ML19259B945

Municipal Energy Agency of Ms Requests Commencement of Proceedings to Require Util to Comply W/Cp License Conditions Re Interconnect Agreement.Related Correspondence W/Doj Encl

ML19259B945
Person / Time
Site:	Grand Gulf
Issue date:	05/29/1979
From:	Mcdiarmid R SPIEGEL & MCDIARMID
To:	Harold Denton NRC OFFICE OF STANDARDS DEVELOPMENT
References
NUDOCS 7906040201
Download: ML19259B945 (150)

Text

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LAW OFFICES SPIEGEL & McDIARMID 2600 VIRGINIA AVENUE, N.W.

WASHINGTON, D.C. 20037 TELEPHONE (202) 333-4500 GEORGE SP'EGEL BONNIE S B LAIR ROBERT C. MCDIARMID TELECOPIER (202) 333-2974 ROBERT H ARLEY BE AR SANDRA J. STREBEL THOM AS C. TR AUGER ROBERT A. JABLON JOHN MICHAEL ADRAGNA JAMES N. HORWOOD CYNTHI A S. BOGOR AD ALAN J. ROTH '

tu AS3ACMUSETTS S AR ONLYi FRANCES E. FR ANCl3 G ARY J. NEWELL DANIEL l. DAVIDSON M ARC R. POIRIER THOM AS N. MCHUGH, JR.

DANIEL J. GUTTM AN PETER K. M ATT May 29, 1979 D AVID R STRAUS Mr. Harold Denton Director, Office of Nuclear Reactor Regulation Nuclear Regulatory Commission Washington, D.C. 20555 Re: Mississippi Power & Light Co., Grand Gulf Nuclear Station Units 1 and 2, NRC Docket Nos. 50-416A, 50-417A

Dear Mr. Denton:

The Municipal Energy Agency of Mississippi

("MEAM"), hereby requests the Nuclear Regulatory Commission to commence proceedings pursuant to 10 CFR S2.202 to require the Mississippi Power & Light Company and its affiliate, Middle South Energy, Inc., to comply with the license con-ditions attached to the construction permit for the Grand Gulf Nuclear Station Units 1 and 2.

MEAM is a joint agency as defined in Section 77 705(c), Mississippi Code Annotated 1972; Chapter 363, Laws of Mississippi of 1978. As such it is empowered to own and operate generation and transmiasion facilities, to acquire power and energy, and to coordinate bulk power activity on behalf of its members. The members of MEAM are the following Mississippi cities: Canton, Clarksdale, Durant, Greenwood, Itta Bena, Kosciuscc, Leland and Yazoo City. All of these Cities are interconnected with Mississippi Power & Light Company and several are full requirements customers of MP&L.

Clarksdale, Greenwood and Yazoo City provide generation suf-ficient to meet all or, in the case of Yazoo City, a part of the present capacity needs of their customer-owners.

On May 24, 1973, Thomas E. Kauper, then Asoistant Attorney General, forwarded to the (then) Atomic Er.ergy Commission the Department's Letter of Advice with respect to Mississippi Power & Light Company ("MP&L"), then the appli-cant for the construction permit for the above-captioned 79060402d/,g

Mr. Harold Denton May 29, 1979 units, in accordance with the provisions of Section 105 of the Atomic Energy Act of 1954, as amended. That Advice Letter confirmed that the Department had reached agreement with the applicant as to license conditions which would resolve "any questions as to the policies that it intends to follow during the period of the Grand Gulf License .... "

( Letter of Advice , page 5 ) . The commitments themselves, attached to the letter of May 22, 1973, from Donald C. Lutken, then and now President, Mississippi Power & Light, to Mr .

Kauper, provided, inter alia, that MP&L would:

(Commitment 2) interconnect with and coordinate reserves with other entities in the area; (Commitment 4) " offer an opportunity to participate in the Grand Gulf Nuclear Units ... to any entity (ies) in the Western Mississippi Area by either a reasonable ownership interest in such units (s) [ sic], or by a contractual right to purchase a reasonable portion of the output of such unit (s) at the cost thereof if the entity (ies) so elects";

(Commitment 5) " facilitate the exchange of bu'lk power by transmission over its transmission facilities between or among two or more entities in the Western Mississippi Area with which it is interconnected; and between any such entity (ies) and any entity (ies) engaging in bulk power supply outside the Western Mississippi area between whose facilities Applicant's transmission lines and other transmission lines would form a continuous electrical path, pro-vided that (1) permission to utilize such other transmission lines has been obtained, and (2) the arrangements reasonably can be accommodated from a functional and technical standpoint" and; (Commitment 6) " sell power for resale to any entity (ies) in the Wes tern Mississippi Area now engaging in or proposing to engage in retail distribution of electric power."

Mr. Harold Denton May 29, 1979 MEAM believes MP&L to be in violation of commitments four, five and six, for reasons stated below. In all cases, MEAM and its members have sought to resolve their differences with MP&L by negotiations, and such negotiations have con-tinued for approximately two years. It now seems, however, that MP&L has firmly determined not to conform to the con-ditions upon which it was licensed to construct the Grand Gulf Units.

(a) MP&L is in violation of its license commitment to offer an opportunity to participate.

As early as 1972, MEAM member Greenwood requested information as to the terms , price and conditions under which MP&L might offer a portion of Grand Gulf to others. No response was ever furnished. Again, in December, 1975, a consultant for the City of Clarksdale inquired of MP&L as to the availability of partial requirements power from MP&L and of the likelihood of an offer of participation in the Grand Gulf units. The company responded that it did not propose to serve individual customers not previously served at wholesale and that:

... the company does expect to fully comply with the Policy Commitments which it has made and which are set forth in the license for the Grand Gulf units.

Item 4 of the appendage to that license addresses this matter. In the absence of a specific request by the City of Clarksdale concerning the amount of power desired, the point of delivery and service characteristics it is difficult to quote terms and conditions.

If you would like us to quote terms and conditions for one or more alternate proposals we would be pleased to do so."

Following that letter and pursuant to the additional infor-mation therein, the City of Clarksdale proceeded with the interconnection then under construction with Mississippi Power & Light, which was completed by early summer of 1977.1/

MP&L filed the interconnection agreement between MP&L and Clarksdale on June 27, 1977, with the Federal Power Commission. On July 20, 1977, Clarksdale filed a petition to 1/ Prior to that time, Clarksdale had operated isolated.

Mr. Harold Denton May 29, 1979 intervene in that docket, noting that the agreement in question was an outgrowth of MP&L's policy commitments appended as conditions of its AEC license and that in the view of Clarksdale the interconnection agreement met some of the requirements undertaken by MP&L but by no means all.

Clarksdale specifically noted that the commitments required the sale of power for resale, provision of transmission capa-city, and other matters within the jurisdiction of the FPC.

Clarksdale noted that it was filing the intervention petition in order to give notice "of its belief that the inter-connection agreement is inadequate and that it will seek the additional service schedules which are believed necessary which it hopes will then be filed voluntarily by the Company." On August 4, 1977, MP&L filed its Response of Mississippi Power & Light Company to Petition to Intervene of Clarksdale, Mississipppi. MP&L, opposing the intervention of Clarksdale in that docket, stated that:

... the FPC has not been established as the enforcement agency for license conditions included in nuclear power plant licenses. Rather, to the extent that Clarksdale may believe that MP&L has not fulfilled its obligation under its construction permits for the Grand Gulf Nuclear Plant, its remedy rests with the NRC, not with this Commission."

On July 19, 1977, the Mayor of Clarksdale, Richard M.

Webster, Jr., had also directed a letter to Mr. Donald C.

Lutken, President of MP&L. Mayor Webster noted, inter alia, that so far as Clarksdale's records showed , no offer of par-ticipation in Grand Gulf Nuclear Unit had been made to Clarksdale, and inquired when the process of making an of fer or furnishing data prepatory to an of fer would be made. On 1.ugust 18, 1977, Mr. Lutken responded to Mayor Webster suggesting that Clarksdale had never expressed an interest before in participation in the Grand Gulf unit and therefore participation would be difficult if not impossible, but that the company was willing to discuss the matter further if desired. A series of negotiations followed , over the suc-ceeding 18 months, in which MP&L has taken various positions, but it has now apparently firmly retreated to a position that its only obligation under the license comraitments was to answer inquiries which might have been made as a result of newspaper stories at the time it received its license to construct the Grand Gulf units.

Mr. Harold Denton May 29, 1979 In July, 1978, senior management and counsel of MP&L met with Donald L. Flexner, then Chief of the Antitrust Division, Energy Section, Departmen t of Justice. MP&L requested an interpretation of its license conditions that would not require recognition of any expression of interest in ownership participation by the City of Clarksdale made more than 90 days after publication of the license conditions in the Federal Register. In its letter of confirmation of this meeting, dated September 25, 1978, MP&L stated that the effect of this interpretation would be to limit ownership participation in Grand Gulf "to the aggregate 10 percent par-ticipation currently in the final stages of negotiations with South Mississippi Electric Power Association ("SMEPA") and West Mississippi Electric Power Association ("WMEPA") and to exclude Clarksdale from such participation, inasmuch as it had not made a timely request." Clarksdale, Greenwood, and MEAM have made bonafide attempts to participate in the Grand Gulf units. MP&L has adamantly refused to make an of fer of participation in any form, let alone a meaningful one. See, e.g., Louisiana Power & Light Company (Waterford Steam Generating Station Unit No. 3), 8 AEC 718, 743 (at n. 1).

The Company has continued to hold out the possibility of par-ticipation, however, until recently. MP&L's last position, as reported to MEAM is that MP&L will not of fer participation in Grand Gulf to MEAM or its members. Since no one contends that any offer has been made by MP&L to others than SMEPA and WMEPA, MEAM requests enforcement of License Condition 4.

(b) MP&L has failed to observe the require-ments of its commitment to transmit.

After a request for it so to do, and some discussions with MEAM and its members, MP&L filed a transmission rate applicable to Clarksdale in FERC Docke t No .

ER78-583, and one to Greenwood in Docket No. ER78-584, both on August 28, 1978. While Clarksdale and Greenwood, and MEAM, did not believe those filings to be fully in compliance with the Grand Gulf license conditions, nor just and reason-able, and thus intervened in the FERC with respect to those matters, Clarksdale believed that it would be able to utilize the transmission tarif f to obtain some economic relief from the extremely high energy costs which it was forced to incur in procuring high cost oil to operate its units in a situa-tion where base load power and energy were not available from any other source. Consequently, Clarksdale entered into

Mr. Harold Denton May 29, 1979 an agreement with the City of Laf ayette , Louisiana for the purchase of something more than 14 megawatts of capacity and the delivery of that power and energy (in unit contract form) from Lafayette te MP&L over the system of Gulf States Utilities Compa: connected with MP&L by the 500 kv backbone transmission sys' 11 in the area at the Gulf States' Willow Glen site and with Lafayette near the Lafayette transmission system proximate to Laf ayette's Doc Bonin Generating Station.

MP&L declined to transmit that power and energy on the ground that, although it had an interconnection with Gulf States at 500 kv, it had no " interconnection agreement", but rather "a coordination agreement", which it stated was inadequate.

Gulf States met several times with MP&L to attempt to negotiate the " interconnection agreement" which MP&L has stated it needs, and MEAM has been advised that Gulf States believed it had reached agreement with MP&L on such a nego-tiated " interconnection agreement," and furnished a copy to MP&L for execution, which has since been rejected by MP&L with the request that negotiations begin all over again. As a consequence, there has been no power or energy which MP&L has been willing to transmit to Clarksdale over this inter-connection.

In addition to the self-imposed lack of an inter-connection agreement, MP&L has stated to Clarksdale, Greenwaod and MEAM that it would not in any circumstances consider power transmitted over a si" 71e 500 kv line to be available for reserve sharing and capacity credit. MP&L has represented that this is the case because it has only a single interconnection with Gulf States, even though that interconnection is at 500 kv and serves as a backbone for the entire Southwestern Power Pool System. MP&L has suggested that, in order for capacity credit to be claimed, it would be necessary to have yet a third transmission rate paid to its affiliate, Louisiana Power & Light Company, which has addi-tional interconnections both with Gulf States and with MP&L.

In order to seek to permit the basic transaction to proceed ,

Greenwood wrote to LP&L, proposing that, in light of the dispute, LP&L transmit whatever energy and capacity was needed when the Gulf States-MP&L interconnection was down.

Louisiana Power & Light has stated that it would consider signing a further transmission agreement with the City of Lafayette, and would insist upon such an agreement (at full rates) in any circumstances since some of the power exchanges over the Gulf States lines would somehow impact the transmission loads on LP&L's system. In other words, Middle South, which has a single free flowing transmission pool among its members, insists on fully allocated transmission rates for each of its affected members. The effect of this insistance on a " layering" of unnecessary participants is to render both risky and potentially uneconomic a clearly bene-ficial agreement for the Southwestern Power Pool area.

Mr. Harold Denton May 29, 1979 MP&L (or its parent, Middle South Utilities) is apparently attempting completely to reverse the usual industry practice of obtaining contractual paths for transmission flows. Since all of the transmission systems in the area are interconnected, of course any transaction will, from time to time , have some impact upon every other transmission system. Indeed, the electromagnetic unity of the Interconnected Systems Group in the East and Central United States would permit this argument to be made for all of the entities tied to the basic transmission grid in the country and it seems apparent that MP&L and Middle South are attempting to preclude any transactions by entities within their control area with any entity outside the ir control area, except at a prohibitive price. 1/ Since MP&L has refused to transmit even energy from Gulf States' lines without an " interconnection agreement", an exception not men-tioned in its license commitments, and has refused to transmit power from Gulf States in any event, it is clearly in violation of its license commitments.

(c) MP&L has not been willing to sell power for resale to other entities in the Western Mississippi area.

MP&L has on file with the FERC Rate schedules for service to REA cooperatives and mu-icipalities. It has declined to make service under those rate schedules available on a partial requirements basis to municipalities such as Clarksdale and Greenwood, or to MEAM for resale to Clerksdale and Greenwood. Rather, it has offered to sell energy at incremental costs 2/ to Clarksdale and Greenwood under the terms of the interconnection agreements therewith. MEAM con-cedes that this may satisfy the commitment as to reserve sharing, but it clearly does not meet Commitment 6, which separately requires MP&L to sell power for resale to any entity in the Western Mississippi Area now engaging in or proposing to engage in retail distribution of electric power.

Such a commitment would be meaningless if it permitted MP&L to sell at one rate to existing wholesale customers and at a much higher rate to new wholesale customers, as it proposes to do.

1/ It will be noted that MP&L under its basic ag reemen t among the Middle South System Companies incurs no extra cost for transmission over other Middle South System Companies ir.

like circumstances.

2/ Incremental costs appear to be defined as incremental to the Middle South System.

Mr. Harold Denton May 29, 1979 These matters have been detai'- in an exchange of correspondence among counsel and the Department of Justice, which is attached. MEAM does not have unlimited resources, and cannot continue to expend monies in fruitless nego-tiations or in extended proceedings at FERC which may not resolve the basic issues. Attempting to deal with these matters elsewhere bids fair to exhaust both potential reme-dies and MEAM. MEAM ustlieves that failure of MP&L to conform to the NRC license conditions to be clear. Consequently, MEAM requests that the Commission promptly commence pro-ceedings to enforce its license conditions.

very_truly yours, N

/

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R5bert C. McDiarmid Attorney for the Municipal Energy Agency of Mississippi and its members cc: Richard Merriman, Esq.

Reid & Priest John H. Shenefield, Esq.

Assistant Attorney General Antitrust Division Department of Justice Attachments:

MEAM Le t ter (Spiegel & McDiarmid to Department of Justice dated September 22, 1978.

MP&L letter (Reid a Priest) to Department of Justice dated September 25, 1978.

MP&L Letter (Reid & Priest) to Department of Justice dated October 16, 1978.

MEAM Le tte r (Spiegel & McDiarmid) to Reid & Priest dated October 31, 1978.

MP&L Letter (Reid & Priest) to Department of Justice dated November 17, 1978.

'CMcD:jbs

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, , t Aw CPmCES SPIEGEL & McDLLRMID 2600 VIRGINIA AVENUE, N. W.

WASHiNGTCN, D. C. 20C37 TELEPt4CNE (202) 333-45c0

'CRGE SPIEGEL PETER 4. MA?T

,8ERT C. MCCIARMfD QANIEL J. GUTW AN SANORA J. STMEBEL DAVIO R. STMAUS ROSERT A. JASLON SCNNIE S. SL44R JAMES N. MCRWCCO RCBERT MARLEY SEAR ALAN J. ROTH THCMAS C. ?MAUGER

• a*NCas t SaANC23 September 22, 1978 CAN4EL l. CAvlOSCN JAMES CARL PCLLCCM THOMAS N. MCNUGH. JR.

Janet Urban, Esq.

Antitrust Division Department of Justice P. O. Box 14141 Washington, D. C. 20044 HAND DELIVERY- STAR BUILDING, ROOM 9412 Mississippi Power & Light Company, Grand Gulf Nuclear Station Units 1 and 2, NRC Dockets 50-416A, 50-417A, Department of Justice File 60-415-57.

Dear Ms. Urban:

This will confirm my inquiry to you as to the sta-tus and int erpretation of the antitrust license conditions in the above-captioned proceeding. You advised me that the Department might, indeed, be interested in the situation apparently inconsistent with the antitrust laws arising under the license conditions and apparently inconsistent with those conditions. Consequently, I furnish, for your information, the following data with a request for your review and further advice.

On May 24, 1973, Thomas E. Kauper, then Assistant Attorney General, forwarded to the (then) Atomic Energy Commission the Department's Letter of Advice with respect to Mississippi Power & Light Company ("MP&L"), then the appli-cant for a construction permit for the above-captioned units, in accordance with the provisions of Section 105 of the Atomic Energy Act of 1954, as amended. That Advice Letter confirmed that the Department had reached agreement with the applicant as to license conditions which would resolve "any .

questions as to the policies that it intands to follow during the period of the Grand Gulf license..." (Letter of Advice,

p. 5). The Commitments themselves, attached to the letter cf May 22, 1973, from Donald C. Lucken, President, Mississippi Power & Light, to Mr. Kauper, provided, inter alia, that applicant .culd:

'I Janet Urban, Esq. September 22, 1978 (Commitment 2) interconnect with and coordinate reserves with other entities in the area; (Commitment 4) " offer an opportunity to participate in the Grand Gulf Units ...

to any entity in the Western Mississippi Area; Commitment 5) " facilitate the exchange of bulk power by transmission over its transmission facili-ties between or among two or more entities in the Western Mississippi Area with which it is interconnected; and between any such entity (ies) and any entity (ies) engaging in bulk power supply outside the Western Mississippi Area between whose f acilities applicant's transmission lines and other transmission lines would form a continuous electri-cal path, provided that (1) permission to utilize such other transmission lines has been obtained, and (2) the arrangements reasonably can be accom-modated from a functional and technical standpoint.", and; (Commitment 6) sell power for resale to any entity in the Western Mississippi Area now engaging in or ,

proposing to engage in retail distribution of electric power.

The City of Clarksdale, Mississippi, which had pre-viously operated isolated, has entered into an interconnec-tion agreement with Mississippi Power & Light which, for present purposes, may be assumed to satisfy MP&L's obligation under Commitment 2. That Interconnection Agreement, however, did not provide for transmission service, or for the purchase by Clarksdale of wholesale power under MP&L's filed tariffs at the FERC. That Interconnection Agreement was filed at the FERC by MP&L on June 27, 1977, and the facilities were first energized in early August, 1977.

As early as December, 1976, however, the City c#

Clarksdale had inquired as to the availability of partial requirements power from MP&L and of the likelihood of an offer of participation in MP&L's Grand Gulf Units. Shortly, thereaf ter, the Company had respcnded that it did not propose to serve individual custcmers at wholesale not previously served (Letter of January 17, 1977). We are advised, in this connection, that MP&L had discontinued its previous partial

~ Janet Urban, Esq. September 22, 1978 partial requirements rate filed at the FPC which it had uti-

^ lized to sell partial requirements power at an FERC rate to Yazoo City, Mississippi, at approximately the same time it began negotiating interconnection agreements with Clarksdale and Greenwcod, Mississippi.

On July 20, 1977, Clarksdale filed a Petition to Intervene in the FPC docket in which MP&L had filed the interconnection agreement with Clarksdale on June 27.

Clarksdale noted that the agreement in question was an outgrowth of the policy commitments of MP&L appended as con-ditions to its AEC license and that in the v. w of Clarksdale the interconnection agreement met some of the requirements undertaken by MP&L but by no means all. Clarksdale specifi-cally noted that the commitment required the sale of power for resale, provision of transmission capacity, and others, and noted that it was filing the intervention petition in order to give notice "of its belief that the interconnection agreement is inadequate and that it will seek the additional service schedules which are believed necessary and which it hopes will then be filed voluntarily by the Company." On August 4, 1977, MP&L filed its Response of Mississippi Power

& Light Company to Petition to Intervene of Clarksdale, Mississippi, in the FERC docket. MP&L, opposing the inter-vention of Clarksdale in that docket, stated that:

... the FPC has not been established as the enfor-cement agency for license conditions included in nuclear power plant licenses. Rather, to the extent that Clarksdale may believe that MP&L has not fulfilled its obligations under its construc-tion permits for the Grand Gulf Nuclear Plant, its remedy rcsts with the NRC, not with this Ccmmission."

On July 19, 1977, the Mayor of Clarksdale, Mayor Richard M. Webster, Jr. , had directed a letter to Mr. Donald C. Lutken, President of MP&L. Mayor Webster noted, inter alia, that so far as Clarksdale's records shcwed, no offer of participation in Grand Gulf Nuclear Unit had been made to Clarksdale, and inquired when the process of making an offer or furnishing data preparatory to an offer would be made.

Mayor Webster also expressed an interest in purchasing base load power and energy frem MP&L under MP&L's wholesale filed rate. Mayor Webster noted that Clarksdale would have capa-city excess to its needs best suited for peaking purposes as

. Janet Urban, Esq. September 22, 1978 a result of the national policies which had deprived Clarksdale of the gas supply upon which it had relied in the construction of its generation, and inquired as to the -

transmission rate which MP&L would apply to the sale of unit capacity by Clarksdale or purchase by Clarksdale to or from other entities interconnected with the Middle South Transmission System. On August 18, 1977, Mr. Lutken, President of MP&L, responded to Mayor Webster suggesting that Clarksdale had never expressed an interest before in par-ticipation in the Grand Gulf Unit and therefore participation woud be difficult if not impossible but tha t the Company was willing to discuss the matter further if desired. The letter suggested that a better approach might be to consider the pose" 'ity of supplying Clarksdale's needs temporarily pending the planning and construction of future generating f acilities and that the present interconnection agreement provided a schedule for that. He later noted, however, that energy available under those schedules would be at the incre-mental rate for the entire Middle South System, then esti-mated to be in a range between 5% and 69 per Kwh. The Company offered to consider the purchase of Clarksdale's excess capacity for peaking purpcses and requested addi-tional information. It also stated its willingness to deve-lop a proposal for transmission service to Clarksdale and requested an idea as to the maximum quantity of power under consideration and the point of interconnection with the MP&L transmission system.

Mayor Webster responded September 8, 1977, again requesting an offer of participation to be made for the Grand Gulf plant, and requesting an opportunity for Clarksdale to purchase base load electricity priced at its appropriate cost or to purchase approximately 19.5 megawatts of capacity from Mississippi Power & Light at established FPC wholesale rates.

Several meetings were held between Clarksdale and MP&L, beginning on October 25, 1977. Preparatory to that meeting, Mayor Webster had furnished to Mr. Lutken a letter of October 18, 1977, specifying in more detail some of the matters which Clarksdale wished to achieve. Clarksdale has no wish to divulge at this time the particular positions taken by MP&L at these series of meetings, but it is clear that no offer of participation in Grand Gulf has been or is likely to be made; that MP&L has declined to purchase power or energy from Clarksdale or to sell base load power or energy or power and energy under its FERC filed rate to Clarksdale even though it can be shown that such transacticns would be advantageous to its shareholders; but MP&L did file a proposed transmission

, Janet Urban, Esq. September 22, 1978 rate for Clarksdale on August 28, 1978, in FERC Docket No.

EP78-583, together with a similar rate for the City of Greenwood, Mississippi in Docket ER79-584. While 'larksdale believed certain aspects of that rate filing to be oppressive and unjust and unreasonable, and filed a Protest, Petition to Intervene and Request for One-Day Suspension on September 15, 1978, Clarksdale also believed that it would be able to uti-li e that transmission tariff to finally obtain some relief from the extremely high energy costs which it was forced to incur purchasing high cost oil to operate its units in a situation where base load power and energy were not available from any other source. Consequently, Clarksdale entered an agreement with the City of Lafayette, Louisiana, for the purchase of scmewhat more than 14 megawatts of capacity, and the delivery of that power and energy (in unit contract form) from Lafayette to MP&L over the system of Gulf States Utilities Company, connected with MP&L by the 500 KV backbcne transmission system in the area at the Gulf States' Willow Glen site. By letter of September 8, 1978, Mayor Webster requested that MP&L, in accordance with the notice provisions of its filed tariff, provide transmission service for this power and energy as quickly as possible, and also inquired further about the decision to offer participation in Grand Gulf. As a result of a request from MP&L's manager of system operations, Clarksdale furnished MP&L a -~oposed hourly sche-dule for transmission service starting at 8 :00 AM September 20, 1978, as requested. By letter of September 15, 1978, MP&L formally acknowledged receipt of Mayor Webster's letter, and stated that there was a technical difficulty in scheduling and accounting fpr the energy requested at the delivery point since MP&L did not have an interconnection agreement with Gulf States,lbut indicated that it might have been able to work out a way to accommodate by asking Louisiana Power & Light Company, its corporate affiliate, to act as agent. It indicated, however, tha t it would be unable.

to furnish firm transmission service over the interconnec-tion proposed since there was but a single transmission interconnection with Gulf States, but proposed utilizing the services of Louisiana Power & Light Ccmpany or other entities for facilities to "back up" the Gulf States interconnection.

. - Janet Urban, Esq. September 22, 1978 By telephone conversation of September 19, 1978, however, MP&L advised Clarksdale that it would not be possible under any circumstances to receive energy from Gult States until an interconnection agreement between MP&L and Galf States could be worked out, and that this negotiation might be quite lengthy. Thus, MP&L suggested that Clarksdale (or Lafayette) contract with Louisiana Power & Light for ser-vice under LP&L's transmission schedule, in addition to the transmission rates, terms and conditions with which Clarksdale would have to comply already with Gulf States and MP&L. Since none of Clarksdale's advisors could understand a legitimate basis for such position, Clarksdale, by letter of September 20, 1978, requested a written explanation of MP&L's position. MP&L initially indicated that it would furnish such a written explanation, but at approximately 5:00 PM that afternoon, stated that inasmuch as the Company's refusal to provide transmission service from the Gulf States intercon-nection had long-range implications, it could not furnish such a letter.

As may be seen from the above, despite diligent application and substantially more correspondence than is outlined above, although Clarksdale has requested wholesale service on a partial requirements basis under FERC tariffs, MP&L has dec?.ined to provide such service, a position which Clarksdale believes inconsistent with MP&L's obligations under the License Conditions. Although Clarksdale (and others) have repeatedly requested that an offer of par-ticipation in MP&L's Grand Gulf Nuclear Units be made, no such offer of participation has been forthcoming and Clarksdale has been given no reason to expect that such an offer will be made, a position which Clarksdale believes to be in violation of MP&L's License Commitments. Moreover, although MP&L has finally filed a transmission service sche-dule, it has chosen to interpret its service schedule in such a way as to effectively preclude the ability of Clarksdale to obtain capacity and energy which would be economic for Clarksdale even with the payment of two " pancake" transmission rates, insisting that Clarksdale enter into an agreement with its corporate affiliate LP&L as well, and pay both of these Middle South Utilities' affiliates even though the Middle South System itself, which is believed to have an interconnection agreement with Gulf States, permits a free-flowing centrally operated transmission cperation over and through all of its affiliates for the benefit of any one.

Clarksdale believes this, as well, to be inconsistent with MP&L's license obligations.

Janet Urban, Esq. September 22, 1978 on behalf of the City of Clarksdale, this will serve to inqui e whether the Department of Justice believes these positions of MP&L, which I think are fairly outlined herein, to be consistent with the agreement reached between Justice and MP&L embodied as the Grand Gulf License Commitments . If the Department does believe these positions to be consistent with license obligations, I believe that, at a minimum, substantial attention should be directed to the function which the Department has been exercising under Section 105 of the Atomic Energy Act of 1954, and its posi-tions revised. If the Department believes that these posi-tions are not consistent with its agreement with MP&L, this will request your advice as to what, if anything, the Department does in such situations to enforce its agreements.

I apologize for directing this letter to you; this is a matter of some urgency, however, to the City of Clarksdale as a result of the comparative electric rates which it has been forced to assess its consumer-voters in the absence of alternatives, and the (comparatively) lower rates charged by MP&L in the surrounding area, together with the repeated efforts of MP&L to purchase the City's facilities in the past. I understand that you will be willing to direct this letter to the appropriate niche within the Department's ever varying structure to permit us to comply with protocol while still obtaining the Department's views, if such views ,

are to be given, as quickly as possible. Two additional copies of this letter are attached for your convenience.

v s very truly,

'7, m)

/

/ f3'f Robert C. McDiarmid Attorney for the City of Clarksdale, Mississippi Enclosures RCMcD:jbs

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UNITED STATES OF AMERICA n esc'- v ver FEDERAL CIERGh~3tECbLdbbRY CCMF.ISSICN Mississippi Power & Light Cc=pany) cccket No. IR78-583 PRCTEST,- PETITICN TC DITERVENE, AND REQUEST FCR ONE DAY SUSPENSICN AND CCUSCLIDATICN The City of Clarksdale, Mississippi ("Clarksdale*)

hereby prctests certain aspects of the Mississippi Pcwer &

Light Cc=pany Transmission Service Schedule filed en August 28, 1978, requests a one day suspension, petitions tc inter-vene as a full party in this proceeding, and requests ron-sclidation of this decket and Decket ER78-534. 1,/

2.

The name of the Petitlener is the City of Clarkedale, Mississippi.

I.

The na=es titles, and addresses ci the perscns =

whc= ce==unica:icas concerning this petitien shculd be addressed are:

Rcher: C. McDiar=id, Esq.

Ja=es N. Ecrvced, Esq.

Spiegel & McDiarmid 2500 Virginia Avenue, N.W.

Washingten, D. C. 20037 cavid R. Sunt, Es q .

Sullivan, Smith, Sunt & vickery P. C. Ecx 1196 122 Court Stree:

Clarksdale, Mississippi 38614 1/ The Cc==issien's :ictice cf the filing cf an identical

ansmissicn service schedule as to Greenwced, Mississippi, does 00: have a full decke: n"- er en th e prin ad copy, bu:

the Secretary's effice advises us tha: the apprcpria:e decke:

nu=her is IR73-584.

~

Mr. Fred R. Saffer R. W. Beck and Associates P. O. Sox 6817 Orlando, Florida 32553 III.

• The City of Clarksdale is presently intercennnected with and served by Mississippi Pcwer & Light Ccmpany ("EP&L*)

under an Interconnection Agreement which was accepted fer filing in 1977 in Occket No. ER77-478. That Interconnecticn Agreement provides schedules for " Reserve Capacity",

" Unintentional Energy", "?irm Capacity", and "Econcay Energy".

As Clarksdale noted in its Petition to Intervene in that docket, the Intercennection Agreement was an cutgrewth of MP&L's Atemic Energy Ccamissicn License Cceditions of May 22, 1973, with respect to its Grand Gulf Units, in AEC Cccket Nos. 50-416-A, 50-417-A. As here relevant, Clarksdale has, since at least July,1977, and in scme instances earlier, asked MP&L fer service to fulfill its cbligations:

1) (Paragraph Sa cf these License Ccnditiens) to

" facilitate the exchange cf bulk pcwer by transmissica ever its transmission facilities between er a=cng two er =cre entities in the Western Mississippi Area with which it is intercennected; and between any such entity (ies) and any entity (ies) engaging in bulk pcwer supply cutside the Western Mississippi Area between whcse facilities Applicant's (MP&L's] transmission lines and other transmission lines wculd form a een-tinucus electrical path. . . " en ter=s that "...

fully ccmpensate Applicant fcr its ecst."

2) (Paragraph 6 cf the Cc=mitments) to " sell pcwer for resale to (Clarksdale er other entities] in the Western Mississipci Area..."

3) (Paragraph 4 cf the Cc==itments) = * ... cffer an cyper: uni:7 := participate in the Grand Gu'd Nuclear Onits and any other nuclear generating unit (s) which (Applicant and any successer in title] nay construct, cwn and cparate in the 3 tate Of Mississippi... to any entity (ies) in the Western Mississippi Area ... .

_3 Che instant filing is MPEL's respcase to the first of these recuests, after seme discussion had been held en terms, ccnditions and price of the needed service. As MPEL notes in its filing letter, despite the negotiations that have taken place, no agreement has been reached en rates, terms or condittens, although the differences between the par- ,

ties have been narrowed. Because MPEL has declined to make -

power and energy available to Clarksdale under its wholesale rate filed with this Cc= mission, 1/ the filing with this Ccemission of this transmission rite is important to the City. Clarksdale's cwn generatien, which was designed and installed in reliance en a centinual supply of natural gas as fuel, has beccme extremely high ecst as Clarksdale has been forced to burn virtually entirely high priced cil. Che filing of a transmission tariff, hcwever flawed, will enable Clarksdale to seek to find other sources of ecmparatively inexpensive base load energy and pcwer to suhstitute for its own generatien.

E7.

Clarksdale appreciates the MPsL filing of the transmissicn rate schedule which will per=it it to search for and (hepefully) utill:e sc=e cheaper scurces of energy.

Withou: transmissicn, Clarksdale is confined to the purchase of pcwer and energy under the intertie arrange =en:, which energy is priced at lift of the rather high incre= ental ces:

cf energy en the entire Middle Scuth System. Ncne theless ,

there are a nusher of cenceptua' di3-~'-d es v4-" -w e filing which has been =ade. We would note, in this ccnnection, that the incremental ecs:s en the Middle Scuth System have varied between 50 and 60 mills per Kwh in the pericd since the MPsL-Clarksdale Intercennecticn Agreement has been in effect.

Ccnsequently, absent the ability to purchase firm pcwer f cm MP&L under a TIP.C rate (which Clarksdale has effered to do ,

but been rebuffed), citi: ens of Clarksdale have nc access ::

ecencmic scurces of energy unless they have an effective transmission service schedule.

1/ Althcugh Clarksdale has not been purchasing fir = pcwer and energy frcm MPEL, it has been purchasing pcwer and energy in the fer: cf certain in:archange se rvices , i.e., reserve capacity fer scheduled =aintenance and e=ergene Is .

4_

V.

The prepcsed service schedules provide for " firm" transmission 12 scnths. Itservice en a 100% ratchet basis for no less than provides, as well, for "interruptible" service en a month by month basis at the same =enthly rate per Kw of transmission. The firm secvice is available enly en 30 days notice (Paragraph 50.21(g)), and apparently requires a separate specific agreement for each service. The interrup-tible service is available caly upcn ten days notice and only for a full calendar =cnth at a time. (Paragraph 50.22(i)).

That service as well is available only after a separate spe-cific agreement for each transaction. Thus, the service suf-f ers frem two flaws in the terms, as well as the pricing

' flaws, infra; if ic is to be interpreted as requiring a separate payment for each transaction, whether er not used cencurrently or whether er not additive, the pricing is imp cperly derived and the transmission service is virtually useless in seeking to engage in the sc : cf short term hulk ecenc=y exchanges which are sure tc he needed and are cen-templated by MP&L's nuclear license cenditiens. Merecver, if Clarksdale identifies an inexpensive short ter= pcwer scurce, MPsL ce a sister Middle Scuth affiliate can reap the benefits of such a gewer scurce during the ten-day notice pericd. Cn bo tt counts, the transmission service in the filing dces not satisf7 MPsL's agreed upon cbligatien tc facilitate transmissicn transacticns "between and a:eng" entities in the State and elsewhere.

Clarksdale is an active participant in the Municipal Inergy Agency of Mississippi, e new joint acticn agency which was established pursuant te Ecuse Bill No. 1203, Chapter Nc. 353, Laws cf Mississippi cf 1978. It is antici-pa:ed that the new joint agency wculd he able to ecnstruct, cwn and cperate, in conjunction with MP&L or cther utilities, new generatica sized and designed to take advantage of ecccc-

=ies of scale in fuel and size to fully hena'4 - '"e Agency's sembers and their custc=ers and the citizens of Mississippi as a whole. Since this scr cf joint venture is clearly under active development and is known to MP&L, the particular errers in the design of this rate wculd i=pede er deter the develcyment of a jcin: action generatica plan which wculd attain ecencmias cf fuel and size. The Mississippi cities which are pctential participants in such a " i - =~= sca::ered ever the MPsL area and Optisus siting fcr the Agency's needs wculd almes cartainly recuire a sita vi:n wacer transper:stien.

As such, cne could well assu=e that all such new generatica sight be off system for these cities in the fu tu re , as it frequently is in New England. These Mississippi cities with interchange agreements with MP&L have agreements like that of Clarksdale, requiring that the City provide: -

" dependable capacity to serve its cwn lead plus '

reserves at least equal to the percentage of reserves saintained by the Middle Scuth System; pro-vided, however, that Clarksdale shall not be required to provide scre capacity than 125% of its maximum cicek hourly lead in the twelve (12) =enths ended with the current =cnth." ( Paragraph 5.2 of the Clarksdale-Mississippi Pcwer & Light Intercennection Agreement).

Chviously, since the Cities' cbligations to previde capacity are measured in terms of installed ki?.cwatts, it would be apprcpriate to derive a transmissic:4 rate based cpen installed kilowatts rather than based upon load. This is

=ade even clearer by the previsions of Sectica 50.24 of the instant filing which .=rovide that transmissica capacity is assured as "available caly when the transmission and genera-tien system is in its normal cperating =cde."

y There are certain specific deta:Is of the ter=s and cenditiens cf the instant filing which require clarificatien.

?cr exa=ple, while CLarksdale assu=es that the definition cf _

" entity" in Section 50.12 would include the Municipal Energy Agency cf Mississippi which qualifies as a =unicipality under the ter=s of that Act, it wculd be well t= have this understccd in advance.

Section 50.21 cf the instant filing provides in subclause a) , that the " firs" transmission service is available only if "such service will neither i= pair the ahi-lity of the C:=pany to render adequate service to its custe-sers cr reduce the reliability of electric service by Cc=pany to its cwn custc=ers during the term cf the scheduled service.' Presu= ably, this is intended :: =ean tha 'fi ="

transmissicn service custc=ers are interrupted firs: befcre the Cc=pany's native lead. If this is -he case, then it shculd be reflected in the pricing previsicas, wnics it is act.

~

Secticn 50.21 of the instant filing, subclause d),

prov.

fc:

des that "in the event the supplying entity is unable any reaccn to supply pcwer for trans=issien, the Cc=pany shall have no respcasibility to deliver such pcwer frc= its cwn or cther sources." Cbvicusly, if unit gewer is purchased .

and delivered pursuant to fir = trans=issica service, it .

shculd count toward =eeting a city's capacity respcasibility .

and, if so, shculd be backed up in accordance with the ter=s of the interconnection agreement. Presu= ably, this subclause does not intend to provide the contrary, but it is unclear an? shculd be clarified.

Section 50.30 provides for =easurement by, inter alia, kilevar =eters; yet, there is no provisien elsewnere wcere the ficw of kilevars wculd =ake any difference.

Secticn 50.40 of the instant filing prevides, in ter=s far breader than the provisions of Section 35.1(d)( 2) wculd suggest apprcpriate, that acceptance of the instant filing would permit the Cc=pany to file to change any centract asscciated with service to Clarksdale, a prescsition with which Clarksdale dces not agree.

7II.

To be useful for exchange of ecenc=y energy, a trans=ission schedule cannet require a pay =ent of a =cnth's s demand ecst, at least when the =cnth's demand ccst is as expensive as it is bere, in crder to save =cney and fuel rescurces incre=entally. Clarksdale believes that it is apprcpriate, indeed necessary, serve this need to be priced en a = ills per Kwh basis, since for a trans=issica rate to ne ene knews when ecenc=y energy exchanges begin precisely c hcw long they will last. Otherwise, this prevision would allcw M.?sL te seize for itself ecccc=y transacticns iden-tified by Clarksdale.

VIII.

shculd be The ter=s cf Sectica 50.31 cf the instant filing clarified. .c: exa=ple, id the Ci y recuests transmissien service fer 12 =enths, presu=ahly it wculd be erpected  :: pay the demand rate fer each of 12 =enths, even as designed by MJEL, We assume tha: the ratchet i=pesed is act intended vice period, be- <- =

c cen:inue beycad the s:stad  ::ansmissica ser-shculd be clarified .

IX.

There are difficulties, as well, with the deriva-tien of the transmission rate. Most importantly, of ccurse ,

it is wholly inappropriate for a rate with a 100% ratchet to .

be derived en the basis of a 12 month coincidental peak allo- ,

cation. Assuming the correctness of =enthly peak demands shown at page 10-1 of the cost of service back-up (seme of which seem to vary slightly frcm Form I data), it can be seen that there is a significant difference betwe:a the average peak and the single peak, which would be eccmensurate with the basis cc which Clarksdale would be billed. Cbvicusly, a rate designed in this fashion should be designed upon a single peak basis.

~

In *.ny event, no cne has ever suggested that transmission requires the same sort of scheduled cutage and unscheduled cutage predictions which permit the use of the 12 coincident peak methed as analegcus to the Icss of load probability studies which form the basis upon which the Ccmpany installs generation.

In any event, as we have acted above, if applicable to unit purchases, the derivation shculd be upcn the basis of the inst:11ed capacity available to the MPEL grid, net the varying (cr even peak) lead of MPEL's native lead. This could be approxi=ated, cf ccurse, by the peak icad, tcgether with the necessary reserve =argin, which in this case we uncerstand to be scmething in excess of 20%.

The preliminar7 analysis of the filing which has been =ade by Clarksdale appears tc indicate that the balances in Acccun: 255 are i=preperly included as an additien to equity in the capital structure.1/ The interest synchreni:a-tien adjust =ent which has been made appears te have been =ade only with respect to first =crtgage bends, and not "other 1cng term debt *, which would substantially change the incese tax allcwance fer ratemaking. It is not clear frem the filing whether er not the measurement cf Kw fcr billing pur-peses (wnich is =easured as 103% cf a= cunts received) is cen-sistent with the lead data used by MPSL in develeping the unit charge, even en MPEL's th ec r? . In any event, since this service is applicable enly, at the =ccent , fcr transmissien service a: 115 Kv, it is net at all clear that the 2% icss 1/ See Carclina ?cwer i Licht Cc., Cpinica Nc. 13, issued Augus: 2, .373 ac 5-10.

~

. _a_

f acter used in deter =ining the billing demand is an appropriate less factor for energy, and certainly would net appear to be an appropriate 1 css facter for demand =easure-sents.

X.

A such =cre basic problem is that MPEL, and Middle South, provide transmission service in substantial a= cunts to other entities. Thus, MPEL participates in the South Central Electric companies' exchange with 77A, and trans=its very large a= cunts of pcwer pursuant to that Agreement. Mereever, MP&L participates in the " Agree =ent Among" the Middle Scuth cperating entities, which provides for transmissica service for each of them. Very large amcunts of pcwer are transmitted by MP&L under these arrangements. For example, MP&L's Form 12 (.Sch. L3) shows that en August 9, 1977, (which is not the maximus scnthly peak used in this filing) the ccmpany delivered 731 =egawatts ever its transmissien system and recovered for the year S1,976,699, fer an apparent charge of $2.70 per kilewatt year for this service. Indeed, it appears that much larger amounts were pericds. The Ccmpany has taken the revenues frc= these transmitted at cther transmission services as a revenue credit in its derivatien.

This wculd not he an unacceptable technique if the a= cunts received were comparable to these whien it picycses := charge Clarksdale and Greenwced, but, as has been ncted aheve, these a= cunts appear to be substantially cut of line. Id the transmissien leadings were added to the leads utili:ed by MPSL (which appear te be its native lead) in the derivatien of its rate, the result would be a substantially lcwer rate.

Under the " Agreement A=cng", the accounting treatment cf other transmissien uses ce=plicates the pricing cf transmissicn services. Because the Middle Scuth System operates and ccnstructs its entire transmission systa= (with slight exceptiens) as a whcle, Clarksdale has requested a transmissica race based en the Middle Scuch System as a whole. A Middle Scuch trans=issien rate veuld represent the only legical basis for avoidance of the unnecessary duplica-tien cf c=sts for eccperative ventures a=cng utilities in the area cf the Middle Scuth cperating systems.

I_. .

MPSL has filed an al=cs iden:ical transmissicn service agree =en: which i: prcycses :: =ake applicable :: the Greenwecd Ctili:ies cc=sissica cf the City cf Greenwced,

~

_g.

Mississippi. Clarksdale requests that this docket be cen- r sclidated with that Docket No. ER78-584, that these service agreements be accec. ted as additional rates _1/ and that thev.

be suspended for cne day, subject te refund, and that the Ccmmission direct a conference among the parties te determine whether or not any of these issues can be settled by ,

agreement among the parties. .

Respectfully submitted, n'ccer

[. !/c.bw C. ".cciarmic i fA bf)

N, ,

h es_N. Ecevcod Attorneys for the City of September 15, 1978 Clarksdale, Mississippi Law Offices Of:

S?IIGII. & McCIARMD 2600 Virginia Avenue, 3rd Jashing cc, D.C. 20037 1/ See, e.c., Crder en Rehearing, Cleveland Electric

llumina .nc Cc=canv, Oceket No. I275-;34, septa =:er 5, '.373.

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7ERI?!CATICN DISTRICT CF CCLCME!A, SS:

James N. Scrwced, being first duly sworn, deposes and says that he is an atterney for the City cf Clarksdale, Mississippi and that as such he has signed the foregoing "PRCTEST, PETITION TO DITER7ENE AND REQUEST FOR CNE-CAY '-

SUSPENSION AND CONSOLIDATICN" fer and en behalf of said party; that he is authori:ed so to do; that he has read said Petition and is f amiliar with the centents therecf; and that the matters and things therein set forth are true and ccrrect to the best of his information, kncwledge and belief.

_O E s

@ es N. Ecrwecc Subscribed and swcrn to before ne this 15th day of September, 1978.

^

k O. h U i J

/ Notary ?ual:.c

[ fr --c' -- z=ge.e Tc=. n. I m CIRT!?!CATE C? SE27:C" I hereby certify that I have this day caused to be served the feregoing document upcn each persen designated cc the efficial service li<,t ecmpiled by the Secretary in this preceeding in accordar.:t with the recuirements of 51.17 cf' the Rules of Practice and Precedure.

Dated at Washingten, D. C., this if th day cf Septe=her, 1973.

.i e J e s II. 5crwccc

v s

a s r, -

Y ,!!;=2nJ f j ililf? MISSISSIPPIHelping POWER S. LIGHT COMPANY l' s Build Mississippi D'~!1 ~ nG u P. G. 8 0 X 1S40. J AC K S O N. MIS SIS SIP PI 3920S Septa =ber 15, 1978 F ram 4 S. YO R K. J 2. Eccorasle Richard M Webster, Jr RECEIVED - Xapr, Citf of Clarksdale Post Office Box 940 SEE 211073 Cla='csdale, Mississippi 38614 Sc.lEr'n & ".*r M MID cear zayer Jebster nis will ack=cwledge receipt of your lettar of September 8, 1978. Ct c--= y regards your letter as its first definitive notice that you wi.sh to purchase 14 megawatts of interruptible transmission service f_- cur interc==necuica with Gul.f States Utilities C:mpasy (" Gulf States") to the City of C' m '@ ' e. It is our understandi=q that yeu= letter also requests that this tra-=--i nica service be ade av=4' =kle en a firm basis at the earlies: 7:seti=able date. You prepose en have 14.42 =egawatts delivered o us at our 500 r/b 1:.ter==cac d n with Gulf States at the southern bounda=y of the State of Mississippi. a:his would cover the amount to be delivered to you, plus 1=sses. yc== letter states that the censu=matica of ycur request is c=ntingent upcn e app:= val of the sales cent =act with the preposed supplying entity. Cur C:=pany d=es not.have an inter =onnectica agreement with Gulf States and thered::n, there is a technical diffi=ulty in scheduling and a===u=ti=g for the energy requested bo be supplied at this inter:ennec,1cn peist. We believe, h= wever, we may have been able to werk cut a way to ac===cdate you by asMag Ioui..iana Power & Tight C=tcpany (which has an 1= =- ===actica agree =ent and a uetered inter ==nnection ;cint with Gul" 5:stes at this location) to act as cur Agent for his transac,icn with Gulf S:stes. We would hope to confi=m these arrangements with you by ' phene Menday, Septa =cer 18, 1978. If so, we will he prepared to provide the requested service on an inte==up dkie basis beginni.sg then er on a =utually agrasahle suc=eeding date. When you are in a ;csiticn to k cw on what day you will schedule isi-d =' ser rica, please let us k=cw. Cur C = m y will be unable to fu =ish 'd - trans=ission service t= you over .he into t==ection ycu pr=pese since.it would not be possible m

a. S te such, service _*.=m a fc=cticcal and tect d "' standpcist over the si:gle m-e4 =si=n inte===nnec icn we have with Gulf States. If you will sec=re the pe==.ission of 'cuisiana Pcwer G !ight C:=pany or sc=e c-der a .i ites wi h which we have other inter:cnnection pcin s to use such req =. ired fard' d ies to back up .he Gulf States in er==nnecti=n, we w-11 he .

glad to consider fur =ishing the requested firm service. Member Midcle Sou:M U:ili:!es Sys:em

f g _ MISSISSIPPt PCWER & ! !GHT COMPANY 3c:crable Richard M Webster, r Septe:her 15, 1978 Apparert17 you were misinformed regar:iing an "cral agreement" between Mr Saffe: and me that Mississippi power & Light Ccmpany wculd pro-vide trans=issica for 14 segawatts of power f==m Gulf States to the Citf . of r~' = * *> $ ' e. n a telephone conversation with Mr Saffer, I told him , that our Company intended to be as cooperative as possible as to power ' s=; ply a==ange=ents =ade by the City, that we needed to kncw in advance cvar what li.=es he power would be flowing ard that the ten days required a precess these requests would enable our C mpany to determina whether de re:;uests c=uld be met. I also pointed cut that we needed to

               'c=cw who was entitled to speak for the City o,f '"a**d=T e and 'that we veuld p==hably need a letter f:=m the City designating R W Beck as the City's Agent, if Beck were to act for the City. Your letter indicates to us that you will speak for Clarksdale and make whatever a==angements are DeCassary.

Cur Washingt=n Attorney, R x Me:risan, said that the status of cur

               4     g with II3C for a rate applicable to : =-< d <sian service on your behalf              .

has been discussed with Bob McDia==id, your Washington Acts. ey. Ecb said that although the Citf would ask fer a "4 4-=' suspension, the City would

               . , rt our request to have de transsission service schedule heceme effec -

tive on de date of initiation of se:vice. If I understand the first part of the third parag:sph of your letter, you are asking whether the 10-day period for our i=vestigati=g and acting on your request for ist wdble trans=issica service ceuld :un c=:cc.==ently wie de 30-day period we require to der =-4 e whether '" d a e ,.ld be furnished en a firm basis. The '-*#could :un occurrently, but ycu veuld need to let us k=cw 30 days in advance dat you e:q:ect to c=nve.~. to " - service and give us a firm cc:mnit ent at hat ti=e. Chvicusly, we need =cre ir.e to de = 4 = whether we can provide firm t.mae-d arsion servi =e f== a year than we need to der =--n ne whether we can provide in-c.ptible

               --=-=-4 =sien service for a 2C-day period. In any event, hcwever, the intant veuld be to furnisa you interruptible se:vice f          one ful'a csth and f* -

service "or a year, with no preratien. 1"e.ese are cpe=ational details ard 2.:=bably we should have the folks who cperate cur systems get together, i'=- y areas where the c=crr.'.inatien is required a=d =ake ree--- -> = tic =.s. A wculd par icularly r=M c' you that it will he necessary for you to work c= with your prcpesed supplier in this instance an heurly schedule of hr s deliveries to Gulf States, fer our dispac=her to work with the Gulf States dispa cher for delive:7 of such pcwer to us and f== your operator to cent cl da iveries .'. =m us to de scheduled a= cunt. In he lat er part of the thim:i paragraph of ycur letter, you d-d' este hat cur C:=pany's 1C-day request peried has prevented your

               --4 ' d -ing pcwer and energy av> 4 ' Ale to ycu "-     d -' 'epterher.           "'his seems
                .c he at cdds wi:h your earlier request hat yeu be furnished ::ans=iscica sa: .ca =cediti:nal ':;:en app = val of a sales centract with the supplying en ity and =aking arrange =ents .m get that pcwer c cur transmission systra.
               'cis does .c        seen to describe an 1 r.edia:ely available scur:e. While cu:.-
                ...,    z.t.1 thcught was that all b d g shocid be en a calerda      =cn h basis

     , .      ~

MISSISSIPPI PCWER & LIGHT COMPANY

                        ~ rable Richard M Webster, Jr                                 Septe=her 15, 1978 fer si=plicitf, we would agree that the one :enth peried specified shculd, as 4 = attar of equity, he for 30 days after the initiation of service under the appli-wie provision of the t=sesmissica schedule. ::f this is done,
                        *"' y under the firm trane4 *sion service schedule would begin at the end              ,

cf the initial 30 day pericd, assuming, of course, that the requirements of Sectica 50.21 of Service Schedule E are =et. Ncne of our proposed trans-

                      =ission rates provide for proration nor is any intended.

In this regard, and fer si=plicity of scheduling, we sugges that, when ;cssible, tre* 4 <sion service he scheduled on a calaer'a? month basis; i e, it would be de=4 mM e to consider ycur request for t. ne'ssion service as a request for initial service en Cctober 1,1973. ':his would elimi-ate an7 proration ;rchlams that might othereise arise. Cur Ccmpany insists that the provisiens of the agreenents hetbeen us, that is, the Inter =cnnection Agree =ent, and its appended service schedules (8--'-d3 g the one just filed fc= tr:u-e4 =sion service) , speak fcr the=selves and where differences in interpretation exist, they should either he .:tc. ally resolved or the basic agreements he cdified. Because of this, se wculd suggest a =eeting of our operating folks to discuss the day to day crerations, develop a pr= posed cperating procedure, and s"Wt it to both parties for approval. Sincerely, w

                                                                   ? S Tcrk, :r, vice president an Se_ecary m ir:ic G

mm

   ..      ~                                                                                                             ,

v. np

                          .i
                          $Y     bb MISSISSIPPI POWER & LIGHT COMPANY r      \* ;                    Helping Build Mississippi P. O . B O X 16 4 0. J A C K S O N. MI S SI S S IP PI 39205 August 25, 1978 P R A pe n S. 7 0 8t 4. J R.

Federal Energy Psgulatory Cc= mission 825 North Capitol Street, NE Washington, C C 2C426 ATTENTION: .. ** Kenneth F Plu=b, Secreta:7 Gentlemen: Re: Fate Schedule FE3C No. 243, Inter ==nnection Agreement by and between the City of Clarksdale, Mississi=ei and Mississi=ei Pewer & Tich C =cany Enclosed herewith fer filing with the Cc:=tission pursuant to part 35 of the C:==ission's regulatiens are six (6) c= pies of Service Schedule E, Bulk ?cwer Trans=istien Ser rice, dated August 25, 1978 to the Inter cnnection Agreement between de City of Clarksdale (City) and Mississippi Pcwer & !ight C:=pany (C:=pany) dated February 13, 1976. Alchcugh the Cir/ asked the C:mpany to provide trans-missicn servtce, and extensive negotiations have taken place, there has been no agreement as to the rate for, er te::ts and ccnditi ns of, Service Schedule E. Theref:re, the C:spany is tendering the se rice schedule for filing wi ccut being executed by the Cit /. It is prep:: sed that Service Schedule E bec =e effective on the date of filing with the C:==issien so that pursuant ~a de City's request to the C:mpany, it will have trare'ssion ser rice available to it i==ediately. For this reason, pursuant to Secti n 35.11 cf the C::=tissien's Regulati ns, the C:mpany respectfully requests that the C :=tissien waive the thirty (30) day notice requirements. At this ti=e, no schedule of deliveries of pcwer has been devel= ped by the parties. Ter this reason, no esti=ates of revenues during the first : elve (12) =enths of reerati:n are included in this filing, and waiver of the requirements of the Cc:=tissien's Regulations is requested. Se suppcrting C:sr cf Se: rice data 3--" tted herewit pursuant to Part 35 of the C ::issi:n's Regula icns is subsan--'ily based en applicable C--"4 ssien precedents and policy s.ata=ents. Mem::er Micele Scu:n U:ili:ies Cystem

MISSISSIPPI POWER & LJGHT COMPANY Federal Energy Regulater/ C ==Lission August 25, 1978 Although the C:=pany now provides no si=ilar service, the Cen:pany concurrently is filing with the C--4ssion the same Service Schedule E to the Inter,annection Agreement with Greenwcod Utilities C = mission which has also requested trans=tission service. ne same service is being offered to Yazoo City, which also has an Interconnection Agreement with the Cczpany. No additional facilities need be installed by the C mpany to provide service under Schedule E. Se monthly transmission rate of 30.97 per KW for trans=tission service is designed to reflect cost and is supported by the Cost of Service data included herewith. Se billing dete=tinants (demand)

 '               are on the sa=e basis as the cost allocation deter:tinants suppo.~.ing the charge.

No special facilities are devoted entirely to. the service involved. ne service provided is en .irely e'a ed related with the demand respcnsibility being based on the average of the twelve (12) monthly system peak demands for the pericd ended June 30, 1978. ne ccmputation of the average of the twelve (12) =cathly system peaks is shown en page 10-1 of the C st of Service study. Pursuan a sectica 35.S(a) of the cer=Lission's Regulatiens, enclosed is a f:rm of Notice for publication in the Federal Register. Check #08-0177 dated August 25, 1978, in the amcunt of one hundred dollars ($100.00) is included herewith as the filing fee prescribed by Part 36 of the Cc==ission's Regulations. If fur her inf==:tation is required, please advise us or our Attorney, Mr Richard M Pa',rri=an, Reid & Priest, 1701 K Street, N W, Washington, D C 20006. Sincer='v, F S York, Jr, g - 71ce Preside:w'and Secreta v RMI:fe b Attachments

. . s I

MISSISSIPPI POWER & LIGHT COMPANY Federal Energy Regulatory C:=:lission August 25, 1978 cc Honorable Richard M Webster, Jr Mayor, City of Clarksdale Post Office Box 940 - Clarksdale, Mississippi 38614 Mississippi Public Serrice Ccemission Post Office Box 1174 Jackson, Mississippi 39205 Mr Richard M .$'.arriman Reid & Priest 1701 K Street, N W Washington, D C 20C06 l

CIITED STATIS CF A E.*CCA FEDERAL I"RGr RIOUI.ATORY C012CSSICN Mississippi Power & Light Company Decket No. NOTICE CF TRANSMISSION SIR 7:CZ AGRIIMCIT Take notice that on August 28,1978, ' Mississippi Pcwer

                   & Light Company (MP&L) tendered for filing an unexecuted bulk pcwer trar snission service agreement (Serrice Schedule E) between it and the City of Clarksdale (City) , Mississippi, dated Augst 25, 1978, as a supplement to the Interconnection Agreement between the City and Mississippi Power & Light Ccmpany dated Febre.ary 13, 1976.

MP&L requests waiver of Section 35.11 of the Commission's Regulations requiring thirty (30) days notice in order that trans=is-sion service say be available i==ediately to the City of Clarksdale. Any person desiring to be heard or to protest said filing should file a petitien to interrene or protest with the Federal Energy Regulaterf C%sien,825 Ncrth Capitol Street, N E, Washingten, D C 20426, in accordance with Secticns 1.3 acd 1.10 of the Cecmission's Rules of Practice and Precedure (18 CFR 1.8,1,10) . All such petitions er protests should be filed en er before . Protests will be censidered by the Cc issien in determining the appre-priate action to be taken, but will not serve to =ake pr=ces xts parties to the proceeding. Any person wishing to beccme a party must file a petitien to intervene. Copies of this filing are en file with the Ccemission and are available for public inspection. Kenneth ? Plu=b, Secretarf

SEFl!CE SCIEOU'E E SUI.K PCWER *FMSMISSICN SET /ICI CI"Y CF CI. ARKS::AI.E and MISSISSIPPI PCWER & LIGi* CCMPANY . SEC"'ICN I - PURPCSE 50.10 It is the purpose of this rehedule to facilitate the exchange of bulk power by transmission over the transmissien facilities of Mississippi Power & Light Ccmpany (C=cpany) between the City of Clarksdale (City) and any entity with which Ccmpany is interconnected; and between the City and any entity (ies) engaging in bulk pcwer supply with which Company is not intereennected but between whose facilities ccmpany's transmission lines and other transmissien lines would form a centinucus electrical path, provided that 1) , permissic;. to utilize such other transmissien line has been cbtained by City, and 2) , the arrangements reasonably can be ac=c=medated frem a functional and technical standpoint; and to provide a basis for billing and set _lement for the serrice so p;cvided under this schedule. 50.11 "3ulk Pcwer" (pewer) =eans the electri: pcwer (kilewat_s) and any attendent enagy (kilevatt hours) supplied er made available at transmission voltage by one entity to another, 50.12 "Entit/" means a person, a private or public corpora.ica, a =unici-pality, a ec-operative, an associa icn, a joint st=ck association er business trust cwning, cperating er proposing to cwn er cperate equipment er facili.ies for the generatien, ransmission er dis.ributi=n o f electricity, previded that, except for :.t.nicipalities or rursi electri: ec-cpera_ives, ent ty" is restricted

.. s to those which are er will be public utilities under the laws of tne State in wnich the entity transacts or will transact business or under the Federal Power Act, and are or will be providing electric service under a contract or rate schedule on file with and subject to the regulation of a Stat:r regula- - torf ec:nission or the Federal Energy Regulater/ C-*dssion. SECMCN II - CEUAC'"ER CF SERVICE A!C AVA!!.ABI!!!"I 50.20 Serrice shall be delivered at r-4 .a1 115,000 volts er such higher voltage as may be .vailable at the point (s) of intercennection. 50.21 Fi :: Serric e : Company will furnish transmission service en a firm basis in acccrdance with this Service Schedule to the extent Cc=pany has exist-ing transmission capacity available to provide such sertice under scund engineering and cperating practice and subject to the following standards: a) Such sertice will neither impair the ability of the Ccmpany to render adequate sertice to its custc=ers or reduce the reliability of electric sertice by Cc=pany to its own custcmers during the term of the scheduled sertice; b) such sertice will not endanger or i= pair the operatien of the Cc= p y's sy em, or create unsafe conditions en the system er any of the facilities of the Company er its custeners er parties with which it is intercennected; c) such ser71 e shall not require .he Ccmpany to cens-ci.ct er in-scall any new facilities; however, if all of the felicwing condi-tiens and _he ether standards described in -his senedule are f.e t , Cc=pany well include in its planning and construction pregram sufficient transmissien capaci y := acce=cdata preposed _ransmiss:,cn serrice under this Senedule:

.. s (i) the participating entity (ies) gives/give the Ccepany sufficient advance written notice of the details of the requested service as =ay be necessary for Ccmpany to plan and ecmplete frem a functional and , technical standpoint the facilities deemed neces-sary by Company to provide such service in accordance with Ccmpany's construction and operating standards; (ii) the participanng entity (ies) fully ecmpensates Company for the cost of such facilities beyond the cost Ccmpany would otherwise incur for its cwn use. d) In the event the supplying entity is unable for any reasca to supply power for transmission, the Ccmpany shall have no responsi-bility to deliver such power fran its own er other scurce(s) e) the determination of the availability of existing transmission capacitf of the Ccmpany during the propcsed scheduled peried shall be made on the basis of existing lead, future contracted er pro-jected new lead beycnd ner=al lead g cwth, previously scheduled load, and ner=al load growth of the Ccmpany, all derarmned by the Cc=pany. f) If the requested transmission service involves transmissicn di-rectly or indirectly ever the facilities of a third utilitf system, Citf will make arrangements for use of those facilities. directly with that third system, and P "pany shall not he cbli-gated := cc_ ence ransmissica ser rice .:ntil such arrange =en s have been =ade.

p Sertic9 shall be for a period not less than twelve (12) months and scheduled in writing at least thirty (30) days before initial serrice is rendered. Such sertice is available only by specific agreement, executed by an authcrized officer of the ccmpany, and each participating entity. 50.22 Interruptible Serrice: Ccmpany will furnish transmission sertice on an interraptible basis in accordance with this serrice schedule to the extent Crepany has existing transmission capacity available to provide such service under sound engineering and operating practice and subject to the following standards: a) Such service say be interrupted without liability to the Company; r) Company will, when circumstances permit, give entity (ies) advance notice of such interraptions; c) such serrice will neither impair the ability of the Ceepany to render adequate seriice to its custcmers or reduce the reliability of electric service by C:mpany to its own custcmers during the term of the scheduled service; d) such sertice will not endanger or impair the cperatien of the Cenpany's system, or create unsafe conditions en the system or any of the facilities of the Company or its custaners or parties with which it is interconnected; e) such ser71ce shall not require the Ccmpany to censtract or install any new facilities; f) in the event the supplying entir/ is unable for any reascn to supply pcwer for transmission, the C:mparc, shall have

                                                   -S-no responsibility to deliver such power frem its own or other source (s) ;

g) the determination of the availability of existing trans-mission capacity of me Ccmpany during the proposed scheduled period shall be made on the basis of existing load, future , contracted or projected new load beyond normal load growth, previously scheduled load, and normal load growth of the C.wy, all determined by the Company.

              , b)   If the requested transmission service " involves transmission directly or indirectly over the facilities of a third utility system, City will rake arrangements for use of those %cilities directly with that third system, and Ccmpany shall not be obligated to ecmmence transmission ser rica until such arrange-mants have been =ade.

1) Service shall be for a period of not less than one (1) :enth, and scheduled in writing at least ten (10) days before initial service is rendered. Such service is available only upon specific request by the City and after approval by an authoriced officer of the Ccepany.

f0.23 It is recogniced that the interchange of power is under the control of the participa 1::q er.uity(ies) , and they agree it shall be the responsibility of the supplying entity (ies) to supply, under this schedule, the a:cune of power, plus losses, the receiving entity (ies) is/are taking frem the Ccmpany's aans-mission system a: all ti=es t -ider this schedule. T.e supplying entity (ies) shall supply at all times three percent (3%) more than all ,:owar being taken by s

6-e.e receiving entity (ies) to ecupensate fer transmission lesses. 50.24 Since e=ergency conditions or required =aintenance can cause the system capability to be =cdified as er aditions of the =cment dictate, the capacity specified by the Ccepany ~ teing available, is available only when the trans- ,

  =ission and generation system u in its nor=al operating =cde.

SEC"ICN III - ME*ERING AND BI!.I.ING 50.30 cc=pany will =eter seriico at 115,000 velts. All power (kilevatts and kilcwatt hours) billed under this schedule snail be measured. by =eters located in Ccmpany's Clarksdale Substation. ~he =easurement of all pcwer under this schedule shall be by sui able kilevatt, kilovar, and kilewatt hcur meters capabli of measuring en a 60-minute interial. 50.31 Menthlv Rate for firm and i:.cerructible seriice: 50.97 per :G of demand The KW of da-and to be billed d=ing the =cnth shall be the greater of: a) When the City is supplying entity, the maximum :G cf demand sc measured during the =enth such seriice is supplied. b) When e.e City is e.e receiving entity, e.e =aximum :G of demand sc =easured during the =cnth such service is received,

                 =ultiplied by the icss facter of 1.03.

c) For fir = sertice, the =aximum :G cf demand under a) er b) above for the prior eleven (11) =cnths. d) he maximum iCf of N-and sched'.iled to be delivered or received d=ing -he :ncnth, e) 1,000 :G 50.2 Energy (kilcwatt-hours) :aken by e.e receiving entity (ies) in ex-cess of e.e energy furn.sned by ne supplying ent. 7(ies) shall be : =puted

l in accordance with the follcwing formula and considered as unintentional energy delivered by the Ccmpany to the City and bil'ed in accordance with Service Schedule B, Unintentional Energy. Formula: . E = 1.03 (R) - D where E = excess kilevatt hours delivered by the Ccmpany R = kilcwate hcurs received by he receiving entity (ies) D = kilcwatt Ecurs delivered by the supplying entitf(ies) 50.33 Energy (kilowatt hcurs) furnished by the supplying entitf(ies) in excess of the energy taken by the receiving entity (ies) shall be w + uted in accordance with the fo11cwing formula and considered as un' intentional enerrf delivered by the City to the Ccmpany and billed in accordance with Seriice Schedule B, Unintenticnal Energy. Form 214: E = D - 1.03 (R) wne.7 E = excess kilevatt hcurs delivered by City R = Pd1Natt hcurs received by the receiving entity (ies) D = kilewatt hours delivered by the supplying entity (ies)

  . 50.34       Bills for trwW ssion service shall be rendered monthly to the City of Clarksdale and shall be payable in accordance with Article 6.2 of the Inter-connection Agreement By and Eetween City and Cc=pany.

50.35 Interruptible Service cat =ay be taken by the City under this schedule for less than ene month (30 days) shall be ce=puted in accordance with the centhly rate withcut preratien. 30.36 In instances whers the Cc=pany pr:vides service under this schedule to the City and ancther entity sith which the Cccpany S u executed an agree =ent for transmissien service, the parties shall =utually agree and notify the Cc=pany in writing, which entity shall be respcnsible for the payment for such ser ric e.

SEC"'!ON !7 - RICL"J"'ORY APPRCt'AL_ SC 40 The effectiveness of this schedule is centingent upon any regaisite regulatory approval. This schedule is sub]ect to the orders of regulatory authority of ecc:petent jurisdiction. However, nothing contained herein shall be construed as affecting in any way the right of the party furnishing service under this rate schedule to unilaterally make application to the Federal Energy Regulatory e-~4ssion for a change in rates, charges, classification, or service, or any rule, regulation, er contract relating thereto, under Section 205 of the Federal Pcwer Act and pursuant to the Ccmission's Rules and ReTalations premul-gated thereunder. SECTION V "'EP*4 50.50 This service schedule shall be attached to and becc=e a part of the Intercennection Agreement entered inte on February 13, 1976 by and between the Cit / a:x1 Missiasippi Pcwer & '.dght Ccmpany and shall continue in force concur-rently with said Agreement provided that either party may ter=inate this schedule by eritten notice given to the other party not less than five (5) years in advance of the designated date of termination. F XE.L. .: : as of , 1978 CITY CF CLAPI3CAIZ Sy Mayor A"J"IST : City Clerk

CSSIS3:7?! PCWIR r, "20HT CO:#2.LW Ey__

A!**EST : Secretary

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                                    . UNITED STATES OF AMERICA BEFORE THE                           as y          qA FEDERAL POWER CCMMISSION                            j     p  i [

11 3 hiU N  ! Mississippi Power & Light ) Docket No. ER77-478 - Cc=pany

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3. ...i TO PETITION TO INTERVENE OF CLARKSDALE, MISSISSIPPI On June 27, 1977, Mississippi Power & Light Cc=pany (MP&L) tendered for filing as an initial rate schedule an Intercennection A=-==-- ' 'a*-een MP&L and the City of.

Clarksdale, Mississippi (Clarksdale) dated February 13, 1976. That agreement provides for the establishment of an electric intercennection between MP&L and Clarksdale, and for service over that interconnection under separate service schedules for reserve capacity, unintentional energy, fir = capacity and ecenc=y energy. Tictice of the prcpesed Intercennection Agrec=cnt was issued by the Cc--d ssion en July 8, 1977. On July 20, 1977, Clarksdale filed a pretest and petitien te intervene in this preceeding in which it alleged that the Intercennection Agreement "is an outgrowth of the policy ec==it=ents of Mississippi Pcwer & Light Cc=pany

           . appended as conditions to the AEC License of its Grand Gulf                                         -

Nuclear Units 1 and 2 (AEC Decket Nos. 5 0-416A and 5 0-417A) " , but that the agreement does not provide fer all of the ser-vice schedules which Clarksdale states were conte = plated in those policy cc. it=ents. This preceeding is related sclely to the lawfulness of the Intercennecticn Agreement between MP&L and Clarksdale, and the service schedules attached theretc. Ecwever, as Clarksdale's petition te intervene =nkes clear, Clarksdale does nce object := the ter=s and conditiens set fcrth in that agreement. Rather, it apparently seeks tc use this proceeding as a forum fer chtaining additional services frc= MP&L which are not presently included in the Intercennecticn Agrea-a

• The Intercennection Agreement, which was executed in February 1976, represe--=A ""a cu'~'natien of lengthy

                                                -2_

discussions and negotiations between representatives of MP&L and Clarksdale which cc==enced pricr Oc the prc=ulgation of any policy ec==it=ents with respect to the Grand Gulf Nuclear Plant. The agreement enec= passed all of the services which were requested by Clarksdale at tha* M -a To the , extent that studies which Clarksdale has undertaken since that agreement was executed =ay suggest that additional services are appropriate, MP&L =~ains willing to discuss provision of such services upon reasonable terms and condi-tions, so 1cng as such additional services will nct i= pair MP&L's ability to meet its existing obligations. However, the decer=ination of additional services which =ay be provided to Clarksdale is outside the scope of this proceeding. It should also be noted that the policy co==it-

                   =ents =ade by MPGL in NRC Ccchet Mcs. 50-41GA and 50-417A have been included as conditions to the construction permits issued by the Nuclear Regulatory Cc==ission     for the Grand Gulf Nuclear Plant, Units 1 and 2. MP&L believes that it has fully cc= plied at all ti=es with those policy co- it=ents. Ecwever, the FPC has not been established as the enforcement agency fer license conditions included in nuclear power plant licenses. Rather, to the extent that Clarkedale =ay believe that MP&L has not fulfilled its chligations under its construction per=its for the Grand Gulf Nuclear Plant, its rc=edy rests with the NRC, not with this Cc==ission.

Clarksdale concludes in its petition that "Clarksdale should be admitted as a party ec this decket,

        ---- --- --i" the -docket is , for any reason, to remain open" (Petitien,

p. 3). By letter order dated July 25, 1977, the Cc==ission accepted the Interconnection Agreement for filing and ter=in-ated this proceeding. There is therefore no pcrpose to be served by the grant of interventien to Clarksdale.

WHIR.EFORE , inasmuch as the Petition to Intervene filed by Clarksdale relates solely to =atters which are not properly before the Cc--ission in this preceeding: and inas=uch as Clarksdale's request to intervene was condi-ticnal upon the determina:icn of the Cc==issicn to hcid a hearing with respect to the lawfulness of the Interconnection Agreement, and the Cc==ission has de~=--' ed not to hold such

f a hearing, MP&L requests that Clarksdale's Petition to Inte.-tene be denied. . Respectfully submitted, . MISSISSIPPI POWER & LIGHT COMPANY n

                                                 !'           W la   . .     ,      .rs e 5y   L.-:-is s a /)   ,Mt 4. .&. d.V James K. Mitchell Its Attorney

['f She_-aced Wise Wise, Carter, Child, Steen & Caraway P.O. Box 651 Jackson, Mississippi 39205 Richard M. Merriman James K. Mitchell Reid & Priest 1701 K Street, N.W. Washingten, D.C. 20006 A terneys for Mississippi Power & Light Cc=pany August 4, 1977 ._ 4 8 8 6 6e 6m e_ ' 6 6 M

VERIFICATION DISTRICT OF COLi.;MBIA ) ss: James K. Mitchell being first duly sworn, deposes and savs that he is attorney for Mis sis si; ,:)i Pcwer & Light Cc=pany  ; that he hc.s been . duly authori:cd to e:cccute, verify and file with the Federal , Power Commission the foregoing document; that he has read the centents of same and that the statements contained there-in are true and correct to his best informacion, knowledge and belief, s e . -, 5 &4 d'/

                                                      //

Subscribed and suorn to before

           =e this        4th     day of Aurast
                                ,    19 M Nj/.,.v
                         .         . etes'.>G Taresa A. H er ca.:

Notary Public' . M

                  %r cm* w.-w Er;t.:4. un CERTIFICATE OF SIRVICE
                        -I hereby certify that I have this day served the foregoing dccument upon each person designated en the efficial service list compiled by the Secretary in this proceeding in accordance with the requirements of 51.17 of the Rules of Practice and Precedura.                                                  .

Dated at Washingten, D. C. this 4th day of August , 19]. h.tt , N 2 [2//

                                                                          'ei

[ James K. ' ell Of Counsel For: Mississippi ?cwer & Light Cc=pany

      '5hf           O          'fGTf?S(fGf6                                                       FEGEBEddED FJR FRGEEEEE!

RICH ARD M WESSTER.JR. PCST CFrtCE ACE SAC CuRKs3 ALE, MISsisSIPPt 386 f 4 M A v C,4 October 18, 1977 - Mr. Donald C. Lutken Mississippi Power rs Light Company P. O. Box 1640 Jackson, Mississippi 39205

Dear Mr. Lutken:

This will ecnfirm our meeting with you and your staff scheduled for October 26 in Jackson, and attempt to specify more precisely what Clarksdale seeks to acecmplish at that meeting, as you suggest ir. your letter of August 19. I share your view that we, as reasonable people, should be able to work out a mutually benedcial arrangement to the end that all of our State might have an adequate power supply at the lowest possible cost without having to resort to litigation. As we have noted, the current fuel situatien makes the Clarksdale generation capacity more useful for peaking and reserve capacity and energy production than for the base load energy production it now serves in part in meeting all of the City's loads. We note, in this respect, that Clarksdale is capable of providing energy at a substantially less expensive rate than the peaking energy costs you have shown in your last statements, and thus it would seem that the use of the Cig generating units in this peaking fashion would be desirable for your customers or de customers of other entities in Mississippi and the mid-Sout area as well. On the other hand, it also seems clear that de MPEL wholesale rate is prontable to ycu, would be a desirable source of base load. capacity and energy for te City, and would mesh well with the City's own plant to serve the needs of Clarksdale. Because of the vagaries of the fuel market, we both would seem to have something the other could predtably use--we have relatively ef.Scient and low cost peaking and reserve capacity excess to our needs, and you seem to have relatively ef5cient base load capacity excess to your needs. We prepcse $e obvious " swap" or carn-around sale. In any event, we are prepared, and wish, M E?* 8V W J8 JAuts. c a. .. iCMS

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Mr. Donald C. Lutken Page 2 October 18, 1977 to purchase power under your MW 15 rate presently on fPe at the FERC in the amount of 19 to 20 megawatts of annual peak demand. We suggest that, in order to assist your planning personnel, we buy under your filed tariff, with (dequate notice period for change or cancellation (one year). We would, of course, give you the same notice and cancellation provision on the peaking and reserve capacity you might buy from us.1/ It may be that your system would not wish to purchase all of the peaking capacity which would be excess to our needs. In order to give us the opportunity to dispose of that capacity to those who might need it, and also, frankly, to give us the opportunity to plan for our future power supply in such a manner as to best protect the people of Clarksdale, we request that the Middle South System, which we understand operates what is in essence a single transmission system, file a " postage stamp" transmission tanff that would enable us to work with whatever other entities may wish to join us for the benefit of the entire middle South area. Obviously, we cannot work out any arrangements of this nature before such a transmission rate is available , and since we understand that you are willing to file a transmission rate, we are sure that you will not wish to put us in a ' chicken or egg" situation. As to what your letter indicates may be a " difficult" prcblem, we have examined our files , and find no evidence therein that MP&L has ever made the offer of Grand Gulf participation to Clarksdale which we have understocd you to have promised the NRC. While we understand that there was no restriction placed upon the time within which MP&L was required to make such an offer, we would assume that you would wish to try to tie down these matters now rather than wait until the plant was ccmplete er nearly ccmplete. We would, of course, be pleased to have If Our engineers advise that on a conservative basis we have a minimum of 54 MW of dependable capacity (net) available to meet our summer peak of 32.5 MW. Assuming 25% reserves, dis peak would require 40.6 MW of capacity , thus indi-cating an excess of more dan 13 MW. If we purchase 20 MW of capacity and energy under ycur MW-15 schedule, dis would free an additional 25 MW of de City's capacity for a total of 38 MW. Our engineers have suggested dat SIS per h"# year ($1.50 per KW month) would be expected to be an attractive rate to others. Our current fuel ecsts are $1.33 per 3DISTU for 46 cil and $2.73 per 3D13TU for 42 oil. I believe dat the specific characteristics cf our units are known to you, but will be pleased to furnish additional data if requested.

Mr. Donald C . Lutken Page 3 October 18, 1977 our engineers discuss your projected coal units, but we do wish to formally request as well that an offer of participation in the Grand Gulf units in an amount of at least 10 MW be made to Clarksdale. Our estimate indicates that we could well use at least that amount. This represents a conservative evaluation of a fair share allocation to us from those units, and we understand that MP&L may be preparing to offer some of these units to others. Finally, we would like to inquire whether anything in the MP&L tariff or other centracts would preclude us from offering some of our valuable peaking and reserve capacity (and energy) currently excess to our needs to other systems interconnected with MP&L--either your affiliated companies or the non-'f'm.,ted Middle South customers who we understand are now seeking to assist you in providing for their power supply in the future. If nothing pre-cludes us from making such an offering, do your contracts or tariffs preclude these custcmers from accepting and purchasing such capacity and energy? I note that we are allin the Southwest Power Pool area, and thus that there should be no technicalimpediment to this sort of operatien, just as the Southwest Power Pool seems adequately to handle the TVA-SCEC seasonal exchange. I hope that this letter will assist in expediting our discussion on the 26th. We 1cck forward with pleasure to a productive discussicn. Yours very truly, Richard M. Webster, Jr. Mayor cc: David R. Hunt, Esq. N Robert C. McDiarmid, Esq. Mr. Robert E. 3athen

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Mississippi Pcwer & Light Ccmeanv. ) Docket No. ER77-47S

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The City of Clarksdale, Mississippi ("Clarksdale")

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                                                  .                                               -,     -an Rcher             A. Jablen, Esq.

SPIZGIL & McD .A.O.v.ID 2600 Virginia Avenue, N.W. Washing cn, D. C. 20037 David R. Ecnt, Esq. S ull.:. van , Smith, Etne & 7ickery P.O. Scx 1196 3,

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3' - CCNCLUSICN For the ahove stated reasons, Clarksdale should be - admitced as a party to this docket, if the decket is, for any reason, to remain open. Respectfully submitted,

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Rccer C. McDiarm'd Attorney for the Cicy of Clarksdale, Mississippi

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Rcbert C. .McDiarmid, being first duly placed upon affi.~ation, deposes and says that he is an attorney for the City of Clarksdale,. Mississippi, and that as such he has signed de foregoing " Petition to Interrene" for and en behalf of said party; that he is authcri::ed by the party so to do; that he has read said Petitica and is fa.~iliar with the centents thereof; and that the =atters and things therein set forth are true and correct tc the best of his knowledge, inic:=ation and belief.

                                                                 -  m thf'Y6-Rocert C. McD:.arnu.d Suhscrihed and affirmed te before ne this 20th day of July, 1977.
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v 3rr cn=essc:a -w:,s !=. M. !?M CIRTIFICA"'I CF SIR' IICI I hereby certify that I ha're this day caused :c be ser7ed the foregcing dccu=en: upcn each persen designated en the efficial serrice list cc= piled by the Secretar/ in this preceeding in accordance with the rege. ire =ents cf S1.17 of -le Rules of Practice and Precedure. Cated at Washington, D. C., this 20th day cf w u.3 'f , 32//. S

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t ... .LD n.. _ g... bh O UbGTl2SbGle MMEM ME.EEE! pcs? orrtCE acx 34o RrCHARo M. wEasTER. JR. C' ARKsc AL.E. MISSISSIPPI 38614 40 AT C ft

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September 8,1977

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Mr. Donald C. Lutken, President Mississippi Power & Light Ccmpany P. O . Box 1640 Jackson, Mississippi 39205

Dear Mr. Lutken:

This is in response to your letter of August 18, 1977, in which you express a willingness to meet with us concerning power supply arrangements. I shall have our attorney telephene you to establish a mutually convenient time and place for such a meeting. I hope that agreement can be reached between Mississippi Power & Light Ccmpany and Clarksdale cencerning the matters raised in my July 19, 1977, letter. Ycu state that you are willing to offer joint participation in a preposed coal-fired plant. I sha!! request that cur consulting engineers study the feasibility and desirability of such joint participatien. Howevar, ycur suggesticn shcuid not be to be xclusicn of Clarksdale's possible nuclear participation. My understanding is that the Mississippi Power s Light Ccmpany's Crand Culf Nuclear Ccmmitments state:

                            "Applicznt. . .shall offer an cppcrtunity to participate in the Crand Cutf Nuclear Units and any other nuclear generating unit (s) which they, or either of them, may consider, own and cperate in the State of Mississippi, severally cr jointly, during tne term cf the initial license. . .

Our records do not show that such an offer was made to us, ifI am mistaken in mis regard, I wculd acpreciate your scecifying any offer dat has been made in accordance with ycur license conditions. Your tetter states dat cur interconnecticn rgreement sc".edules amply cover the varicus power supply arrangements" suggested by my July 19 letter. I wcu!d Ycu estimate mat Schedule C pcwer may be in a range cf 5 to 5d per KWH . anticipate dat acprocriate power supply arrangements wcu!d affcrd Clarksdale me cppcrtunity to purchase base ! cad electricity priced at its acpecpriate Mcreover, ycur cost. I know of no reascn why such a sale wcu;d be inappecpriate.

letter appears to preclude even the purchase of wholesale power at established i:ederal Pcwer Ccmmissicn wholesale rates. Clarksdale wculd !!ke to discuss beginning the purchase of ' m oximately 19.5 MW frem Mississippi Power & Light. I hope that the detal of such purchase, including the commencement dat , can be arranged at cur meeting. I have requested that our censulting engineers, R. W. Beck & Associates, respond to your request for cost information and power availability asscciated v itn the sale of excess capacity by Clarkst; ale. I have further re-quested that th_ey supply you with any additional 1-formaticn that you may require corsarning transmissicn availability. However, Clarksdale's request is for a filed transmissicn rate which wculd give us access to available power Such rate is necessary supply scurces and markets that may become available. to afford us opportunity to take advantage of power supply cr sale opper-tunities as they may occur. Again, I hcpe that necessary agreements can be I am looking forward reached to the benefit of customers of both our systems. to meeting with you tcward this end. Y rs very truly, .

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                                               -   Richard M. Webster, .!r.

Mayor RMW:pm cc: Mr. David R. Hunt Mr. Robert C. McDiarmid Mr. Rcbert 5. Sathen

p p. ct G t - e ri-IN: . MISSISSIPPI POWER S. LIGHT COMPANY

                    =                             Helping Suild Mississippi P. O. S O X 18 4 0. J A C K S O N. MIS SIS SIP PI 39205
         =cru g c;y,u m "                                                January 17, 1977 Mr. Rchert E. 3athen, Manager
                                                                           / h*4 Criando Regional Office R. W. Beck and Associates Pest Office Sox 6817 g g#
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Criando, Flcrida 32803 %. 4t., Cear Mr. 3athen: Pursuant to your request of Dece=ber 8, 1976, we are attaching the fcilewing docu=ents fer your use in =aking a preli=inary investigation of the pcwer supply alternatives for the =unicipal electric systes of the City of Clarksdale:

1. A copy of the testi=ony and exhibits filed by the Cc=pany with the Federal Pcwer Cc-miasien on July 30, 1976 in support of its prepcsed increase in wholesale rates, t=gether with our 1975 Annual Report to Stockholders.

2. A copy of our reports en Federal Pcwer C ==issien For=s 1 and 12 fer the years 1974 and 1975.

3. A copy of the C =pany's Pr:spectus dated August 26, 1975 issued in cennection with the effering of $25,C00,C00 of First Mertgage Sends , our last security offering.

4. A copy of the license cemitment made by de Cc=pany as a cendi-t:.cn of license fer the censtructica pe._.it and the operating license en the Grand Gulf Nuclear units. (This is in the form of a letter of transmittal, dated May 22, 1973, to Mr. Thc=as E.

Kauper, Assistant Atterney General and the policy ce=mit=ents of our C =pany, dated May 22, 19 73, to be appended as license cencitiens in this =atter.) In response to the fifth item of infer =atica ycu have requested, cur = cst recent esti= ate is that the Grand Gulf Nuclear units will ecst a total of S1,907,900,000 to censt:tuct. This is exclusive of the cests cf acquiring nuclear fuel. O.e first unit is expected to be ce=pleted in 1960 and the second unit in 19 84. 2.e c st of fuel and the operatien and "intenance expenses expected are net available at this time. Because of the long lead time and the many un-=i-i-s inherent with nuclear plants ycur guess, based upcn indust:7-wide experience, wculd prehably be as gecd as curs.

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                                 **!SSISSIPPI POWER & LIGHT COMPANY Mr. Rchert E 3athen                           2                    January 17, 1977 Responsive to ycur sixth and seventh inquirf, the Cc=pany does expect to f ully comply with the Policy Cc=mit=ents which it has =ade and which are set forth in the license for the Grand Gulf Units. Item 4 of the appendage to that          -

license addresses this matter. In the absence of a specific request by the City - of Clarksdale cencerning the amount of pcwer desired, the point of delivery and service characteristics it is difficult to quote terms and conditices. If you would like us to qucte terms and cenditiens fer one or more alternate propcsals we would be pleased to do so. Regarding item eight of your inquirf, the Cc=pany has not developed any formal calculations er ccst cf serrice studies in suppcrt of an interconnectica agree =ent with the City of Clarksdale. Since the sa=e Schedules are available to Clarksdale as we have filed in connecticn with the proposed interconnecticn agree =ent with the City of Greenwcod, a ecpy of our Greenweed filing =ade with the Federal Pcwer Cc=missien is attached. Ole letter of transmittal sets cut the manner in which these charges were cenveived. A deficiency letter received frem the Federal Pcwer Cc=missicn regarding this filing and our respense is enciesed for your further infor=ation. As ycu are aware, cur wholesale rate filing with the Federal Pcwer Cec = tis-sien was =ade for service to individual named custc=ers who have been served by our Cc=pany in the past. O: s they have been included in the Cc=pany's lead projections beth past and future. O.e Ccmpany would not propese to ser te any new custc=ers en this sa=e basis. Sin e1 , l

C' : jis cc: Mr. Richard M. *4ebster, Mayer City of Clarksdale Post Office Sex 940 Clarksdale, MS 38614

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                   '           H MISSISSIPPI POWER & LIGHT COMPANY
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Helping Build Mississippi N# A P. O. S O X 16 4 0. J A C K S O N , M I S SI S S I P P I 3 S 2 0 5

ce.4e c unwe August 18, 1977 Honorable Richard M. Webster, Jr Mayor, City of Clarksdale Post Office Box 940 Clarksdale, Mississippi 38614

Dear Mayor Webster:

In your July 19, 1977, letter you asked us to respond to several questions to enable you to evaluate recommendations made by your engineering consultants, R. W. Beck and Associates, and your legal censultants, Spiegel & McDiarmid, regarding ways in which the City of Clarksdale might minimi:e the cost of electric pcwer and energy to the citiz2ns of Clarksdale. Your letter states that your censultanes have suggested that it should be possible to work out a more econcmical program to meet the City's energy needs, and have suggested that you meet with us to discuss several alternative approaches to your problems. We are willing to meet with you at a mutually ccnvenient time and will be glad to assist you in any possible way which wculd not inter-fere with achieving our pr d -a f goal o# ""'#41'i g our franchise and contractual re:7ensibilities to our present retail and whcie-sale custcmers. Our responses to your questions are as follows:

1. We are surprised that the city of Clarksdale is not aware of conditions surrounding the right to participate in the Grand Gulf Nuclear Unit. The facts show that Mississippi Power & Light Company has been attempting to negotiate intercen-noctions and energy supply arrangements with the City of Clarksdale since 1964. The following summary of these negotiations since t%4 waa ine-1 arina in blin an t L-Lnu:L i n t~n nnation nupplind lay our Company in connection with its application for a Construction 4~ # ~- the Grand Gulf Nuclear Station:

Pe "Clarksdale In the latter part of 1964 MP&L representatives discussed an interconnection with the City of Clarksdale en the folicwing basis:

1. The City wculd provide for intercennecuien an its expense.

MISSISSIPPI POWER & LIGHT COMPANY Page Two

2. Parties would supply emergency service to each other to the full extent of their respective ,

abilities to do so. .

3. MP&L would supply supplementary service and spinning reserves.

4. MP&L would offer off-peak power.

5. The rate for emergency and supplementary power would be 12 mills. Off-peak service would be at 5 mills.

6. There would be an ad]ustment for fuel.

On February 28, 1966, MP&L repeated its offer of March 1964. As an alternative it would lease the power plant and sell the City its entire requirements at wholesale. This offer also included the lease or purchase of Clarksdale's electric system, the amount to be paid to be determined by study. The City indicated no inte:est in either of the above two offers. An attempt was made again in February 1969 without results. In December of that year MP&L proposed an interconnec-tien agreement in the form of Attachment A, hereto. At the request of the City of Clarksdale FPC made a study of MP&L's offer and made a report to the City of Clarkdale. The conclusiens were summari=ed in the report and are shown as Attach =ent 3, hereto. The City was reported to have the proposal under advisement as of Janucry 1972." Clarksdale and other municipal and cooperatively-owned systems were aware of these statements by the Company and of the subsequent ecmmit=ents of Mississippi Power & Light Ccmpany as condi:icns to the censtruction permit issued by the Atemic Energy Ccmmission in connection with the Grand Gulf Statien. In fact, the Ccmpany has been in negotiations continuously with the City of Clarksdale regarding an intercennecticn agreement pric: to and subsequent to the inceptien of the Grand Gulf Project. In ncne of these discussions has Clarksdale indicated that they wished :c purchase a part of the Grand Gulf Nuclear Station or a portien of

t MISSISSIPPI POWER & UGHT CCMPANY Page Three its output, or purchase any other station. Our first indication 1977. of such interest is your letter of July 19, . We quote frcm your petition to intervene in Federal Power Commission Docket No. ER77-478:

                 "This interconnection agreement is an outgrowth        Light of   the Ccm-policy co=mit=ents of Mississippi Power &

pany appended as conditions to the AEC License of its Grand Gulf Nuclear Units 1 and 2 (AEC Cocket Nos. 50-416A and 50-417A)." (NRC) This indicates your awareness of the terms of the AEC From the date of its issuance, there license mentioned above. has been no change in our position. As you are aware, the construction cycle of a nuclear plant is about twelve years, and the Grand Gulf Nuclear Station is more than half complete, time-wise. It was planned to meet loads expected to be suppliedThere by theisMiddle South no way, underSystem within the circum-that completion time frame.that we could have been aware of your interest stances, Thus, until new and could have included your lead in our forecasts. allowing you to participate in this plant at such a late date en any basis which would not be detrimental to the interest of we Ecwever, our customers, wculd be difficult - if not i=possible. are willing to discuss this matter with you further if you desire. Perhaps the better apprcach would be to consider the possibility of supplying your needs temporarily pending the planning intercon-and con-struction of future generating facilities. Our present We are conducting nection agreement provides a schedule for this. a preliminary study regarding the feasibility of building a coal-fired plant in north Mississippi and would be happy to plan for as much capacity as you might desire in this plant. 2. We have recently filed with'rti thei Federal Powar Com-n A.;i==mant e ..vic== minatuu . .n e In t ai mnna.m l.in A.p = = ma n s . schedules for Reserve Capacity, Firm Capacity, Unintentional Energy and Econcmy Energy. We believe that these schedules a= ply cover the varicus power supply arrangements and wouldand permi: the variety of to arrangements your questions sugges allcw you to make the ecmparisons ycu would be sufficient If the City of Clarksdale wishes us to estimate cur ces: wish. to supply various quantities of energy, weI wculd am sure bethat gladyou te do so upon receipt of such specifica:icns.of and operate as a Middle Scuch reccgnize that we are a part and that cur ability Utilities, Inc. integrated power system, to supply wculd be subject to such restraints.

a MISSISSIPPI PCWER & LIGHT CCMPANY Page Four

3. We will be pleased to consider the purchase of .

Clarksdale's excess capacity for peaking purposes or to assist . Clarksdale in the sale of this capacity to other interconnected systems who may be in a position to use it. Perhaps you could furnish us additional information as to the amount of power available and the cost thereof.

4. We will be willing to develop a proposal for transmission service to Clarksdale. It would be helpful if you would give us an idea as to the maximum quantity of power under consideration and the point of interconnection with the Mississippi Power & Light Company transmission system.

5. Our Company does not contemplate receiving any of the output of any presatly scheduled nuclear units of the Middle South System other than the Grand Gulf Nuclear Station.

6. The energy rate for the next few months under Service Schedule C of our Interconnection Agreement could fall in a range between 5C and GC por KWII.

Our Company is ready to meet with you and your advisors at any mutually convenient time to discuss alter.atives which you or your consultants feel should be available tc Clarksdale. Let me assure you that we are anxious to work with you to the end that all of our State might have'an adequate power supply at the lowest possible cost. We are willing to enter into whatever arrangements would benefit you, provided that the te_ s and conditions would not prejudice the rights of our presen,t customer ,

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Yours'trul -

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Donald C.lLutken, PraaIrlent OCL

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                         !   ih MISSISSIPPI POWER & LIGHT COMPANY L                    Helping Build Mississippi C2            P. O. B O X 16 4 0. J A C K S O N. MIS SIS EIP PI 3 9 2 0 5 July 28,1977 ecs3,o,cguwss The Honorable Richard M. Webster, Jr.

Mayor c. City of Clarksdale - P. O. Box 940 Clarksdale, Mississippi 38614 Dear Mayor Webster This will acknowledge receipt of your letter of July 19,1977 suggesting a meeting between representatives of the City of Clarksdale and our Company to discuss the City's desire to reduce the cost of electric power and energy to the citizens of Clarksdale. To this end, you request that we provide you with certain information as raised by the questions 12. your letter. We will be very glad to meet with you at the first oppo rtunity. We are beginning to put together our answers to your questions, and will complete this as rapidly as possible. The absence of some of our people from the city, whose input will be necessary to this project, has delayed us somewhat in gathering the necessary info rmation. Please be assured that we will move forward as rapidly as possible and will be back in touch with you as we develop the necessary information. S' c,erely [ ,

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l L DC L/dbr . k Member Middle Sou:n Utilities System

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R.W. BECX AND ASSOCIATES

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       'itt ~o-       FF-5168 - EP1 -MX                                                December 8,1976 Mr. D. C. Lutken, President Mississippi Power & Light Company                                 5 Ebb             U P. C. Box 1640 Jackson, Mississippi       39205 Dea: Mr. Lutken:

R. W. Beck and Associates has been engaged by de City of Clarksdale to make a preliminary investigation of the power supply alter-

                      =atives available to the City's electric syste= and possible arrangeme=:s drough which the varicus power supply alternatives might be impleme=ted.

In light of the pla==ed interec==ection between the City of Clarksdale a=d Mississippi Power & Ligh: Cc=pa=y a=d your co- itments as cc=ditions to the co=st nctio= =. e ~it a=d et. erati=-S lice =s es for de Gra=d Gulf Nuclea: Sta:ic=, U=its 1 and 2, all of the alternative power supply a angements the City might ec= sider i=volve MPLL in sc=e m a==e r . For . hat reaso=, c= Cetober 26 I ce= acted Mr. Harry Ped of de law firm of Reid & Pries: with whom I am well acquainted and that you engage c= federal regulatory mat:ers requesting certai= readily available i= formation from the Company. I u=dersta=d Sa: reques: was made to de Cc=pa=y by Mr. Merriman, bis associate, and Mr. Pod has jus: rece=ly i=for=.ed me dat de Cc=pa=y has decided a=y such request should come directly f == =e to you. It would be ex::e=ely helpful and importa= .c de Ci y of Clarksdale if you wculd provide de fcilewing i=fer na:ic=:

1. A ccpy Of your "" g including tes-i. .c=y and e='cibits in your = cst recen: wholesale rate case which is in peccess b e #- -- - e Federal Power Oc==is sics, a=d a ecpy of your lates: Report : Stockholders f =ct i=cluded as par:

of your filing.

 .e hir. D. C. Lutke=, President                                               December 8,1976 Page 2

2. Copies of the Company s Form 1 and Form 12 reports to 2

the Federal Power Co==ission for the years 1974 and 1975.

3. A copy of the latest prospectus issued by the Company is con =ection with the sale of its s ecurities, i. e. , bonds, co==on stock, or preferred stock.

4. A copy of the license co==itments =ade by the Compa=y as a condition of lice =se for the construction permit a=d the operati=g license on the Grand Gulf nuclear u=its.

5. The most recent estimates of de cost of construction, estimated date of completion, fuel cos: and operation a=d mainte=ance costs on the Grand Gulf nuclear u=its.

6. .A.= answer as to wheder the Company is we g to have de City of Clarksdale participate is some reasonable share of de Grand Gulf nuclear u=its by either a direct ownership interest in such u=its or by contractual right to purchase a portion of the output at the cost dereof.

7. As suming a= affirmative answer to 6 above, what would be the terms and conditions and cost of transmission service as sociated w.th such a= ownership i=terest or pu chase?

S. Sa=ple calculations and any cost of service studies you

                           =ay have i= support of de ra:e schedules or for ulas embodied in de i=:erco==ection agreement wid de City of Clarkscale for various types of power exchange services, particularly firm capacity and energy, under service schedule "C".

Your cooperatio= in supplyi=g the above i= formation is vitally i porta = to the Ci:y of Clarksdale for it to properly evaluate its power supply alterna:ives. I= ligh: ci de :ime ha: has already elapsed, your prc=p: response will be greatly apprecia:ed. Very :ruly yours,

                                                        . . . <W.     : C .r .1.siD.
                                                                  - - .          .   .S e..eO C~.1.
                                                                                                .   . .:.~c fMRober: I. 3athen
                                                                                         . AA RIS/ebf cc -Iarry co th Iscuire Af a=ager, Criandc Regional Cffic e

r RECElVED itzj o HIGrkSdGf6 I' " NERMEE ER EEEEEE! RICH ARo M. WEBSTER JR

c. m_ c .mmo . ., ..,= . . ...

wavce C'.ARKsoALE.

                                                                                          .               MISSISSIPPf 3S611 September 8,1978                     p., ,     U"'^
                                                                                               . ,         p : '. s
                                                                                               .4 Mr. Frank S. York, Jr.

Comptroller and Secretary Mississippi Power f, Light Company P. O. Box 1640 Jackson, Mississippi 39205 j l [

Dear Mr. York:

g T 4 r,k, - f *g This will request, in acccedance with your oral agreement with Mr. Saffer of R. W. Beck and Associates, the City's consultants, that MPSL provide transmission under your filed service schedule for 14 megawatts of ,, capacity to be delivered to the City of Clarksdale. The City requests this transmission for a unit purchase which will be delivered to your 500 Kv intercennection with Culf States Utilities. This request is made with the understanding that the implementation of this transmission service is condi-tiened upon formal approval of the sales centract with the supplying entity and the making of proper arrangements with Culf States Utilities for use of their facilities. Confirmation of these matters can be made price to the end of the ten (10) day notice period, in acccedance with provisions covering losses in ycur filed schedule, 14.42 megawatts will be delivered to ycu over ycur.tle with Culf States so that 14.0 megawatts will be delivered to the City. We understand that your agreement to previde us with immediate transmission service will preserve cur rights to request a minimal suspension from the date of filing and to seek refunds of any amcunts determined to be excessive by the FERC, but we have undertaken not to centend that there is any illegality in your providing the immediate transmission service before acceptance by the FERC. Ycu have advised Mr. Saffer, as we understand it, that ycu will insist ucen the ten (10) day notice prevision set cut for interruptible service in Paragra=h 50.22 of your filed tariff but that after twenty (20) days of such service, or thirty (30) days fecm receipt of notice, whichever is earlier, it will be possible to change this service to firm service under 'aragracn 50.21. Orcinarily, of course, we wculd have wished to begin this service immediately, as of the first of the month cf Sectember. Since ycur desire to insist ucen the ten day notice pericd will postcone cur acility to utilize the power and energy involved until mid-month, we wculd assume that you wculd agree eitner to pro-rate the transmissicn rate for the month of Sectemcer er to put the billing mcnth for transmissicn en a basis wnicn begins en the first day of transmis-sien . We wculd suggest me former solut!cn as 'he easiest. We wcuid also

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      ~

Mr. Frank S . York, J r. Page Two September 8,1978 take advantage of your offer to permit conversion of this service to firm transmission as of the first day of the earliest possible billing month in which this can be acccmplished. We also anticipate requesting that this transmission service con-tract be assigned to the Municipal Energy Agency of Mississippi, ai on appro-priate time. You will recognize, of course, that Clarksdale does not abandon its request for permission to purchase wholesale power directly from MPSL. . 4 We have not heard further frcm your attorneys with respect to our inquiry about your obligation to offer the Mississippi Cities an ownership interest , in Crand Culf Nuclear Units. We would request that you advise us whether you . have determined that no offer will be made or whether ycu anticipate an offer, and if so, when it ceuid be expected. Yours very truly, A.d Richard M. Webster, Jr. Mayor

fh O NGdSdGf9 FRGEREMMED FGB FRGEBEEE! POST OFMCE SOE 9 4 (s).p)ater and w(?.g lst G wepartment Septeter 16,1978 c!.AR KSDALE. MISSISSIPPI 3 8 614 Mr. Tc:n Da'7 as P2:ager, Sys e::s Opern~4cns and Cctst='mtien Mississippi Pcm & Light rgony . P.O. Ecx 1640 Jackscn, Mississippi 39205 Re: Sched21e fcr T-a..s::=.ssica Serv 4.ca fer recrinder of Sept. ,1978

Dear Mr. Pallan:

Attached is an 1 curly schedule for t W *sien serrice stas.J:g as of 8:00 A.M. Septe&er 20,1978. This schecule has been devised to :neet ycur request for increcents of stole rega: mets and as a c..ged to "n"-a the swing as ::uch as possible. k'e intend to adjust with the su plying entity twice daily and this schadnla is daeM to q,14 e MG durirg each daily transac~len. If ycu need any further clarific'"cn er o.:7 s/df-dcnal infc=acien, please let ne k=cw. I a:s formrding a ccpy of this letter and sMde to Mr. J.E. 3rabsten at Middle Scuch UH14 l es Opera **cns Center at Pine Bluff as yuz regmsted. Please let :n knew as seen as pcssible if ycu need-d her infc=:ntica. S h arely, fA - fn . /) F2:: vin L. Ca._ cay Assistant Superint > ant

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                                                                                                                                                                                                         .s MAY 2 41973 J.pz-Marcus A. Rouden, Escuirc-                                                                                            '

7_;' y E Ascociate General Counsel - N U.S. Atomic Energy Cc==ission N Washington, D. C. 20445 [jmky Re: Mississioni ?cuer & Lieht Ceccanv Grand ' ' " ' ' Gulf Nucl' ear Station Units 1 h 2' AEC Decket Mos. 50-416A and 50-417A; Dcoartment of Justica File 60-415-57

Dear Mr. Ecuden:

You have recucated siens or .eection 103

                                                                     . - c:- t.gc        our advice pursucne to the.provi-
                                                                                       .. a. tenic ~,ncrgy Act or. .a:,                                         . .,. , as onended by _3..L. 91-200, in                           _,

regarc. to the above-captioned L application.

                         ..d,ississ1Dc1 .ucuer anu _a..gn. e Company (n.

e. pol.ican n) ,n s aD.D.11cc 207 a Const! Ction Ue: Cit fer it0 Granc

                                                                                                .                                                     Gi,_ NucicOr
                                                                       .< g :- . The                 facilit/             uill     be located in
             ,..Sta tion, Units 1 and 2.

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u Caieration cf uni: cne has baan scheduled for July 1979> uith unit tuo follouing in January 1981. ~ ( P

                                                                                                                                                                             /'             ,

Acclicent  ;

                                                                                                                                                                                                   .e Mississippi ?cuer and 1.ight has generation. trans=ission o -.,.d d.i.c ~u '- b u + -d ..- . e                  ' .4 1.4 .. -4 es . . c . ' d # . .,

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i. -- et-41 u.'

s ,. '...1..e. vice to 185 cc = unities and uholesale cicctric ce.vice to six Icentec. cunici ali:ies and eiche :".:ral electric ecoceratives

                                                   -he ucctern P.al:. c:. the State c:. Miss ss-pp:..
                                                                                                                                                                                                   . h-Applicant scr /cs se:.e 240,573 custccers thrcuc;h lines cen-s 4 .e4- ng                ,u,4     ,o.,no / .,.,,c.
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_ m- .. .. m < o . # e n , n..' d --i e - @* tribution lines 209 c:ble ailes of uncerprcund cistribution .; b lines, and 2270 ..iles of 7.15 ~C or above transmicsica lines . f' For the yacr endin;;; Cctober, - - 31, 1972, Applicant P.ed tctal si energy s0ics or / . / g,-, 3.i c , v:: . e

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generated by the 1622 M7 available dependable capacity 1/ ' provided by its four ther=ci generating plants. 2,/ ~ i Interconnection and Cecrdination with Others - I Applicant is an operating subsidiary of Middle Scuch  !

                     ' Utilities, Inc., a registered holding ce=pany under the                                        4 Public Utility F.olding Cc=pany Act.                 The other operating                      F subsidiaries of the Middle South Systc= are: Aricansas                                        f Power and Light Co. ; Louisiana Feuer and Light C.o. ; New                                    f Orleans Public Service, Inc. ; and Arkansas-Missouri Pcuer                                    L Co. In 1972 the ocak load for the Middle South System uns                                 b 8,322 M1, and it had a total dependable capacity 'o f 9,727                                   E M:1, including 1,419 M1 of fir = power available under contracts.                             y From an operational standpoint, each subsidiary ec=prising                                    2 the Middle South Syste= constitutes a ec=ponent of a totally                                   '
               ~

integrated bulk pcuer systa=. A central dispatcher controls all the facilities in the Middle Scuch Syste= and frc= =ccent to =c=ent satisfies the Systc='s de=and by supplying energy available on the Middle South Syste= on the basis of incrc-mental generation and cransmission cost. Generating reserve require =ents are established for the Syste= as a uhole, and reserves are available to each subsidiary without restriction f to =cet any contingency on the Middle Scuth Systa=. Ccepre-  !' hensive coordinatec planning of sencration, trans=issien and interconnection of the integrated systc= with it large load enables cach subsidiary to achieve the benefit of ecenc=ics

              -        of neale. The principal mechanis= used is the staggered e '~          construction of generation facilities uith conccmitant short-ter= sales of surplus pcuer and purchases of defi-ciency. power.                                                                   .

Applicant and its affiliates (excepting Arkansas-Hissouri Power Ccmpany), together uith seven other privately-ouned public utilities cparating in scuch central United States have forced the South Cancral Electric Cc=panies fer pur;cscs of entering into =utually beneficial culk pouer arrangements i i 1/ In 1972' Applicant cuned a generatien capacity of 1,785 R.1 of which 163 Mf's ucre cc==itted to other affiliates in ( s' order to cbtain the separata lead / capacity ratio required y to bc =aintained by each operating ec=pany in the Middle g South Systen. . p x 2/ Applicant has no hyd:celectric facilitics; Grand Gulf y Gill be its first nuclear generation. .e .- . p

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.- l uith the Tennessee Valley Authcrity. This contrcctual c range- I cent provides f er coordinated plcnning, j oint stucies en lead gru.eth and location ci future fccilities, and coordinated l

             =aintenancc schaculec. Under the centreet becucen TVA and                                               i the association =c=bers, schedules arc crovided for ecenc=v
                                                                  ~

energy sales, fir = pcuer purchaces , c=crgency services and'  ; deferred diversity cacccity. The cost incertant item is i the exchange of 1500 bl of' capacity made available by the  % seasonal diversity of load. Under the exchange the Middle t South Syste= receives 455 MT frc= TVA during its su==er i; peak, of which Applicant cakes 92 LM. .. [f , c Applicant is a me=ber of the Southwest Power ?ocl, a 3 g regional coordinating and planning group (nce an operating a pool). The Southwest Pcuer Pool is cc=pesed of 31 electrical ,

• systc=s, including invester-cuned ce= panics, rural electric cooperatives and =unicipal sys te=s . .

In addition te its direct interconnection with TVA Applicant is directly interconnected with Mississippi Pewer Cc=pany. 3/ Mississippi Peuer Cc=pany is an cperating sub-sidiary or The Southern Cc=peny, a registered public utility , holdineo ec=pcny. 6/ This direct intercennection is =ain- I tained pursuant to a re_3lacility arrange =ent cecreen the j Southern Syste= (The Southern Cc=pany) and the Middle Scuch Syste=. . l Structure of the Eulk Foner "crket in Mississiroi f

      ;, s I

In terms of bulk pcuer supply, the Secte of Mississippi

              =ay be divided roughly into three areas: the northeast quarter served by TVA, the scucherst c.uarter served by Mississioni ?cuar Ccaceny and South Mississicci Electric Power As' socia:ica, and the western half principcily served
                           ~

by Applicant. TVA sells bulk pcuer to a nuccer or inccpenc-ent distributing rural electric ccoperatives in northesst , 1 1

                                                                                                                )

3/ For the primary purpose of facilitating the exchange of , power betueen TVA and Gulf Sectes Utilitics. Inc., Applicant g has a direct 500 KV interconnectica uith Gulf States. u. 4/ For a detailed discussion of the Scuchern Cc=pany Systa= Q 16, 19 y

               ~t lease refer te cur letter of advice of Aucgst' he                                  Alabc=a;gg?cue act, and our letter cf advice of August 2, 1972 cn the Georgia                                     C Pcwer Cc=peny, AEC Dechat No. 50-366.                              . . , _ ,

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Mis sis sippi. (The TVA Revenue Send Act of 1959, 73 Stat. I 2S0, 15 U.S.C. 3315-4 prchibits TVA frem selling or inter-changing pcuer uith any ciccerical system to uhich it did l not provide services pricr to enactment of the Act.) . i

                                     ~

Mississippi ?cuer Cc=pany supplies both 5:holesale and l retail custc=crs in scuchcas t Mississicci. In 1972 it had

                      ~

a generating capacity of 1,030 MN uitha peak lead of 966 E P 107. ei. F The generation and transcission facilities of South Mississiooi Electric Feuer Associatica (SMEPA) are located fe essentially in scucheastern Mississippi, although sece cransmission lines are within sete of the eastern = cst b( A countics of Mississippi served by Applicant. SEEFA was - organized in 1941 by a number of distribution rural electric cooperatives in South Mississippi and adja-aa~ T c_uisiana to provice a more reliable anc. ccenc=le scurce c: pener. SMEPA uas not able to begin operaticn until 1971, and its members non consist of sin rural electric cooperatives located in south Mississippi. Three ce=bers of SMEFA, Magnolia E7A, Scuchucst Mississippi EPA and Southern Fine EPA, are located in scuchuest Mississippi uhich Applicant serves. Applicant continues to supply pouer cc these dis- , tributing ccchers of CHEFA in Applicant's area, although T SMEPA acts as a purchasing agent. l There are three =unicipall d generation and dis-

            . c' tribution systecs in Acolican:'y-cune   ~'

s area. Greenuced has a total gener' acing capacity of 67 L'i, Clarksdale has dS M7 and Ya:co City has 31.5 h*J. Caly Yance City has an inter-connection uith Acc.licant> under uhich it purchases ecanemy Both Yazoo City and Greent: cod are and c=crgency pcuer. connected to adjacent rural electric ccepcratives to unca each wholesales a small accent ci pcuer. Clarksdale operates ccepletely isolatec. */ Results of Antitrust Revicu As noted above, Applicant is the dc=inant ;ulk pcuer  ;- supplier in Western Mississippi and cuns and centrols y virtually all the transcissica f acili:ics in the area. p In the ccurse of cur entitrust revieu, certain allegations

                                 ~

y ucro rcccived, the gencr:1 i= pert cf which uns that Appli- g[g cant has misusec its =encpely positi:n in generat.jen anc , transcissica to restrain the ccmpetitiva cpportunities c: 73 smaller sys:c=s in Western Mississippi. For its parr, g: 2 t

                                                                 -                                         l 1

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                                                                                                                   +

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                                               .                                                                   I Applic.nt denied that its pelicies and practices have been or arc inCCnsicCOnt *'ith the antitr.:s t lO t.'s .           HCwever, in                                f order to clicinate any questions as to the policies that it intends to follcu during the period of :he Grand Gulf license,                                         ,

Applicant indicatec its villingness to formalize these policies and to have the= included as conditiens to the license. As a result of discussions with the Department, ( e these policies have been articulated and are set out in the D attach =ent to the letter of Aeolicant's president to the Ie Department, dated May 22, 197Y, which is attached hereto. E 1: In its cc==it=cnts, Applicant affii=.s that it will =ake '

                                                                                                            'd, the follcuinz type of arranec=ents uith other bulk power
                            ~

suppliers in i.festern Mississippi: access to the Grand Gulf Nuclear Units ; coordination and sharing of res.crves ; uni.t power sales and purchases uhich would reduce ecsts for the partics: and trans=ission services over its facilitics. In our opinion, these should provide competitors of Applicant with co=cetitive, alternctive bulk pouer supply sources and substantially ell.=inate the grounds en which cc= plaints =ade .  ; to the Decart=ent by the s= aller systems were based. On . the stren'gth of tha'se policy ce==it=cncs, and uith the L, expectation that the Cec =issien will include thc= as condi- i tions to the license, ne conclude th t an antitrust hearin:;; will not be necessary with respect to the instant application.

        ,@                                        Sincerely ycurs, e
                                                     '74[A;f .       M                          -

j THO:'AS E. IU!UE2 5 Assistant Attorney General Antitrust Division lt B

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                      '                  B O X 16 4 0. J A C K S O N. MISSISSIPPI 39205                                              t i

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I May 22, 1973  ! i k. Mr. Thomas E. Kauper ' I? ' Assistant Attorney General . Antitrust Division I F U. S. Department of Justice ' f Washington,_ D. C. 20530 .- f _J [

Dear Mr. Kauper:

                                                                                                                                  's Re:       Mississippi Power & Light Company (Applicant)

Grand Gulf Muclear Station, Units 1 and 2 g AEC Docke: Numbers 50-416A and 50-417A Decartment of Justice E'ile 60-415-57 Attached to this letter are co=itments of Mississippi power 1

               & Light Ccmpany, the applicant in the above styled and numbered cause, which we agree may be included as conditions                                                      i 1

to the construction permit and operating license to be issued by the Atomic Energy Cc=ission in connection with the above referenced application. These cc=itments repre-sent a statement of policy for the future direction of

           . Mississippi Pcuer & Light Ccapany and are made wich the
         '     understanding that the Department cf Justice will recommend to the Atomic Energy Cc=ission that no antitrust hearing will be required.                                                                                 . . ,

The ce=itments herein made are subject to the following . understandings: (1) Applicant does not intend by these cc=mitments to.,. become a co=on carrier. .. (2) Applicant reserves all rights and protection afforded it by law with respect to retail distribution c f - electricity in those areas in Western Mississippi for 6 which it holds a certificate of public convenience  ?

-                        and necessity .frc= the Mississippi Public Service                                                    h re Commissicn.                                                                                           p
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                               ~   ~

Mem::er Middle Scu:h Utilitics Sys:cm

. Mr. Themas E. ..auper ..ay 22, 1973 g 1 c, if (3) A major c.ortion of Western Mississi.cci constitutes I_3 ~ the exclusive retail service area of a number of L; distributing electric power associations and municipal distributors and nothing contained here-(Q in should be construed to change.or disturb in any k y respect..t-he retail service areas' of other entities. g.. 2 (4) Mississippi Power & Light Company and the Middle ' South System have a policy, which is expecced to continue, of locating new generating capacity gen- , erally in accordance with the demand in the respective regions served by operating companies making up the overall system. 1 (5) All of the understand ngs anc commitments of the  ; applicant are centained in the co=mitments herein f made and this cover letter. ' (6) None of the commitments herein made shall be con-strued as a waiver by applicant of its rights to contest schether or not a future faccual situation

   .!>           is inconsistent with the commitments herein mace.

Sincerely vours, , t a-4*,! t

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                                                                                                              .~.,

Donald C. Lutken c President Ed

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I I I r f Por--T CY C C'.^. P_?_'. c_.'u S Ce '. IIS S T. c. .S T_=. . _ D_ C"n '., - I LIGliT COMPA"Y TO SE AFFE"DED AS CCNDITIONS TO GM"D GUL7 "UCLE.u UNITS #1 AND #2 AEC  !

                .               LICENSE AEC DCCKET SCS. 50-616A & 50-417A                                                   L r

May 22, 1973 p

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1. As used herein: y (F

(a) " Western Mississippi Area" means the counties of: U Walthall, Laurence, Jefferson Davis, Covington, Si=pson ' N Smith, Scott, Leake, Attala, Choctau, Montgccerv, Grenada' < Yalobusha, Fanola, Tate, DeSoto, Pike, Amice, W'ilkinson' Hinds Adams, Franklin, Lincoln, Ccpish, Jefferson, Claiborne, Rankin, Madison, Yanco, Warren Issacuena, Sharkey, Hucchreys' ' Holmes, Carroll, Laflore, Sunficuer, Ucchington, Bolivar, Talla,na tchic , Cuitman, Coahc=a, and Tunica. An entity shall be deemed to be in the "'.lestern Mississicci Arca" if it has electric poner generation, transmission er dis tributica facili-tres locatec in uhole or in part in the above-described area. (b) " Bulk Pouer" means the electric power, and any attendant cncrgy, supplied er made available at transmis-sion or subtransmission voltage by one entity to.another.

        ?                  (c)       " Entity" means person, a private or public corpora-tion, a municipality, a cooperative, an association, a joint stcck asscciation or business trust cuning, operating or proposing to cun er operate ecuipment or facilities for the generatica, trans=icsien er distributien of clectricity, provided that except for cunicipalitics or rural electric cooperative, 7' entity" is restricted to those which are or will be pu~clic utilitics under the laus of the state in which the entity transacts or will transact business er under                                         ,

the Federal Feuer Act, and are or will be providing electric . .. .. . service under a contract or rate senccute en :11e ul..-n and subject to the regulation of a state reguhtery ec==ission . E' or the Federal ?cuer Cc= mission. C~ (d) " Cost" means any cperating and maintenance expensas 9 involved together with any cunership cects which are reasen- (.j ably alleca'cle to the transacticn consistent c'tn pcuer y pooling oractices (ehere applica'le). o "a value shall be Q included' fer locs of revenues frca sale of pcuer at whole- @ sale er retail by one party to a customer which another 3 party micht otheruise serve. Cost shallThe include a ressen- {" able retGrn on Applicant's invest =ent. sale of a percien , of the capacity of : generating unit thcIl be upon the basis 8 of a rate that will raccvar cc the sclier the pro rata part

                        .     .                                                                                   ..N

6 m , c: the ftxec ccsts and cperat:.ng and maintenance expenses et. Y, the unit, provided that, in circumstances in unich Applicant and one or r. ore entities in the '..'es tern Mississippi Area tche l 3 an undivided interest in a unit in fee, cons truction cos ts and operation and maintenance enpenses shall be paid pre rata. 2; b v

2. (a) Applicant shall intercennect uith and coordinate

[f_ reserves by = cans of the sale and purchase of c=crgency ,t and/or scheduled =aintenance bulk pcuer uith any entity (ies) { in the Western Mississippi Area engaging in or propcsing to - engage i'n electric bulk pouer supply en terms that will pro- ]i vide for Applicant's costs in connection therewith and allou ' the other party (ies) full access to the benefits of reserve coordination. .. . (b) E=crgency service and/or scheduled =aintenance service to be provided by each party shall be furnished to the fullest encant available frc= the supplying tarcy and desired by the party in need. Applicant and each party (ies) shall provide to the other e=crgency service and/or scheduled maintenance service if and uhen available frc= its can genera-tion and frc= generation of others to the entent it can co so uithout i=pciring service to its custc=crs including other electric sys te=s to uhc= it has firm cc==itments.

    ,,               (c)       Applicant and the other party (ics) to a reserve sharing arrangc=cnt shall frc= dl =c to ti=e jointly estab-lish the minimum reserves to be installed and/or previced under contractual arrange =ents as necessary to =cintain in total a reserve cargin sufficient to provide adecuate reliability of pcuer supply to the interconnected syste=s of the parties.           If Applicant plans its reserve cargin en a pooled basis uith other Micdle Scuch Sys tc= cc= panics,                      I the reserves jointly established hereunder shsil be en the                     ;

same basis. Unless otheryise agreed upen, cinimum reserves j shall be calculated as a percentage of escinated peak loac n responsibility. No party to the arrangement shall be recuired to maintain greater reserves than the percentage #- of its estimated peak load respcasibility which results frc= G the aforesaid calculation, providcc that, if the reserve b

           . requirc=ents of Applicant are increased ever the a= cunt                       P Aoplicant uculd be recuired to maintain uithcut such inter-                    S connecticn, than the other party (ies) shall be recuired to                    E carry er provide for as its (their) reserves the full a= cunt                  6 in kilcuatts of such increase.                                                 y
                                                                                            G-(d)       The parties to such a reserve sharing arrangement shall provide such a= cunts of ready reserve capacity as =cy O

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     .                                                                                                                                                                                                           t be adecuate to avoid the inocsition of unreasonable demands                    ~

en thc 'other in mec ting the normal contingencies of cpera-  ! etng its system. ..towev e r , in no circums:ances son,_, t,ne .  !

                                                                                                                                                  -                                                              t ready reserve recuirement excee,J tw..e insta,lec reserve requirement.                                                                                                                                                                             -

(e) Interconnecticns will not 'ce limited to low volt - I - ages when higher voltages are available frca Applicant's L Ins t al,.ac. tact,ities in the area where interccnnection is desired, when the procosed arranzement is found to be tech- - . f e L,o ntr e ,t anc telemetering e n,ically anc. econcmical ce prov ygcc reasible. as requirco ror sam,e and prudent

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                                                     -                                 2 cperation of the interconnected systems.                                                                                                                       . . . . .

E f I (f) Interconnection and coordination agreements shall not embody any restrictive previsions pertaining to i.nter-system cooroination. Good incustry practice as aevelopec in . . rem time to time II non-restrtetive) a . . . ut,,._ satisry the area u. this proviston. i

3. Applicant will sell bulk power at its costs to or purchase bulk ccuer frca any other entity (ies) in the Western Mississippi Arca engaging in or proposing to engage in generation of electric power uhen such transactiens uculd serve to reduce -

the overall costs of neu aiulk ecuer sucolv for itse.1:- cr rcr the other party (ies) to the trhusnctich.'. " This ref ers specifically

    ...     to the opportunity to coorcinate in the plann,ius or neu genera-          ,                . .           ... .                                .                 . .

_ais provision tr.on, transmissten anc relatec rac 11 tics. t shall not be construcc to require Applicant to purcha.se or nell bulk Ocuer 1r it :inds sue.n curenase or sale Inteasto,.e or its cashs in connection with such purchase or sala uculd exceed its benefits therefrem. - (a) appiteant and any successor in tit,e sna.,ti c::cr 4. an opportunity to participate in the Grand Gulf Nuclear Units j and any other nucicar generating unit (s) .rhich they or either s of them, may ccnstruct, own anc coerate in .the State of

                                                                                                                           .     .                                         .       .                       f.

Mississippi, severally or j. oint.ly, curing tcc tcra c: tne pn instant license, er any entension or renewal thereof, Oc . . . . . g& any entity (tes) in the ..estern h,iss'_sstppt area oy ettner a a p

             'rcasona' ale cwnership interest in such units (s), cr by a con-                                                                                                                            g tractual right to purchase a reascnable portion of the cutput                                                                                                                            a of such uni:(s) at the cost therecf if the entity (ics) so                                                                                                                               d elects.                 In connection uith such access, Applicant will also                                                                                                              ?

o::er transmission service as may ce rec.utrec ror celivery E a of such pcuer to sucn entity (Les) on a casts t.nat wait ruity CCmpensate Applicant fcr its Cost.. - .- . . l i 3 '..~

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(b) In the event that curing the term of the instant { license, or any extension or renewal thereof, Applicant j obtains particip:tica in the cunership of or rights to a ( portion of the cutput cf enc or more nuclear generating y

                        ' units constructed, cuned and operated by any affiliate or                                   1   -

subsidiary of the Middle Scuch Utilities System other than E Applicant or by any successar in title to the Grand Gulf } Nuclear Units, Applicant shall exert its best ef obenin participation in such nuclear unit (s) by.any forts to (Les) E entity  ;, in the Western Mississippi Area recuesting such participation 0 on terms no less favorable than the ter=s of Applicant's k* participation therein.

5. (a) Applicant shall facilitate the exchange of bulk power by transmiscica over its transmission facilities

                         .between or aneng tuo or core entitics in the Western Missis-sippi Area uith which it 'is interconnected; and between any such entity (ies) and any entity (ics) engaging in bulk power supply outside the Western Mississippi Area between chosa facilitics Aeolicant's transmission lines and other trans-mission line's' would form a continucus electrical path, pro-vided that (1) pernission to utilize such other transmission lines has been obecined, and (2) the arran;ecents reasonnbly can be accetacdated frca a functional and technical stand-point.       Such tr:nscissica shall be on terns that fully cc= pen-scte Applicant for its cost.            Any entity (ies) recuesting such transmission arrangements shall give reasonable acvance notice of its (their) schedule and recuire=ents. (The fore-going applies to any entity (ies) to uhich Applicant =sy oc interconnected in the future as well as those to uhich it is now intercennected.)                                                 .

(b structio)n picgrac sufficientArnlicant shall' include in capacity transmission its planningas and con-required for the transacticas referred to in subparagraon j (a) of this paragrcph, provided that any entity (ics) in' the Western Mississippi Arca give Applicant sufficient ( 7, advance notice as cay 'ce necessary to acccm=odate its (their) g requirc=ents frc= a functional and technical standpoint and a that such entity (ics) fully ec=pensates Applicant for its ( cost. Applicant shell not be required to construct trens- is mission facilitics uhich vill be of ne de=enstreble present M or future benefit to Applicant. . b h a

6. w Applicant uill sell power for resale to any entity (ics) }

                       .in the Western Mississippi area new engcging in or proposing                               j to engage in retail distribution of electric pcwer.                                        .

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7. The foregoing cenditions shall be implemented in a manner consistant uith the previsions of the Federal Fouer Act and  ?

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e I the Mississippi Public Utilitics Act i t charges or practices in connection therewith are to beof 1956 anc all rates, l s ub;., ce t to the appreval of regu.3 atory agencies having jurl.Sc1Ction OVQr Cd,GO .

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NNl O 'fG2"f2SdGfB FRGEREMMED FUR FEGEEEEE! Pos? CFrtCE sox 340 July 19, 1977 CLAR KsDALE. MississtPP! 38 6f 4 Mr. Donald C. Lucken RLE COPY President Mississippi Power & Light Cc=pany , Re: City of Clarksdale, Mississippi

Dear Mr. Lucken:

Now that the City of C1crksdale's Substation and Interconnection with MPLL has gone into operation, we have examined the City's electrical operations in order to find means to reduce the cost of electric power and energy to the citizens of Clarksdale. We have asked our engineering consultants, R. W. Beck and Associates, and our legal consultants, Spiecel

                    & McDiar=1d, to exantne the City's operations and status in this regard.                                         -

Both consultants have suggested that it should be possible to work out a = ore econo =le program for the City's energy needs, and suggested that we =cet with you to discuss the =eans of acco =odating this end. Consequently, we ' id seek to meet with you, or your designated repre-sentatives, to c. . ss several alternate approaches to the problem which have been suggested. In this connection, we would appreciate your attention to several questions:

1. So far as our records show, no offer of participation in your Grand Culf Nuclear Unit or even a preli=inary furnishing of data prior to such an offer, has been =ade to Clarksdale. When do you anticipate that you will begin this process, and how much capacity do you anticipate you will offer to Clarksdale?

2. We note that you have now concluded a settle =ent of your wholesale electric rate case at the FPC in Docket No. ER76-830. In light of the high energy costs which Clarksdale has been forced to incur since the effective gas c at-off, we would be interested in purchasing a portion of our necessary capacity and energy from MPLL. We assu=e, in this regard, that your energy rate is likely to remain substantially below our cost of fuel, but would appreciate advice as to your esti=stes of energy costs in the future. If we were to

          '                   .assu=e a " base lead" =ede of operation in purchase fro = MPLL, at what rate would MPLL capacity and energy be available?

3. In any event, Clarksdale has capacity excess to its needs under the Interconnection Agreenent, and will have such capacity for a substantial period into the future. That capacity, at current oil prices, is probably best suited for peaking purposes if viewed in an area-wide context. Would MPLL or other Middle South operating c:=panies be interested in purchasing unit power fro = such capacity?

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4. What trans=1ssion rate would be applicable to a sale of unit capacity by Clarksdale to othet ?ntities interconnected with the Middle South transmission system? What transmission rate would be applicable to a purchase of capacity by Clarksdale from other entities interconnected with the Middle South transsission system?

5. Is MPSL obtMMng or does it contemplate obtaidng a portion of the output of the other nuclear units on the Middle South System such as ANO, either directly or through the Agreenent A:nong Middle South operating conpanies? If so, has any effort been made to allow participation by Clarksdale on s1=11ar ter=s, and what was the result?

6. What do you anticipate the energy rate under Service Schedule C of our Interconnection Agreement to be in the ne:ct few months?

We would appreciate a meeting with you to discuss the various alternatives available to Clarksdale, after you have had a chance to consider the specific questions here raised. Obviously, such a =eeting would be more productive if it were possible to have responses in writing in advance, - but we are prepared to =eet with you, together with our auvisors in these

          =atters, at your convenience.

We will appreciate your early response. You g ery truly, ,

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          . .il'aull    _ Allbs 4Jg/ d Richard M. