was
$7,118,020, and the total revenue under the proposed
, rates is S7,113.991. When the PCRF that is common to both is subtracted, the base rate revenue under the final order rate is $7,170,579, and the base rate revenue under the proposed rate would be S7,166,550. In either case, the difference is only S4,029.00. Schedule C-2.0 is a proof of revenue using data for the twelve months ending April 30, 1988. This analysis was performed to determine any maj or shifts in revenue caused by changes in usage. The proposed rate is within
$10,000 of being revenue-neutral; the proposed rate produces revenues of S9,338 less than the existing rate.
(5) Schedules D-1.0 and 0-2.0 provide a comparison showing the change in the existing and proposed cap rock rates.
During the summer months, the change does not have any material impact; the billing under the proposed rates is generally within 1% of billing under the existing rates.
There is a change during the winter months. The billing to customers with usage in the 200 kWh to 600 kWh range will increase, whereas billing to customers with usage in excess of 2000 kWh will decrease. The decrease occurs because of the intent to make the Cap Rock rate more competitive with the TUEC rate. All customers on the Cap Rock system with usage less than 600 kWh will pay the same rate during both the winter and summer months.
l w". -. ! */_4 / . J. . 'f. J'2.'. _ _ _ _ , . .. , ._, .-.
t II.
The changes are applicable to all areas to which the Utility provides electric utility service. Based upon the twelve months i ending April 30, 1988, the decrease amount of which results from the proposed modification of the General Service class is $9,338 or approximately .13% of test year revenues. The Utility does not propose to recover this decrease from any other class. 1 III. 1 Consumer classification anc rate applicability will remain unchanged.
IV.
Inquiries concerning this Statement of Intent should be !
directed to the undersigned at McGinnis, Lochridge s Kilgore, 1300 Capitcl Center, 919 Congress Avenue, Austin, Texas 78701, tele-phone number (512) 476-6982.
Respectfully submitted, McGINNIS, LOCHRIDGE & KILGORE 1300 Capitol Center i 919 Congress Avenue :
Austin, Texas 78701 4
(512) 476-6982 i
By 8 w
EARNCST CASSTEVENS j
State Bar .lo. 03980400 l
a ATTORNEYS FOR CAP ROCK ELECTRIC
] COOPERATIVE, INC.
Post Office Box 700 Stanton, Texas 79782 1 ,
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cad RCCK E:.EC:RIC CCCFER.U1VE, INC.
SECTION: '
S e c t. i cn No . II RATES AND CHARCES Sheet No.
- - Effective Date APPLICABILITY:
Revision No.
ALI. AREAS SERVED I
- 02. Rate Schedules.
202.1 Ceneral Service - Rate Codes 10 and 15.
A. Avai l abi li ty.
General Service - Single Phase is available to Members having 50 KVA or less of* installed transformer capa-city in accordance with the Cooperative's Service Rules and Regulations for all domestic, farming, ranching, and public uses other than crop irrigation, I and commercial uses.
B. Tw o _o f Se rvi c e .
Single or Three Phase Service at the Coope rative 's standard distribution voltages, where available. :
C. Monthly Rate. ;
Each billing period the Member shall be obligated to pay the following charges:
(1) Customer Cha rge $8.50 per meter This charge is an availability charge for pro-viding electric distribution service. It does not include any KWH; a nd i PUBUC UiluiY CCMMIS$lCH OF ILXAS APPROVED
.. l . . .!~Z: . : . . . EXH1DIT 1 EP2 TS oocut 6778 BY !
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CAP RCCX ELECTRIC CCCPER.ATG, INC.
S-"'tCN: I i
j I li II RATES AND CHARCES 3
Sheet No. -
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E Ef fective Date l Revision No.
APPLICA8ILITY: ~
i
- ALL AREAS SERVED -
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(2) Energy chacqe May through October: .070237 per KWH November through April: .055500 per KWH D. Minimum Charge.
Each billing period the Member shall be obligated to pay the following charges as a minimum, whether or not any energy is actually used:
(1) The customer charge plus $1.00 per KVA of installed transformer capacity in excess of 10 KVA or (2) The amount stated in any agreement with the Member, whichever is greater.
E.
Billine Adiustments.
This rate is subject to all applicable billing l adjustments.
I l
. 1 Pueuc ution comissioN OF TUAs !
APPROVED '
SEP2 '86 coext 6778
.. . _ -8Y TARtFF CLERK EXHIBIT 1
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ROCK El.ECTAIC CCCPt uTI\I, t w SECTION TIT 11:
Section No. 11 RATES AND CHARCES Sheet No. 2 Effective Date .
Revision No. 1 APPLICA31LITY:
ALL ARIAS SERVED 202. Rate Schedules.
202.1 Ceneral Service . Rate codes 10 and 15 A. Availability.
General service . Single Phase is available to Members having 50 kVA or less of installed transformer capacity in accordance with the Cooperative's Se rvic e Rules and Regulations for all domestic, farming, ranching, and public uses other than crop irrigation, and commercial uses.
B. Type o f S e rvic e .
Single or Three Phase Service at the Cooperative's standard distribution voltages, where available. ;
C. Monthly Rate. I Each billing period the Member shall be obligated to pay the following charges:
(1) Customer Charte $8.50 per meter This charge is an availability charge for providing electric distribution service. It does not include any kWh; and (2) Energy Charte ~
May through 0etober: $0.071 per kVh November through April:
First 600 kVh $0.071 per kVh N Over 600 kVh $0.044 per kVh.
l l
EXHIBIT 2
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Section No. 11 ;
RATES AND OLARGEs Sheet No. 3 I
Effective Date -
I Revision No. 1 ALL AREAS SERVED '8'- 'I D. Minimus Charte.
Each biling period the Member shab te obitgated to pay the folloivns charges as a mintau.a. whether or not any energy is actually used:
(1) The customer charge plu $1.00 per kVA of installed transformer capacity in excess of 10 kVA: or (2) The amount stated in any agreement with the Member, whichever is greater.
E. Billinz Adiuscuents.
This rate is subject to all applicable billing adjustments. ,
l i
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i EXHIBIT 2 '
. . . _ _ . . .. . . ... . . . . . . page 2 l
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Sc.% dule A.a.o TUEC RESIDENTIAt SUMP.ER Firstsee**eee kWh/ Month tS 041500/kWh Minimum =S 6.00, includes .00 kWh Customer Ch,t eg e s 6 00 CAP ROCK EXISTINO CEN SERVICE SUMMER Firstonesee** kWh/ Month tt .070237/kWh Minimum =$ 8. 50, Includes . 00 kWh Cu4tomer Charge s 8. 50 COMPARISON OF RATE SCHEDULES kWh TUEC CAP ROCK INCREASE USAGE S S S 50 9.27 12.02 2.75 29.67 100 12.53 15. 54 3. 01 24.02 200 19.06 22.59 3.53 18. 52 400 32.12 36.66 4.54 14.13
) 600 45.18 50.75 5. 57 12,33 800
- 58. 24 64.83 6.59 -
11.32 1000 71.30 78.92 7.62 10.69 l 2000 136.60 149.33 12.73 ' 9.32 i
3000 201.90 219.75 17. 85 8. 84 5000 332.50 360.58 28.08 8.45 Fuel /PCA .0238000 .0001790 , S/kWh i
EXHIBIT 2 I l
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l Schedu!e A.2, o TUEC REGIDENTIAL WINTER First I Over 600 kWh/ Month ts .041SOO/nWn I 600 hWh/ Month es .0143OO/kLn Minimum =s 6.00. Includes Customer Charge .00 kWh s 6.00 CAP ROCK EXISTING CEN SERVICE WINTtR First******** kWh/ Month ts .055SOO/hWh Minimum =s Customer Charge
- 8. 50. Includes .00 kWh
$ B. 50 COMPARISON OF RATE SCHEDULES kWh TUEC
. USAGE CAP ROCK
$ $ INCREASE S
X 50 9.27 11.23 1. 96 21.14
. 100 12.53 13.93 1.40 11.17 200 19.06 19.36 O.30 1, 57 I 400 32.12 30.20 -1.92 -5.98 600 45.18 41.05 -4.13 -9.14 800 52.80 51.90 -
-0.90 -1.70 1000 60.42 62.75 2.33
- 3.86 2000 98. 52 426.98 18.46 18,74 3000 136.62 171.22 34,60 25,33 5000 j 212.82 279.69 66.87 31.42 i l Fue1/PCA .0230000 l
.0012635 , S/kWh EXHIBIT 2 page 4
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Sc.hedule B 2.C TUEC RESIDENTIAL SunnER
' 4 Firsteeeeeees kWh/ Month es .041500/kWh M1 n linuma s 6.00, Includes Customer Charge .00 kWh s 6.00 CAP ROCK PROPOSED CEN SERVICE SUnnCR' Firsceeseeese kWh/ Month t S .071000/hWh Minimum =s 8. 50. Includes Customer Charge .00 kWh s 8. 50 COMPARISCN OF RATE SCHEDULES kWh TUEC USAGE CAP ROCK INCREASE s s s */.
50 9.27 12.06 2.79 30.10 100 12.53 13.62 3.09 24.66 200 19.06 22.74 3.68 19.31 500 38.65 44.09 5.44 14.08 600 45.10 51.21 ,
6.03 13.35 800 50.24 65.44 7.20 12.36 1000 71.30 79.68 8.38 11.75 2000 136.60 150.86 14.26 10.44 3000 201.90 222.04 20.14 9. 93 .
5000 332.50 364.40 31.90 9.59 Fuel /PCA .0238000 .0001790 , s/kWh EXHIBIT 2
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Schedule 8 8.0 TUEC RESIDENTIAL WINTER First .
Over 600 kWh/ Month t5 041500/tWh 600 kWh/ Month ts .014300/kWh Minimum =s Customer Charge 6.00. Includes .00 kWh s 6.00 CAP .
ROCK PROPOSED CEN SERVICE WINTER
- First Over 600 kWh/ Month tS .071000/kWh 600 kWh/Nonth es .044000/kWh Ninimum=s 8. 50, includes Customer Charge .00 kWh s 8. 50
.h Wh COMPARISON OF RATE SCHEDULES ,
TUEC USAGE CAP ROCK
$ o INCREASE s %
50 9.27 f
12.00 2.73 29.45 100 12.53 15 48 2.95 23.54 200 19.06 22.46 3.40 17.84 400 32.12 36.40 4.28 l 13.33 '
600 45.18 50.35 5.17 11.44 800 52. 80 58,90 6.10 11.55 '
1000 60.42 .
67.45 7.03 11.64 2000 98.52 110.18 11.66 11.84 3000 136,62 ,
152.92 16 30 11.93 5000 212.82 238,39 25.57 12.01 Fue1/PCA .0238000 0012635 e s/kWh 1 l
l 1 EXHIBIT 2 Page 6 -
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li CAP 30CC'EltCTRIC C00PER4t!Vf, IsC.
]* 1 Pe00F Or afvtuut AttEse4TE 1
). USIst SILLING UNITS FRoss DOCKET 4TTS
. . 'l6, TWELvf se0 sins Esofst Just 30, 1905 j '
!~
. OILLies
- Detts SATE
........... A8uGUNT
!!' . trasraes semeest N ewtCa Simmer Customere km 54,372 3,5000000 50,4T1, M 1 442,162 s etetet .8T02370 3,544,978 PCar 4,907,14e Tetet Se,471,M 1 .0001790
~ 9,034 g 4,916,174
. Ufater
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> " Cuetesora 1, [ hm 53,8T4 4.5000000 1 'O 457,929
- s 5 4tetet 43,747,935 .4555000 I
, 8 2,705,51s PCaF y 48,747,935 3,163,439
, y Tetet (.0012435) (41,593) 3,101.844 Total Esteting
- 1. 7,118,929 t
t , P90 POSED M MSAL M RVICE i
g.
Cwetamere km 54,3F2 8.5000000 442,142 i 50,478,M1 S*tetel .5T10400 3,595.48s
{ PCSF 54.471,M1 4,045,650 fetet .0001790 9,034 4,954,M4 l:
Winter . m
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Cuetenere 53,874
! First 400 km 19,18F 483 S.5000000 457,929 m Escoes km 29,560,452
.0710000 1.342,311
- E s
subtetel .0440000 1;300,440
- PCaF 48, T47,935 ,3,120,900 n fotal - (.0012435) (61,593) 3.059,307 ."
Total Propeegd ,
O 7.113,991 elfference
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EXHIBIT 2
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ScAedule D.1.0 '
CAP ROCK EXISTINO CEN SERVICE SUMMER i First*****ese kWh/ Month tS .070237/kWh 1
Minimum =s 8. 50, Includes Customer Charge .00 kWh s 8.50 CAP ROCK PROPOSED OEN SCRVICE SUMnER- .
Firsteeee**** kWh/ Month ts .071000/kWh Minimum =$ G. 50, Includes Customer Charge .00 kWh S 8. 50 COMPARISON OF RATE SCHEDULES kWh EXISTINO USAGE PROPOSED
$ $ INCREASE 50 12.02 12.06 0.04 0.33 100 15.54 15.62 0.08 0. 51 200 22.59 22.74 0.15 0.66 400 36.66 36.97 0.31 0.85 600 50.75 51.21 0.46 0. 91 800 64.83 65.44 0.61 O 94 1000 78.92 79.48 0.76 O.96 2000 149.33 150.C6 1. 53 1.02 3000 219.75 222.04 2.29 1.04 .
5000 360.58 364.40 3.82 1.06' Fuel /PCA .0001790
, .0001790 , s/kWh
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1 EXHIBIT 2 '
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Schedule 002.0 CAP ROCK EXIST!NG CEN SERVICE WINTER Firstseesseee kWh/ Month eS OS$500/kWh Minimum =8 Customer Charge
- 8. 50, Includes .00 kWh s 8.50 CAP ROCK PROPOSED GEN SERVICE WINTER First ,
Over 600 kWh/ Month ts .071000/kWh 600 kWh/ Month t s .044000/kWh .
Minimum =s 8.50, Customer Charge includes .00 kWh s 8.50 kWh COMPARISON OF MATE SCHEDULES EXISTING CAP RO'K J USAGE $ 2NCREASE 50 11.23 12.00 0.77 6.84
. 100 13.93 15'.48 ,1. 55 11.13 200 19.36 22.46 3.10 16.01 400 30.20 36.40 6.20 20.53 600 41.05 50.35 - 9.30 22.66 800 31.90 58.90 7.00
- 13.49 1000 62.75 67.45 4.70 7.49 2000 116.98 110.18 -6.80 -S.81 3000 171.22 152.92
-18,30 -10.69 5000 279.69 238.39 -41.30 -14.77 Fuel /PCA .0012635 .0012635 . s/kWh 1
l EXHIBIT 2 l
page 10 *
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l DIRECT TESTIMONY r '. "' .
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DAVID PROITT ,
el Q Please state your name, business address and position with Cap Rock Electric Cooperative, Inc. (the "Cooper-ative").
A Hy name is David Pruitt and my business address is high-way 80 West, Stanton, Texas. I hold the position of General Manager.
42 Q What are your responsibilities _as General Manager?
. A I am the chief executiva effi;;r-of the Cooperative. In this capacity I am responsible for the overall operation of the Cooperative within the policy parameters estab-lished by the Board of Dirsctors.
- 3 Q Describe your exoerienet in electric utility management.
A
. I received a Bachelor of Science degree in Agricultural '
t Economics from Texas A&M University and a Master of Science degree in Agricultural Economics from Texas Tech University. I have also completed numerous management, '
engineering, member relations, and financial training t seminars. I began employment in the electric utility l i
1 business with Deaf Smith Electric Cooperative, ;.ic. in l Hereford, Texas in 1971 as Area Development Manager. I remained in that position until the end of 1977. In Jan,uary of 1978 assumed the I position of General
. : :::. :~ * -' ~.* : '. ' .*,, . - . _. .. . ;
9
a O t Manager of Greenbelt Electric Cooperative, Inc. in Wellington, Texas. In early 1985 I assumed the duties of Assistant General Manager of Cau Rock Electric Coop-
~
erative, Inc. I became General Manager of Cap Ro::k Electric Cooperative, Inc. in May of 1987.
e4 Q What is the purpose of your testimony in this proceed-ing?
A The purpose of my testimony is to explain the considera- '
4 t'
tions which underlie the decision of the Cooperative to modify its General Service rate.
- 5 Q Please describe briefly the nature of the Cooperative and its operations.
I A Cap Rock Electric Cooperative, Inc. provides service to 3
approximately 10,000 square miles in 13 counties in West i
Texas. Service is provided te consumers through 15,300 meters with almost 5,000 miles of transmission and dis-tribution line. More than half of the energy sold by 2
Cap Rock Electric Cooperative,,,Inc. is provided to patroleum production loads in the Permian Basin. Almost i
all of the remaining energy sold by the Cooperative is l
consumed by residential customers, with less than 2% l being provided to agricultural and irrigation loads.
Residential service is I.rovided pursuant to the General Service tariff classification.
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, e The Cooperative currently purchases all of its wholesale power requirements from Texas Utilikies Elec-tric Company ("TUEC") through the Texas Electric Service Company Division.
TUEC is also Cap Rock's principal competitor for retail loads. More than half of Cap Rock's service territory is dually certified for service by both TUEC and cap Rock Electric Cooperative.
46 Q What considerations prompted the Cooperative to seek a modification of its General Service rate? ,
A 4
TUEC, the competing supplier, can and has set prizes in t a manner which adversely affects Cap Rock's ability to compete; that is, in a manner whic'h creates a price squeeze. The price squeeze occurs, in part, because of i
the different rate designs employed by TUEC in its wholesale and retail tariffs. TUEC's residential retail tariff reflects a seasonal differential; the rates are much lower in the winter than they are in the summer.
There is no such seasonal differential in TUEC's whole-sale tariff.
For example, Cap Rock takes service under TUEC's Tariff WP.
This tariff contains a ratchet that is based upen the preceding twelve calendar months. In other words, TUEC's wholesale customers' rates in the winter i
are ratcheted at a level set at the highest summer peak demand experienced during the preceding twelve calendar i ,
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i months. Simply put, TUEC charges lower rates to its retail customers in the winter than in the summer, but charges one rate to its wholesale customers all year round.
The effect of this rate design difference is openly acknowledged by TUEC. Denton County Electric Coopera-h Inc. ("Denton County") recently petitioned the Public utility Commission for a rulemaking that would limit dual certification of service territories where the result is wasteful duplication of facilities. The petition was occasioned by TUEC's recent aggressive construction of retail distribution' facilities in the service territory of Denton County and TUEC's represen-tations to Denton County that it was embarking on a campaign of active solicitation of retail customers.
During the course of the argument on Denten County's petition, the following exchange took place between ;
counsel for TUEC and Comissioner Campbell of the Public l
- Utility Comission
i
, MR.
things BOHANNAN (counsel for TUEC): One of the l
that provoked this (petition is because tising campaign TUEC Electric entered into an a)dver-and basically around the !
metroplex type area, advertising its rates. :
i The result of that has been (that] two of the four co-ops affected have filed petitions with i this commission seeking to reduce their rates. I i
4 COMMISSIONER CAMPBELL: Mut that's bar:ause of I the winter / summer differential, isn't it, Hr. '
Bohannan? Let's be honest about it.
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l MR. BCHANNAN: It's because of the differen-tial. It's because that our winter rate is appreciably cheaper than their winter rate.
It's the competitive nature. It's not because.
of the rate structure of their rates at all.'
[
They were reducing the revenues. i
[
COMMISSIONCR CAMPBELL: But it's because of !
the structure of your rate isn't it? l MR. BOHANNAN: That's right. It's caased (them) to be more competitive with our rates.
TUEC is openly engaged in a price squeeze that it acknowledges places its wholesale customers in a com-r petitive disadvantcge in their competition with TUEC at retail. I 1
The tariff which Cap Rock proposed in Docket No. !
