ML19269D035

Answer of Tx Util Co & Subsidiaries to Dept of Justice First Set of Interrogatories & Requests for Production of Documents.Certificate of Svc Encl

ML19269D035
Person / Time
Site:	South Texas
Issue date:	01/12/1979
From:	Knotts J, Relyea S, Reynolds N DEBEVOISE & LIBERMAN, WORSHAM, FORSYTHE, SAMPELS & WOOLRIDGE (FORMERLY
To:
References
NUDOCS 7902260607
Download: ML19269D035 (17)

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.p 'o UNITED STATES OF AMERICA  %

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JAN 161979 >

ATOMIC SAFETY AND LICENSING BOARD 9 7:2n 2 In the Matter of )

U s

) / m, u HOUSTON LIGHTING AND POWER )

CO., et al ) Docket Nos. 50-498A

) 50-499A (South Texas Project, Units )

I and 2) )

ANSWER OF TEXAS UTILITIES COMPANY AND ITS SUBSIDIARIES TO THE FIRST SET OF INTERROGATORIES AND REQUESTS FOR PRODUCTION OF DOCUMENTS FROM DEPARTMENT OF JUSTICE COME NOW TEXAS UTILITIES COMPANY ("TU"), TEXAS UTILITIES GENERATING COMPANY ("TUGCO"), DALLAS POWER & L'GHT COMPANY

("DPL"), TEXAS ELECTRIC SERVICE COMPANY ("TESCO"), AND TEXAS POWER

& LIGHT COMPANY ("TPL"), all collectively referred to as "TU Companies," in compliance with Section 2.740b and 2.741 of the Rules of Practice of the Nuclear Regulatory Commission ("NRC"), and make the following answers to the Department of Justice's First Set of Interrogatories.

Most of the interrogatories request information with respect to both the TU Companies and Houston Lighting & Power Company ("HLP"). The answers filed herewith are for and on behalf of the TU Companies only. With respect to certain matters, including the production and identification of documents, reference is made to the Objections and Motion for Protective Order of the TU Companies filed contemporaneously herewith.

INTERROGATORY NO.1. "Providing the identity of the requestor, the date of the request (s), the individual contacted and the nature of response (s), describe each occasion upon which an Electrical Utility engaged in interstate commerce, or interconnected with a Electrical Utility engaged in interstate commerce, contacted HL&P and/or TU, regarding: (a) a request to purchase, sell, or exchange electrical power or energy, including but not limited to wholesale transactions; (b) requests for the use of transmission services; (c) requests for membership in the Texas Interconnected System (TIS); (d) requests for membership in the Electric Reliability Council of Texas (ERCOT); and (e) provide all documents which relate to (a)-(d) above."

1(a). The TU Compcnies are aware of no such request except for Western Farmers Electric Cooperative, Inc. and El Paso Electric Cooperative. See items 1.b. and I.h. of the Information Required for the Antitrust Review of TUGCO's Operating License Application in the Matter of Texas Utilities Generating Company, Docket Nos. 50-445 and 50-446. See also the response to interrogatory No.22.

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l(b). None, except as set forth in Answer 1(a).

l(c). Brazos Electric Power Cooperative, South Texas Electric Cooperative /Medina Electric Cooperative and City of Brownsville.

l(d). None.

l(e). Documents requested by this inquiry have been made availabie for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROCATORY NO. 2. " Identify each contract, agreement, or understanding among any Companies or between or among any Company and any third Electric Utility, since 1935 relating to: (a) the installation, maintenance and inspection of mechanical devices designed to prevent either the flow of power from interstate commerce into the lines of each Company, or the flow of power from each Company into interstate commerce; (b) procedures whereby should any Company desire to engage in interstate commerce, it would notify the other within a specified time; (c) any contract, understcnding, agreement or plan whereby either or both Companies would disconnect from any third Electric Utility with which they were interconnected should that third Electric Utility commence to transmit or receive electrical power or energy in interstate commerce; and (d) provide all documents which relate to (a)-(c) above."

2(c) and (b). The WTU-TESCO interconnection agreements dated October 9, 1935, and February 16,1938, as amended, require prior notice if either party desires to commence interstate operations, directly or indirectly, and permit the installation of protective devices to prevent the flow of interstate power through the systems while interconnected. Protective devices are also installed at the Denison Dam. Each TU Company has individually understood that if any electric utility with which it is interconnected desires to engage in interstate operation, that utility would give the TU Company prior notice in order to allow the TU Company to choose whether to remain solely in intrastate or to become subject to federal regulation by virtue of indirect interstate operation. See the depositions taken in and testimony of Messrs. T. L. Austin, Jr. (T. 1206-1231), B. B. Hulsey, Jr.

