ML20003B533

Transcript of PA Public Util Commission 800922 Restart Hearing in Harrisburg,Pa.Pp 1-15

ML20003B533
Person / Time
Site:	Three Mile Island
Issue date:	09/22/1980
From:	PENNSYLVANIA, COMMONWEALTH OF
To:
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References
NUDOCS 8102120357
Download: ML20003B533 (15)

Text

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Sefare \

.:. . . 9 2 TI'E ?ENirIST.UTANIA PUELIC UTILITY C0:GIISSION (v3

--oCo--

[ '. .

~t F

q. In re: I-79040308 -

g C-80072105 - Metrorolitan Edison Compan7 3 !:

vs . Pertnsylvania Public Utility Cetmincion.

[ Alleging temporary rates fixed by the Commission M.

in its order of May 23,1980 at I-790403c8 are unjust and unreasonable, and do not provide 7i for company operating and capital costs.

i 3i Prahearing conference.

--oCo--

i 10 !' Stonographic repcrt of hearing held in

[ Hearing Room No. 1 3 North Offics Building, 11 c Harrisburg, Pennsylvania, L,,

1% l,' Monday, F September 22, 1980 t 10:15 o' clock a.m.

p" 2c 1

I? --ooo--

ti 15 j; .TOSEP3 P. MATUSCI!AK, AD'ENISTRATIVE LAW Ji.iDGE 16 --oCo-~

a 17.1 APPr.APAzcz.3 : THIS DOCUMENT CONTAINS P0OR QUAUTY PAGES  !

Li p; '

RYA 3, RUSSELL a: McCONAGEEY I t

530 Penn Square Center j

'? 7 O. Obx 699 i l l Icad'ng, Pennsylvr.nia 19603 l '6 4: SA:1UEL B. RUSSELL, ESQUIRE

! 11. EDWIN CGDEN, ESQUIRE

. ALAN MICHAEL SELTZER, ESQUIRE f i For - Metropolitan Edison Company }

2 l ,

, .~l l

GTL7Eli A. McCLAREII, ESQITIRE ,

2 Tay2ty Chief Counnel (

.ily.1DD ?IIIIICE, ESQITIRE {

- ~

>ortoe=at coanoel  !

O-j - I.TDAI? 2. PANKIW, ESQUIRE

' ' . J . Ex: 32o5, Harrisburg, Pennsylvania 17120 f

- - -..- -- a : .: 3 For -;-Cor.aliscica s:v  :. u : ..:.2 Tris.1

- -;;.ury ,c. Staff

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8102120$

2 .

_.._.___..q

, 1 zj'APPEARAUC1:S: (Continued) n

!i DUAUE, MORPJ.S.6 HECIC3CHER

~'; P. 0. Box 1003 Har:.'isburg, Penncylvania 17108 h

~l nl Ey: ROEAUD MORRIS, ESQUIRE

4. .

RO3ERT E. KELLY, JR. , ESQUIRE 4 For - Victaulic Company of America

.7 jf:

EcHPZS, WALLACE & ITURICK P. O. Box 1166 Gl lH Harrisburg, Pennsylvania 17108

'j !! Sy: MAURICE A. FRATER, ESQUIRE

[ For - St. Regis Paper Company 60 f DECliERT, PRICE & RHOADS o/ 800 liorth Third Street y IIarcisb'trg, Pennsylvania 17102 10i! Ey: Gl.If L. JAMES, ESQUIRE l For - Bethlehem Steel

.4 -4

! ).

DAVID P'tRASCH, ESQUIRE 12 ., CRAIG EURGRAFF, ESQUIRE

ASE3EY SCIIANNAUER, ESQUIRE

(

13!{

P 1423 Strat1 berry Square Harcisbars, Pennsylvania 17013 O UN For - Office of Consumer Advocate Hi) GISILD GORNISH, ESQUIRE

12t'.1 Floor, Fackard Building PJ;j Philadelphia, Pennsylvania 19102 Fo

c - Citibank, N.A ., Agent and

[ Chemical Bank, Co-Agent 17ll o 13.I 19k

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I q i THE ADMIIIISTRATIVE LAW JUDGE: We have before il g j us this mo: ning two matters involved in the prehearing a

a e!' conference, lion one is the general rate investigation pro-

~!1 j, ceeding at R-8co51196 and complaints in connection therewith, 5[.andtheotheristhecomplaintofMetropolitanEdisonCompany