6778 contained a summer / winter differential for the General Service class. Cap Rock proposed an energy 1
charge of 30.0757 per kilowatt hour for the months of l May through October and a rate of 40.0600 per kilowatt i hour for the months of November through April. This differential has not been sufficient to ameliorate problems regarding residential service in the winter.
i TUEC's residential winter base energy rate is $.041500 !
per kilowatt hour (plus fuel) for the first 600 kilowatt L j hours and 80.01430 per kilowatt hour (plus fuel) for all kilowatt hours over 600. We are proposing to revise the l
rate as requested to address this competitive problem.
4 The modification proposed in this filing would result in !
.I a rate design for Cap Rock's General Service rate iden- !
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tical to the design of TUEC's residential rate insofar as the summer / winter design aspect is concerned.
47 0 What is the nature of residential service by the . coop-erative? .
A Most of the residences served by the cooperative are not located in areas served by gas distribution systems with the result that over 80% of the residences served by the cooperative are all electric homes. A typical all elec-tric home averages 3500 kilowatt hours of usage per month in the winter months.
48 Q What is the nature of the service in the General Service class at low usage levels?
A The General Service class includes service to water wells, fence chargers, and other such non-residential loads which constitute the lion's share (over 85%) of the meters served at usage levels below 600 kilowatt hours per month. Low usage levels would also include short months for residential service locations whero a disconnection on new connection occurs during the month. I 69 Q Does this conclude your profiled written direct testi-mony? I A Yes, it does.
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DOCKET NO. 82f3 .... g.3 .
DIRECT TESTIMONY p3.... . . , . . . . , . . . .
-* ..1 CARI. N. STOVER, JR.
C. H. CUERNSEY & COMPANY OKiNIOMA CITY, OKLAHOMA -
ON BEHA1.F OF CAP ROCK E1.ECTRIC COOPERATIVE, INC.
4 1 Q. Please state your name and business addrers.
2 A. My name is Carl N. Stover, Jr. My business address is 3555 N.V. l 3 58th Street, Oklahoma City, Oklahoma 73112. l 4 Q. By whom a:e you employed?
, 5 A. I an employed by C. H. Cuernsey & Company. Consulting Engineers 6 and Architects. Oklahoma City, Oklahoma.
7 l Q. Vhos do you represent in this proceeding?
- 8 A. I an appearing on behalf of Cap Rock Electric Cooperative, a
9 Inc. ("Cap Rock'~ or the "Coopsrative").
~~
! 10 Q. Vhat is the purpose of your testimony? '
J j 11 A. In the Order of Suspension and Notice of Frehearing Conference, dated 12 August 18, 1988, reference was made to several factors that the 13 Comreission considers in determining whether a rate fi.}in neckame 14 is required or not required for a given proposal. The purpose of 15 af testimony is to address those facters. It is Cap Rock's 16 position that if these factors are considered that a rate filing i 17 package is not required in support of the proposed rate change.
j 18 Q.
Vere you involved in the development of the proposed rate change? !
19 A. Yes, I was directly involved in the analysis and in the 1 I l
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CARL N. STOVER. JR.
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1 development of the proposed race.
2 Q.
Could you please describe the proposed. rate change?
3 A.
Yes. Attached as Schedule A.1.0 of Exhibit (JNS.1) is a copy 4
of the existing Cap Rock Ceneral Service rate. Attached a4
$ Schedule A.2.0 is a copy of the proposed change. The proyo. sed l 6
change deals only with the enerry charme provision.. in the race.
7 The change is identified as "N" on the tariff.
8 Q. Could you please address the factors that are identified in the 9 Order of Suspension and Notice.
10 A. The factors are:
11 j!.a.,; _ What is the nature of the proposal, and would the effect on 12 customers be adverse?
13 The proposal changes the energy charge applicable to 14 the General Se rvice customers. The change is proposed 15 because the cap Rock rate is not competitive with the TUEC
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16 rate applicable to residential customers. Schedules 8 1.0 17 and 8 2.0 are a comparison of the existing TU and Cap Rock 18 rates. The comparison shows that during the vinter months 19 the existing residential rate is not competitivo for usage 20 above 1000 kWh. Schedules C 1.0 and C',2.0 show that under 21 the proposed rate the differences between TV and Cap Rock 22 billing are reduced and that cap Rock is able to be l 23 competitive during the vinter months for usage in excess of 24 1000 kWh.
25 The proposed change in rates is revenue neutral. !
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, CARL N. STOVER, JR.
I 1
Schedules C 1.0 and C.2.0 compare billing under the existing 2
and proposed rates. Two different usage periods were used.
3 Schedule 01.0 uses the twelve me ths ending June 1985, a r.d 4
is consistent with data presented in Docket 6778. In that 5
proceeding the total revenue under the Final Order rates was
$7,118.020; this compares with total revenue under the 7
proposed rates of $7,113,991. When the PCRT that is common 8
to both is subtracted, the base rate revenue under the Final 9
Order rate in Docket 6778 was $7,170,579; this compares to 10 base rate reve.'ue under the proposed rate of $7,166,550. In 11 either case the difference is a reduction in revenue of 12 approximately $4,029. Schedule D 2.0 is a proof of revenue 13 using data for the tvelve months ending April 30, 1988.
14 This analysis was performed to decernine whether or not any 15
~
major shifts in revenue occurred becausa of changes in 16 ' usage. Billing under the proposed rat $ is $9,338 less than 17 actual billing under the existing rate'.
18 As a class, the proposed change has no effect on the 19 :
existing customers. There will be changes in billing at i 20 different usage levels. Schedules E.1.0 and T 2.0 provide a-21 comparison of the existing and proposed Cap Rock rates.
22 During the summer months, the difference in billing is l 23 generally in the range of one percent. During the winter 24 months, the change vill be greater depending upon the usage 25 l level. This is to be expected, however, given the fact that i
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CARL N. STOVER, JR.
1 the overall rate is revenu, neutral.
2 2.b.
Is the overall revenue ist at positive or negative, and what 3
is its magnitude?
4 -
Billing under the proposed rate is revenue neutral. t 5 2.c.
What are the costs and relative benefits of allowing the 6
proposal to proceed without a full rate package, as compared 7 .
to requiring,a full rate application?
8 i The primary benefit is the reduced cost associated with 9
implementing the rate change. Cap Rock is a rural electric 10 cooperativa and any costs incurred will eventually have to 11 be paid by the member customers.
Any reduction in operating !
12 costs will accrue to the direct benefit of the sembers. It 13 is estimated that the preparation of a c'esplete rate package 14 i
and a full hearing before the Commission could cost. 4+ such 15 as $20,000.$25.000.
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16 Another consideration la that, if the Commission 17 requires Cap Rock to prepara a full rate application, then it it would be impossible to realize effective rates for the 19 winter of 19t ' 89. The benefits associated with reduced 20 energy costs would not be realized by the customera in a 21 timely fashion.
22 2.d.
Has the Commission set the rates for the applicant in a full 23 rate case?
i 24 The last Cap Rock rate filing was Docket 6778, which 25 was based on a test year of 6/30/85.
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CARL N. ST0VER. JR.
1 2.e.
Is there a danger that approval of the tariff proposal vould 2
result in recovery of costs already being recovered in ra:en 3
which would not be changed under the proposal?
4 .
No. The propaed rate is revenue neutral. '
5 2.f.
Has the utility or another party done a costing analysis 6
that is reasonable in the context?
7 !
The primary objective is to allow Cap Rock to realize a 8
competitive position with Texas Utilities. Cap Rock har not 9
prepared a detailed costing analysis in support of the i 10 ;
proposed rate change.
11 23, Does the utility have a pending or inc.ipient rate case that '
12
! could reasonably serve as a vehicle for the proposal?
13 No. '
14 2.h. Wat are the procedural and factual circumstances in which i 15 the sufficiency of a tarift filing was challenged?
16 .
No respoase.
i 17 2.t.
To what extent would the information in a full rate filing !
18 package aid the Commission in setting a fair rate for the t 19 services which are the subject of a tariff proposal?
20 The preparation of a full rate filing would not aid the 21 Commission in setting 1' air rates for service.
The basis for 22 the proposed change is in response to competitive 23 considerations. In order to resolve the competitive j
24 considerations on a cost basis it would to .nects2. ort for the I 25 Coemission to reconsider the TV rata design.
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, CARL N. STOVER, JR. (
1 Q. Does this conclude your testimony?
2 A. Yes, it does.
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AFFIDAVIT STATE OF OXLAHOMA )
) SS.
COUNTY OF OX1410MA )
Before me, the undersigned Notary Public, personally appeared CARL N. STOVER, JR. , who being duly sworn on oath deposes and says that the foregoing prepared direct testimony and statement of fact contained therein are true and correct to the best of his knowledge, information end belief. '
i 6/Carl/77
' /.
N. Stiover, Jr. /
J Subscribed and sworn to before me this 30th day of August, 1988.
j 1
A4!wd wh Nota g Public 1
My Commissica expiree:
Deeember 31, 1989_ _
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DOCKET NO. 8283 2
s CAP ROCK ELECTRIC COOPERAT!YE, INC.
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i SUPPORTING EDl! SITS ;
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CARL N. STOVER, JR. . -
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SECT 80Nt SchOdulo A.1,0 '
Sectton No.'*9'tt\ C! 2 ' ' ~
RA .* ES AN D C ri A AG E S Sheet No. ~
=-
Effective Data AP P t,!CA 8 !!,ITY :
Revision No. '
ALI. AAEAS SERVED ~
l
- 02. Rate Schedules.
9 202.1 Ceneral Service - Rate codes 10 and 15. ;
- A. Availability.
-"~ ~
General Service - Single Phase is available to Members having 50 XVA or less of* installed transformer capa-city in accordance with the Cooperative's Service Rules and Regulations for all domestic, farming, ranching, and public uses other than crop irrigation, and commercial uses. 1
- 5. Tyr.e o f S e rvi c e .
Single or Three Phase Service at the Cooperative 's standard distribution voltages, where available.
, C. Monthly Rate.
Each billing period the Member shall be obligated to pa'y%e following charges (1) customer charge $8.50 per meter W.is charge is an availability charge for pro-viding electric distribution service. It does not include any XWH; a md i PUBUC Uilun CCMM15$1CN Of IDAS APPROVEO 4
- SEP2 16 w.xT 6778
- - ' y TARIFF CLERK
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i war ROCK E.*.EC;it:C CCCP EM71VE, I .NC .
{ SECTt0H1 Sene. h A-1.,
Page 2 of 2 Section No. !!
RATES AND CHAAGES 3 l Sheet No._ i
, Effective Cate I Revision No.
AP P t.f cA a r t.rTY :
I Page of I I ALL AREAS SERVED '
4 (i ) Energy charge May through October .070237 p,a r X W H November through April . 055500 pe r XWH D. Minimum charge.
Each billing period the Member shall be obligated to pay the following charges as a minimum, whether or not any energy is actually used: -
(1) The customer charge plus $1.00 per KVA of installed transformer e,apacity in excess of 10 KVA or (2) The amount stated in any agreement with the Member, whichever is greater.
I E. E}1ine Adjustments. '
1 Thja, rate is subject to all applicable billing )
i adfustments. l 1
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PUBUC UiluiY COMMIS$10N OF IDAS I APPROVED
$92 '86 ooo<t 6778 ey
... .. TARIFF CLERK p ..+N*e
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)#ROCKELECTRICCOOPEA\TI\c,l')[Schedule A.2.0 P.38t 1 of 2 SECT!0W TIT 1I:
Section No. II RATES
- kid ~OdiR'CES Sheet No. 2 Effettive Date APPLICA31LITY:
Revision No. 1 ALL 13EAS SERVED mm 1 202. Rate Schedules.
202.1 Ceneral Service . Rate Codes 10 and 15 A. Avail abili ev.
General service . Single Phase is availab'le to Members l having 50 kVA or less of installed transformer capacity in accordance with the Cooperative's Service Rules and Regulations for all domestic, farming, ranching, and public uses other than crop irrigation, and comeercial uses.
l
- 3. Type of Service.
Single or Three Phase Service at the Cooperative's standard distribution voltages, where available.
C. Monthly Rare.
- Each billing period the Member shall be obligated to pay the following charges:
(1) Customer Charge - -
$8.30 per noter l
- This charge is an availability charge for providing electric distribution service. It does not include any ,
kVhi and -
- (2) Enerry Charge .
May through october: *
$0.071 per kWh j
November through April: j First 600 kWh $0.071 per kWh N Over 600 kWh $0.044 per kWh.
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. . Schedule A-3.6 P, age 2 et 2 SECTION TITut Section No. II RA'TES AND OtARCES Sheet No. 3 Effective Date -
APPLICA.31LITY: Revision No. 1 ALL AREAS SERWD P'8' 'I D. Minimurs Charge.
Each biling period the Member shall be obligated to pay the folloivng charges as a minimus, whether or n,ot any energy is actually used: *
(1) The customer charge plus $1.00 per kVAl of installed transformer capacity in excess of 10 kVA; er (2) The amount stated in any agreement with the Member, whichever is greater.
E. [1111ntAdjustnants. -
This rata is subject to all applicable billing adjust =ents, t
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-) Schedule 303,0 TVEC RESIDENTIAL SUMMER First******** kWh/ Month 8t .041500/hwh Minimum =$ 6.00, includes Customer Charge .00 kWh s
4.00 C.48 ROCK EXISTINO GEN SERVICE SUMMER First******** kWh/Nonth 3 s i .070237/kWh Minimum =8 8.50. Includes .00 kWh Customer Charge s 8. 50 i
COMPARISON OF RATE SCHEDULES kWh TUEC CAP ROCK INCREASE USACE S e s
.i 7.
30 9.27 12.02 ,
2.75 29.67 100 12.33 15.54 3.01 24.02 I
200 19.06 22,59 i 3. 53 18. 52 1
400 32.12 36.44 4. 54 14.13 l 600 43.18 50.75 5, 57 1 12.33 y
800 58,24 64.83 i ,
4.59 11.32
- 1 1000 71.30 78.92 7.62 10.49 2000 136.60 149,33 12,73 9.32 3000 201.90 8
219.75 -
17.85 8.84 5000 332.50 360.SS 28.08 8.45 Fuel /PCA .0238000 .0001790 . s/kWh
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) Schedule 0-2.0 ,
I TUEC RESIDENTIAL WINTE" First 600 kWh/ Month a s Over .041300/kWh 600 kWh/ Month e S .014300/kWh Minimum =$ 6.00. Includes Customer Charge .00 kHb s 6.00. .. +
CAP ROCK EXISTING CEN SERVICE WINTER 4
First******** kWh/ Month e s
.053500/kWh Minimum =$ 5. 50. Includes Customer Charge .00 kWh s 8.50 COMPARISON OF RATE SCHEDULES kWh TUEC CAP ROCK INCREASE USACE s e a X 50 9.27 11.23 1. 96 21.14 100 12,53
- t
, 13.93 -
- 1. 4d 11.17 200 19.06 19.36 0.30 1.57 :
400 32.12 30.20 -1.92 -3.98 i 600 45.18 41.05 -4.13 -9.14 '
800 52,30 51,90
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-0. 90 -1.70 1000 60.42
- 62. 75 2.33 3.86 l
- 2000 98. 52 116.90 18,46 l
. . . . . . . . . . ~
18.74 i 3000 136.62 171.22 34.60 25.33 !
5000 212.82 279.69 66.87 31.42 Fuel /PCA .0238000 0012635 . S/kWh l
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. Schedu3e C-a.0 I TUEC RESIDENTIAL SUMMER ,
Firste**f**** kWh/ Month 8s .0415C./kWh M i re i mum = $ 6.00, Includes . 00 k W'h Customer Charge s 6.00 CAP MOCK PRC.80 SED GEN SERVICE SUMMER' F1Pst******** kWh/ Month 8 s
.071000/kWh Minimum =S 8. 50, Includes Customer Chargo .00 kWh a 8.50 l COMPARISON OF MATE C 'HEDULES kWh TUEC CAP ROCK INCREASE USAGE s s s Y.
50 9,27 ~
12.06 2.79 30.10 100 12.53 15,62 l . 3.09 24.66 s
- 200 19.06 211, 7 4 3.68 t
19.31 I 400 32.12 36.97 4.85 15.10 600 45.18 31.21 4.03 13.35 800 SS.24 65.44 7.20 12.36 i
1000 71.30 i
f 79.68 S.38 11,75 2000 i 136.60 150.36 14.24 10.44 3000 201.90 222.04 20.14 1 9.98 5000 33'.50 1
s 364.40 31.90 9. 59 :
j Fuel /PCA .0238000 .
- .0001790 . e/hWh 1
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. Schedule C4.0 i
TUEC RESIDENTIAL WINTER l
First 600 kWh/ Month t s Over .041500/kWh 600 kWh/ Month tt .0143OO/kWh Minimum =s 6. C 0, includes Customer Charge .00 kWh s 6.00 CAP ROCK PRCPOSED GEN SERVICE WINTER First 600 kWh/ Month e s Over .071000/kWh 600 kWh/ Month e S .044000/kWh Minicomes 8. 50, includes .00 kWh Customer Charge s 8. 50 i
I COMPARISON OF RATE SCHEDULES !
kWh TUEC CAP ROCK INCREASE USAGE s s s %
50 9.27 12.00 2.73 j 29.45 100 12.33 15.48 2.95 23.54 200 19.06 22.46 3,40 17.84 400 32.12 36.40 4.28 13.33 i 600 45.18 50.35 . 5.17 11.44 l sOO 52. ao Se. ,0 6.10 11.55 !
1000 60.42 67.45 7.03 11.44 !
2000 98. 52 110.18 11.66 11.54 3000 136.62 152.92 16.30 11.93 5000 212.82 238.39 25.57 12.01 Fuel /PCA .0238000 .0012635 e S/kWh ,
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le , " ZwieT M SEEESAL etevitt e.sener tuotemere 54,372 huen 0.5000000 442,142 j se,471,M1 .e182370 3,$44,978
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- 50,471 M1 .e001F9e 9,834 Tetel e
4.e!4,1F4 i. atteter Cuetessee $3 e74 g bute 8.5000000 437,929 l 48,74F,935 .eSSSees 2,705,510 seetetet
,,- PCer 3,143,439
;. ; 44,747,e35 c.eesm333 set.n ni,5933 3 ,es,eu
] 7etet Esfetiste i F.118,e29
- . - Peep 90ee Gemee4L steWICE
(; eument Custeuere 54,372 nien 0.540000s 442,142 . t, ; se,4ri,Mi .erieeee
' Sehtetel 3.Sn.4u PCeF 4,e45,4Se Se,4F1 Mt jI e fetet m * .settF9e 9 e54
' 4,054,484 on i g.. vtater n o Customere $3,e74 (L S.38 0000 437,929 I first 400 etet faceae 6emb 19,1e?,4e3 .e718 00 1,362,311 6 29,514,452 *
- 1 Sietetel .e44eeee 1,3ee,Me -
PCer 3,128,90s o,
- r.t.