(T.1233-1382) and W. G. Marquardt (T. 1386-1452) of the transcript of West Texas Utilities Company, et al v. Texas Electric Service Company, et al, No. CA-3 0633-F, the trial of which was completed in November,1978 before the United States District Court for the Northern District of Texas, Dallas Division. The pleadings, discovery requests, depositions, transcript and exhibits in that case have been made available to the Department of Justice.

2(c). None.

2(d). Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice. See also the contracts attached to the antitrust information submitted with TUGCO's Application for Construction Per-mit.

INTERROGATORY NO. 3. "(a) Describe in detail the reasons, factors or policies which were considered by HL&P and/or TESCO in determining 's disconnect on May 4,1976, from other Electric Utilities with which they had been interconnected. (b) Provide all documents which relate to the response to this interrogatory."

3(a). In mid-1974, in June 1975, and in December 1975, S. B. Phillips of CSW threatened that if TU did not voluntarily cooperate with CSW in integrating its systems in synchronous interstate operation, CSW would force TU's cooperation.

The TU Companies have evaluated various integration plans proposed by CSW and found that their implementation would jeopardize reliable and economic electric service to the TU customers, would expose the TU customers to disturbances from remote systems and would utilize the facilities which the TU customers have paid for without compensation. Moreover, the TU Companies concluded that the CSW plans were seriously defective, intentionally biased, illogical, unreasonable, calculated solely to save CSW's holding company under the 1935 Holding Company Act, and devoid of even an attempt to determine what mode of operation was in the best interests of the TU Companies' customers or even of CSW's own customers.

On May 4,1976, WTU violated its interconnection agreement with TESCO by failing to notify TESCO of WTU's commencement of the interstate operation.

The TU Companies had no alternative other than to open their interconnections with WTU and CPL on May 4,1976, in order to insure reliable electric service to their customers and to preserve their right to operate in a manner they believed best served their customers. See the depositions and testimony of Messrs. Hulsey, Marquardt and E. D. Scarth (T. 3227-3571) in West Texas Utilities Company, et al v. Texas Electric Service Company, et al, Id.

3(b). Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROGATORY NO. 4. "In order of their relative importance, describe the underlying policies or bases upon which HL&P and TU justify their refusal to engage in the interstate transmission or reception of electrical power or energy or to be interconnected with any other Electric Utility engaged in interstate commerce; orovide any documents which state or describe these policies or bases."

4. The past and present policy of the TU Companies is to operate their respective systems to produce the most reliable and efficient power for their customers. The Texas Public Utility Regulatory Act, T.V.C.A., Art.1446c, imposes on electric utilities in Texas the duty to provide safe, adequate, reasonable, economic and reliable service. Based on the facts, circumstances and available alternatives, the TU Companies believe that an intrastate mode of operation has been and continues to be in the best interests of their customers. See the depositions and testimony of Messrs. Austin and Hulsey in West Texas Utilities Company, et al v. Texas Electric Service Company, et al, Id. See the answer to Interrogatory l(e).

INTERROGATORY NO. 5." With respect to the South Texas Project, identify and describe: (a) all requirements which had to be satisfied before any Electrical Utility would be allowed to participate in the project; (b) all provisions of the South 3

Texas participation agreement, if any, which limit participation to Electrical Utilities engaged only in intrastate commerce; (c) whether there is any method whereby it is technically feasible to operate the South Texas Project in a situation where one of the participants is engaged in both intrastate and interstate commerce, while all the other participants are engaged exclusively in intrastate commerce; (d) if there is a technically feasible method to allow this manner of operation, state how much it would cost to implement this method, specifying all assumptions, methods of calculation, and techniques employed in rnaking that estimate; and (e) provide all documents which relate to (a)-(d) above."

5. These interrogatories are not applicable to the TU Companies.

INTERROGATORY NO. 6. " State in current dollar amounts what cost, if any, would be borne by HL&P and TU if ERCOT were interconnected with the Southwest Power Pool. Had these costs, if any, been calculated prior to the opening of any interconnections on or about May 4,1976? State all cssumptions underlying these calculations, who made such assumptions, the basis for such assumptions, when the calculations were made, and whether these calculations were undertaken for any purpose other than to use in this or related litigation. Provide all studies, draf ts, working papers, etc. relating to the calculations of any such costs."

6. Interconnection of ERCOT with the SWPP would be on extremely complex technical project, costing millions of dollars if accomplished in a manner which preserves ERCOT's record of reliable and economic electric service.

The exact cost to the TU Companies depends on a number of variables, none of which have been determined. These costs were not calculated prior to May 4, 1976. The TU Companies had determined that adequate interconnections would cost their customers substantial sums without any corresponding benefits.

Historically, ERCOT has been and continues to be an optimum size, large enough to achieve the maximum benefits of interconnected operation while small enough to avoid unwieldy and excessively burdensome administrative and operational problems, which necessarily accompany larger interconnected systems.

An excellent communications network within a limited number of systems has enabled easy, quick, and efficient notice of system disturbances and has permitted immediate resolution of disturbances.

Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROCATORY NO. 7. "(a) Identify every occasion upon which TESCO either threatened to open or in fact did open any or all of its interconnections with West Texas Utilities Co. (b) With respect to each such occasion identified in response to (a), describe and/or identify all individuals involved in either threatening to open or in actually opening interconnections, the surrounding circumstances, the substance of any such threats, the recipient (s) of any threats, and the response (s) of all involved individuals or entities to any threatened or actual disconnections. (c) In addition, identify and describe each reason, 4

justification, or policy which led TESCO either to threaten disconnection or actually to disconnect from WTU. (d) Provide all documents which relate to the response to this interrogatory."

/

7. In early 1954, shortly after the expiration of an FPC order exempting the TU systems from jurisdiction by virtue of its interconnections with WTU, TESCO opened its interconnections with WTU. A disagreement between TESCO and WTU had developed over what type of protective devices should be installed on WTU's system to insure on intrastate mode of operation. These interconnections were reestablished in April 1954. Mr, Longley of WTU and Mr. Perry Davis of TESCO were principally involved in this matter, in 1976, in connection with a wholesale rate proceeding by WTU at the FPC, WTU indicated its willingness to eliminate the intrastate only provision from its contract with Gate City Electric Cooperative, Inc. When TESCO learned of this willingness, Mr. Marquardt, President of TESCO, advised Mr. Durwood Chalker, President of WTU, that TESCO may open its interconnections with WTU if WTU eliminated the intrastate only provision from its Gate City contract.

On May 4,1976, after WTU commenced interstate service, TESCO opened its interconnections with WTU. This decision was made by Mr. Marquardt, President of TESCO, and Mr. Scarth, Vice President of TESCO.

Each time when TESCO opened its interconnections with WTU, the sole purpose was to preserve the reliability of TESCO's system and to operate in the mode which TESCO believed to be in the best interest of its customers. No TU Company has ever had any intent, design, purpose, or motive to injure the competitive or economic position of any other system. See the depositions and testimony of Messrs. Hulsey, Marquardt and Scarth in West Texas Utilities Company, et al v. Texas Electric Service Company, et al, Id.

Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROGATORY NO. 8. "(o) State every occasion since 1965, if any, on which HL&P or TU communicated with or considered communicating with any other Electrical Utility to dissuade that utility from commencing to operate, or to discontinue its then current operation, in interstate commerce. (b) With respect to each such occasion identified in response to (a), describe and/or identify all individuals involved in any such communications or contemplated communications, the surrounding circumstances, the substance of any such communications, the individuals (and the entities for which they worked) to whom such communications were made, and the response (s) of those individuals or ennties. (c) Provide all documents which relate to the response to this interrogatory."

8. See the answer to Interrogatory No. 9. Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

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INTERROGATORY NO. 9. "(a) Identify each and every occasion, if any, upon which HL&P and/or TU communicated with West Texas Utilities Company or Central Power & Light Company the subject of possible interstate operation by WTU or CP&L, giving the date(s) of any such communication (s), the surrounding circumstances, the individual (s) so communicating,the recipients of any such communication (s) and the response (s), if any, of those recipients. (b) Provide all documents which relate to the response to this interrogatory."

9. WTU and CP&L are free to operate their systems in any manner they see fit, provided such operation does not interfere with the TU Companies' ability to operate their systems in the most reliable and efficient manner and in the best interests of their customers.

The TU Companies have discussed WTU's intrastate operations on numerous occasions since 1935 in connection with the negotiation and administration of TESCO's agreement with WTU.

The TU Companies are members of TIS and ERCOT. Numerous meetings of committees of these groups and their predecessors have taken place over the years, during which the question of intrastate operations of the members thereof was discussed.

Prior to the filing of the Complaint at the SEC in March 1974, at no time did WTU or CP&L indicate a desire to commence interstate electric service.

Quite to the contrary, Messrs. Chalker, Hardy, Hutchison and others repeatedly expressed their ciesire to avoid FPC jurisdiction and to operate solely in the State of Texas.

Following the SEC Complaint, Mr. S. B. Phillips discussed with Mr. T.

L. Austin and Mr. B. B. Hulsey of TU the possiblity of engaging in studies looking solely at the question of operating ERCOT in parallel with the SWPP. TU declined to participate in such studies because CSW had predetermined the conclusions thereof in order to preserve CSW's status under the 1935 Holding Company Act.

CSW has continued to refuse to study the continued operation of ERCOT in intrastate commerce or to impartially analyze what was the best mode of operation for CSW's Texas companies.

Since May 4,1976, TU has communicated to WTU and CP&L by means of various pleadings, briefs, depositions, testimonies and other matters related to and in connection with the various proceedings at the Texas Public Utility Commission, the United States District Court for the Northern District of Texas, Dallas Division, FPC and FERC, SEC, NRC and various appeals from such proceedings. See the depositions and testimony of Messrs. Hulsey, Marquardt and Scarth in West Texas Utilities Company, et al v. Texas Electric Service Company, et al, Id.

To the extent that records exist, documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

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INTERROGATORY NO.10. "(a) State whether HL&P and/or TU through cny of its management or executive employees has ever promulgated, published, circulated, or in any way communicated throughout the Company or to its shareholders, or to any external person or entity. that it maintained a policy or practice of operating exclusively in intrastate commerce. (b) State whether HL&P and/or TU through any of its management or executive employees has ever promulgated, published, circulated, or in any way communicated throughout the Ccmpany or to its shareholders, or to any external person or entity, that it intended in the future to operate exclusively in intrastate commerce. (c) If the answer to either (a) cr (b) is in the affirmative, give the date(s) of any such communication (s),

the surrounding circumstances, individual (s) so communicating, the recipients of any such communication (s) and the specific responses, if any, of those recipients.

(d) Provide all documents which relate to (a)-(c) above."

10. Based upon the facts, circumstances and available alternatives, the TU Companies believe that the operation and maintenance of an intrastate mode of operation has been and continues to be in the best interests of their customers and provides the highest degree of reliability and economic electric power to their customers. The TU Companies have communicated this determination to their shareholders, underwriters of their securities, the FPC, the PUC, NRC, Department of Justice, to other electric systems other federal and state agencies, cnd to the public generally.

Documents requested by this inquiry have been made available for inspection and copying, and all documents designated t? oe g ied have been delivered to the Department of Justice.

INTERROGATORY NO. II. " identify each and every period or occasion during or on which HL&P has been intercceected with Gulf Sta~es Utilities, or any other Electrical Utility engaged in intersbie commerce, and she occasions upon which HL&P either transmitted electrical power or energy to Mat company or received electrical power or energy from that company. Spei;ify the total number of kilowatt hours (KWH) either tgysmitted or received du ing these periods and the specific circumstances, if any, surrounding the interconne ctions."

II. This interrogatory is not applicable to the TU Companies.

INTERROGATORY NO.12. "With respect to the FERC's Fort Werth regiona!

office study," STAFF REPORT ON ELECTRIC RELIABL.lTY COUNCIL OF TEXAS INTERCONNECTION AND RELIABILITY EVALUATION," March,1978, co Houston and TU contend that: (a) the report is incorrect in as~essing the amount of cost necessary to interconnect ERCOT and SWPP as being $31,175,000 (p. 32); (b) The report is incorrect in asserting: " ' Internal' load flows for single contingency loss of the largest generating unit in South Texas (South Texo: Project 1,250 MW unit) and single contingency loss of the largest generating unit in North Texas (Comanche Peak I,130 MW unit) were made for ERCOT interconnected with SWPP and the rest of the eastern interconnected systems group for 1982. No over loads or adverse effects were observed" (p. 28); (c) if the answer to (a) or (b) is offirmative, and HL&P or TU does reject that finding of the study, explain the basis for that rejection; (d) provide 'all documents which relate to (a)-(c) above."

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12(a). TU believes the report is incorrect.

12(b). TU cannot determine the meaning of the report in this respect.

12(c). See answers to Interrogatories Nos. 4,6 and 14.

12(d). Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROGATORY NO.13. "(a) Do HL&P or TU assert that the costs of regulation under FERC regulatory authority would be greater or less than the costs of regulation under the Texas Public Utility Commission;(b) if HL&P and TU assert that greater costs will result from FERC regulation, state the basis upon which that contention rests; and (c) provide all documents which relate to (a)-(b) above."

13. FERC regulation would be added to, not completely replace, state regulation by the PUC. Thus, FERC regulation would necessarily result in greater costs. No comparative studies have been made to determine the exact additional costs to the TU Companies as a resuit of FERC regulation.

Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROGATORY NO.14. " State whether, prior to the May 4,1976 disconnection, HL&P and/or TU made, commissioned or reviewed any analysis, study or evaluation as to possible adverse effects upon wholesale, industrial and residential consumers of electrical power throughout Texas which would result from HL&P and TU disconnecting from all other Electrical Utilities with which they were interconnected. If so, state the conclusion of any such analysis, study or evoluotion, and by whom when and under what circumstances it was made.

e Provide all documents relating to such analysis, study or evaluation."

14. Based upon the facts, circumstances and available alternatives, the TU Companies believe that on intrastate mode of o; eration has been and continues to be in the best interests of their customers. This conclusion has been fortified by repeated analysis over .he years of what mode of operation is in the best interest of their customers. In each instance, the TU Companies have concluded that operating in an intrastate mode produces for their customers the most reliable and economical electric service. The adverse consequences from disconnection on May 4,1976, were for less than the adverse consequences of remaining connected. See the depositions and testimony of Messrs. Austin, Hulsey, Marquardt and Scarth in West Texas Utilities Company, et al v. Texas Electric Service Company, et al, Id.

Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROGATORY NO.15. "Do HL&P and TU contend that if they become 8

subject to FERC jurisdictional authority, the Commission could order them to implement interconnections, provide transmission services, or take other action, the result of which would be detrimental to their customers? If so, state the basis of that contention and provide all documents relating to that contention."

15. Yes. See answers to Interrogatories Nos. 4, 6 and 14. See also applicable federal statutes and the depositions and testimony of Messrs. Austin, Hulsey, Marquardt ,nd Scarth in West Texas Utilities Company, et al v. Texas Electric Service Company, et al, Id.

Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROGATORY NO.16. "(a) State for every wholesale customer of HL&P and TU: the full name or title of the customer; complete address of the customer; and the amount of wholesale power purchased by that customer by year for the ceriod 1950-1978. (b) State all requests received by HL&P and/or TU for wholesale service whether or not such service was ever provided, specifying when the request was received, by whom the request was made, and whether the requesting party was at the time of the request engaged in interstate commerce. (c) Provide all documents relating to the response to this interrogatory."

16. The TU Companies need additional time to collect the information, to the extent such information exists and is available, requested by this interrogatory.

INTERROGATORY NO.17. " State the purpose for which ERCOT was formed and provide all documents relating to its formation. Do HL&P and TU contend that ERCOT engages in activities different from, or has more power and authority than, other regional reliability councils such as SERC (Southeast Reliability Cot cil)?"

17. ERCOT was orpuized in July 1970. The purpose of ERCOT is to promote the reliable operation of power systems in Texas by providing a means of gathering information relating to the member systems for reporting to NERC.

ERCOT's functions and authority are outlined in the ERCOT Agreement, and insofar as reporting to NERC, aie similar to that of other regionni reliability councils.

Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Depcrtment of Justice.

INTERROGATORY NO.18. " State the purpose for which the TIS was formed.

Provide all documents relating to its formation. List every occasion upon which an Electrical Utility has requested membership in TIS and provide all documents relating to such request and the response to that request."

18. In JAay,1967, the informal TIS operating guidelines and planning criteria were formalized by a coordination agreement. The purpose of TIS is to improve service reliability through coordination of planning and operations. See response to interrogatory No. l(c).

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Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROGATORY NO.19. "(o) Do HL&P and TU contend that, if, pursuant to the July 21,1976, FPC order (based on Sec. 202(d) of the Fedearl Power Act) authorizing reconnection without attaching FPC jurisdiction, they had reconnected with the Electric Utilities with which they had been interconnected prior to May 4, 1976, that the result would have been either economically debilitating or detrimental from on engineering perspective? (b) if the answer to part (a) of this interrogatory is in the affirmative, explain in detail precisely why such action would have been economically debilitating or detrimental from on engineering perspective, specifying each assumption, premise, calculation, or conclusion upon which that response is based; (c) if the response to part (a) of this interrogatory is negative, ident'fy the basis upon which it was determined not to interconnect under authority of the FPC's order."

19. Limited to the systems as they existed on July 21,1976, no, unless such action would have subjected the TU Companies to the jurisdiction of FERC which could not be determined until the FPC order became final.

INTERROGATORY NO. 20. "In reference to the formation of ERCOT, identify each occasion upon which any emplayee of HL&P or TU engaged in any communication with any other party, individual or entity, specifying the substance of each such communication, the employee of HL&P or TU who made it, the date, the .ecipient of the communication, and the recipient's response, if any, relating to: (a) the advisability of limiting membership in ERCOT to Electric Utilities engaged only in intrastate commerce: (b) concern about possible antitrust implications of so limiting membership to intrastate Electric Utilities only; (c) alternative devices or understandings, either formal or informal, whereby Electric Utilities engaged in interstate commerce could be foreclosed from membership in ERCOT without this being made an explicit requirement for membership; and (d) provide all documents relating to (a)-(c) above."

