ML19309G008

Comments by Public Utils Board of City of Brownsville,Tx on Central & South West Corp 800409 Opposition to Joint Motion for Extension of Time & to ML Borehelt Affidavit.Corrects Position Re Settlement.W/Documentation & Certificate of Svc

ML19309G008
Person / Time
Site:	South Texas, Comanche Peak
Issue date:	04/15/1980
From:	Poirier M, Spiegel G SPIEGEL & MCDIARMID, TEXAS, STATE OF
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML19309G006	List: ML19309G005 ML19309G008
References
NUDOCS 8005020164
Download: ML19309G008 (15)

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8005020 UNITED STATED OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD HOUSTON LIGHTING & POWER CO., et al., ) NRC Docke t Nos. 50-498A (South Texas Project, Units 1 I 2T~ ) 50-499A

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TEXAS UTILITIES GENERATING CO., ~~et ~~ al., ) NRC Docket Nos . 50-445A (Comanche Peak Steam Electric ) 50-446A Station, Units 1 & 2) )

BROWNSVILLE'S COMMENTS ON THE RESPONSE OF CENTRAL AND SOUTH WEST CORPORATION OF APRIL 9, 1980 Comes now the Public Utiliites Board of the City of Brownsville, Texas ("Brownsville") and comments on the

" Response of Central and South West Corporation to Opposition by Brownsville to Joint Motion for Extension of Time and Affidavit of Merle L. Borchel t ," filed April 9, 1980, as follows:

1. The af fidavit of Mr. Robert E. Roundtree, which Brownsville attached to its Opposition to Joint Motion, is not contradicted by the af fidavit of Merle Borchelt, submitted by C&SW.1/ There is nothing alleged by Mr.

Borchelt to show that Mr. Roundtree, on behalf of Brownsville, agreed to accept the concept of DC inter-connection or otherwise to settle Brownsville's interest in the many-face'ted Texas interconnection litigation.

1/ Except as to the immaterial point of whether he stated that the Federal agencies has already reviewed the settlement. We stand on Mr. Roundtree's affidavit.

2. Brownsville is not prepared to accept the DC inter-connection as a portion of the proposed settlement until there is a showing that such interconnection will serve the public interest. The attorneys for Brownsville are authorized to discuss settlement of the various Texas utilities litigation, in particular Houston Lighting &

Power Co., et al., (South Texas Project Units 1 & 2),

(NRC, Docke t Nos . 50-498A, 50-499A; Central Power &

Light Co., et al., FERC Docket No. EL 79-8; Central and South West Corp., et al. , SEC Admin. Proc. File No.

3-4951; West Texas Ut111tles Co. v. Texas Electric Service Co., 470 F.Supp. 798 (N.D. Tex), appeal pending No. 79-2677 (5th Cir.).

3. Brownsville still has not participated in any meaningful discussion of settlement. The meeting of March 25th between Messrs. Borchelt and Roundtree pro-vided the first substantive information concerning the general terms of the settlement as privately negotiated among the three Texas Companies.1/ On March 26, 1980, the undersigned attorney wrote to C&SW's attorney David M. Stahl, Esquire, and stated that "Brownsville views the settlement of this litigation as extremely desirable and is prepared to cooperate fully to achieve this end;"

1/ Central & South West Corporation ("C&SW"), including its subsidiaries; Houston Lighting & Power Co. ("HL&P"); and Texas Utilities Company ("TU") including its subsidiaries.

that C&SW was requested to provide copies of the agreements or understanding to date; and that C&SW was requested to " provide for our prompt entry into the d isc ussions . " (Attachment A to Opposition by Brownsville to Joint Motion for Extension of Time...., April 3, 1980). There has been no response yet to Brownsville's request for entry into the discussions; there was a brief telephone outline of the general terms by C&SW counsel on April 2nd; and by C&SW counsel's letter of April 10, 1980, Brownsville has received a 2-page

" Outline of Settlement" . Brownsville is writing today to C&SW's attorney again requesting entry into nego-tlation discussions. (Appendix A hereto.)