48,T47,935 (.0012435) (
- 3. 41,$e3)
$ ,,307 7 o
0 Tetel Propeeed -l : T,113,991 offference e (4,e??)
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04/29/88 16:03 ~
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?- -g 881tlet WelIS SATE Asoeust I *
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- Cuetamere 48,958 km 8.5000000 414,143 48,5SF,14 T .87823F0 3,412.415 5 4tetet PCar 3,828,F58
,- 48,58F.14T .0081F99
, Totet s,49F 3,83F,455 Winter I,
- Coetamere 48,511 twen 8.5000000 412,344 j 53,183,584 .e555000 2,951,6e9 5 4tetel
. PCar 33,183,500 3,364,635
.. Te&et (.0012431) (6F,19F) 3,296,834
. Tetet teletlag t
- 7,134,291
' l Peed 9tto SEWSAL Stevl N lt i gemeer ,
,, e ,
Casstemere - tune 48,954 8.5000000 48,58F,147 414.143
- Setetel 8F89000 3,449,48F PCe7 3.865,834 tetel 48,50F,142 0001799 3,69F e
% , 3,8F4,52F vfator
...... M Custeuere :r 48,511 8.5000000 412,344 e First See 6 tan Escoes em 20,933,383 .0710000 1,484,2F0 g setetet 32,250,205 .0448008 1,419,809 i
- PCSF 3,317,623 I
fetal 53,183,58s (.0012635) tar,197)
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l 3,250,424 l Tetet Propeeed ." c. F,124,953 j .iere, - e e (9,318)
.' .' .. Schedule E-2.0 i
CAP ROCK EXISTING CEN SERVICE WIN 7dR First******** kWh/ Month S s
.053500/kWh Minimum =s 8.50. Includes Customer Charge .00 kWh
' s 8. 50 I
CAP ROCK PROPOSED GEN SERVICE WINTER First 600 kWh/ Month a s Over ,071000/kWh 600 kWh/ Month 4 s .044000/kWh 3 Minimum =s 5.50, Includes Customer Charge . 00 kWh s 8. 50 t i COMPARISON CF RATE SCHEDULES kWh EXISTING ; CAP ROCK INCREASE USAGE s s i i s X . 50 11.20 12.00 9 0.77 . 6.86 100 13.93 15.48 *1. 55 11.13 200 19.36 22.46 3.10 16.01 ' 400 30.20 L i 36.40 6.20 20.53 ' 600 41.05 30.35 9.30 22.66 800 51.90 36.90 7.00 13.49 1000 62.75 i 67.45 4.70 7.49
, 2000 116.98 110.18 4
~4. 80 -3.81 3000 171.22 152.92
-15.30 -10.69 5000 279.69 238.39
-41.30 -14.77 Fuel /PCA .0012635 .0012635', s/kWh i
I 1 l i i
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e ATTACIIMENT 3 i i a f i I l l l 1 i I 1 i 1 I i, F i L-
Attachment 3 to TXX-88751 October 21, 1988 M
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October 20,1968 Steven E. Collier, P. E. Vice-Preddent - Analytical Services C. H. Guernsey & Company Landmark Towers West Building 3555 Northwest 58th S&eet Oklahom a City, Oklahoma 73112-4778 !
Dear Mr. Collier:
This is in reference to our meeting of Augtst 2,1988, and your follow-tp letter of August 4. Regrettably, your letter does not reflect the substance of our 1 Augtst 2 meeting. It seems that Guernsey & Company may be more interested in usingits relatformhlp with Cap Rock as a "posturing" platform for the benefit of its l other client, Panda Energy Corporation, than in discussing Cap Rock's futtre power l 1 regtdrements. For those reasons and since Cap Rock has now elected to institute a complaint with the NRC, it appears that further discussions between ta at this ', time will not be fruitful. A copy of our response to Cap Rock's NRC comments is j enclosed for your information. " I When and if the full requirements power ptrehase agreement with Cap Rock has terminated, TU Electric will continue to discharge all its legal obligatf orm to , Cap Rock, whether in Cap Rock's capacity as a wholesale customer or an electrie l utility company (provided it is fully equipped to procure, receive and dispatch its ( own generation). However, among others, these obligations do not include the L making of economic decisions for Cap Rock, the providing of scheduling, energy I banking or similar services as have been requested or the rendering of any electrie i service which imposes a disproportionate share of TU Electric's costs osi its , customers for the benefit of Panda or Cap Rock. We have indleated our willingness i
' to consider a short-term scheduling arrangement for economy energy, on terms then being offered to others, upon termination of Cap Rock's present power purchase agreement.
t l TU Electrie intends to offer electric service to all of its customers at retail or at wholesale in accordance with the rates and charges established by the Public Utility Commission of Texas and to engage in utility planning activities through ' ERCOT on a non-discriminatory basis. You and your ellent are in as good a . positico as TU Electric in speculating what rates and charges the PUCT may i establish in the future. As a member of ERCOT, Cap Rock has access to its ' planning information. This, together with the data already on file at the PUCT and , i the FERC and that furnished to you by TU Electric, should enaole Cap Rock to : 2001 B,)am Te.ee Danas. Tenas 75M i m _ _ _ _ _ _ _ _ _ _ _
i make its own decision with respect to whether it desires to give the contractual I notice with respect to the cancellation of the current power purchase agreement 1 and purchase power and energy from third partin, includng Panda Energy ' Corporation, upon exrdration of its power purchase agreement with TU Electric. I S 1y, 1 i
/ l, /
\ b OIt/ K ,;g \
. Darrell Bevel ymer/ !w
{ d i ect Mr. David Pruitt ' Cap Rock Electric Cooperative' i West Highway 80 ; P. O. Box 700 Stanton, Texas 79742 1 Nuclear Regulatory Commission i Enclosure ' 1 . i I
, i 1
1 : i i I I l s i I ^ f d i 1 ! , i i I l ! u i 4 ; 4 i
49 ATTACIIMENT 4 i a l i I f t i
Attachrnent 4 to TXX-88751 ,Octobgr21aw1988 gmma oss ows evsmss scuerm .mr Panda Energy looks to cogeneration to fuel future growth Outlook for energy source appears bright, but inroads must be made with electric utilities By hb L8lligt Once shunned b irnestment houses, The circumstances seem incon. Panda Energ>l no )onger has to scrape it's too early to tell whether utshty gruous, esen improbable. On this Fri- I0 companies ultimately will cooperate day morning, Bob Carter has ., '. hen insestment bankers call with fromcapital ,,Now." cogenerators, smiles but beneath Carter. the sur-representatises from two of America's b'* YON, we don I rush to return face lies all the affection of a Cow. largest corporations. Bechtel and Pacif. their calls., boys / Redskins rivalry in the current struggle. ic Gas & Electrie, waiting in the com. Panda Energ> plans to go pubh,c at pany conference room. The) recently some future point, perhaps as earl > as The first unheralded shots were fired in 1978 when Congress passed the Pub. joined forces with his compan). Panda nest year, Carter sa>s. "This is a set) Energy, on a 5:00 milhon deal and capaaMntenshe buuness, so we'll defi- lic Utilities Regulatory Pow er Act. hase returned to talk about possible nitel) become a public company." which directed utility companies to cdditional business sentures. Carter said. Panda will likely hase an purchase competitively priced power On other Frida>s, in presious > ears, eaun ume raiung capital through a from alternate sources, such as coge. Carter sweated making pa> toll, not pdhe Hock gffering than it did neration, to help fulfill long term muhimillion dollar deals. Panda Ener- through praate irnestort capa:ity projections. Utility companies g3 Corp., a small prisately held com, Carter predicti Panda will be a bil- originally dismissed the requirement as pan > with only 12 employees, has been IIon do!!ar compan) within 10 > ears. little more than a nuisance but hase
% the energy business for four years ,,% e currently have commitments of a since come to realiac that entrepre.
d has yet to make a dime. Now, half billion dollars in project resenues neurial upstarts ljke Panda are redefin. accord ng to Chief Esecutise Officer oser the nest 15 > ears." Panda's joint ing the industry - and not necessaril) Carter' that's about to change. senture with Bechtel and Pacific Gas & Panda's business is cogeneration. Ele:tric, for the purchase of a central on terms fasorable to them, until recently a forgotten technology In p na M hp enu-that generates power mare effi: tent!') Tesas gas pipeline, will bring the joint 87. the inefficiency of consentional than today's commercial power plants, senture restnues of more than $200 power plants was of little concern. The re emergence of cogeneration, like milh n during the nest decade. Panda That is no longer true. Utahty andustr> other alternate sources of power traces hopes to be able to use gas reserses obsersers espect electr6 city rates to rise back to the OPEC drnen oil pr,ce
- Un
- n acibu.ts. e to fud p ssMe cogenua. fann man Mam M N hauen of in:reases of the 19?Os. While interest in this century, presiding a compelhnt wind and solar power has dasipated in . Nest ) ear, we'll have revenues of reason for both business and rendenual the late 1980s, cogeneration seems $U million from the pipeline. The fol. users to demand efficient electric pow.
uniquely posinoned to impa:t energ) lowing year, as addiuonal projects er-costs and availability during the come on line, we'll hase resenues of Today,s large commercial pow er terr.ainder of this century. . 150 to 1100 million."
. plants are less than 30 per:ent efficient, The U.S. Department of Energy esti. Sining in his well. appointed North with the remainder lost as thermal mates that by the > ear 2000, cogenera- Dallas office, the 30 > ear old Carter talks enthusiastically about his com. waste. That means that for 100 unas of tien will pr.oduce 13 percent of the fuel input, only 30 units of electricit>
pany's future. He compares his 12.per. are produced. The cogeneration pro-nanon's power. By then, cogeneration son outfit to MCI, the long distance could be a $60 billion induury. cess uses one fuel source, usuall> natu-phant ccmpany, The potential of cogeneration was rtl gas, to create two sources of power "They made no money for the first - typica!!) steam and ele:trietty. not an eas3 sett tot Carter at the ounet. 10 > cars. Now, in their isth year of W hen he founded Panda in 1954. Cart- Costneration recosers part of the business, they are a 53 billion dollar escapina heat and conserts it into er tried to raise capital for his tiedghng company. compan> through area insestment steam energy. Federal guidelines houses. but they weren't interested. The affable Carter makes another require cogeneration to produ:e energy comparnon. "Our su>s are hke 'The at a min %um a2.5 percent effacncs,
ndaunted. Panda raned $3 milhon Dirty Dozen'in the moue. Some of us but
.ough prnate sources and set out to soduces eners> in e ? a5 are a little crary, and we operate pen tru range - apptou, compe:c against one of the .: tost pow- behind enemy knes." The enemy lines erful and most protected industries m m %prosernent oser in Panda's case, are a>mbohted by the c4 '. L the state of Tesas - the pubhc utih- power lines that supply his office with i ties, : g ration com.
electrmt). g. ;," such as mais
- ihun WTah.
tieg fo, _ g ~ , .- I' lese hosts a
;.. ;Je the site for cogeneration facili. in the country.' Clements ow ne', ,
ties, and sign long. term agreements to cogeneration desebpment f" "' ' Fort purchase some of the generated output Worth, w hich he sold in 198.1, at seiy attractise rates. Usually, more Panda's unnappiness with TU's electricity is generated than the host secretite competitise bid proced' ires ' can utilite, and the surplus is sold by ruffles no festhers at TU Electric, at plant desetopers sud as Panda. least not publicly. Another local des cloper is "With regard to cogenerated powcr. ENSERCH. Ihc parer.t compan> of says fiorellt "Toas utilities are in a ' L one Star Gas. ESSERCH lias also bu>cr's market because there's so mush
. been attracted b) the potential of coge. asailable. The result of an open com.
neration but with a different focus. petithe bid procedure would be to Subsidiary ENSERCH Deselopment make that power more espensise for os Corp. is building a large cogeneration and for our customers. Naturall), we facility in Sweetwater, scheduled to go think that's a bad idea." on line nest spring. EDC, according to "There's absolutely nething to sub. Dasid Rosier, a t.onc Star Gas Repre. stantiate TU Electric's claim that secre-sentative iraotsed in the Sweetwater cy serses the public interest," aflues project, belieses cogeneration "pro
- Carter. "Open bidding is a nationwide sides an important new market for standard when the public must uits.
natural gas. The energy industry is mately pay, Secret bids are conducise sluggish, and cogeneration presides to the highest price, not the lowest." new demand." Panda's inability to sell power to the Panda has signed host agreements in most likely buyer, TV Electric, forced I the North Tesas area with four com. Carter to try a new strategy, one that panies: S'andard Nteats, a meat pro, may pay big disidends. In Nta) of cessing plant in Fort Worth; Rock. 1988. Panda announced a 15.> ear Tenn, an Oak Cliff paperboard manu. agreement to sell surplus power from facturing plant: Bunge Edible Oil Co. the Oscar hie >er facility to Cap Rock in Fort Worth; and Oscar hie >er meat Electric Cooperatise. Cap Rock is a parking plant in Sherman, Permitting member. owned electric cooperatise in underwa> for the Oscar Nie>er facili. that supplies energy to 13 West Tesas ty while plans for the other three are on counties. A Panda spokesman said Cap hold until Panda can find bu>ers for Rock is the first rural electric coop the escess electricity produced. A co. (CO OP) in Tesas, and perhaps in the generation plant can be built within nation to buy power directly from a about tw o ) ears. cogenerator. In that contest, Panda's unprece. To date. Panda has been unsuccess. dented agreement with Cap Rock may fut in its efforts to sell surplus capacity signal the emergence of what Panda from any of its contra:ted host plants oUicWs call a "competitise supermar. to its primary market .- TU Electric, ket" for electrical power in Tesas. ; the utilit) that otherwise prosides pow. er to area customers, if they begin to "defect" from the major utility compantes and instead Competitise bids are submitted for purchase independently cogenerated the purchase of additional capacity, power, utility cotapanies, burdened by and in each instance that Panda has fised capital costs, could be hurt. And sumbitted bids, they hase not gotten a if the) try to pass increased costs on to ; contract. "We feel we were compett. a declining customet base, the) may I l tise, but it's hard to sa) because bids end up fighting, and losing, a pohtical aren't disclosed," Carter esplained. l ENSERCH Deselopment has fared. contest'While the larger issues are being i better TV Electric has agreed to pur* sorted out Bob Carter is hasing fun. chase surplus power from its faality in H s contract to suppl) Cap Rock with Sw eet w at er. 40 percent of its power needs for the A spokesman for TU Electric, Dase nest 15 > cars proses ihai traditional I Fiorelli, sa>s cogeneration can be niihty companies aren't Panda's 'nt > ' adsantageous for botn the utihty and prospectist customers. for ratepayers in terms of supplying "The opportunities are here, the reawonabl> priced po*er. "W.e encour. resources are here, and the infrastruc-l agc tt." he says. . ture is here. The ont> way we'll failis if l Howeser, Fort Worth sogeneration we don't manage the compan> proper. consultant hm Clements disagrees. 1)," said Carter.
.TU Elcetric is probabl> as strong an Rod tallier as a Dallas free lJait opponent of coseneration as any utiht) w rit er.
r
en ATTACllMENT $ 9 I i I I i
Attacha.ent 5 to TXX-88751 October 21, 1988 ; ( { u 1 PANDA NPrw - H q ENERGYCORPORATION An Alternate Energy Company j March 2,1987 , l Texas Utilities Electric Company ! 2001 Bryan Tower ! Dallas, Texas 75201 i Attni Mr. Dan til Bevelhymer
Subject:
Proposed Cogenerated Electricity t Sale And Purchsse Agreement - { Rock-Tenn Cogeneration Faci!!ty j Gentlemen By letter dated February 6,1987 (as supplemented by letter dated February 20, 1 1987) Panda submitted its latest proposal for subject Agreement. We understand { that TUEC's decision relative to the purchase of Cogenerated Electricity is immineryt: '
- that TUEC may purchase considerably less than the quantity of electricity belhg i offered by the hpndful of remaining cogenerators that the window being filed by - !
TUEC does not sxtend .beyond 1989: and that Panda's prospects for receiving an ' ] award are therefore limited. i .. [ ( ! As you know, Panda has executed Cogeneration Agreernents with several hosts In the TUEC service area and has been asked,'by several additional hosts, to do ( ( i the same. Panda (as an alternative to contracting for a sale of Rock-Tenn electricity j i to TUEC) is pursuing arrangements to sell electricity directly to its host industries 1 and to other electric utilities, municipalities, and cooperatives. Panda will (as { j a part of this alternative effort) consider designing its Cogeneration Projects to - accommodate such direct sales and to permit the sale of excess electricity, on i # an "as available" basis to TUEC at TUEC's full avoided fuel cost. Panda will (also as part of this alternative effort) attempt to "pool" its projects electrically so l
}
! as to provide more firm power and its own backup power to said host industries, i j electric utilities, municipalities, and cooperatives. Appropriate applications will i be madetotoachieve projects the Texas PUC for permission to wheel power to and from the various this end. {,
s ' i Panca would obviously rather sell power directly to TUEC in buy-all. sell-all t
, arrangements. Panda and its hosts are, however, firmly committed to cogeneration F j and its economics (particularly in light of the potential rate impact associated !
with Commanche Peak) and are prepared to pursue this, alternate approach if necessary. ! A considerable amount of work is required to complet0 these ! arrangements. made. Accordingly, we will appreciate TUEC's decision as**soon as it is
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- l 3
- 4100 Spring Valley. Suite 1001 Dattas Tcsas 75
- 44 2treosom:50 l i
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- e. ;. i Mr. Darrell Develhymer
( ( l ( Paes '- i r [ In addition, it is requestod that TUEC open its requirements window (to be filled I by the through needed cogenerators 1992. under consideration) to contract for cogenerated electrici! would work in the best interest of TUEC and its consumers.This would pr[ t i (particularly in light of obscure, changing and possibly f and in light of previous pricing agreements and correspondence). i { We hope that TUEC will decide to purchase capacity and energy directly from t our projects (whether to fill tne present window or the expanded window requested by th!s letter). We look forward to your response. ) i Sincerely, ., [ a
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Fans R " try. vs.'kullenbu i HRVK/tb _ I , , i ect Mr. Steve Collier '" ' "' ' ' " " '
- j C. H. Guernsey & Company * . !
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l l t l l 1 l 1 1 j I 4 ATTACIIMENT 6 1 h i I l i F F i 1 f i
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Attachment 6 to ?XX-88751 October 21. 1988 (, ! l
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TEXAS UTILITIES GENERATING COMPANY SalVW47 TOWEP ' 404 NORTH OLivt STREET. L.S. 44 04LLA s, Tg tre ,8888 i
*! .".".M .'.U !.'.".! ".! " # '
i i Mr. Hans R. Von kullenburg i President ' i Pondo Energy Corporat!on ! i 4100 Spring Volley, Suite 1001 : Dollos, Texas 75234 . Re: Pando Energy Corporation Letier of Mov 2.1986
Dear Mr. Von kullenburg:
. ~
I am in receipt of your letter of May 2, I?86. That letter contains several statements which I would like to oddress. You express disoppointment that TUEC would not oecept your Initial rote pro\ As we indicated to you in our Febrvory meeting, your offer was simply not comp! . with the price et which we con purchase cogenerated power from others. You s
- that you have not been presented with. "formal criterlo" for our essessment of i cogenerotten offers. You mus' realize, however, that TUEC chooses suppliers in the so
{ t fashion as any prudent business person, I.e., we evolvete mdrIy factors, in ! reliability, competency and experience of project porticipants, terms and condI As we Indicated to you in our February meeting, your offer was not competitiv tried to give you on Ideo of what the market was without violating confide ogreements in force. Our first and foremost interest in purchasing cogenerated powe I t to provide relloble cogenerated power to our customers at the least possible co ( we were allowed to discuss other competitive offers, which we cre not dve! confidentiellty ogreements, we believe that, for rather obvious recsons, that 9001 is not ! furthered by a detailed discussion with you of our ovailable competitive We are op'tlons. sorry If that mckes your business decisions more difficult but we steadfestly be it best serves our rotepoyers interests. f l
- 4 est,ssou or truss t ratarers stretare cowp45, '
. i L_-____-_-_-_____-_
a ( ( i Mr. Hans H. Von kullenburg i May 8,1986 , Pace Two ; f* 1 i ' We believe that we have Indnd gone beyond what should be necessory by( 1 you mentioned, that o 5% discount on copocity and energy was competitive. J0st as we j k
- 2 did then, we will try to communicate to you, in general terms, what the market is i
violating confldentiality ogreements currently in effect. Many of the proposals tha . i cre presently receiving are in the ronge of 3.75 cAWh to 4.25 c/kWh in 1984 orvi - escolating et 3% to 3.5% per year thereafter. These volves are calculated using o ccpocity factor. As you con see, even your lotest proposcl is outside the current ' competitive merket. Your letter mentions that you are concerned about having to compete with ' ( l from cogenerators outside of TUEC's service oreo. All other things being equel, t [ t - prefer to purchese power from cogenerators within our service aeo. However, w
..:- l received offers from cogenerators outside our ~service area which are attractive an j W{
we believe provide o higS degree of rellebility. Those offers connot be igno
\
because they are from projects outside TUEC's servics oreo.- Also, you mu j we odjust oli proposols by the effect of system line losses.~FN example, if yo i ( i produced a 1% reduct'on in loses, then in our comparing of your offer with thos i
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4 others, we would fully ccesider that 1% reduction In our determinotion of the rer i competitiveness of the verlous proposols. i Your statement regarding our supposed lock of response to your verbal J Februcry 21 is incorrect. f 1 Not only was o response given to Steve Collier on March 4 byl i I 4 Rick Dickey of our office, but, in addition, o similar response was given to M { on March 4. That response is ottoched. - l ) i
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j The lost peregrcph of yovr fetters states that you would like to contin'v ' I contract terms. At our lost meeting with representatives of Pando on Merch 13, w ! 1 i I j . I 1 I __ _ . _ _ - _ - _ - I
( ( ' Mr. huns n. Von !<ullenburg May 8.1986 Pece Three 4 you did not attend, Ed Gwynn stated that he would send to our ottoney, Rich i ! mark-up draf t conto!ning Pando's suggested contract langvoge during thei p Nothing was s r received. Since we rever received that mork-up over o l weeks, we cssumed that Pondo's Interest in selling power to TUEC had diss . 1 ' be pleased to continue negotletions with you, but we believe that It may w of tin,e for all concerned unless ecme optimism con be developed that Pond ( willing to compete on price with other credible cogenerators. We will meet be pleased * > i with you on May 15 et 9:0Q o.m. In TUEC's offices at 400 North Olive to dis potential for fruitful negotletions. i t I orn disoppointed that you are not satisfied with our response to your!