20. To the extent the information requested is available, documents which respond to and were requested by this inquiry have been made available for inspection md copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROGATORY NO. 21. "In reference to the agreement, understanding, or contractual arrangements whereby HL&P and TU reconnected following their disconnection of May 4,1976, identify and specify in detail: (a) the occasions, instances, and dates upon which negotiations between HL&P and TU employees relating to possible reconnection occurred; (b) the precise agreement, understanding or contractual arrangements whereby the reconnection was effected; (c) any conditions that HL&P and/or TU insisted upon, requested or solicited from the other as a requirement before reconnection could be ef fected; (d) any contacts or communcations from Electric Utilities other than HL&P and TU pertaining either to reconnection or new interconnections, and the response of HL&P and TU to those communications;(e) any conditions that HL&P or TU insisted upon, 10

requested or solicited from other Electric Utilities as a requirement before either Company would consider reconnection; and (f) provide all documents which relate to (a)-(e) above."

21. See the depositions and testimony of Messrs. Austin and Hulsey in West Texas Utilities Compcny, et al v. Texas Electric Service Comoany, et al, Id.

Documents requested by this inquiry have been made available for inspection and copying. and all documents designated to be copied have been delivered io the Department of Justice.

INTERROGATORY NO. 22. "In reference to the Comanche Peak Project identify and explain: (c) any requirements which had to be satisfied before any Electrical Utility would be allowed to participate in the project; (b) all provisions of the Comanche Peak participation agreement, if any, which limit participation to Electrical Utilities engaged only in intrastate commerce; (c) each instance i n which an Electrical Utility engaged in interstate commerce, or interconnected with an Electrical Utility engaged in interstate commerce, ever requested participation in Comanche Peak and was refused; (c) those Electrical Utilities which requested participation in Comanche Peak and were granted participatory status; (e) for any Electrical Utilities identified in the response to parts (c) or (d) of this interrogatory, explain why that Electric Utility was either denied or granted participatory status; and (f) provide all documents which relate to (a)-(e) above."

22. Ownership in Comanche Peak was made available in accordance with the requirements by the NRC for the issuance of the Construction Permit. Only TMPA and Brazos Electric Power Cooperative made a timely request to purchase an interest, and a contract of sale for such purchase has been executed, a copy of which has been previously filed with the NRC.

In 1976, WTU expressed an interest in negotiating for the purchase of an interest in Comanche Peak, two years offer the cut-off date and at a time when no participation was available.

Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROGATORY NO. 23. "(a) Describing the circumstances and providing the date, persons participating, and facilities inspected, identify each occasion upon which employees of HL&P and/or TU (including attorneys retained by either Company) visited the generating plants, relays, installations, or equipment of the other Company, either alone or accompanied by employees of the Company owning the facility, for the purpose of inspecting any relays, mechanical devices, or other equipment designed to prevent the flow of electrical power or energy in interstate commerce. (b) Describing the circumstances and providing the date, persons participating, and facilities inspected, identify each occasion upon which employees of HL&P or TU visited the generating plants, relays, installaticns, or equipment of any other company, entity or Electric Utility (i.e., other than HL&P or TU) for the purpose of inspecting any relays, mechanical devices, or other equipment designed to prevent the flow of electrical power or energy in interstate commerce; (c) 11

Identify each occasion, occurrence, or date upon which any employee of HL&P or TU requested, provided or received any pamphlets, printed material, reports, or other written matter, pertaining to the installation or maintenance by any Electrical Utility, of any relays, mechanica! devices, or other equipment designed to prevent the flow of electrical power or energy in interstate commerce, specifying the date, requested material, material received or provided, and the individuals involved; (d) estimate how much money has been expended, if any, since 1965 by HL&P and TU for the purpose of seeking to inspect relays, mechanical devices, or other equipment of another Electrical Utility or entity to ascertain whether any electrical power or energy was flowing from that equipment into interstate commerce; and (e) provide all documents which relate to (a)-(d) above."

23. It would be unduly burdensome, if not impossible, to answer this interrogatory as framed. Various protective devices have been installed on WTU's system to prevent interstate flow of electric energy, and periodic tests and inspections by numerous employees have been made over the years to insure compliance with the Federal Power Act by the TU Companies, and in particular to assure the underwriters of their securities that prior approval by the FPC was not required since such provisions of the Federal Power Act did not apply. E. D. Scarth of TESCO made one inspection of the HLP-GSU Huffman interconnection. TESCO operating procedure manuals were provided to HLP from time to time, and the TU Companies ordinarily informed each other when interconnection changes were made which could have offected their intrastate status.

Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROGATORY NO. 24. "(o) Identify by date each occasion or period upon or during which TU was interconnected with any Electrical Utility transmitting or receiving electrical power or energy in interstate commerce, or was interconnected with any Electrical Utility that was in turn interconnected with an Electrical Utility transmitting or receiving electrical power or energy in interstate commerce; (b) state in detail all detrimental financial consequences or disadvantageous engineering ramifications, if any, that occurred during these periods, occasions or instances of interstate interconnection which were a direct result, and/or were caused or effected by, this interstate interconnection; and (c) provide all documents relating to (a)-(b) above."