3. Brownsville's position regarding the settlement is well stated in its Opposition of April 3, 1980. Brownsville has received nothing which is suf ficient to demonstrate that the proposed settlement will solve the anticom-petive circumstances and actions surrounding Brownsville as the captive customer of CP&L and nothing to support a conclusion: (i) that the proposed DC connection will be adequate to serve the larger public interest in South-west regional coordination and power supply; nor (11) that splitting the regulatory control over the Southwest power supply between the Federal Energy Regulatory

Commission and the Texas Public Utilities Commission without substantive inter-agency agreement will serve the larger public interest. There is no showing that the DC interconnection will provide the C&SW holding company system with an intergrated operation so as to alleviate the need for divestiture.

4. Moreover, Brownsville must oppose any settlement which does not include the filing of reasonable tariffs

- for the wheeling of capacity and energy to and over the DC interconnections, in view of CP&L's current efforts to exact a grossly excessive charge of some S5.40 per kw i

monthly for wheeling firm capacity merely through its system ( Attachment C to Brownsville's Opposition of April 3, 1980).1/ It could take years of further liti-gation to establish a reasonable wheeling rate if there is a settlement under which the matter of wheeling is left to "a rate approved by the governmental agency having Jurisdiction over such rates." (Outline of DC 1/ CP&L's " Estimated Transmission Service Rate for 1980" would produce an annual bill of S3,240,990 for wheeling 50 MW of TU power over the CP&L system, i.e. from HL&P to Brownsville (4th and 5th pages of attachments).

S3,240,990 = S64.82 per kw year 50,000 kw i

S64.82 = S5.40 per kw month 12 kw By contrast, CP&L estimates the price at which it will sell firm capacity (i.e. both generated and transmitted by CP&L) l 1s S2.83/kw month (2nd page of attachments), some 42 the price for wheeling alone!

Settlement, par. 6). In the interim, CP&L's demand for an exorbitant rate for transmitting firm power (capacity) is tantamount to a refusal to wheel.

5. C&SW's Response of April 9,1980 is replete with mischaracterizations and distortions of Brownsville's Opposition of April 3, 1980, which are so obvious as to be unworthy of detailed reply. For example, it is true tF.at CP&L (and HL&P) are wheeling interruptible off-peak energy which TU sells to Brownsville and others when available, but this is not " wheeling power" (C&SW Response, p. 2); what Brownsville is complaining of is the refusal to wheel power in the form of firm capacity (by proposing an exorbitant rate therfor as discussed above).

6. C&SW does not attempt to rebut most of the ma]or promi-ses set forth in Brownsville's Opposition of April 3, 1980.

The Public Utilities Board of the City of Brownsville, Texas, respectfully requests that this Board take note of the above comments, which accurately reflect Brownsv111e's posi-tion on settlement. ,

Respectfully submitted,

, & ' s/

/ George Sp'iegey l GM C & E Mhrc R. Poirier

• Attorneys for the Public Utilities Board of the City of Brownnv111e, Texas Law offices of: .

SPIEGEL & MCDIARMID 2600 Virg inia Avenue , N.W.

Suite 312 Washington, D.C. 20037 i _

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LAW OPPsCEs c3ORGE SPIEGEL. P.C. SPIEGEL & McDIARMID sONNIE S. BLAIR KOCERT C. Mco ARMio RosERT HARLEY eEAR SANDRA J. STRE8EL 2600 VIRGINIA AVENUE, N.W. THOM As C. TRAUGER CO; E RT A. J A B LON JOH""'CHAE'#URAGNA WASHINGTON. D.C. 20037 JAMES N. HORWOOD CYNTHIA 5. BOGORAD ALAN J. ROTH TELEPHONE (202) 333-4500 G ARY J. NEWELL l P tANCES E. PRANCl3 MARC R. PolRIER l DANtEL 1. D AvioSON TELECOPIER (202) 333-2974 MARTA A. MANILDI THOM AS N. McHUGH. JR. JOSEPH L VAN EATON l OANIEL J. GUTTM AN I FETER K. M ATT  !

oAvio R. sTRAus HAND DELIVER David M. Stahl, Esquire Isham, Lincoln & Beale Suite 325 1120 Connecticut Avenue, N.W.

Washington, D.C. 20036

Dear Dave:

We have received you letter of April 10, 1980, for-warding a copy of the 2-page " Outline of DC Settlement,"

a copy of which is attached.

This evidently is your response to my letter of March 26, 1980, in which I requested " copies of such agreements or proposed agreements or understandings that have been reached to date...." Can I take it that this " Outline" is the only document that fits the category requested? If not, please send me all requested documents so that I can get up to speed on the settlement negotiations. The Outline , of course , pro-vides no supporting materials or ideas to show that the pro-posed "DC Settlement" will serve the public interest.

Your April 10th letter states that you "would be happy to discuss this" with me at my convenience. If this invita-tion is a response to my March 26th request for "our prompt entry into the discussions" of settlement, I can meet with you the day after you receive this letter or any day thereafter as you select. However, there is no point in meeting with you unless you have sufficient authority to enter into meaningful settlement negotiations with Brownsville.

If you lack such authority, I request that you arrange for someone with such authority to, meet with me the day af ter you receive this letter or. any day thereaf ter as you select.

Brownsville is interested in pursuing a fair settlement.

Please review Brownsville's positions as stated in our Opposition of April 3, 1980, in Houston Lighting & Power Co.,

et al., ( South Texas Pro 3 ect, Units 1 & 2), NRC Docket Nos.

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50-498A, 50-499A.

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I Brownsville's position is cleat . Brownsville has neither the desire nor the means for protracted litigation l and seeks to cooperate fully to reach a settlement which is l f air to all parties and demonstrably serves the public l interest. The settlement, as sketched in the Outline, cannot be accepted by Brownsville without more because, inter alia:

(a) There is no showing or support that it will serve the public interest by assuring optimal intercon-nected power supply coordination for the Southwest region (i) across state borders (Is the proposed DC Connection adequate and will joint wheeling charges to and across state borders be reasonable for feasible transactions?); or (ii) within TIS and STIS (What commitments will be made to assure achievement of the benefits of coordinated joint ownership (and unit sales) of large scale genera-tion and of coordinated dispatch as described in the Stagg studies and deposition, and what reasonable wheeling rates will be established?). There is no showing that the public interest will be served; (iii) where jurisdiction over Texas utilities is split between FERC and the Texas PUC, without inter-agency substantive agreement; or (iv) in the absence of SEC clarification of the holding company status of C&SW, including potential divestiture.

(b) There is no remedy: ( i) for the anticompetitive circumstances which made Brownsville the captive customer of CP&L without' access to the benefits of optimal (Stagg) TIS and STIS operations; nor (ii) for past anticompetitive actions by CP&L which have seriously damaged Brownsville; nor is there (iii) any assurance that CP&L will not continue its anti-competitive actions against Brownsville, par-ticularly the refusal to establish a reasonable wheeling rate.

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Thus, Brownsville expects to oppose the settlement as now proposed, absent meaningful negotiations with the parties necessary to settle the foregoing problems.

Sincerely yours, George Spiegel Attorney for the Public Utilities Board of the City of Brownsville, Texas cc: Mr. Robert E. Roundtree, Brownsville, Texas John W. Davidson, Esquire, San Antonio, Texas All Parties in the following proceedings:

- Houston Lighting & Power Co., et al.,

( South Texas Proj ect, Units 1 & 2)

NRC Docket Nos. 50-498A, 50-499A Central Power & Light Co., et al.,

FERC Docket No. EL 79-8 Central and South West Corp., et al.,

SEC Administration Proceeding File No. 3-4951 l

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ISHAM, LINCOLN & BEALE COUN50.CRS AT LAW 1130 CONN CCTICUT AVENU C. N.W. # _

sulTC34S wAS M 0 NOTON. O. C. 2OO 3e TELEPwCN E 203 833*9730 gnicago err,CC ONC rims? MafiONAk abAZA FO*TT's CCOMO FbOOR CMsCASO swmois 40403 TC6CPwCMC Jt3*ssa.7sCO TC6CA2*s384 April 10, 1980 . . . . . . . . . . . -- .... -. .

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George Spiegel, Esquire Spiegel & McDiarmid

• Suite 312 2600 Virginia Avenue, N.W Washington, D.C. 20037 t

Dear George:

By letter of March 26, 1980, you requested a copy of any agreement or understanding entered into by CSW, ELP and TU regarding the interconnection question. You will recall tha.t on April 2nd I advised you by telephone that no settlement had been entered into by those parties but that they had reached agreement on the basis upon which the interconnection issue might be resolved, and that this had been explained to Mr. Roundtree by Mr. Borchelt on March 25, 1980. You will recall fur.ther that, in the course.of our conversation, I specifically advised you of the terms of the basis of resolving the interconnection dispute. I enclose herewith for your information a copy of an " outline of DC Settlement" which sets forth those terms.

I would be happy to discuss this with you at your convenience.

V. ed y s, I

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David M. tahl DMS:R .

Enclosure l

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Outline of DC Settlement

1. CSW will censtruct a nominal 200 MW capacity intercen-nectics between Lawren, Oklahc=a, and Munday, Texas (" North inter-connection")r _

2. CS~rr will const=uct a ac dnal 600 MW capacity intercen-nec-len between SWIPCo's Walker County Lignite plant.and the ST?

Nuclear P cject (" South interconnection") */

3. CSW will pay for all of the North interconnection.

4. CSW, E&P and GSIT will pay fc the South interconnec-tion in propertion to their respective interests in the line.

5. To the extent cd available capacity, the Nceth and Scu-5 d- e: connections will be- used by any electric utility in the event of emergencies (to include both the failure of facilities for the generation c: transmission of electric energy for ady reason, and inadecuate supplies of generating capacity c fuel), whether such emergency transfers are voluntary under Section 202(d) of the Federal Power Act er are =ade pursuant to c dars of any governmental agency having authcrity to require such transfers.

6. To the extent of available capacity, the North and I Scu-' i-~a connecticns =ay be used by any elec Jic utility fc non-emergency sales c exchanges in furtherance cf the purposes cf these two DC intercennections, to include the conservation of energy or capital th cugh utilication of econc=y energy exchanges, utili:ation of coal and nuclear capacity to replace cil and gas generation and the p cvision of cec:dination services.

7. Any electric energy wheeled over the Ncrth and South interconnections shall be at a rate established by /ERC and l any wheeling over other facilities, which is incidental i therete, shall be at a rate app cved by the gover== ental agency having jurisdiction over such rates. The rates paid fer transfers ever the Scu h interconnec-icn shall be .

appcetiened a=cng CSW, E&P and GSU accc ding to thei re-spective interests.

• / The exact location of the ta =inus in SWFP is subject to change. GSU has indicated that it wants te pa -icipate in the Scu-" '- erconnectica and nay want a different interconnection Ucint.

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8. The agreenent is contingent upon an order f cs FIRC providing that EL&P and TU will net becene public utilities wd~"i- *"a neaning of Section 201.cf the Federal Power Act, as a result of either the- construction or expansion of the Nc:th and South interconnections or any other interconnec-tiens, c as a result.of the transfers of electric energy described in paragraphs 5 and 6.

9. All intervencrs in the TIRC proceeding, and any other elec ric utility entities, shall be given fo al opportunity */ to indicate what their needs for Direct Current l interconnection capacity =ay be in respect to the two inter- )

cennections nentioned, and to join in constructing the j interccnnections, wd*h *"a cos: cf that pc tion of the '

capacity . attributable to their needs to be borne bv them, .

unless otherwise agreed. Cwnership and. operating con :cl j cf the interconnection shall be in p cpertion'to that

.cortion o' 'ka capacity. . = aid for bv. -he enti.ty concerned.

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D"9]D o Ju o . A Nlrd o 1/ Informal centacts with such entities indicate that GSU is the only such entity with an interest in cwning part of the interconnectien. -

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,i UNITED STATES OF AMERICA BEFORE THE NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY LICENSING BOARD In the M6tter of )

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HOUSTON LIGHTING & POWER COMPANY, ) Docke t Nos . 50-498A et al. ) and 50-499A

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(South Texas Project, Unit Nos. )

1 and 2) ) '

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In the Matter of )

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TEXAS UTILITIES GENERATING COMPANY, ) Docke t Nos . 50-445A et al. ) and 50-446A

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, (Comanche Peak Steam Electric )

Station, Unit Nos. 1 and 2) )

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l CERTIFICATE OF SERVICE i

I hereby certify that I have caused copies of the foregoing MOTION BY BROWNSVILLE FOR LEAVE TO FILE COMMENTS AND BROWNSVILLE'S COMMENTS ON THE RESPONSE OF CENTRAL AND SOUTH WEST CORPORATION OF APRIL 9, 1980 to be served on the following by deposit in the United States mail, first class, postage paid, this 15th day of April, 1980. l Marshall E. Miller, Chairman Sheldon J. Wolfe, Esquire Atomic Safety & Licensing Board Atomic Safety & Licensing Board Panel Panel Nuclear Regulatory Commission Nuclear Regulatory Commission Washington, D. C. 20555 Washington, D. C. 20555 Michael L. Glaser, Esquire Joseph Rutberg, Esquire 1150 17th Street, N. W. Antitrust Counsel Washington, D. C. 20036 Nuclear Regulatory Commission .

Washington, D. C. 20555 l Ann Hodgdon, Esquire Fredric D. Chanania, Esquire R. Gordon Gooch, Esquire Michael B. Blume, Esquire John P. Mathis, Esquire Nuclear Regulatory Commission Baker & Botts

, Washing ton , D. C. 20555 1701 Pennsylvania Avenue , N. W.

l Washing ton , D. C. 20006 l

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Jerome Saltzman, Chief Antitrust & Indemnity Group Robert Lowenstein, Esquire Nuclear Regulatory Commission J. A. Bouknight, Jr., Esquire Wash ing ton , D. C. 20555 William J. Franklin, Esquire Lowenstein, Newman, Reis, Chase R. Stephens, Chief Axelrad & Toll Docketing & Service Section 1025 Connecticut Avnue, N. W.

Office of the Secretary Washing ton , D. C. 20036 Nuclear Regulatory Commission Washing ton , D. C. 20555 Frederick H. Ritts, Esquire Law Offices of Northcutt Ely Watergate 600 Building Washington, D. C. 20037 Donald Kaplan, Esquire Antitrust Division Wheatley & Wolleson Department of Justice 1112 Watergate Office Building P. O. Box 14141 2600 Virginia Avenue , N. W.

Washing ton , D. C. 20444 Washington, D. C. 20037 David M. Stahl, Esquire Roff Hardy, Chairman and Sarah F. Holzsweig, Esquire Chief Executive Officer Isham, Lincoln & Beale Central Power & Light Company 1120 Connecticut Avenue, N.W. P. O. Box 2121 Suite 325 Corpus Christi, Texas 78403 Washing ton , D.C. 20036 G. K. Spruce, General Manager City Public Service Board Susan B. Cyphert, Esquire P. O. Box 1771 Antitrust Division San Antonio, Texas 78201 Department of Justice P. O. Box 14141 Jon C. Wood, Esquire Washing ton , D.C. 20444 W. Roger Wilson, Esquire Matthews, Nowlin, Macfarlane Joseph Knotts, Esquire & Barrett Nicholas S. Reynolds, Esquire 1500 Alamo National Building Debevoise & Liberman San Antonio, Texas 78205 1200 17th Street, N. W.

Washing ton , D. C. 20036 Perry G. Brittain, President Texas Utilities Generating Co.

Douglas F. John, Esquire 2001 Bryan Tower Mc De rmo t t , Will & Emery Dallas, Texas 75201 1101 Connecticut Avenue, N.W.

Suite 1201 Joseph I. Worsham, Esquire Washing ton , D.C. 20036 Merlyn D. Sampels, Esquire Spencer C. Relyea, Esquire Worsham, Forsythe & Sampels 2001 Bryan Tower Suite 2500 Dallas, Texas 75201 I

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R. L. Hancock, Director G. W. Oprea, Jr. I City of Austin Electric Utility Executive Vice President Department Houston Lighting & Power Co.

P. O. Box 1088 P. O. Box 1700 ,

Austin, Texas 78767 Houston, Texas 77001 l l

Jerry L. Harris, Esquire W. S. Robson , General Manager l Richard C. Balough, Esquire South Texas Electric Coop. , Inc.

City of Austin Route 6, Building 102 P. O. Box 1088 Victoria Regional Airport  !

Austin, Texas 78767 Victoria, Texas 77901 Dan H. Davidson Michael I. Miller, Esquire City Manager Isham, Lincoln & Beale City of Austin One First National Plaza P. O. Box 1088 Chicago, Illinois 60603 Austin, Texas 78767 Donald Clements, Esquire Don R. Butler, Esq. Gulf States Utilities Co.

Sneed, Vine, Wilkerson, Selman P. O. Box 2951

& Perry Beaumont, Texas 77074 P. O. Box 1409 Austin, Texas 78767 Knoland J. Plucknett Executive Director Morgan Hunter, Esquire Committee on Power for the McGinnis, Lochridge & Kilgore Southwest, Inc.

900 Congress Avenue 5541 Skelly Drive Austin, Texas 78701 Tulsa, Oklahoma 74135 Kevin B. Pratt, Esquire Jay M. Galt, Esquire Linda Aker, Esquire Looney, Nichols, Johnson & Hayes P. O. Box 12548 219 Couch Drive Capital Station Oklahoma City, Oklahoma 73101 Austin, Texas 78767 John E. Mathews, Jr., Esquire E. W. Barnett, Esquire Mathews, Osborne, Ehrlich, McNatt, Charles G. Thrash, Jr., Esquire Gobelman & Cobb J. Gregory Copeland, Esquire 1500 American Heritage Life Bldg.

Theodore F. Weiss, Jr., Esquire Jacksonville, Florida J2202 Baker & Botts 3000 One Shell Plaza Robert E. Bathen Houston, Texas 77002 R. W. Beck & Associates P. O. Box 6817 Orlando, Florida 82803

Somervell County Public Library P. O. Box 417 Glen Rose , Texas 76403 Maynard Humah'; General Manager Western Farmers Electric Coop.

P. O. Box 429 Anadarko, Oklahoma 73005 James E. Monahan Executive Vice President and General Manager Brazos Electric Power Coop., Inc.

P. O. Box 6296 Waco, Texas 76706 Robert M. Rad er , Esquire Conner, Moore & Corber 1747 Pennsylvania Avenue, N. W.

Washing ton , D. C. 20006 W. N. Woolsey, Esquire Dyer and Redford 1030 Petroleum Tower Corpus Christi, Texas 78474 Mr. G. Holman King West Texas Utilities Co.

P. O. Box 841 Abilene, Texas 79604

{s MAf tu s '

Marc R. Poirier Attorney for the Public Utilities ,

Board of the City of Brownsville, Texas l

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April 15, 1980 l

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