! TUEC attempts te treet potential cogenerators quite fairly. We of
' must, ,uin!
i cur public service responsibilities, oct to farther the best Interests of our cust . t q! believe that our record in the cree of procuring cogenerottor, for our cus ' < good one. ( Let me essure you that it is TUEC's htinuing desire to purchese [q cogeneration, et a price which is attrective to our custo ,'ers."We hope that Pan!
) o pcrt of that program.
I i i J
' Trely, \
/ sf&f <
Derrell Develhymer 7 DB/sw } Enclosure 1 4 l
.. 1 < l i i I
i l l l l
a O P ATTACllMENT 7 I ( i i i
Attachment-7 to TXX-88751
' October 21, 1988 ( .
PANDA WPhPt .,, ENERGYCORPORATION An Auctnate Energy Company Fel' ay 4,1987 Mr. Darrell W. Bevelhymer Manager Cogeneration Texas Utilities Electric Company 400 N. Olive LB #81 ~ Dallas, TX 75201 Dear Darreth Thank you for your time in meeting with us this morning to discuss our Rock-Tenn cogeneration contract. We are still expecting to reach a mutually agreeable business arrangement under which you will purchase the surplus t power from this project. However, we are bitterly disappointed to disecar that we have been placed back at the end of your cogeneration contract queue by alleged developments completely beyond our control. We are especially frustrated that, after considerable effort on our part in arranging fuel supplies and project financing, aur once acceptable competitive power sales rate is now deemed unacceptable, because of new, highly prospective and unverified project developments. . . Tne Rock-Tenn project has n superior cumbination of chara'cteristics, including geographic location, host industry, gas supply and project design and equipment. The Rock-Tenn project will be as reliable, available and durable as any cogeneration project availablo to TUEC. The Rock-Tenn project has more certainty of gas supply, qualifying facility status, environmental permits 3 i and construction schedule than any other potential projects which you are considering. We are certainly offering power to you for less than other projects with which you have signed even longer contracts. 1 Our first inclination is to abandon this endless, unfruitful "negotiation" process in favor of pa: suing other purchasers and/or legal and adminl**21tive remedies. liowever, we feel we must make every ressonable effort to cell you pawer i REL. . :D FEB > '.C t .' CNENERATION 4100 Sprina Valley. Suite 1001 f>altas. Tesas 75244 21 U960 7159 r
I ,
< C Mr. Darrell W. Bsysthymer C
Page 2 from this excellent project and we believe you need this reliable and economical power now and into the future. As a result, we will get back to you within the next few days with apf improvements which we can make in our proposed contract terms. best offer to purchase our power.In the meantime, we are always prepared to cons Sincerely, Hans R. va PggsMent'rt KutleTburg HVK/np - cc: Mr. Steve Collier Mr. Ed Gwynn - Mr. Robert W. Carter Mr. Mike Wollitz e e a e 6 eW S 9
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e
- d i
- .n
e ATTACIIMENT 8 I I I l l l 1 l l 1 1
Attachment 8 to-TXX-88751 October 21, 1988 00CX5T NO. 7470 PETITION OF PANDA ENERGY l CORPORATION, ET AL., FOR A CEASE PL'BLIC UTILITY COMMISSION I , AND DESIST ORDER AGAINST TEXAS I ~ UTILITIES ELECTRIC COMPANY 0F TEXAS - l ORDER In public meeting at its offices in Austin, Texas, the Public Utility i Corraission of Texas finds that the above referenced application was processed ' accordance with applicable statutes and rules by examir,ars who prepared and > filed a report containing Findings of Fact and Conclusions of Law, which Examiners' Report is ADOPTED and made a part hereof. issues the following Order: The Commission further 1. Panda Energy Corporation and Rock-Tenn Mill Division, Inc.'s " Petition is hereby DISMISSED for these reasons reflected in the Examiners' Report' in that' the Petitioners have failed to state a claim for which relief can be granted.
- 2. For the purposes of ruitng upon Texas, , Utilities Electric Company's Motion to Dismiss, the factual assertions contained in the Petition are taken as true.
t
-continu,ed-I P
I l 00CXET NO. 7470 : ORDER - PACE NO. 2 l 3. All motions, applications, and requests for entry of specific Findings of Fact and Conclusions of Law, and any other requests for relief, general or specific, if not expressly granted herein are DENIED for want of merit. ' ' SIGNED AT AUSTIN, TEXAS on this the
~~
_ day of h 1987. PUBLIC UTILITY COMMISSION OF TEXAS SIGNED: 8 b DENNIS L. THOMAS a SIGNED: < 0 "IqdLLMP g Q j O :.
- SIGNED:
r di . ~ ~ ~ nd ) up(uEna - p ATTEST: - h k. h $Gr ~ PHILLIP A./ HOLDER SECRETARY OF THE COMMISSION s 1sw h r 9 ... h I a l 1 f
,--c - _
t
/
l' * Public Utility Commission of Texas o.nni, :.. rhom,, 7800 Shoal Creek Boulewd Suite 400N " ""'8 e
, l Austin, Texa 78757 512.'458 0100 Jo tampbell N.. Cornaumoon Marta Gre>tok October 1, 1987 #"""*""
'J: Chairman Thomas Comissioner Campbell Commissioner Greytok '
All Parties of Rec.crd . Re: Docket No. 7470--Petition of Panda Energy Corporation, et al. Cease and Desist Order Against Texas Utilities Electric Company , for a
Dear Sir 'o'r Madam:
~
the above referenced docket. TP e Enclosed is a copy of the Examiners' Report and open meeting on October Comission will consider this case at an 7000 Shoal Creek Boulevard, 21,1981, Austin,at 9:00 Texas. a.m. in the Commission's offices. Exceptions to the Examiner's Report inust be filed in writing by Monday, October 12, 1987. keplies to.. exceptions must be filed in writing by Mnnday, October 19, 1987. An" original and ten (10) copies of exceptions and replies to exceptions must be filed with parties of the Comission . Filing Clerk, and a copy must be ' served upon all record. , Pursuant to Commission Procedural Rule 21.143, requests for oral argument all partiesmust be made by 5:00 p.m. in writing, filed with the Comission, and served on final order meeting. the fourth scheduled working day qreceding the this requirement discretion. may be waived and oral argument nearo at ti., welecme to attend if you want to.Your presence at the final order meeting is n ; to you shortly after the final order meeting.A copy of the signed Order will be maile *
' Sumary of Examiners' Review and Recomendation This is a ecmplaint filed by an electric cogenerator against an electric utility. The cogenerator, Panda Energ facility, Rock-Tenn. Company Mill Division, Inc.y Corporation, and its host of relief from the Comission, , era seeking various forms execute a retroactive cogeneration contractincluding an order requiring the utility to calculated in the utility's standard avoided at thecost full avoided cost as !!<,. 6065 docket (Docket F
00CXET NO. 7470 Letter - Page No. 2 The utility. Texas Utilities Electric Company, has filed a Motion to Dismiss. The examiners are recomending that the Pr.tition be dismissed in its entirety based on a finding that it fails to state a cause of action for which relief can be granted. This recomendation is based in large part upon the finding that there is more cogeneration capacity available to the utility than is necessary to fulfill its cogeneration capacity requirement. The applicable statutory provisions include the Public Utility Regulatory Policies Act (PURPA) and Section 16(g) of PURA; the issues are governed by P.U.C. SUBST. R. 23.66. Sincerely, C9 Paula Cyr - < Administrative Law Judge f fGa/Q J. Xay Trostle Hearings Examiner 1sw .~ ,, Enclosures '
= se9 m
Og e 4 a 4
*') .
.t
't DOCKET NO. 7470 -
PETITION OF PANDA ENERGY l CORPORATION, ET AL., FOR A CEASE PUBLIC UTILITY COMMISSION I AND DESIST ORDER AGAINST TEXAS 1 UTILITIES ELECTRIC COMPANY 0F TEXAS l EXAMINERS' REPORT (This document serves as an Examiners' Report in Docket No. 7470 and as an ' Examiner's Order in Docket No. 7581. The only difference is that the Examiners' Report in Docket No. 7470 contains Findings of Fact and Conclusions of Law ta Section V and there are no findings or concitsions in the Examiner's Order in Docket No. 7581. In every other aspect the documelts are identical. This fonnat facilitates the Comission's consideratico of separate dockets.) identical issues 9n I. Procedural History A. Docket No. 7470 On April 14, 1987, Panda Energy Corporation and Rock-Tenn Cornpany Milt Division, Inc. (Panda and Rock-Tenn or the Petitioners) filed a pstition with this Conmission requesting that Texas Utilities Electric Company (TU Electric be ordered to enter into a long-tenn firm purchased power agreement with Pandai , and that upon notice and hearing, the Comission order TV Electric to cease and ' desist from entering into any contracts for the purchase of capacity and ene from any other r,nalifying facility pending final ruling on this matter. O r, ., April 28, 1987, TU Electric filed its Answer to the Petitioner's Request. 1 P
k e
.. . DOCKET NOS. 7470 and 7581 PAGE NO. 2 Pursuant to notice, a prehearing conference was convened on May 5,1987.
Appearances' were entered by the' Petitioners, TU Electric, Occidental Electrochemical Corporation (Occidental), Gentex/TSG , Ltd. (Gentex), Cogen - Lyondell, Inc. (Cogen Lyondell) and the Commission's ' General Counsel._ The ; motions to intervene of Occidental and Gentex were granted. (Cogen Lyondell had i not yet moved to intervene at the time of the prehearing conference.) I Pursuant to a prehearing order dated May 7,1987, the examiners established 1 a briefing schedule on legal issues relating to the appropriateness of a cease and desist order. The examiners also established the -type of notice to be { i provided in this case. On May 12,1987, the examiners set forth ' a briefing - f schedule to address the Petitioners' request for a Comission order rtquiring~ TU Electric to enter into a contract with the Petitioners, i { On May 8,1987, the. Petitioners appealed the examiners' prehearing order i regarding the cease and desist issues to the Commission, and on.May 15, 1987, TU Electric filed its appeal of the examiners' order regarding notice, and further filed its response ~ to the Petitioners' appeal. I On May 18,1987, the ! I examiners advised the parties that, by written ballot, the Comission had k ! declined to hear the appeals of the Petitioners and of TU Electric. I n p requestet. On May 20,1987, TU Electric, with concurrence of "all parties of record, uat the examiners stay their May 7,1987 order and further proposed a { i revised procedural schedule. t In its motion. TU Electric asserted that the { Petitioners would file an Amended Petition and that TU Electric would fi! Answer and/or Motion to Dismiss thereto. The parties further requested an I i opportunity to file briefs on the I Petitioners' Amended Petition and i TV Electric's Answer and/or Motion to Dismiss. In its motion. TU Electric further proposed a revised procedural schedule for this case to which all the parties agreed. On May 20, 1987, ! the examiners granted TU Electric's motion and established a new procedural schedule to govern this case. L 4 On May ti,1987, ti.e Petitioners filed Petition. their First Amended Original l On June 5,1987, TU Electric filed its First Amended Original Answer
- and Motion to Disniss. On June 22, 1987 TU Electric filed its initial brief in 6
) e
- - - - _ - - . . . _ , . . - . - , . . , . . , . _ . . . , , . - , _ _ , _ . _ _ _ _ , _ . .._...-,-,m.-_ . . . _ . . _ _- ._-_..m. . . , . . . - - . , , _ ,-_ ,,<--- _._
*1 00CXET NOS. 7470 and 7581 PAGE NO. 3 support of its Motion to Dismiss, and the Petitioners filed their initial brief in opposition TU Electric's motion. On July 6, 1987, TU Electric, the Petitioners and the Ccmission's General Counsel all filed reply briefs.. No {
other briefs were filed. On May 7,1987, the Petitioners filed a motion requesting Commission order excepting Panda from complying with the confidentiality agreement into which it had entered with -TU Electric; such agreement prohibited Panda from disclosing any' infomation it had obtained during the negotiation process. On May 15, 1987, TU Electric filed its response to the Petitioners' request for an j exception and Comission order regarding. the confidentiality agreement. On , May 21, 1987, the Petition (rs filed comments regarding TU Electric's response to Panda's request- to be excepted from complying with the confidentiality agreement. ) On May 29,1987, the examiners directed the parties to file final I coments regarding the issue of the confidentiality Agreement, ordered [ TU Electric to file a proposed protective order, and established dates by which j ( ! parties were required to file coments to TU Electric's proposed Protective " Order. , On June 8, 1987, and June 9, 1987, the Petitioners and TU Electric filed l final coments regarding the issue of the confidentiality agreement. By order dated June 17, 1987, the examiners determined that parties cculd obtain discovery on confidential infomation relating to cogeneration contracts into which TU Electric had entered. Such access, hoiever, must first be in j compliance with the discovery dispute procedures which the examiners established in their June 17, 1987 order. s i l On June 18, 1987, TU Electric filed a proposed Protective O' der. No timely ! cements were filed. ! On July 8,1987, the examiners issued a 3rotective Order o k i that did not adopt TU Electric's proposed in toto, and that would be utilized in this case only after the parties complied with the procedures relating to discovery disputes outlined in the June 17th order, and only af ter the examiners detemined that the requested information ! i j otherwise exempted from disclosure. is confidential, privileged, or ' i j i j On July 8,1987, the Petitioners requested an opportunity to present oral argument in opposit.on to TU Electric's Motion to Dismiss. { (The examiners note I s 4 m , . _ _ , . _ , , , _
DOCKET NOS. 7470 and 7581 PAGE NO. 4 that TU Electric had made a similar request at the May 5,1987 prehearing conference.)- Pursuant to an order dated July 27,1987, oral argument was scheduled in Docket Nos. 7470 and 7581 for August 21, 1987. (Oral argument was. -; heard in Docket No. 7581, Petition of National Cogeneration. Inc. for an- Order i ! Reoutring Execution of Power Purchase Contract by Texas Utilities Electric Ccmoany, because the legal issues presented in that case were virtually identical to those presented in Docket No. 7470.) and un August 3,1987, and on August 6,1987, PSE, Inc. (PSE), Cogen Lynch Cogen Lyondell fileo a motion for protection against TU Electric being required to produce certain confidential- information. On August 6, 1987, " PSE, et al., filed affidavits in support of their jnotion. On August 3,1987 Falcon Seaboard 011 (,ompany (Falcon Seaboard) and Power Resources, Inc. (Power Resources) filed a similar motion, and further requested limited intervention to protect their interests against disclosure. On August 20, 1987, Applied Energy Rescurces, Inc. (AES) filed its objections to certain requests for infonnation propounded upon TU Electric and further requested limited ; intervention. .On August'21, 1987 , Bio-Energy Partners (81o-Energy) similar objections and motion. filed On August 3, 1987, TU Electric filed its
^
objections to Petitioners' First Set of Reglests for Information, and on August 3, 1987, and August 18, 1987, to Petitioners , Second Request Information. for ; On August 3,1987, the Petitioners and TV Electric filed a joint , motion requesting relief from complying with the procedural discovery schedu established in the examiners' June 17 1987 order regarding objections to the { First and Second Requests for Information, and further requested approva revised procedural schedule to address these objections. ! examiners granted this motion. On August 4, 1987, the On August 12, 1987, the Petitioners requested clarification of the examiners' June 17, 1987 and July 8,1987 orders because these orders did not delineate proceJures to addrest third party discovery objections, and further requested an extensica of time to file such respon)! On August 18, 1987, ! requests for the examiners issued an order stating that' outstanding intervention, third-party discovery objections, and the Petitleners' request for clarification would be taken up at the August prehearing conference. , 1987 21 l
.,. . ~ . __ _.
. 00CXET NOS. 7470 and 7581 PAGE NO. 5 On August 21, 1987, a joint prehearing conference was convened. ,
Appearances were entered oy TU Electric, the Petitioners, National Cogeneration, Inc. (Natinnal), Falcon Seaboard, Power Resources, Occidental, Cngen Lynchburg, Cogen Lyondell, PSE, and the Commission's General' ' Counsel. Motions for , limited intervention 'of Falcon Seaboard, Power Resources, PSE, Cogen Lynchburg, Cogen Lyondell, and AES were granted. Under the mechanism established in the ' examiners' June 17, 1987 order, the motion to intervene of Bio-Energy Resources was also granted. All discovery to which objections hed been filed were placed in abeyance pending the examiners' ruling .on TU Electric % Motion to Dismiss. [ Official notice was taken of the Examiner's Reports and Commission Orders in , Docket No. 6065, Apolication of Texas Utilities Electric Comoany for Acoroval of - Standard Avoided Cost Calculation;
. Docket No. 6190, Apolication of Texas U t.111 ties Electric Company ~ for Approval j
of Notice of Intent to . File an i Apolication for certification of Combustion Turbine Generating Units in Ward. Mitchell and Hood Counties; C Jcket No. 6526, Application of Texas Utilities i Electric Company for Certification of Combustion Turbine Generating Units "in
- l Ward Mitchell and Hood Counties; and of pages VI!-1 through VII-28 and VII-56 '
through VII-58 of Volume ! 'of the "Long-Term Electric Peak Demand and Capacity Resource Plan for. Texas ," issued by the Comission in August 1986. (The , examiners would note that official notice of these de;uments was also taken in ! Docket No. 7581.) 4 [ No notice, other than to the Texas Register, has been provided in this. Case. (For purposes of simplification, when the examiners refer to Panda, they do
- not intend to ignore Rock-Tenn's position in the above case, but because it is identical to that of Panda, the report will simply refer to Panda for the sake of efficiency.)
i d j e
4 00CXET NOS. 7470 and 7581 PAGE NO. 6 Panda has requested the following relief, all of which TU Electric opposes: 1. A Commission order requiring that this cogeneration contract be based upon the terms and conditions and the standard avoided- cost calculations as approved in Docket No. 6065; 2. A Commission order detenntning the true capacity needs of TU Electric and expanding the amou:st of firm energy and capacity for which TU Electric must, contract with qualifying cogenerators, above the requirements reflectM in TV Electric's "Long-Term Electric Peak Demand and Capacity Resource Forecast for Texas" as established under ' Section 16(f) of the Public Utility Regulatory Act (PURA) Tex. Rev. Civ. Stat. Ann. art.1446c (Vernon Supp.1987); 3. A Commission order disallowing TU Electric's recovery of all payments made f.or cogenerated energy and capacity for ' all cogenerat16n _qontracts executed by TU Electric during the pendency of this case; -
- 4. A Commission order prohibiting TU Electric frcm contacting any, potential host of Panda or any utility with whom Panda is currently attempting to negotiate a cogeneration contract;,aH
{ 5. A Camission order requiring TU Electric to adopt a specific fonnal bid procedure for evaluating offers from qualifying facilities within ' 4 a specified period of time. B. Docket No. 7581 On July 6,1987, National Cogeneration, Inc. (National) filed its Original Petition and Complaint. In its Ccmplaint, National prayed, in part, for an order requiring: (1) that TU Electric satisfy sll the matters complained of or i answer the Complaint within 20 days fecm date of service; (2) thatTU Electric state in detail and with specificity the terms and conditions of National's preposed contract to which it objects and the basis for each objection; and (3) that an expedited hearing schedule be est blished. ) P ,
0 0t,- 7- ! " O, os# Examiner's Order Mo 1 a ts 2' -
.;1y -
requirements set out aboys
- i u. d tSe first t%
t "dur: 'otes iv ordar and set a prehearing co .. v., ..
, ,1 y , , ,
filed r mot:tn requesting modification of certa en pt. .. nr E ,, . ',* . A prehearing conference w - elo a '4 N , tons c' *:"' .,w 3 Complaint requestir.g the amend.menc - t
- a Jubstamive Rt ter were dismissed as bs ; inappropriately .rc . . -
cf a ce plaint ' t- .; ' b.; , and as not following the appropriate
- Mr & rulemak.ing ;x. ;.a ,
Discovery procedures were set forth, and .
.r determined that should any 3aterial worthy of protection be reque. .! ;rotec t've order entered in '
Docket No. 7470 would be, utilized to . s No. 7581 also. TV Electric indicated that it would shortly be filing a mdion to dismiss the docket. After determining that the issues in this docket were nearly identical to those raised in Docket No. 7470 (taking into account certain factual differences between National and Panda / Rock-Tenn situations, and that the prayers for relief we're not identical), a briefing schedule was set tht allowed the parties to "piggyback" their efforts 'onto the work that .had already been done in Occket No. 7470. . TU Electric, in conformance with the examiner's orde,r, filed its Motion to Dismiss and Original Answer on July 29, 1987, and its Initial Brief in support of its Motion to Dismiss on August 5,1987 National filed its Response to the Motion to Dismiss on August 12, 1987, in which it adopted the briefs filed by Panda in Oceket No. 7470. Since National has adopted Panda's briefs, for convenience the examiners will refer only to panda, unless it is appropriate to distinguish between the two. TU Electric fil m d its Reply Brief August 18, 1987 on On August 19, 1987, the general counsel filed his Response to TV Electric's Motion to Dismiss, incorporating the brief filed by the general counsel in Occket No. 7470.
- l B*
n ,- ,y- _ .- L-DOCKET N05. 7470 and 7581 l PAGE NO. 8-National has requested the following substantive relief, all of which
- TU Electric opposei
- -
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- 1. l That the Commission detennine that National's Complaint states a. prima !
facie case and conforms to the rules of the Comission;
- 2. i That the commission find that the proposed contract submitted as an attachment to the Complaint be fouad just, reasonable, .
nondiscriminatory, in the public interest, and in compliance with all i applicable federal and state laws and rules; and that TU Electric be ordered to execute the contract at TU Electric's full avoided cost, ' or, in the alternative, substantially in accordance with the rates,
~ '
tenns and conditions of the proposed contract (as updated by National ! and Comission amendments); 'l
- 3.
The amendment or elimination of P.U.C. SUBST. R. 23.66(d)(1)(F) arid ' ' (F)(iii), as. the rules are discriminatory in practice and' effectively - circumvent Section' 210 of the Public Utility Regulatory Policies Act (PURPA), 16 U. S.C . A. 1824a-3 ! (this portion of the Complaint was dismissed in Examiner's Order No. 1); ^ , 4 j 4 i The amendment of P.U.C. PROC. R. 23.66(d)(1)(G)ln such a man ; I require each utility to set up timely and reasonable time periods or ! windows, with an orderly request for purchase procedure, during which I the utilities are first to solicit and evaluate capacity offers frem , I projects within that utility's service area (this portion of the ( Complaint was dismissed in Examiner's Order No.1); f { ! 5. I The disallowance, for ratemaking and rate recovery purposes, of any !
- and all cogeneration contracts executed by TU Electric during the
{ I pendency of this docket, due to TU Electric's violation of the i applicable federal and state statutes and rules; and '- 6 Such further relief as may be lawful and proper if it is found that l TU Electric wrongfully misled National into protracted and expensive , ef forts to obtain a power purchase agreemJnt, l P
th I ATTACllMENT 9
Attachmhnt'9to'TXX-88751 October 21, 1988 f
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SELECT COMMITTEE ON A STATEWIDE ENERGY PLAN Written Comments Submitted By CAP ROCK ELECTRIC COOPERATIVE
.Stanton, Texas l
h i I August 8,1988 .
*q e e
O* F I
CAP RCCK ELECTRIC COOPERATI','E. I!!C. k*RITTEt CCMMEtiTS FOR SEI.ECT CCMMITTEE ON A STATE *.;IDE ENERGY PLAN July 15, 1988 Cap Rock Electric Cooperative. Inc., respectfully submits these co==ents to the Select Committee on a Statewide Energy Plan. The purpose of these comments is to: statewide energy planning, (i) indicate strong support fot _ and (ii) make the Select Com=Letse aware of certain matters that constrain .the ability of independent electric utilities, including rural electric cooperatives such as Cap Rock Electric Cooperative, Inc., to participate in, or to gain any benefit from, statewide energy planning activities. BACKCROUND INFORMATION Cap Rock in headquartered Electric Stanton.Cooperative, Texas. Rural Inc. is a rural electric cooperative electric cooperatives are electric utility systems which were originally organi:ed to serve rural areas utilizing financing from the Rural Electrification Administration (REA) of the United States Depart =ent of Agriculture. A rural electric cooperative is a nonprofit utility which is owned by its consu=ar members and operated by a professional staff which reports to a Board of
- Directors made up of consumer members elected by the consu=er members.
Although rural electric cooperatives were o~riginally built and operated to s e rve rural residential and agricultural loads, they now serve all types of loads, including residentist, commercial, industrial, municipal and 45ricultural in both rural and suburban areas. One in ten Texans is a member of an electric cooperative, and cooperatives provide service in all but nine of the State's 234 counties. Texas Rural Electric Cooperatives currently own and operate more than 250,000 miles of transmission and distribution line, and provide electric se rvice to consumers throu5h approxi=acely 1,034.000 meters. This se retce is provided throughout the State of Texas with only 5,524 employees operating more than two billion dallars in plant in service.
' There are 88 electric cooperative systems in Texas.
are electric distribution cooperatives which buy all powerOf these, 76 requirements at wholesale for subsequent resale to retail and wholesale consumers. Approximately one third of the Texas distribution cooperatives are members of one of the three operatin5 generation and transmission systems all provide (C&T's) the which are wholesale the=selves REA cooperative systems. C&T's power requirements of distribution systems their member resources, wholesale from wholly and/o r jointly owned generation power purchases, and federal hydropover allocations. An operating C6T. along with its neeber dist'ributten 1 i 9
cooperatives, makes up an integrated e'.ectric power systen similar in planning and operation to the invescor owned utilities (IOU's). The remaining distribution cooperative systems purchase their wholesale power requirements from one or = ore utilities including investor owned utili..ies and state agencies such as the Lover Colorado River Authority (1.CRA) . Many of these distribution cooperatives are members of "paper" C&T's which do not currently operate generation and transmission facilities, but which have begun to develop power supply plans, including assignment of the me=ber distribution system wholesale contracts. A few individual distribution cooperatives, such as Cap Rock Electric Cooperative, are independently pursuing development of power supply plans involving acquisition and operatien of generation and transmission resources. Cap Rock Electric Cooperative provides service to approximately 10,000 square miles in 13 counties in West Texas. Service is provided to consu::ers through 16,300 meters with almost 5.000 miles of transmission and distribution line. More than half of the energy sold
- by Cap Rock Electric Cooperative is provided to petroleum production loads in the Persian Basin. This is a particularly important service since Permian Basin oil production accounts for approximately 20% of the total oil produced in the United States. Most of the remainin6 energy sold by Cap Rock Electric Cooperative is consumed by residential and agricultural customers. Considerably loss chan 10% of total energy sales are provided to agricultural and irrigation loads on an annual basis, but as much as 30% of the energy sales may be consu.ned by these loads during irrigation months.
While cap Rock Electric Cooperative va's originally formed as an REA distribution cooperative, it has since entirely refinanced its federal mortgage and no longer relies on federally guaranteed funds te finance expansion of plant in service. Cap Rock Electric Cooperative currently purchases all of its wholesale power requiremeats from Texas Utilities Electric Company (TL'EC) through the Texas Electric Service company Division. loads. TUEC is also Cap Rock's principal ecmpetitor for retail More chan half of Cap Rock's service territory is dually certified for service by both TUEC and Cap Rock Electric Cooperative. Cap Rock Electric Cooperative is not currently affiliated with any operating or "paper" C&T. CAP RCCK SUPPORTS STATE *JIDE INERGY PixiNING There is a need within ERCCT for joint planning and inte grated operation of the bulk power system for maximum economy with acceptable reliability. There is also a need for ERCOT to be more strongly ) involved in regional bulk power system planning and operations. Cap j Rock Electric Cooperative strongly supports legislation and ragulations which: (i) provide ! planning and operations, strong andincentives (ii) for statewide and regional energy remove the considerable barriers which j currently constrain and even prohibit meanin6ful statewide buIk power l l 2 I l l I l l
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system planning and operations. It is certainly possible for bulk power system plannin5 and operations to transcend the boundaries and self interests of individual electric utilities. An example of this is the Inte6 rated Transmission System of Georgia which is jointly planned, built and operated by Georgia Power Company (an investor. owned utility), Oglethorpe Power Corporation (a C&T cooperative with 39 distributic;. cooperative members), and the Municipal Electric Authority of Georgia (a municipal power authority with 49 municipal electric systems). This joint bulk power system has eliminated duplication of bulk power system investments as well as nonoptimum segregation of operations. Also, coordinated planning and operation of bulk power systems are successfully accomplished in the Pacific Northwest and in many eastern states. Part of the reason given by ERCOT's few controlling utilities for the continuing isolation of ERCOT from the rest of the nation is the critical need for coordinated However, bulk power system control within ERCOT. , withit. this carefully isolated bulk power island is a segmentation of planning, operations and bulk power resource control that operations. really piecludes true economies in system investment and Cap Rock urges the Select Committee to persist in the investigation and implementation of effective joint bulk power system planning and snerations within ERCOT. These comments number of issues and concensus that must be considered inare intended to highlight a this necessary objective. accomplishing i DESIRABILITY OF "PUBLIC P0k'ER" ENTITIES Cap Rock Electric Cooperative believes, electric cooperatives and municipalities in as do the other rural Texas, that the "public power" organitation structure (i.e., the public power electric utility is evned and governed by its consumer members) is a desirable form of electric utility, and provides for superior customer se rvice and management accountability. The public power organitational structure does not suffer from the conflicti.*g goals of profitability stockholders and economy of power cost for consumers. Furthermore,for a public power electric utility which is wholly ovned by tes consumers, as well as governed by its consumers, is more strongly oriented toward consumers. As a result, the public power utility has a singular incentiva for maximum service and minimua cost. If Texas' public power entities are unable to maintain financial and organitational viability in the face of aggressive competition and predatory wholesale power pricing, this highly desirable form of i electric utility will be absorbed by neighboring profit. oriented, investor owned electric utility, thereby further reducing 4,esirable diversity of electric utility structure within the ERCOT bulk power 3 I l 9
4 system. No utility in Texas can expect to maintain financial or organitational viability without access to transmission and generation in the bulk power and joint operations. system, and participation in stacevide energy plannin5 net one of the Those independent utilities in Texas which are - not few major generating utilities which control ERCOT may for these key matters. remaining dependent on their principal competitors survive by simply Cap Rock Electric Cooperative finds that it cannot be assured of its survival as a public utility or of its ability to prov..de economically competitive service to its consumer members unless it
- begins ;o actively pursue direct power supply planning activities. -
including obtaining access to transnission service and alternative power supply resources, and possibly acquisition of transmission and generation resources. ,
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j POWER SUPPLY PLSSNING ACTI'/ITIES Cap Rock is engaged in several activities designed to improve its automatingand efficiency the strengthen monitoring its economic viability. Cap Rock is currently 1 electronic supervisory controland control of its utility system through an and data acquisition (SCADA) system. j Turther improvements are expected through automation of mappin5 and engineering functions with microcomputers. j voll. A Cap Rock is aggress'.vely pursuing power supply alternatives as ;
- contract has been executed for purchase of economy energy from Houston Lighting & Power Company. t 4 Another. contract has been executed .
for purchase of 33,000 kW of capacity co5eneration facility. Several other options and associated energy from a L are being considered, and discussions are progressing with utilities throughout ERCOT. Capactivities planning Rock has discovered during its relatively new power supply i that there is little or no affective joint planning ' and operation of generation and transmission resources among the major generating utilities 4 within ERCOT. There is certainly little access to i transmission for participation in the ERCOT bulk power system. The five i or six major generating utilities within ERCOT engage in joint planning, I i construction necessary and operation to achieve of generation their own and transmission only as ! control. As a result, objectives of independence and market ; few economies have been achieved and few ' stracogies have been developed to maximite the economy of statewide energy planning maximite andand the control operations instead of strategies developed to particularly unfortunate since independence of each major utility. This is these same utt1Leies have been { responsible for
) maintaining nation's interconnected grid, the isolation of ERCOT from the rest of the
] supply planning and operating efficiencies.thereby foregoing potential regional power J l b 4 i i 1 [
REASCNS FOR PC'.*ER SUPPLY ALTE?3ATI'!ES passive, The question might arise as to why Cap Rock, historically a rather all requirements wholesale power purchaser, should nov be so actively involved in investigation and procurement of power supply alternatives. Cap Rocx believes that aggressive pursuit of some participatinn reasons: in the bulk power system is necessary for the following (1) L'holesale Price Sousere. Cap Rock cannot successfully compete for retail loads when its principal competition (i.e. TUEC) is also che utility from which te must buy wholesale electric power service. This is especially true when this co=pecing supplier can set prices in a manner which adversely affects Cap Rock's ability to compete. In the last four general race cases which TUEC has brou8hc before the Texas Public Utility Commission, the level of increase was in each case much higher a for wholesale customers, such as Cap Rock Electric Cooperative, than for TUEC's retail customers. This results in a form of "price squeeze" which causes Cap Rock Electric Cooperative to pay more for wholesale power in some months than TUEC charges its own retail customers for retail power service. This necessarily results in unacceptably high rates for Cap Rock's own retail customers. TUEC has summarily refused requests by its wholesale customers for mitigation of this price squeeze effect. TUEC has specifically refused to consider and coincident peak billing, swiner.vinter differentials, consistent cosc. allocation methods for retail wholesale classes. and Cap Rock's only avenue of relief in these matters is appeal to the Texas Public Utility Commission which, in most cases, vill take a position favoring the larger 'consettuency represented by TUEC recall ratepayers rather than protect TUEC wholesale i customers and their smaller number of retail consumers. This problem is also difficult for other public power entities who purchase power from suppliers who are regulated by the Federal Energy Regulacory Commission, but whose retail races are regulated by the Texas Public Utility Commission. Cap Rock is particularly concerned that this price squeeze vill intensify vich the advent of the Comanche plant. Peak nuclear TUEC has repeatedly affirmed that its recall rate increase will not exceed 10), but has made no such commitment regarding wholesale races. (2) More Econemteal Power Suepiv options. Cap Rock finds that there are sources et wholesale power supply within the State of Texas that are considerably more economical than. tho arbitrarily priced wholesale power bein5 provided by TUEC. , 5 P
Cap Rock finds that, instead of taking advantage of very attractively priced surplus capacity and energy TUEC instead continues to: (i) contract for more expensive capacity and energy from cogeneration p roj e c ts . (ii) plan new natural gas fired combustion turbines, and (iii) continue with plans to co=plete and place in service the incredibly expensive Comanche Peak nuclear generating plant. Cap Rock Electric Cooperative has not had, and does not have any say in the planning decisions made by TUEC, but is expected to pay for the results of TUEC's unilateral planning decisions through whatever wholesale power rates and tariffs can be obtained by TUEC. Given the previously described disparity between recovery of revenue requirements as between the wholesale and retail classes, Cap Rock expects to continue to pay a disproportionate share of even unreasonably high costs for inappropriate decisions over which Cap Rock has no control. (3) Intense Retail Comoetition by TUEC. TUEC has recently initiated an extre=ely aggressive to capture retail marketing and sales pro 5 ras loads in se rvice territories which are dually certified for TUEC and rural electric cooperatives. TUEC's competitive practices are so aggressive as to be predaccry, including plans for construction of extensive duplicate distribution facilities, high profile misleading) (and advertising campaigns in newspapers and billboards, and discrimination in favor of contractors and developers in dually certified service territories. TUEC has also been talking up a plan to seek legisistion to entirnly eliminate certified service corritories in Texas. Cap Rock Electric Cooperative has neither the financial and political - resources, nor the market power (i.e., market power being the control of generation and transmission in the ser/ ice territory) to effectively compete with TUEC. (4) TUEC Obseruetion of Desirable Economy Enerev Transactions. Cap Rock Electric Cooperative has contracted for economy energy purchases from Houston Lighting and Power Company. Notwithstandin5 the fact that the economy energy transaction woul6 Electricbe of economic benefit both to TUEC and Cap Rock Cooperative, transaction to TUEC has summarily refused to allow the proceed, withholding scheduling and transmission services. Cap Rock contracted for this economy ener5y purchses at the express invitation of HL&P, and with no initial indication of refusal by TUEC. TUEC representatives confirmed to Cap Rock Electric Cooperative management that this refusal van based on management policy and not on economics, all requirementsreflecting customersIUEC's would,view that such activitisa by in the long run, be 6 l 9
I l i potentially territeries. damaging to TUEC's market power in its service TUEC refused to allow this transaction for Cap Pock Electric Cooperative, even though it had previously allowed a similar transaction for customers, and even another group of all requirements wholesale though Cap Rock has offered to share the power cost savings with TUEC. . transaction is Refusal to facilitate this in direct conflict provisions of the NRC license of Comanche with certain Peak. of the critical to note It is that the amount that Cap Rock would save in power costs through this transaction would allow a reduction in rates which would mitigate the "price squeeze
- discussed above.
(5) Possibility of Disolacemene/Aeoutsteien by TUEC. TUEC has recently begun power utilities. to show a positive interest in acquiring public Specific '
..fers have been made by TUEC to purchase or lease the electric distribution systems of several municipalities currently se rved by Bratos Electric Power Cooperative. Cap Rock Electric Cooperative is concerned that TUEC may be able to eventually succeed in acquiring public power systems such as Cap Rock Electric Cooperative by leveraging its immense financial and political resources, particularly when its current cash flow constraints related to
, Comanche Peak are eased. (6) Lack of Access to Derer.ulated Bulk Power Market. The electric utility industry is currentiy faced with the prospect of deregulation of so=e at least the generation side of business. So long as Cap Rock Electric Cooperative remains a captive, all requirements customer of TUEC, it is likely that Cap Rock Electric Cooperative vill be precluded from any participation in the economic or other benefits of independent power production (IPP's), or statewide energy planning activities. Cap Rock would not expect to benefit much from TUIC's dealings with IPP's because TUEC has already, on repeated occasions, shown its inclination to svin5 the majority of economic benefits toward its retail consumer class at the expense of its wholesale consumer class, including Cap Rock Electric Cooperative. (7) Need to Suceert Corenerat;on Purchsse. Cap Rock Electric Cooperative has contracted with Panda Energy Corporation to purchase 35,000 k'J of capacity and associated energy from a cogeneration project, The purchase rate is significantly less than avoided costs, Electric Cooperative providing substantial benefits to Cap Rock i ratepayers. However, Cap Rock Electric Coopeestive is currently totally dependent upon TUIC's provision of wheeling, standby power service, and supplemen~tal 7 9
power service, services. TUEC ascan, well as control area schedulin5 and d'. spa:ch if it so chooses, prevent successful i=plemen:ation of :his desirable project either by outrigh: refusal to and unreasonable ra:escooperace or through less direct nosociation delay TUEC has already indicated and contract that terms and conditions. constraining terms and conditions it will be seeking very in new contracts to be required for Cap Rock to deal with the cogeneracion project. . any Cap Rock Electric Cooperative presents these fices not to request in:ervencion by the Select Committee, but rather to effectively illustrace why Cap Rock Electric Cooperative feels that ic must
#5gressively Furthermore, pursue alternative power supply planning activities. '
these matters should provide the 3 elect Committee with some insight into some underlying impedimenes to efficiencies. . statewide energy planning RECUIREMENTS TCR SUCCESSFUL PC'JEP. SUPPLY PLANNING ACTIV! TIES ' Cap Rock alternacive powerElectric Cooperative is firmly coe.mitted to the pursuit of supply planning activities. significant barriers in this pursuit. Those few However, it faces major ERCOT utilities which refusalcontrol transmission or unreasonable andand pricing Seneration can, by either outright Electric Cooperative from obtaining those services whichcontract terms, prevent Cap Rock to develop an are necessary participate in adequately reliable and economical power supply plan and any meanin5ful way in statewide energy planning activities. Cap Rock Electric Cooperat$ve will specifically require planning activi:1es: access to the following services in order to succeed in its power s (1) Transmission Services For the foreseeable future, the acquisition by Cap Rock ' Electric Cooperative other than new generation in Cap Rockof anyCooperative's
'lectric alternative power supply resou own ser/ ice territory will require transmission services.