.g]againsttemporaryratesgrantedbytheCommissionatInvestiga-

?!

t 9Ution No. 79040308, with the Complaint at C-80072105

• 1-i gl Before we proceed on the rate case itself, 9[l I wculd like to have this discussion on the temporary rat'es.

il 1gltlIwouldliketohavesomeexpressionofcounselastotheir e

$1 suggestiona as to the procedure that may be advisable to

-r 17,j follow at the inception'of the relationship 'oetween these J

13 i- .<o ta t t e rn . IIr. Russell, would you have any statement in

14) that recard?

4 r

i 13! MR. RUSS11L: As far as Met-Ed is concerned, saI:its view would be that they are two different matters, the

~

m t gj Comtission has not seen fit at this point to consolidate them n

.; rp in ene proceeding for the purpose of hea ing or otherwise, and O

e

.i.n. ,' it is IIet-Ed 's view that the matters should remain separate 2C, and proceed independently with the complaint against temporary 9

,g]ratesgettingexpeditedtreatment.

'^

~uc, . " THE ADMIIIISTRATIVE LAW JUDGE: Cou1 mission yystaff?

.. .e MR. McCLAREN: I think our position depent.s, Osj "$

3 3:3 soreshat Your Honor, on what sort of presentation the company v

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We could foresee they may be making a 3 intends to take.

g.precentation on a different time period than the test year e,4in this race case, that they may be presenting other facts.

,1 e

,,. j THE ADMINISTRATIVE LAW JUDGE: Well, it seems n

5 i.j quite obvious to us that if there is any change made in the a

gqtemporaryrates,thatthatmayaffectallthepresentations 4

7 j of the company as to the data, don't you think, Mr. Russell?

I 8 Wo'11dn't that require a change in your data?

g MR. RUSSELL: Hell, if there uere a change

f; in ';iet-Ed 5 a ba se rates, for example, then certainly there uculd be e change in the expected revenue picture, for example ,

3

- g i in the fut 2re test year.

,I 73 ' But I would submit that so far as the future

(_. " ; g

g. test year is concerned, and the monitoring of it is concerned, 1

.5:] there is all manner of items in the income statement that vill j [ be subject to fluctuations anyway, of which Your Honor would l '

'.7. , be kept a6ctise 1 as to the actual results from ttenth to month

..n. ,as na progress.

,gj So this vould be just one of the many variables

,r,that roult; be reflected in the actual experience of the

.;g ,compacy and what the projections would be for the actual

'I 8

r.e.f } results .

m! MR. McCLAPJi.N: The staff would also raise i

,g; , the question, Tcur Honor, with respect to the complaint g

.J IW m mattar thacher under the statute the company is prevented

_ _ _ . _ .m. ,. = _ = . _ _ .. ,. _ ..m =. . _.

5

- ,_ - . . - - - . - ,- .- =

'i g!from receiving a change in its temporary rates since Section 1

1. l 3* 2 1 1308(d) provides that the Commission ~has no authority to r I 3j . prescribe, determine or fix at any time during the pendency i

4' of a general rate increase proceeding temporary rates.

5' THE ADMINISTRATIVE LAW JUDGE: What is your 6i position as to whether or not these two matters could be 1

71 consolidated in the rate proceeding and whether the complaint 8i proceeding should be treated separately by other presiding offic ers ?

9) i -

MR. McCLAREN: I think ue would be in a much 10:I

\

11j better position to address that, Your Honor, if we could have i:

3?d a statement of counsel for the company as to what sort of i

13 presentation they intend to make with respect to their li complaint, t; hat is to be their case in that complaint, what 1

15l} nature of evidence are they going to present.

I 16! That then gives us a basis, and I think for 1? y Your Honor as nell, to iludge whether these are appropriately 1

!?gl consolidated or whether they are to be dealt with separately, l.

19; becausa it is the company, I think, in the first instance 10 ' that frames the issues by the nature of their prima facie t-.

case on the cooplaint.

Oly! . .

22 THE ADMINISTRATIVE LAW JUDGE: Mr. Russell ISG seems to indicate that the matters should be kept separate d

?(andth2.titwouldbeinadvisabletoconsolidatethem.

3 While they are conversing, does the Consuner 23h

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6. .