24. The TU Companies were interconnected with interstate facilities during 1942-1945, during certain post-war periods prior to 1954, in 1968 during the FPC-sponsored test of the GSU-HLP Huffman interconnection, for 10 hours1.157407e-4 days <br />0.00278 hours <br />1.653439e-5 weeks <br />3.805e-6 months <br /> on May 4, 1976, and during other short periods of emergency conditions, all under exemption from FPC jurisdiction. See the depositions and testimony of Messrs. Austin, Hulsey, Marquardt and Scarth in West Texas Utilities Company, et al v. Texas Electric Service Comoany. et al, l_d.

Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

INTERROGATORY NO. 25. "(a) Describe in detail how the desire, practice, 12

preference, or policy of HL&P and TU to operate exclusively in intrastate commerce has offected, influenced, controlled, or modified the design of physical facilities, plants, transmission facilities, or any other construction engaged in by the two Companies; (b) state whether or not the maintenance of intrastate status or operation on the part of HL&P and TU had any impact, influence, effect, or consequences upon the cost of the physical facilities, plants, transmission facilities, or other construction costs borne by the two Compcnies; (c) indicate on approximate fiJure representing how much additional cost, if any, was borne by HL&P ond iU since 1965 in undertaking new construction or maintenance of existing facilities as a result of any policy or desire to remain exclusively in intrastate operation; (d) state in detail what assumptions and calculations were employed to prepare a response to subsection (c) of this interrogator- and (e) identify every individual, person or employee of HL&P or TU who decided, or participated in deciding, to design, construct, or build any facility or modify any existing facility in such a manner that the owner Company would not become engaged in interstate commerce."

25. It would be unduly burdensome, if not impossible, to answer this interrogatory as framed.

The TU Companies believe that their customers have saved millions of dollars because the TU Companies have confined their respective operations to the State of Texas. See the depositions and testimony of Messrs. Austin, Hulsey, Marquardt and Scarth in West Texas Utilities Company, et al v. Texas Electric Service Company, et al, Id.

Documents requested by this inquiry have been made available for inspection and copying, and all documents designated to be copied have been delivered to the Department of Justice.

Respectfully submitted, Jos. Irion Worsham, Esq.

M. D. Sampels, Esq.

Spencer C. Relyea, Esq.

WORSHAM, FORSYTHE & SAMPELS 2001 Bryan Tower, Suite 2500 Dallas, Texas 75201 Joseph B. Knotts, Jr., Esq.

Nicholas S. Reynolds, Esq.

DEBEVOISE & LIBERMAN 1200 Seventeenth Street, N. W.

Washington, D. C. 20036

/

By V v ATTORNEYS FOR TEXAS UTILITIES COMPANY, TEXAS UTILITIES GENERATING COMPANY, DALLAS POWER & LIGHT COMPANY, TEXAS ELECTRIC SERVICE COMPANY AND TEXAS POWER & LIGHT COMPANY 13

THE STATE OF TEXAS  :

COUNTY OF DALLAS  :

BEFORE ME, the undersigned authority, a Notary Public in and for Dallas County, Texas, on this day personally appeared E. D. SCARTH, well known to me to be a credible person, who, after being by me first duly sworn, did depose and say that he is duly authorized to respond to the First Set of interrogatories and Requests for Production of Documents from the Department and Justice on behalf of the TU Compades, has read the above and foregoing Answers of the TU Compar.ies to said Interrogatories from the Department of Justice, and the same are true and correct, to the best of his knowledge and belief.

E. D. SC ARTH SUBSCRIBED AND SWORN TO before me this 12th day of January,1979, to certify which witness my hand and seal of office.

,l e # /

/ ',[

• f \ . [C. '

Notary ,

Public, Dallas County, Teyas My Commission Expires:

(,. - k, . ',' h 14

UNITED STATES OF AMERICA BEFORE THE ATOMIC SAFETY & LICENSING BOARD in the Matter of )

)

HOUSTON LIGHTING AND POWER )

CO., et al ) Docket Nos. 50-498A

) 50-499A (South Texas Project, Units )

I and 2) )

CERTIFICATE OF SERVICE I hereoy certify that service of the foregoing ANSWER OF TEXAS UTILITIES COMPANY AND ITS SUBSIDIARIES TO THE FIRST SET OF INTERROGATORIES AND REQUESTS FOR PRODUCTION OF DOCUMENTS FROM DEPARTMENT OF JUSTICE TO THE HOUSTON LIGHTING & POWER AND TEXAS UTILITIES COMPANIES has been made on the following pcrties listed hereto this 12th day of January,1979, by depositing copies thereof in the United States mail, first class, postage prepaid:

Marshall E. Miller, Esq. (2 copies) Richard S. Salzman, Esq.

U. S. Nuclear Regulatory Commission U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Washington, D. C. 20555 A'..chael L. G aser, Esq. (2 copies) Jerome E. Sharfman, Esq.

115017th Street, N. W. U. S. Nuclear Regulatory Commission Washington, D. C. 20036 Washington, D. C. 20555 Sheldon J. Wolfe, Esq. (2 copies) Chase R. Stephens, Secretary (20 copies)

U. S. Nuclear Regulatory Commission Docketing and Service Branch Washington, D. C. 20555 U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Samuel J. Chilk, Secretary Jerome Saltzman Office of the Secretary of the Commission Chief, Antitrust and indemnity Group U. S. Nuclear Regulatory Commission U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Washington, D. C. 20555 Atomic Safety & Licensing Appeal Roff Hardy Board Panel Chairman and Chief Executive Officer U. S. Nuclear Regulatory Commission Central Power & Light Company Washington, D. C. 20555 P. O. Box 2121 Corpus Christi, Texas 78403

Michael I. Miller, Esq. G. K. Spruce, Richard E. Powell, Esq. General Manager David M. Stahl, Esq. City Public Service Board Thomas G. Ryan, Esq. D. O. Box 1771 Isham, Lincoln & Beale San Antonio, Texas 78203 One First National Plaza Chicago, Illinois 60603 Roy P. Lessey, Esq. Jerry L. Harris, Esq.

Michael Blume, Esq. City Attorney, U. S. Nuclear Regulatory Commission Richard C. Balough, Eq.

Washington, D. C. 20555 Assistant City Attorney City of Austin R. L. Hancock, Director P. O. Box 1088 City of Austin Electric Utility Department Austin, Texas 78767 P. O. Box 1088 Austin, Texas 78767 Robert C. McDiarmid, Esq. G. W. Oprec, Jr.

Spiegel and McDiarmid Executive Vice President 2600 Virginia Avenue, N. W. Houston Lighting & Power Compcny Washington, D. C. 20036 P. O. Box 1700 Houston, Texas 77001 Dan H. Davidson Jon C. Wood, Esq.

City Manager W. Roger Wilson, Esq.

City of Austin Matthews, Nowlin, Macfarlane & Barrett P. O. Box 1088 1500 Alamo National Building Austin, Texas 78767 San Antonio, Texas 78205 Joseph Gallo, Esq. Judith Harris, Esq.

Richard D. Cudahy, Esq. Energy Section Robert H. Loeffler, Esq. Antitrust Division Isham, Lincoln & Beale U. S. Department of Justice Suite 701,105017th Street, N. W. Washington, D. C. 20530 Washington, D. C. 20036 Douglas F. John, Esq. R. Gordon Gooch, Esq.

Akin, Gump, Hauer & Feld John P. Mathis, Esq.

l100 Madison Office Building Baker & Botts 115515th Street, N. W. 1701 Pennsylvania Avenue, N. W.

Washington, D. C. 20024 Washington, D. C. 20006 Morgan Hunter, Esq. Robert Lowenstein, Esq.

McGinnis, Lochridge & Kilgore J. A. Bouknight, Esq.

5th Floor William Franklin, Esq.

Texas State Bank Building Lcwenstein, Newman, Reis & Axelrad 900 Congress Avenue 1025 Connecticut Avenue, N. W.

Austin, Texas 78701 Washington, D. C. 20036 2

Jay M. Galt, Esq. E. W. Bcrnett, Esq.

Looney, Nichols, Johnson & Hayes Charles G. Thrash, Jr., Esq.

219 Couch Drive J. Gregory Copeland, Esq.

Oklahoma City, Oklahoma 73101 Theodore F. Weiss, Jr., Esq.

Baker & Botts Knoland J. Plucknett 3000 One Shell Plaza Executive Director Houston, Texas 77002 Committee on Power for the Southwest, Inc. Linda L. Acker, Esq.

5541 East Skelly Drive Kevin B. Pratt, Esq.

Tulsa, Oklahoma 74135 Assistant Attorney General P. O. Box 12548 John W. Davidson, Esq. Capitol Station Sawtelle, Goode, Davidson & Tioilo Austin, Texas 78711 1100 San Antonio Savings Building San Antonio, Texas 78205 Frederick H. Ritts, Esq.

Northcutt Ely W. S. Robson Watergate 600 Building General Manager Washington, D. C. 20037 South Texas Electric Cooperative, Inc.

Route 6, Building 102 Don R. Butler, Esq.

Victoria Regional Airport 1225 Southwest Tower Victoria, Texas 77901 A stin, Texas 78701 (

GA4t2 ah /. W J

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