That is, one or more neighboring uti. ..es will be required to wheel capacity and ener5y over their tranemission systems from ! the alternative power supply resource to Cap Rock Electric Cooperative. i In order to be able to executo long term contracts for firm capacity and energy, Cap Rock will have to be assured service. transmission of being able to receive corresponding firm ' The existing Texas Public Co aission Substantive Rules provide for Utility
- l utility to. utility wheeling. However, they some limited latitude in pricing and contrac: allow enough l eajor utilities to effectively obstruct wheelingfor the terms and conditions for 1
! independent utilities such as Cap Rock. No provisions epis: to require the coordination services or supplemental power
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. . . s services described below. (2) Coordination Services cap Rock Electric Cooperative vill require emergency standby. maintenance standby, and control area scheduling services for most alternative power supply resources. TUEC does not - currently even have standby tariffs or control area service tariffs on file with the Texas Public Utility Commission, and has indicated timely fashion. sorse unwillingness to develop such tariffs in a There is no provision in Texas state law or Texas PUC Substantive Rules requiring utilities to provide these services. (3) Supplementa'l Power Se rvice It is unlikely that Cap Rock Electric Cooperative vill be able to immediately supply its entire load requirements from alternative power supply resources. As a result. Cap Rock Electric Cooperative vill need to be able to purchase wholesale power to supply some portion of requirements. Again, "UEC does its load not currently have a partial requirs.ments cariff on file with vito Texas Public Utility Commission, and has indicated some unwillin5 ness to do so for rates or terms and conditions any different than its current all rsquirements wholesale tariff. Aga$.n. there is no provision in stats law or Texas PUC rules to require wheel.ng of partial requirements power from any other supplier. (4) Control Area Requirements The major generating utilitiet within Texas, tht; gh ! participation in the Electric Reliability Council of Texas j (ERCCT) maintain their operation in an interconnected grid t with numerous overlapping responsibilities and privileges with regard to transmisJion s e rvic e s , coordiaation services, and supplemental pover services. Many, and perhaps most, cf the these responsibilities available to a "paper" C&Tand or privilogos are not immediately a rural electric cooperative such as Cap Rock Electric Cooperative. Furthermore, the major generati^5 self interest, utilities have in their power, and in fact in their the ability to make successful control area operation difficult for a small utility vichout diverse l generacion tnd transmission resources. The large 6enerating utilities are not inclined to provida control area services for a nov entry, particularly when that new entry is a campetitor. On the other hand, the reserves, telemetry, and dispatching capabilities required for control area operation make it extremely difficult for a nov entry to become a control area in order to be afforded the privileges of 9 4 9
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- independent operation within ERCOT. Again, there is no provision in state law or Texas PUC rules to afford such '
services to "paper" G&T's, rural electric cooperatives, municipalities, independent power producers, cc, generators or a other smali, independent utilities. (5) Participation in Statewide Planning - A relatively few, large generating utilities currently completely control all generation and transmission resources l within ERCOT and all of the DC ties into other reg!.ons. There is really no incentive or even any pressing reason for them to i l cooperate in planning and operations other than as necessary ! for reliability and preservation of monopoly control of bulk !
- power resources. Other independent utilities such as Cap dock are willing and even actively seeking to assume some of the i risk and control of power supply planning and operation. .
However, they are without power to effectively participate in the bulk power system except by transmission access and t support services granted by the few major utilities with , control of these facilities and ervices. Neither state laws nor Texas PUC rules grant such access in any comprehensive or consistent fashion. As a result. ERCOT operates through j
- occasional special deals between major, controlling utilities i without attention to statewide optimization and with practical ;
- elimination of most power supply competition.
I } (6) Just and Reasonable Rates ; The wholesale suppliers in Texas have grown accustomed to being i able to design wholesale races for captive all. requirements customers in a towards manner that is unfavorable the wholesale cus tome r. The utilitation of
- noncoincident peak billing, demand rat-hets, and arbitrary assu.spcions in t
i j cost allocation and race design unfairly favor ;
- residential customers at the expense of wholesale customers. '
i The major wholesale suppliers view the development of rates I and contract terms and conditions for transmission service, i coordination service, and supplemental power service as f ! entirely discretionary and merely an extension of this ; historical discrimination. Some provision must be made for r j these services to be properly cost based and to be provided ! under terms and ! conditions that are not unduly constraining, i In addition to this difficulty, Cap Rock '(snd other cooperatives) have {
, found it extremely difficult to gain reasonable consideration at i the Texas Public Utility Comission for tariff modifications and innovative rate design as are necessary to meet the prics squeeze and predatory price competition of investor owned wholesale suppliers.
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i b CONCLUSICN I Cap Rock does not seek or expect preferencial treatment. 4due r advantages, or unreasonably favorable rates and centracts. However. Cap ! Rock fints, in pursuin5 more economical and viable power supply options. ! that unreasonable barriers can and do exist. The Public Utility Board of the City of Brownsville has shown that these barriers can be overcome, if only imperfectly, only by excet led unpleasant l 4
- and undesirable litigation in various foruas. Cap Rock Electric Cooperative urgea the Select Committee on a Statewide Energy Plan to explicitly i consider the needs of smaller electric utilities such as cooperatives !
and municipalities, as well as for the major existing generating ! utilities which currently control transmission and generation within ERCOT. Their primary interests (e.g. , profitability for stockholders. [ 4 maintenance of market power, acquisition of new service area, etc.) may ; s not be wholly compatible with the development of an optinua statewide - energy plan which provides acceptable reliability and maximus economy. 2 Cap Rock Electric Cooperative reminds the Select Committee of the ! 3 j desirabi?.ity of developing and preserving meaningful competition in the bulk power supply market in ERCwT as one means of promoting maximum i economy of statewide energy supply. Cap Rock Electric Cooperative urges ' I the Select Coanittee to consider that this cannot be accomplished unless ;
' provisions are made for rural electric cooperatives, municipalities, "paper" C&- s, and other independent utilities to obtain access to -
reasonably prtcod transmission service, coordination services, and { supple: ental power services. These smaller utilities must also be given l 1 a meaningful role in the development and impletentation of statewide ! energy plans. Furthermore, without explicit legislation and ! regulations, the few, existing major generating utilities will have no , prevailing reason to sy411y promote stateside and even regional power i supply planning and truly coordinated operations. ' L i [ t a t i
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) ATTACllMENT 10 n-- .
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0 to TXX-88751 October 21, 1988 { C A P ftO C K ELECTRIC COOPERATIVE. lac. - - PO Boy 700 WEST HIGH AAY $3 . $fANTON If XA$ 73?$2 . f(((PHON ( 11gj7%))$1 M roLAN O . CC E S S A 315.563 * >43 big SF AING 3 t 5/26; 61 February 27, 1987 1!r. Ray N. Rhodes Texas Electric Service Co.' - P. O. Box 970 Ft. Worth, 'lX 76101
Dear Ray:
We powerarefrom investigating the' possibility of obtaining some co-generated various entities. would accommodate the following two scenarios:Please furnish us with proposals tha 1. The wheeling of 30.W-50}N of co-generated power f rom hx, 'A the Dallas area to Cap Rock's delivery points. , 2. The vheeling of 30!N-50!N of power f rom Cap Rock's
- Triangle Sub to our Mcdonald Sub.
G%e.. ,, \ pidtrad. - Jo or,/rs O gg //ny sc Joc/.; Ycur prompt attention to this would be greatly appreciated. Sincerely, CAP R0 LECTRIC COOPERATIVE. INC.
., a. d Rod 2er C.,_urch Manager RC3:la ' .
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l l l l ATTACIIMENT 11 1 l l l l 1 l l l l a l l l l
Attachme,ot 11 to TXX-88751 October 21, 1988 . ELECTRIC RVICE ' ~~ - - - ' COMPARY March 27, 1937
- n. n n % ces c , .c %,
Mr. Roeger Burch Cap Rock Electric Cooperative, Inc. P. O. Box 700 Stanton, Texas 79782 '
Dear Rodger:
a This is in response to your letter of February 27, 1987, regarding a ' i proposal for wheeling 30mw-50mw of'cogene area u. 1 Before a wheeling proposal can be prepared, more specific will be needed such as location of arrangements and Cap Rock points of delivery that will be affected the cogeneration n n facility ! Also, a method for matching power delivered by the cogenerator . with and need adjusting load data at various points of delivery for billin 1 would to be developed. " {: be considered. "- If standby power is required, it also needs to involved and items that would needrangement. to be incly e steps dated The Julycurrent 2,1963, cower purchase was not prepared agreement with cogenerationin betweenc mind Cap Roc for Cap points Rock to purchase all of its power fromasTU of delivery. it provides Electric for it arious ment providing for Cap Rock's purchase ofopower power now furnished b replace from and standb similar ')y services.y TU Electric and establishing a framework for wh , those being used with other wholesale ose. custo attached. Wheeling service would be provided delivered to the TU Electric system with Cap Rock's c load s und weron an h purposes. our-by-hour 4 basis and adjusting lead matching system with appropriate charges for administration exp by TV Electric. data at the r billingvarious i Standby power can also be furnished, ifense requested.incurred t 8 . l O. sox 970 . pont w O n t m. ftwat 76t04 . a OevastON OF 78 MAS T E L t p .a o w s t e s ti 338 94 t t W YILtT tt S t t ; C t a tC COMPANY
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Mr. Rodger Burch 2-MFch 27, 1?*7 whose system. systems may be impacted by r.ogener ectric and to discuss detafis necessary to develop a wh n
$1ncerely, h/i/*'/Y'0;--
R. N. Rhodes jvh attachment beet Messrs. D. J. Hay.pton K. M. Webb C. W. Barclay in eng
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Attachment 12 to TXX-88751 October 21. 1988 4 4va y Ag7 , .- y I MEMO To: Cap Rock File + i s TROM: R. N. Rhodes
SUBJECT:
Cap Rock Electric Cooperative - Cogeneration Wheeling l t Electric Cooperative at his office Wednesday. AprilDarrell Bevelh informatio., provided to him with my letter of March 27. 15. 1987 to discuss the !
- 1987 Cap Rock's request for a proposal to wheel cogenerated power. in response to Burch said that his Board had given him "marching orders" to determine -
- if Cap Rock could benefit from a proposal by Panda Energy Corporation to sell 1
them p;ver from a cogeneration plant in the Dallas area. We attached that was reviewed to mywith himofthe letter need for a new contract similar to the draf;i March
- 27. 1987 to provide the framework for L Cap Rock being a partial requ'rement's customer purchasing some of their pow; from a Qualifying Facility and for wheeling and standby se* vices. .
I We discussed the application of the wheeling rate in particular that the , j contract path race'is fixed by load site and does not vary with distance. Also ,- !
! vhy there may be wheeling'* charges from other util,ities that could be impacted Burch asked cogeneration if it would be possible fot him to get a copy of one of our contracts.
Bevelhymer explanted That the contracts are under a , 1 confidentiality not at agreement between TU Electric and the cogenerators and we were' r liberty to reveal the information in those centracts. - j We told Burch that if Cap Kock reaches a point that . ested they l I , in Panda's ment. proposal that we vill work with them on developing a wheelin g agree-1 I i bp t .. ) cci Messrs. D. J. Hampton
- b. W. Bevelhymer K. M. Webb t
- 1 :maiag .
( C . ' t. Barclay R. S. Nickels (fhQff ; J. H. Sanders C. F. Johnston i ! I
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Attachment 1.3 to TXX-88751 October 21, 1988 p-A
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i June 1,1987 MEMO TO: Cap Rock Electric Cooperative Tile l TROM R. N. Rhodas l
SUBJECT:
Cogeneration - Wheeling ' 1 t In a conversation with Rodger Burch on Tuesday, May'26, 1987 I asked if there had been any further developments in their considera- . . , tion of purchasing cogenerated pcwer and a need for wheeling service. i He said they were "in the process of crunching some more numbers. and - i . in the near future would probably be coming to us again regarding the wheeling. i } On Wednesday, May 27, 1987 Mr. Burch called to inform me that he had resigned as Manager of Cap Roc.k. l It is not known at this time what effect this will have on Cap Rock's negotiations for the co-generated power. ' 1 I i - t- . j ., . . bp e.
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j cet Messrs. D. J. Hampton I. - ! K. M. Webb 4 C. W. Barclay ,, J. H. Sanders !' D. W. Sevelhymer / - 1 i M. A. Bunting R. S. Nickels
! C. T. Johnston G. V. Loeckle i
4 1 4 RECtlVEQ ! WN 3 1987 CCGENERATION 9
_m__ e A - .- _ I I I I i b I l i ! I f ATTACilMENT 14 ( 1 i 4 I 4 1 1 4 4
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Attachment 14 to TXX-8G751 October 21, 1988 i O october 29, 1987 I
.I O Mr. J. S. Farringtoa **
Chairman of the Board and Chiaf Executive = l Texas Utilities Company , 2001 Brysa Tower - t Dallar, TX 75201
Dear Jerry:
W. V Thank you for the privilege to meet with you and Dale. Tour bespitality 9 was verydiscussion. lapressive and ' appreciated. I write to _se==marise our positica and our s 1. We consider your TESCO operating personner to be professional and very competent in handlina our daily questions and requirements.
- d 1.
However, my Board f alt it proper to discuse our -~~- plass to become a partial requiremente customar initially with you as Chairsaa. Our , desire was to minimise the chamens of you misinterpreting our reason for I enough fortoyou planning become to hearaitpartial requiramaats customar and we f alt it important i first hand. with you versus breakiat that relationship is our plan and desire.Chassing our lo 3. The necessary coordinating services can be received elsewhere utilizin your tramanissica system only for wheelingt benever, we hope to reach a euttable agteement as to standby and reserve requirements from TO Ilectric . 4 utilising a Dallas a-os host ette.Daly recently have we entered into a letter cont 1987 Ray and Darra11 Bevelhymer have been to o discuse our plans and cogeneration. 6 l l l
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r o,, Hr. J. S. Parrington October 29, 1987 Page 2 5. We will contract, formally, 14. the near future, per our wholasale power p requirements contract.give you written notice of our intent to terminate .- our all to request rates for wheeling and standby.I will be contacting Amy. Rhode Our hope is to continue our good relationship appreciate with your your assistance in company so doing. into the dintant future and we would hospitality and look forward to a prompt response to our request.Again, th Sincerely. CAP ROCK ELECTRIC COOPERATIVE, INC. n David W. Pruitt General Manager DWP:sah cct
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Mr. Dale Scarth[ ifr. Ray Rhodes l'.r. Rusty Jonas P.S. - Ray, Please provide me these c arges and rates ac your earliest convenience. M N. s
A'. TACllMENT 15 I l I l 4 1
Attachment 15 to TXX-88751 October 21, 1988 TEIAS -
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ELECTRIC 7 SERVICE ' courner m N msoces c~e cmw w~ee . November 11. 1987 Mr. David W. Pruitt Cap Rock Electric Cooperative. Inc. P. O. Box 700 Stanton Texas 79782
Dear David:
Confirming 6U"r telephone conversation I an enclosing a copy of our Rate TVC for Transmission Wheeling Service-Cogeneration and a draf t of a new Power Purchase Agreement between Cap Rock and TV Electric. These were sent to Cap Rock previously but may not have come to your attention since you became manager. l We understand' that you plan to formally give us written notice in the near future of,your intent to terminate our current contract under , which Cap Rock is a full requirement's cust.oner. The new agreement will provide and for partial standby requirement purchases and a framework for wheeling services. This draft will give you an opportunity to re-view ment. it prior to our mesting to discuss a cogeneratton wheeling arrange-ing. I will wait to hear from you regarding setting a date for the meet-In the meantime if you have any questions or there is anything else ve need to discuss. please give me a call. Yours truly. lt -0 .-
, R. N. Rhodes bp attachment cc: E. D. Scarth beet D. J. Fanpton *
- 5. C. Povere R. S. Nickals
- 11. A. Punti:4 v'f '
H. S. Creene 4 p. o,go* 970,. pomT woaTM. TEMAS tetot , ygLapwoNg se t ?) 33e es t s A olvis t o N oP T E
- A s V TILif e t s E L E CT m te cou P A N Y r
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A'ITACilMENT 16 i f l 1 l l l i
Attachment..16 to TXX-88 M1 Octob,er 21. 1988 0 CAP ROCK . ELECTRIC COOPERATIVE, INC. . Po aos P00 wtst wrGwAAv to . STANtCN t(I AS ?$742 . t(((PMQN[ 3 viot.ANO . CCESSA 115,10,t 943 April 8, 1988 tiG starNG 9tl/?6 4: Mr. Dale Scarth Division President
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- TU Electric P. O. Box 970 '
Fort Worth. TX 76101-0970 ..