.I l Advocate hcVe any positin?

~lu ,

2, {

1:

MR. EURGRAFF: Just a moment, Your Honor.

g i 3 MR. MORRIS: The industrial representatives i r

/,. and the residential users represented by our firm, sir, are 5[ prepared to state their position after others have conferred.

i i

d jj THE ADMINISTRATIVE LAW JUDGE: I could not d

7 j hear the last portion.

0 6j; MR MORRIS: I am sorry, we are prepared to li c ( state our position, sir, if you want to entertain that before 1

10 F staff is through.

3 1! .

THE ADMINISTRATIVE LAW JUDGE: You may state 9

a 12 ,' i t .

N

G ti MR. MORRIS: Sir, we think that the issues g

14 j presented in the rate application and the petition for

?

s f

15 y, emergency relief present fundamental issues uhich will

$f 16.'l eventuall,'f determine what financial road Met-Ed and GPU go F

17 g do;m, and 7:ith respect to rates, the applications are all

i Ig? bottom line to the users, they are net to the users.

?

19 Therefore we think that severance or failure

o[,toconsolidatethetwocasessimplypresentsyouwithaset d

7,1l', of analyses of various detail in two different contexts which

'I l

.2,must be put together.

i 1

d

,3 ; We do not think there is any formal way to i .; proceed which can divorce the two, or now three, separate g g3C Met-Ed applications, and that to de other than to consolidcte

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.t. c them takes no fundamental sense, because eventually we are 3)goingtocomedowntowhatthestatuterequires,andperhaps 3 the Constitution, for ratepayers, and that is a net ftem.

,g. ! So we formally request that the matters be i

5l consolidated.

i THE ADMINISTRATIVE LAW JUDGE: Do other 6l 7' ccunsel have any expression?

t 0l MR. EURGRAFF: On behalf of the Advocate, i

9 Your Honor, if we could, it is our position that there is no -

il 10 'particular practical basis for not nonsolidating the two matters, as I believe has been alluded to by both the staff lll, 12 ! and by counsel who just spoke.

13 Also, we are not particularly sure that there 14l 1s any particular thing to be gained by not consolidating i

15 j, froa the point of view of what we have jus t gone through with il 15ll the emergency petition.

17! It seems to us that not quite half of i

I ig}MetropolitanEdisonCompany'srateincreaseinthissituation il loijis tied up with the re-inclusion of TMI-1 in both rate base I

!j 20qand base rates for that company. That is also the basis for i

31: the complaint a6ainst temporary rates because ' temporary rates g!!; were set based upon the removal of that plant from both base

.I 25 ', ratcs in rate base.

I!

,g.l Hence, if we are going to not consolidate, 33:d:if we are (;oing to run the risk of having different test u m.e: xmmu.. n=. = n. :.:c.c.ru ... .w.- mai== =. =

b

8

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.: .\ periods and different data over the same matter that applies 3

'g . in both instance , and if we are going to try and expedite ti G 3 ' the complaint against temporary rates as opposed to running I.

the full base rate case, it seems to us that once again we 4

t 5 1i are back in a posture of seeking extraordinary rate relief f! and not going under the statute for extraordinary rate relief i

7ybutattackingitfromthepointofviewoftemporaryrates, 1

Bfwhichishalfoftheratecasetobeginwith.

I i

9 So we would suggest that it would be a

1 10 ! EPProPriate, as f'.r as we are concerned, to see the matters i

! consolidated.

.. - 3

1 n i. MR. McCLAREN: Your Honor, the Trial Staff b

13 f would support consolidation for this reason. We think it is

~'

Y both impractical and unnecessary to have separate cases, that 14q!i 15 i the tcst year in the rate proceeding is an appropriate period gg to determine whether there need be any change in teaporary 17 rates, and that if the coupany wishes expedited consideration it jg,of its complaint, it has the appropriate vehir)e to petition t

13iaEain for extraordinary rate relief which was previously

g i denied without pre, judice.

7,1 So unless the company can state some g convincin6 reason as to why there has to be a differett 33ffactualpresentationandadifferenttitsperiodandseparate 34,; tree.trent for some other reason, it appears to us that it is g

_ W 33- appropriate to consolidate the matters, and whatever determina-

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. 9-li j 0 tion is reached in the rate case will essentially be a i

2 determination of the complaint against temporary rates.

THE ADMINISTRATIVE LAW JUDGE: Mr. Reissell, 3 ff 4 3 what subj ects or issues do you intend to raise in your 5' temporary rate complaint that you have not already raised 6 in your petition for extraordinary rate relief?

7 MR. RUSSELL: We have raised a number of .

S issues with respect to the temporary rates. I would say, 9 first of all, procedurally I think they simply do not bear 10 a constitutional analysis for the manner in which they were 11 a dopted .

17, On the matter of substance, there was no 13} consideration whatsoever as to what the base rate requirements il of Met-Ed should be under a then current picture of its 14 I

15 h operations.

Il And, 'very fiankly, the issue is, I think, one 15[ :

!?q that cries out for prompt adjudication and relief against what t'

13N are literally very oppressive and terribly inadequate and 1?( confiscatory rates.

[

20! So far as the method of presentation in 9

v 21;j support of it is concerned, I don't think I am prepared to

t .

22ffsayatthispointpreciselywhatitwouldhavetobe,butit I

33.';l cast assuradly., for purposes of it, need not necessarily be 11 the fucure test year we are utilizing in this proceeding as Q' 2j I.

33' the basis for the claim.

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1. : It would be, I think, much more expeditious b 2 Ito use a historical period. And perhaps the cost expeditious g

! thing would be to use the historical test period which was 3

,}, filed here pursuant to the Commission's regulations as against 3 a future test year which we think would be the appropriate Sf level to go into effect when the suspension period of this

}

?[ rate filing runs out next "pring.

F o

S. So it s a more present and pressing need i

9i tnan the ultimate resalution of the rate requirements that 10, should go into effect next spring.

11 [ We think they are needs that should havs 12- gone into effect on June the 1st instead of the level that (j, 13. was fixed under the temporary rates. g 14f While all of the rate applications are i

15, precsing, we think the complaint against temporary rates 16{ is by far the most pressing of any of the issues in these l'/ l proceedings assigned to Your Honor, and we think, therefore, gg it shculd be given expedited treatment.

19 ' MR. MORRIS: In taking a decision on this, 20jsir, I uould like to ask you to look at it in another context 21fl than one, I think, suggested by counsel for Met-Ed.

i

,g This is a record which will, because of the

,?3] unprccedented and unfortunate nature of the commercie !. posture

'l 7,) here, raise statutory and constitutional issues which I think I

h JJ ' inevitably - and I would guess Mr. Russell agreed -- likely

---

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d g q at least trill be adjudicated in part in a judicial context in g}0court.

It seems to me that the Comaission' ou6ht, 3l  ;

when this record goes up following whatever decision it is, 4[

5 lto have all of the record that is available in one place.

6 } I think unless you do that it is going to

? create a question in the minds of the courts, when the 8' statutory and constitutional issues are isolated, as to why 9 the whole ball of wax is not before them to look at all the 10 t details, both in Mr. Russell's favor, and I believe as it 1,, .ould ' support the position of the ratepayers.

12 i THE ADMINISTRATIVE LAW JUDGE: It has been 13,3 indicated that there may be some question of the propriety

.J 14 : and the legality of the complaint against the temporary rates.

15 ; In view of that suggestion or position of Commission staff, i.

165 and in vieu of the fact that we won't have the hearings in i

17 L the rate case imaediately, we would suggest and require 13 counsel to submit to us, on or before October 2, a memorandum E

19 of law in regards to consolidation of the complaint against 20;; temporary rate increases, and also, if counsel have any 21h objection to the legality or the propriety of tha complaint 220 for temtorcry rate increase at this time, that that position k

2Sb and that response to the complaint be filed on or before the

' 0'; -

->!: sa=e a=te -

23 MR. MORRIS: Sir, I am not sure I understand m :==e wwus uw. - w ::. u=n.tn n=. -r=====. = n= -

I

12 yjthesecondrcquestyoumade.

Are you asking whether counsel I

24 have objections to a temporacy --

3 THE ADMINISTRATIVE LAW JUDGE: The Commission

/,. , staff indicated there may be some question as to the legality 5[ of the request for change in temporary rates while the general 4

Sj rate increase proceeding is in effect.

7i In view of the fact that there has been a

Sf suggested there may be come question as to the propriety or I

i 91 the legality of the complaint itself at this time, we would i

10 want that position stated within the same time frame.

I-,

11' MR. MORRIS: I think I understand, sir, but i.

12 [ to be sure that I do, let me stato a position and see if it 13[ answers your question.

E4:

d The ratepayers whom we represent have no 15;!.j objection to your entertaining as soon as p;ssible, whether 16[ornotthestatutepermitsit,therequestwhichhasbeen 4

17 j: filed. If that answers your question --

n 18 THE ADMINISTRATIVE LAW JUDGE: I e.m not u

2.f;jrequiringboth. I am requiring either one or both as the 2h position of counsel. If there is cny contest, if there is

?.l g any position that the complaint itself is illegal or not n

i 32 , lau:.'ul or improper at this tine, then we unnt that position 33 tested primarily before we proceed.

24 "i MR. MORRIS : As long as the entire record ggg 3ri hat t has been made to the date you make a decision is cade

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13 a

if 1: and is available for any tests that follow, then I see no

. L O 2L reeson uhr envene shou 1d odsect to that. This oushe to be 3 handled as expeditiously as possible.

4b THE ADMINISTRATIVE LAW JUDGE: Well, my 3 position is, if the complaint itself is improper or illegal 0{ at this time, then there is no need to proceed any further I

I if we rule on that portion of the matter.

6 MR. MORRIS : That is simply a position I 9 think we don't wish to take.

Ib MR. RUSSELL: Is there any possibility you

11. might move up in time the request for these mesos? I would i

12l say this is an issue of some importance. Could we do it in

. I G 13 ' less than October the 2nd?

fg -

l

^4!' THE ADMIITISTRATIVE LAW JUDGE: What is your Oli suggestion, Mr. Russell? -

i ,

1 NR. RUSSELL: Well, I would say either the 1?[endofthisweekorbeginningofnextweek.

li 183 THE ADMINISTRATIVE LAW JUDGE: End of next V)a week would be Friday, October the 3rd. ,,

3 2N! MR. RUSSELL: Fardon? I was going to 1

r Ja

,, pi suggest possibly the end of this ucek.

22} THE ADMINISTRATIVE LAW JUDGE: 'I beg your a

pardon?

/3 V,-

3'1 'j

l MR. RUSSELL

I was going to suggest the end of thiGWeek, the 26th.

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14 1 1

1

.,. it, MR. McCLAREN: That would be difficult for i i

l

,C u to meet, Your Honor. We have commitments in other proceed-: 1 2:

i ings, G

o

,,, Personally, Iwi.11 be in hearings three days y this week following this prehearing in another case.

,g I would have no objection to moving it to 7 ,,

September 30th to give us two working days next week. But i

g; I think sooner than that would be entremely difficult for the p staff to meet.

I yn. THE AD.'4INISTRATIVE LAW JUDGE: Is there any t

i 3..; i objection to the date of September 30th?

. .. l t

2Z it 3

MR. BURGRAFF: We would have none, Your Honor.

, ,tj ,- MR. MORRIS : No, sir.

.. t THE ADMINISTRATIVE LAW JUDGE: Very well, we

.q g!3 will amend the time period to submit a memorandum of law and 3j;any objection to the complaint on or before Tuesday, September'

,7,7 the 30th, i r.

gj We will proceed now into the investigation jp l of the rate case itself. ,

l  :

20

,j -----

,. ,. u (The prehearing conference adjour .d at 10:39 a.m.)

l "2L"I o'cloch a.m.)

I  :

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ff 1 __oco_.

2 I hereby certify that the proceedings and 3 evidence tre contained fully and accurately in the notes I

4 tahan by me on the hearing of the within cause before the O Pennsylvania Public Utility Cc:miission, and that this is a 0 cur rect transcript of the san.e.

7 I ,

O M0HREACH & MARSHAL, INC.

9 10 By kk N g - Official Reporter .

I 11 f-A 9'- fo U REPORTED DY:

l JAMES P. O'HARA l

Mohrbach & Marshal, Inc.

74 27 Eorth Lockvillow Avenue Harrisburg, Pennsylvania 17112 la-16 i 17 13 19 20 (Tne foregoing certification of this transcript 21 dces not apply to any reproduction of the saune by any means unicss under the direct control and/or supervision of the d' certifying reporter.)

23 l

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