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Dear Dalet It was a privilege to meet with you und Bill Criffin and in Midl t night. last visit with us concerning Cap for an adequate, reliable and reasonably priced power s Rock Electric e to plan Coope upply. 4 l With regard to.the items we discussedt j 1. 1
- investigation and procurement ofenergy alternative sources.
cheape
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Contrary to your statement that Cap Rock Electric erative Coop cannot generate and transmit power, Cap Rock Electris Coopera empowered under our Articles of Incorporation to?"anon s i
"generate energy and tomanufacture, trans purchase, acquire and acc g other things...
umulate electric electric energy..."mit, distribute, furnish. sell and dispose of such 3. i i Cooperative. future. The window for this availability ock Electric begiThe procedures last night. to accomodate the transfer orkof outthis the powerOb TU is still holding up this transaction., and your statements your intention to "drag your feet" until the vindow is pa tWe believe in this source of economy energyc Cooperative's and the s on this atransaction, participation th pproximate $100.000 per month savings therefrem. that vill accrue to Cap Rock Electric Cooperativ ' e s benefit 4. ^
; employees (and agents) is varranted.Your acquest for direct
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{ April 12. April 18. April 25. and/or April 26We propose the following datest
, 1988 J
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Mr. Dale Scarth April 8, 1988 Page 2 November 4,1987 and referencederurin ourof letter of O letter 29, 1987, there are various between arrangements Cap Rock Electric C that vill have to be discussed e and settl d alternative energy sources.ooperative and TU Electric, relative to Some of these are metering for Cap Rock Electric Cooperative. nterchangeinterconnec Dale, time is of the essence in the matter of HL&P gy. Econ:my We Ener encourage you to change your position and oaka firmoplans to h ld meetings to acecmodate this orderly transfer of power . early - Best Regards, l CAP ROCK ELECTRIC COOPERATIVE, INC. David W. Pruitt 4 General Manager.- DWP sah cci Mr. Bill Criffin . . , ~ Mr. Rusty Jones Mr. Tom Cregg .' . Mr. Earnest Casstevens ~~ 1 Mr. Michael Moore 1 - Mr. Steve Collier l l . 1 i l e 9
i 1 l ) ' l 1 e i .I I I L 1 I 1 > j i f I i i i ATTACllMENT 17 1 l l' i f l t I
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Attachment 17 to TXX-88751 l Octoberc21, 1.988 C. H. GunnNSEY & COMP / Cox s n7 t w o E xo i x t e n. Ev A RC 8H t tet s* ~ ~ '--* * u . . . . . r. . . . . . . . , . m . . . . 2... ~....... .... s,..., OM LAlf 0M A CMY F3382*4F78 (4 0 5) EP . S 8 4 August 4, 1988 Mr. Darrell Bevelhymer Director of Marketing Texas Utilities Electric Company 400 N. Olive Skyway Tower Dallas, TX 75201 . ,
SUBJECT:
Cap Rock Electric Cooperative i Arrangements for Purchase of Cogeneration Power
Dear Darrell:
l l the arrangements that might be made to allow Cap Rock El Cooperative to go forward with its plans to purchase capacity and energy from a cogeneration project to be developed by Panda Energy Corporation, , i Imeet appreciate your willingness me on Tuesday, August 2, 1983. to come to the Dallas /ft. Worth airport to allowed possible. us to get together sooner than might otherwise have beenThis w Your preliminary concept for dealing with the' Panda cogeneration arrangement was intriguing. to find a way of facilitating this transaction.I really tppreciate your efforts in tryi ! your method would pretty much continue the all requirements wholesaleAs .' customer rr.lationship currently applying to Cap Rock with an after the-fact billing adjustment to ratio the demand and energy taken. ' divided by Cap Rock's annual peak load,from Panda in direct propo explicit treatment of wheeling, standby power service, partialthis could elim requirements power service, or scheduling services. This approach is quite similar to the "X over Y" ratio method used by the Western Area Power Administration in supplying preference power to utility custo.cers. It would it is sieple and seem that this approach has two principal valus. straightforward. First, Second, as you stated i TUEC to facilitate this transaction in the timeframe nece,ssa.ry.ould allow for Cap { Rock to begin making purchases when the cogeneration project is planned i l 1 l l . P
I l Darrell Bevelhymer August 4, 1938 Page : l to come on-line. A: I understand l't, you do not think that TUEC will be able to deal with all of the issues involved in developing explicit
< heeling, standby, partial requirements service, and scheduling in the n0cessary timeframe for Cap Rock to begin purchases from Panda, i
Aprarently another advantage to TUEC is that this approach would - essettally preserve Cap Rock's existing all requirements load chareteristics, most notably load factor, by ratioing the amount of capac ey and ener characteristics. gy from TUEC and Panda so that each has identical load It appears that there are some key difficulties with this approach: (1) This approach does not provide Cap Rock with the independence it is seeking to participate in firm and interruptible power transactions within ERCOT. While it does with some simplicity . and convenience facilitate the Panda transaction, it does not provide any flexibility for Cap Rock to enter into other deals within ERCOT. 4his approach could become quite difficult as multiple firm resources are added and would be especially difficult if Cap Rock were to add its own generation resources (e.g.,apeakin facility, etc.)g turbine, taking over the cogeneration i (2) This approach would be very difficult if not impossible, for i nonfirm resources such as economy ener,gy purchases. Apparently, that is by design since TUEC continues to view these types of transactions as unacceptable for Cap Rock. (3) The final principal disadvantage of this approach would be greatly reducing the amount of energy that Panda would be i seMing to Cap Rock. Of course Panda might.be able to keep its icad factor high by selling the excess ener would generate to TUEC or another buyer as "asavailable" gy that it energy. It may be that all of these difficulties could be resolved with l your approach, but it does not seem likely. Cap Rock still prefers to ' ! also receive specific rates, terms and condittens for "arms length" ! standby power service, partial requirements power service, and ' scheduling :ervices. I suppose that the extreme instance which you might contemplate is one in which Cap Rock has ceased to become an all requirements customer of TUEC and has reapproached TUEC for new i standby, supplemental or partial requirements service, and scheduling services. We are still hoping that whichever approach is ultimately taken, we will not be required to make everyone of our delivery points a transmission or bulk power delivery point and purchase or build the i Y
l Darrell Bevelhymer August 4, 1988 Page 3 I necessary transmission facilities to do so. Further.e. ore, Cap Rock would still urge you to reconsider your continuing refusal to contemplate economy energy transactions. I was very pleased to learn that you recognize that your curr.cnt wholesale rates are not particularly competitive and that they cause a tremendous price squeeze during winter months. I am encouraged that some attention is being given to this within the TUEC organization. However, I hope that you realize that this problem must be resolved i sooner than over the several year term that you indicated would be required. t Thank you again for your time and consideration in these matters. We Panda willEnergy look forward to working with you further on facilitating the transaction.
, Sincerely, C.H. GUERNSEY & COMPANY
>d Steven E. Collier, P. E. 1
- Vice President Analytical Services 1
SEC:cm ' l cc: David Pruitt e ' i I l l i 1 1 l 1 1 l l i
e b ATTA OllMENT 18 b I i
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l Attachment 18 to TXX-88751 l Octobsr 21, 1988 l l i l l RESPONSE OF TU ELECTRIC TO CERTAIN STATEMENTS MADE l BY CAP ROCK ELECTRIC COOPERATIVE, INC. TU Electric strongly protests certain statements made by Cap Rock (Attachment 1) about TU Electric in Cap Rock's filings with the Public Utility Commission of Texas i (PUCT or Commission). Such statements, and the inferences which Cap Rock would have i drawn therefrom, are either falso or highly misleading (a) On page 3 of his prefiled Direct Testimony, Mr. David Pruitt testifies that TU Electric "can and has set prices in a manner which adversely i affects Cap Rock's ability to compete; that is, in a manner which creates a L price squeeze." TU Electric, of course,is a public utility subject to regulatory jurisdiction of the PUCT under the Pub)lc Utility Regulatory Act, Article 1446c, V.A.T.S (the "PURA"). As such, TU Electric's rates (both wholesale and retail) are fully regulated and set by the PUCT, rather than by TU Electric itself. As is the case of any electric utility, TU Electric may only propose l t certain rates, but it is the PUCT which sets the rates. ! (b) On page 3 of his prefiled Direct Testimony, Mr. Pruitt goes on to i i say that a competitive disadvantage results because TU Electric's "residential retail tariff reflects a seasonal differential; the rates are much lower in the ' winter than they are in the summer." Again, TU Electric's residential retail , tariff was set by the PUCT. TU Electric's current rates were last set back in ! 1984 by the Commission in Docket No. 5640. In Docket No. 5640, TU Electric t made two (2) different proposals concerning the design of its residential rate, t The first proposal was to have a single rate applicable in the summer period and a two-step rate applicable in the winter period. The proposed second step I in the winter was to provide a lower rate, beginning with usage over 600 kWh, ' so as to prevent an excessive return from TU Elcotric's space hertins customers. Since space heating customers have a load factor of about 45 P percent, compared with a load factor of about 31 percent for non-space heating customers, TU Electric proposed a lower unit price in order to prevent the space heating customers' paying a disproportionately higher rate of return than non-space heating customers. This declining block winter rate was justified by the cost of service study and still resulted in a slightly higher rate of return from the space heating customers. TU Electric's position concerning : this two-step winter rate is ably summarized on page 274 (Attachment 2) of l the Examiners' Report in Docket No. 5640. The second proposal made by ! TU Electric with regard to the design of its residential rate was to have a 1 I summer / winter differential, with the summer rate being 1.5 times the winter rate. The summer / winter differential was proposed as a price signal to TU Electric's residential customers so as to encourage them to undertake load management and conservation practices to the end that TU Electric, a summer peaking utility, would have to install less additional generating capacity. TU Electric's position concerning the proposed summer / winter differential is ably summated at pages 274-275 (Attachment 2) of the Examiner'r Report in ' Docket No. 5640. The Commission set TU Electric's residential rate with the two-step winter rate in order "to prevent over-recovery from the electric space heating customers" but rejected a summer / winter differential because it felt that no further price signal was necessary and because it felt that the } summer / winter differential was not "adequately demonstrated to be cost , 1 based" (pages 287-288 (Attachment 3) of the Examiners' Report in Decket No. 5640), in short, it is clear that the PUCT set TU Electric's residential rate and did so according to its weighing of the evidence presented in a highly contested proceeding. l l l (c) On page 3 of his prefiled Direct Testimony, Afr. Pruitt goes on to say that there "is no such seasonal differential in TI.'EC's wholesale tariff." What Str. Pruitt says is cor ect, but he does not tell the Commission the full story of TU Electric's efforts in this regard or why there is no seasonal differentialin TU Electric's wholesale tariff. In Docket No. 5640, TU Electric proposed a summer / winter differential be included in its wholesale tariff, arguing that the price signal would, with approprirte rate design on the part of the wholesale customers, encourage load management and conservatloc. TU Electric's position concerning the proposed summer / winter differential in l Its wholesale tariff is ably summarized at page 289 (Attachment 3) of the Examiners' Report in Docket No. 5640. The summer / winter differential proposed by TU Electric was strenuously opposed by certain of TU Electric's wholesale customers, including Cap Rock (see pages 289-293 (Attachment 3) of the Examiners' Report in Docket No. 5640). TU Electric's proposal for a summer / winter differential in its wholesale rate was rejected tsecause the Commission felt that it was not adequately demonstrated to be cost based and because the Commission felt that the wholesale <stomers could not respond to the price signal because they had less control over taele customers' usage than do TU Electric's retail customers (page 293 (Attachment 3) of Examiners' , i Report in Docket No. 5640). (d) On page 4 of his prefiled Direct Testimony, Str. Pruitt refers to the ' 1 l l rulemaking proceeding initiated by Denton County Electric Cooperative, Inc., l ("Denton County"), and assumes the truth of certain allegations made by Denton County. TU Electric has constructed lines in its certificated service area in order to provide reliable electric service to its existing customers and to provide electric service to new subdivisions and developments. No inference of impropriety should be drawn from the fact that this construction i is occurring because, pursuant to Section 58(a) of the PURA. TU Electric is obilgated to provide service to all consumers in its certificated service area. TU Electric has not undertaken any "campaign of active solicitation" of Denton County's existing customers. TU Electric has, in the area dually certificated to TU Electric and Denton County, advertided its rates and its ' record of providing responsive, reliable electric service. While TU Electric's , advertising in the dually certificated service areas of TU Electric and Denton County is certainly lawful, it should be pointed out that TU Electric has not done this type of advertising in the areas dually certificated to TU Electric and Cap Rock. (e) On pages 4-5 of his prefiled Direct Testimony, Str. Pruitt takes out ) of context and improperly embellishe.s upon an exchange which occurred between Commissioner Campbell and Sir. Bohannan at one of the hearings in Denton County's rulemaking proceeding. At the timo that Str. Bohannan was making reference to the recent rate reductions, Commissioner Campbel) inquired as to whether this was because of the summer / winter differential. The answer given was true that TU Electric's winter residential rate is appreciably lower than Denton County's winter retail rates. As pointed out in subparagraph (b) above, there is no summer / winter differential, as such, in TU Electric's residential rate since the PUCT rejected TU Electric's proposed summer / winter differential in Docket No. 5640. There is a differential only because of the lower second step in TU Electric's winter residential rate which was ordered by the Commission to prevent a disproportionally high rate of return from TU Electric's space heating cw.tomers. Again, as pointed out in subparagraph (c) above TU Electric proposed a summer / winter differential in its wholesale rate but this proposal was rejected by the Commission because of the opposition of TU Electric's wholesale customers, including Cap Rock. The
term "price squeeze" is not to be found in the exchange between Commis41oner Campbell and Mr. Bohannan and it is a gross misrepresentation for Mr. Pruitt to state that TU Electric "is openly engaged in a price squeeze that it acknowledges places its wholesale customers in a competitive disadvantage in their competition with TIJEC at retail." Both TU Electric's and Cap Rock's t intes are determined and set by the PUCT in the light of evidentiary hearings ' in which all affected parties are entitled to fully participate. There are differences in the rates of any two utilities. If Cap Rock desires to redesign its rates in a manner that is more comparable to TU Electric's residential rate design, Cap Rock has every right to make such a proposal to the PUCT and TU Electric certainly has no desire to oppose such. But, for Cap Rock's chief l executive uffleer to mischaracteriza TU Electric's actions in another area of the State and to take Mr. Doriannan's comments out of context and, in effect, put words in his mouth that were not there, calls for and justifies a strong protest. 4 a I l .l ' I 5-
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i t i ATTACHMENT 1 TO ATTACHf1ENT 18 0F TXX-88751 t E t i 6 i h i 1 e i t i 4 d
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Attachment 1 to Attachment 18 of TXX-88751 October 21, 1988 '
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The Cooperative currently purchases all of its I wholesale power requirements from Texas Utilities Elec-tric Company ("TUEC") through the Texas Electric service Company Division. TUEC is also Cap Rock's principal competitor for retail loads. More than half of Cap Rock's service territory' is dually certified for service by both TUEC and Cap Rock Electric Cooperative. 46 Q What considerations prompted the Cooperative to seek a modification of its General Service rate? A TUEC, the competing supplier, can and has set prices in a manner which adversely affects Cap Rock's ability to compete; that is, in a manner which' creates a price squeeze. The price squeeze occurs, in part, because of the different rate designs employed by TUEC in its wholesale and retail tariffs. TUEC's residential retail ,
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tariff reflects a seasonal differential; the rates are much lower in the winter than they are in the sumer. There is no such seasonal differential in TUEC's whole-sale tariff. For esemple, Cap Ros:k takes service under TUEC's i Tariff WP. This tariff conteins a ratchet that is based upon the preceding twelve calendar months. In other ' wc:ds, TUEC's wholesale customers' rates in the winter I are ratcheted at a level set at the highest sumer peak demand experienced during the preceding twelve calendar i s l l
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months. Simply put, TUEC charges lower rates to its retail customers in the winter than in the summer, but charges one rate to its wholesale customers all- year round. The effect of this rate design difference, is openly acknowledgad by TUEC. Denton County Electric Coopera-
.t.1v_e2 Inc. ("Denton County") recently ytitioned the Public Utility Connission for a rulemaking that would limit dual certification of service territories where the result is wasteful duplication of facilities. The petition was occasioned by TUEC's recent aggressive construction of retail distribution facilities in the service terc'. tory of Denton Count,e and TUEC's represen-tations to Denton County that - was embarking on a campaign of active solicitation of retail customers.
During the course of the argument on Denton County's ) petition, the following exchange took place between counsel ter TUEC and Connissioner Campbell of the Public utility Comnission: MR. thinos 50HANNAN that (counsel for TUEC): provoked One of the this [ petition is becausecampaign tising TUEC Electric entered into an a)dver-and besically around the nietroplex type area, advertising its rates. The four result co-opsofsffected that hashave beenfiled (that) petitionstwo ofwith the this connission seeking to reduce their rates. ) CONHISSIONER CAMPBELL: But that's because of the winter /sunner differential, isn't it, Mr. Bohannan? Let's be honest about it.
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1 l i , i ' HR. BOHANNAN: It's because of 'ha differen-tial. It's because that our winter rate Js appreciably cheaper than chdir winter rate. It's the competitive naturo. It's nfA because. of the rate structure They were reducing the revenues. of their rates at all.- t COMMISSIONCR CAMPBELL: But it's because of the structure of your rate isn't it? MR. BOHANNAN: That's right. It's caused (them) to be more competitive with our rates. TUEC is openly engaged in a price squeeze that it acknowledges places its wholesale customers in a com-petitive disadvantage in their competition with TUEC at retail. The tariff which Cap Rock proposed in Docket No. 6778 contained a sumer/ wit ter differential for the C9neral Service class. Car Rock proposed an energy charge of $0.0757 per kilowatt hour for the months of May through October and a rate of 40.0600 per kilowatt hour; for the months of November through April. This differential has not been sufficient to ameliorate problems regarding residential service in the winter. TURC's residential winter base energy rate is 3.041500 per kilowatt hour (plus fuel) for the first 600 kilowatt hours and 40.01430 per kilowatt hour (plus fuel) for all kilowatt hours over 600. We are proposing to revise the rate as requested to address this competitive problem. The modification proposed in this filing would result in a rate design for Cap Rock's General Service rate iden-
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ATTACHMENT 2 TO ATTACHMENT 18 0F TXX-88751 1 f b l
Attachment 2 to Attachment 18 of~TXX-88751 m October 21, 1988 8:ee U: ( B. Restdential Rates
- 1. TUEC Proposal .
Tmrowgi t9e testimony o' f ts af tress Charles F. Jonaston. TUEC *eo04544 a residential rate structure (Rate 4) .nf en mas a single rate 'or se'rner use and a t.o step enarge 'or ofnter use. The second step fn tne sinter tegfas a'ter 500 on and designed primarily to provide a lo.ee rate for space nesting sales nica , improve the systent load f actor. TUEC (anibit 18, Jonnston at 9; Transcript at 4333 4390. Mr. Jonaston explained that based on deaiano daring the peak season, the average socce neating customer has an annual load factor of aoowt 45 per:ent, enereas "e average non space nesting customer nas an annual load factor of acost 3 11 peretat. ints means there are more kan over enica a given amownt of annat 'f aed es!* Can te recovered, tnereas prodscing a lower cost per kun for space nesting. TUIC (an' bit 18 Johnston at,9. Mr. Johnston 'wrtner explained that a single all parpose rate is cetter taan navfng specific and use rfders t.o reasons: first, most customers do not understand any a ken consumed fn the sinter by con space meating castomers should cost more 'o produce taan a M consw e ed in the stater ty space nesting castomers. Therefore. TUIC vie s customer understanding and acceptance as an important reason for its t.o sten rate. Second, and use rates, l ssen as space neating and eatea neating riders, tre diff fcalt to adstnister. t9at is, to deterstne amics castoteers snould nave the rider. The use o' rf teas involves constderante time and admin'strative effort in 'nsuring thele proper application. TUtc (anibit IS, Johnston at 10. Mr. Jonaston fertner testif f ed tnat f' a single all purpose rate ef ts the t o step cnarge for ninter is not sporoved, a space nesting rider providing for a lower winter stes = owls te necessary in order
- to insure that space neatirg custo*ers, .nici constitate 29 percent of tne total 4
residential customers, would not te paf fng for more taan tnetr reasonsole cost a' service. TUEC (an'e't IB, Jonnstc6 at 10. In tef e', TutC argues tnat tie decif 9'n; block = tater rate floss from the company's cost of servfee stasy and acc:rv9odates customers s'ta electric space nesting. Transce#pt at 4217, 4390; TUtc 3rf e' on rate desf gn at 18. Tne declining block provides for a lower rate seyond p00 kilowatt moves and is designed to tnat space nesting customers provide only a sifgntly nfgner return than that of all standard residentf at customers. TUEC tan 1 bit II, Jonaston at 10; transcript at 4390. Tytc argues that u its proposed residential rate design is rejected, the rate of return for space nesting custours elll De 'ar above average. Transcrfpt at 4401; TUEC Befef on rate desigi at l$. Tne Co?pany also procoses a s4*v9er/sintee j8'ferentjgt in tie $tanjaat res' dent'al Patt. "P. Jonnston lases tifs rate deligi on tie 'act 1944 Tut 5a 4 i sever peat ng systeam atti tre average eettday load in tne ss' uter mont9s ott9g j
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( abowt 1.5 times the average neesday load in the otner mentis. Accorc89 to Mr. Jonnston, there are substantial Costs for customers 13 Oear in orier to nave afdttfonal capacity available for use in tne sumer tentis over ans asave tie capacity reqJire3 fn otner contns. Thus. 4 susva4r/s t ater di Ht atitial ti tae resfJential rate resJlll In an e"eCtive ec nomic s'gial e' Ag cellve'e2 *3 Customers, aniCn prornotes Jesf racle loss manage *ent and.Canservation ;ractf ees 3y tne customers. For example, customers .ould perceive taat installat'an o' fnsolation in nomes. . more ef'fefent att concittorers and otner casservatasa , practices are economically attractive and as a result, tse C:scany nowls nave ta install less additional generating capacity. TUEC tantett 18. Johnsten at II. TUEC points out fn 8efe' tnat tne rates carrently fn e'fect for tne T7LL c'vtitos contain a summer /efater differentfal (franscript at 4215 4217) and thet the rate recently approves by this Conutssfon 'or CPLL fn Doccet No. 5255 is siellar to 19at proposed of the company in taf s case, and contates a ceclining stoca in tne inter montss. Transcript at 4277; TUCC 8efe' on rate cesign at II. Finally, the company is proposing to maintain t.o existfng es:eritental rates currently in effect. Tha proposed experimental Rate Ru, (Restcentf al (fsites Loss) cad) is designed specifically for those small use castomers emo nave little. I' any, re'ef gerated af e conditioning etutament f. usc. and is virtual!y ':eit* cal *1 i form to the entsting rates. Rate RLL e111 to availante to 6.C00 c.st:?ers .90 ! requtre the ratner listted capacity of approxisately 1.3 <VA or 15A. Tne are::ses I esperimeital rate RTV (Residentfal Time of Use) eilt to avallaste to 2.00'J cust?mers and is designed for those customers ellling to recyce their asage d. ring the on-peak perfod. Mr. Jonnston states that some Interest in this rate nas :eti snown ey Tu(C castomers, and approsimately 300 customers are preseitly recets'ag electete service unde
- this rate. TUEC (antoft 18. Jonnston at 11.
TUCC occosas the City of callas in its attemot ts retastate a set ge:ss 01111n3 featwre in its tariff. TU'c potats out that tats fest ere nas atsa::rs,es and deleted from : Phi.'s tarif f In Occhet 'so. $256, and 19at tae cmf ttism nas amended its rules to reacve reference to that practice. TUIC Irf e' on rate ses8gi l at Jg.
- 2. Cities Propetal l l
1 fee Cf t'es did mot reco vaend $secif f e rates 'or eacs cust:-er c' ass. .: J's l c"er s:ecUic rec:vensations 'or sesigning rates f ar the resuestial :!sst. *se cities recovens rejettfon o' a res'Jential smer/eimtea at"ereitial. ::as s'est
t v i ATTACHMENT 3 TO ATTACHMENT 18 0F TXX-88751 i i
- a rg Attachment 3 to Attachment .18 of TXX-88751 October 21, 1988- m' 8sge ;!'
( , The Cities c posed the rate cesigi offered by staf' sitness toget*, On tie grownd that such a 97000441 nowlJ have a severe tmosat on rest:e9tf 41 spa *e'9est**g Customers during the nesting season, despite the stas propates reve9we it *eale. Tne Cities urge avoiding suci disproportionate itpact by acosting 'ar . patteasses rate desigi proposals. Cities Scie' on rate aestgi at 3 d.
- 4. Recomendation The Cf tf es have advanced the most cogent proposal 'or the mod 1*f est'on of I
TUIC's proposed design of resident 1&l rates, and it is there'are reconneeces inat T'JEC desfgn its residential rates eithout the proposes sw w r/efnter diereitta! Dat eith tne proposed decifning bloca in the winter rate to ;revent over-re:s.e*y from the ele:tric space heating castomers. The castomers o' TJEC accese ta na<a re: elves and understood the inessage that swniner ellls elll te nigner; casto?tes have respo,ided to higner bills ey implementing Conse*vatfoi an$ loss manage ~eit tecnnicuss. In addition, it appears that the price s'gmal to te sent via tne use o' a sumer/ sinter differential would tae diluted when comeines ef t, tne compa9p's average ellifng plan. However, the Cities' proposal t3 reinstate net /gr3ss 3111"g is not recomended for asostion, and TytC's etner rest:ent'al este :es';s proposals, inclwding the too esperimental tarif's, are recovenJes '2r a::st tan. None o' the sumer/ winter di'forentials proposed in tnis docaet 'ar tie residential class (by TUCC, CPC, and staf#) have teen a:essately demostrates ts :e cost cased. In addition, the proposal urged by General Counsel is Sete' is somennat different frets the testimony presented by Mr. Kenner daring the res*ing; a proposal so internally inconsisteit does not appear to have tees well 19cwgit ut and should not te adopted. the use of too separate tariHs, one es:n # 3r standard residential cast: eas and for residentf al electric space heating cast:mers, as propstes by CPC, 2?sseits asetnistrative burceis disproportionate to the tene*f t of assar ing tmat only t9 se customers eno nave space heating receive the too stes winf.te rate.
, Finally, tratos Coop's allegation of wnf air cospetition and price $2 eete 94s not been asetwately sapported. Its cost of service stasy o' the 0vilia sotat s' delivery is too limited to to of swen value in deters *ning tie s'fe;e !
anticompetitive Hea:t af TytC's rates . in its e4ral stad ce areas, 19 "a ' ca*parasility o' tSe Ovilla po'nt 83 selivery to a !;tC : 3 9t s' :e'*se*f .as 8 ser'o sly ensileages. Statos's concl.ston that the evittice M tes :::<et I sspoorts its cont 49t'o9 tial rural costs (3 serve are 9tg9e* Lian wr3a9 ::sts tJ se.*ve is simply errone3vs. No Cost o' service stway $4 sed on geogracil?al I? st'in of cdsto+ers was perforted ty 49y party to this doctet, so tne test ** cay 28 ! i i I
PF 8t79 2!! ( s t9ttlet tiet r.r41 Casts t3 Serve art Rf;9er il Dated 26 1:e atat!;9, act i infor7 d ODiofon. IU!C 945 27000143 4 Sylte niit ets'Ot9tf 41 rate its';9 54543 $9 Its C3$t $f $tevice; titre ft no evidtSt'ary 19;;0ft #0F 19e SIIt;4tici tatt 7.[l Inttitionally :(f';*t2 f t rates t3 tt 19t'Camottitive. i e O
v'"2 3su ita ( C, wholesale $wmer/w'eter Di8ferential 1 TutC Proposal Tnrourtt the direct testfmony of its ef tness Gnaries F. Joneston. P.(C orososes a seasonally differentiates demand charge for the resale rate, Rate a8 TUIC (anibit 18, Jonnston at 19. The company justifies tif s swee*/ sinter gesans :iar;e differentf al as cef ag an effective means ' of encouraging laas manage est' aas conservation practices by the resale systess, as net t as proper rate cest;n tne resale systees to "reflect the costs incurred t'y the coroany in providing resale electrfc service. Proper rate design, in turn, eecowrages castners of tne resafe systems to take actions aimed at conserving electric energy. TUEC Exhibit 18, Johnston at'Ig 20. As set forth fn its proposed taet"s, tne swer/ sinter demasJ charges for the =notesale class would be $10.50 per k for the months June tnrosgs Octooer, and $5.25 per un for Noveter througn May 'or primary servfee, and $3.!3 per kn and $3.93 per km, respectively, for transmission servfce. TutC argues t%at the di'ferential is based on the f aea of pesa lead sefctng, and is designed to gi ve a strong pricing signal ta the suriner to encourage conservation as well as procer rate destgi. Transcrf st at 4273; TJEC 3rf ef on rate cesign at 30. TUtc ge' ends tne preposed degrees of difference as befag necessary to attafn these desfred ee:ts. Transcript at 4273. Ff ve sooths, ratner thai four, for tne smer montis s';nal is 4 necessary because TUIC uses cycts 01111n3, and this insures tnat seas ca95.9stfoi in September is properly priced. Tearscript at 4360 4361, 4353; 7"tC 3rief an rate design at 30.
- 2. $WESCO Proposal In its beter on rate design, $wtsCO discusses the proposes swer/. inter differeitf al in connection ef tn the proposes retenet for t'ie .netesale casto ers.
i
$stSCO agrees eita tne logic of a sumer/ sinter di'ferentf al; 5'at$C0 does tot object to a sweee semanJ charge of two tites the winter deaand enar;e, ;rovf:e3 ,
tne proposes ratenet is not adoptes. !WESCO leief on rate cesign at 1. $.[1:0 agrees with Mr. Jonostqn's reasons for e+ ploying a sper/wintee dif fe'e9tial as si ef fective means of encouraging food manageme91 and : Poper rate des lf 9 of 19e res 'le ] [ customers. $'atsC0 Brief on rate desfon at 7 8. '
- 3. T4P Proposal h8 states in its trie' on este cosion its cosit'oi tmat a 2e' eat'a' o' t.o ifMs tne sinter rate for the sper rate is 194DDroariate sia its ^JL teei smo.1 *o 30 Cost justt'fet. T'iP tenibit 3 at 29 31; TN7 Scie' on rate ses'gi at li. h7 '
b f 4 P
M 3s't 197 ( agrees that a sumer/ sinter df f'erential in rates is appropriate teca,se f t is .9cre empensive to serve custssers during the sme than daf ng the winter, tecs.ase T';t: 15 a sumer peating uttif ty and thus the maximum cesand is imposed on tne system during the spor montns. TN8 1s not opposes to a sumer/ minter at**erestdel 'n tne =molesale rate. but is opposed to one of tne magiitece crocosts ny T';t: in tn's decast. TNP Srfe' on rate desf qn at JI. TNp proposes that the ciarge sea 4. o' demand furing the sumer months should be no greater than 1.2 tires tne a'ntea charge per ks o' daeand. TNP Srfe' on rate design at 31. 4 Tes 4 a Proposal Like TNP, Tea.La asserts that TUCC's prooosed sumer/stnter dema9d cmar;e dif ferential 15 not cost justified. Tenda fantbit 21 at 3; TNP fantbit 3 at 23 30; ' Coops EaMbit 25 at 36; Transcrfst at 5080; Tex 4t< Prie' on rate design at 13. I' aif surtner/ stater differential in the demand charge is to be approved Sy tne . Constission, them Tenda's positfon f s that It should te based on the company's actaal variance in demand costs between seasons. Ten d a Exhibit 21 at 3. Tdx4a asserts that the differential proposed by TUEC is not cost bases and appears to be arattrary. To 44 (xhfoit 21 at 9; 7e244 8efef on rate design at 29. Te 44 further argues that TUEC has provided no information or data woon Men oes cas deters 19e = nether the proposed dif'ereitial re'1ects the pro:er recovery s' tssts inewered by TUEC. Sonte tahtof t 3 at 20; Tesda 3rfef on rate design at 13. Tes4a argues that the only response given by T'lEC to various interve90rs' U!'s requesting support for the seas'>nal differential was load cweves sNoming toe ' differe9ce in the sinter and sumer peau demands. Cocos Eshf 31t 25 at 35; Transcrfst at 5080. Te 4a asserts that these' load carves do not justify tie large di"erential proposes by TUEC; tne cweves merely snow t%e d"fereace in 7;tC's swerer ans sinter peak demands. Te 4a witness Daniel testif fed tnat s sessonal demand enar;e differential should not te justified 1erely on load carves 3st 19c911 be based on actwal cost differences beteets seasons. Tend a Ennitit 21 at 9; Ten. l La Sele' on rate desf gn at 19. ' Tenda asserts that the only support offered for a SJPer/ sinter di'fereat'al appears to be anat TUIC attness Jonnston refers to as a anell recogntaed f act* (Transcript at 4170), that a snea/ stater differe9tta'. encowrages load sansgnent and conservation practfees. Ten.6a taMatt 21 at 11; Tenda trie' on rata sesign at 20. Tend a cmarges t9at wa. Joneston f aites to it onstrate siy sspoort '2r t9's c m on att.* Tes*ia Irfe# on rate design at 20. Sr. Joenston testi'*e: t*at *e has 90 stsd'es to $s:30r1 tne Co*Cany's cciteition. Transcrist at ai?L Tea..a l l
a M 8t*e 29' argues that a two to one seasonal demand Cntrge df fferential SNcJ1d 90t te accepted on blind f attn. Tenda 3rf e' on rate design at 20. Ten.La re'ers to t%e testimeny o' several =Itnesses ano urged the elf stnation of tne proseses dierential since it nas no adecJate cost cased justif fcation. Tr.o Exnf of t 3 at 27 31; Sonte tanisit
- 3 at 21; Teena fininit 21 at 13; Tenda Sef er on rata des'3s at 20.
T4 4a 'urther argues that adetaate price signals alreasy esist 'n tots tMe company's fuel charge and demand ratenet. Teada Exhtett 21 at 10 12. An additional pricing signal in the fors o' a non. cost cased sma/ fstea differentfal is therefore inappropriate and not necessary in Te 44's v f e ~. Transcript at 5083. Gf ven the seasonal af fferentf af fn the demand charge, Te 4a argues t%at tne price sf gnal given to the customers atl1 be stronger toen necessary. Transcrfst at 5083; Tex 4a Befe' on rate design at 21. Te 4a refers to the Comission decision in Oceket 10. 3294 in antes a surveer/vint.or of f ferential in the fuel cost component of base rates for TVE: as
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43 proved. Tex 44 argues that 'tnis differentf al alttady provfits a Defce signal to resale customers for the nfgner energy costs during the est sununer months and encourages conservation. Tes44 Eanf bf t 21 at 9 10. Tenda argues that tme soproved seasonal dffferentf el in the fuel cost comconent estaaltsned a reasonas!e price sigial enten is based upon a demonstration o' actual costs; naving a rate that is cost justfffed sends the proper sigt.al. Transcript at 5084; Te 44 3rfe' on rate destgi at 21. Tex 4a furtner argues tnat providing an additfo9al unnecessary prfte sigial in the form of seasonal demand enarge df f'erentf all creates a 'pancate" effect enen added to the esisting ' Jet cost dif ferentials. Coop Ennfbit 25 at 36; Te 44 trfef on rate desf gn at 22. Tend a asserts that Mr. Jonnston's opfnfon tiat a ssner/etnter d U'eeent'al provides even more incentive for load management than a retenet is anssooortes efiner Dy afe or by any other company af tness. Transcrf0 t at Oldl; Tes4a Brie' 31 rate destgi at 22. Like $st$CO, Tes.La enjects to notn a s p er/ winter differential and an 80 ps ecent demand rateiet. Tes4a also asserts (nat since TkTC's enolelale rate already provf des enougi incentive for its anolesale catto?ers to engage in load manajement practices througn the sper/ sinter di8ferential in the 'Wel Cnarge and the demand ra enets f t 18 not necessary or p*oCer for IUE to f* pose f ts load ma9ajem49% policies on the enolesale custo*ers. Tend a $rief an rate design at 23. Tet44 re'ers to the recently adopted energy e88f c'49Cy 0139 3' the Comiss'on, 8.U.C. $;t17. 4. 23,33, as patting h sla:e a statee':e oo'*cy si
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M 8tte 27? ( load manageme9t poliCf es 494 practfCes. The rule reowires CEC as' nell. as f ts
+
wnolesale Customers to engage in Certain load manage *ent prograss 89 geger' to ce*DIf sito the stateside Colicy. Tes*'wa argues '9at since tie Osm'ss'or 945 estacilsmed snat leas management practices tie .nolesale c4sto ers ~sst 4:ost, it is nettner crecer noe necessary for TUEC to 'epose its loas sasa;e e-t :e:' sus on tne wnolesale custo.mers througn the rate structure to enolesale castyrers. Ten..a Befer on rate design at 23. Finally, Ten.La asserts that the proposes sw-eer/ sinter dierential snow!3
, be elfsinated because it would cause cash volattitty proolem to the cooperative
.holesale buyers. Ten La witness Danfel testifled tiat fea os's .Molesale so.ee rates to its someer cooperatives reflect the esisting !pR unclesale rate to Tes.la
.%f en crestitly incIwies a sener/vinter di'fere9tial in tne semand cMarge. (OPR 945 no unoltsale customers, and TESCO does not nave a sacamer/ minter differeit'41 in
, it: .nolesale rates.) The majority of the castomers of Tea.'.a's temser
- cooperatives read tnetr own meters, smien resgtts in a inf rty day lag in reve94e collection tet.een the time the cooperative pays its power otll and tse tire tie cooperative receives payment from its customers. As a result, the mea.cer coccaratives can and have encerfenced casm shortage ce
- clems. Ten La Eti'oit 21 at 12 13. In additfon to tne prooleas unich would be f acosed on cooperattve eislesale castners, fen.La asserts that a seiner /nintea di"erential .ould s'so oose swestantial casi ' low problems for other enolesale custo ers eno co not have seasonal differentf als for their residentf at custo-ers. Sowie tanteit . ) at 21 Ten La concludes that the suriner/ winter differential is not neeced in ordea to ancG. rage load maiagement, and it results in cash volattlf ty prooless 'or tne smolesale customers, and that therefore it should be disallcwes. Ten.ia leie' on rate desigi at 24 TeI*La Conte 90s 1941 the elimination o' tne precosef
$#Teer/wfoter differeitf al would not result in any revenge impact to the otMer CJstomer classas. Transcrfst at 4692. '
i In its brief, tutc refwtes' Tea ta's conteit ten tint si 30 per:eet 'rattaet renders tne sper/ stater differential unnecessary. Tea La timisf t 21 at 313; i TutC vefef on rate design at 30. TutC asserts that fen.La's eit ess 'n:orre: tty l assumes tnat the catchet's sole pwroose is load management; ner ever, T;t: siteess l Johnston esplatned tnat .nfle tne ratenet sees prov'de soee f acentire for load management, its aritary swesose is revenue stantitty ano the avoida9ce of :* css. i sassisirstfon sitiin a class, franscrist at 4134; ?.'t; 3rf e' on rate cesi;9 it 10. I tut l also co+9tl out tiat fes.La efiness $49fel tes*18iet tnet tne real39 8;r *ie Coo 3erattve's cash #1cs croDIems 's a resw't o' 143 'i reve9ae actie 49: st*s.se l 1 l l l ^ W
M i ( *ait 2;3 Ten La's'recer cooperatives allow tiefe customers to read teefe can Mtees entle Tes.La requires payments frera its CooDeratives witnin sitteen days. Tesda f antait 21 at 12; Transcrfst at 4726. TUEC f ndicates tnat tiis is not a probles n'th the sumer/=fnter of fferential in and of itself. TUEC 3rf e' on rate des'gn at 33. Ten. La employs a dferential reflecting tne aHferent'al' c9arges et oy 78 6 franscrfst at 4721. TUEC asserts tnet a strong price signal is necessary 'or tne mem:ers of the wholesale class in order to assure that tney atti employ e"ectfie ,l rate designs sending appropriate price signeh *.;, 6iele custoterj. Trans:rfst at 4184. 4201; TVEC $rlef on rate deste,r. at A ll, TUtc points out that $Wr sC0 also employs a sumer/ win'ee ef fferential even tnough it too ls concerned with revenue stantlf ty, franscr'st at 6138 4139. Tut; i
- 'wetner refers to the testimony Skt$CO witness Fer3 ants .60 acanowitsges tnat a seer / winter differential can be an approse' ate price s+gnal 'n an esattsole cost allocation (Transcrfst at $125), but t%at r is cou.ter pro
- wctive to reve%e st451Ilty. Transeript at 6137.
9
- 5. Coops Proposal In telef. tne cross assert tnat tne swererinfoter of'ferentf al secocses in all rates by TUIC should be elfminated or drastically re0wees. Coop (Anf Mt 2$ at 35 33; Cocos Sefef on rate design at 11 As s.t alternative, the coops state that if any serr4r/ winter dif ferentf al. other tha.1 in fuel, is retained, the rate to the wholesale systems shou 1J have no greater offferential tian the co:=pany's j residential class. Coop Brief on rata design at 17 i
- 6. Recorrendatfon
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As nits tne proposed residentf al swer/stnter di"erentf al TufC nas 'stles to demnstrate that its proposed snolesale sumer/ sinter dif'erentf al is cost. nased, shfle the casi flee proslems of tme cocotratives cannot te attttowted to the presence of a enolesale sumer/ winter differential, it does assear that such a rate cesign .owla cause some revenue id stantlf ty for TUEC dessite tne wie of a ratchet. The enolesale customers of futC co not nave as much control o' teele loaa r as do the retail or end use customers of TUIC; thus, despite tne alleges strong price signal to nolesale custoters to te tent throw;i a s.ver/ stater di'ferential, taere may be 11ttle response a nolesale casto*er can o "er. lt is therefore re:ovences tnst fut;'s proposes anolesale s.vs.or/einter P.*
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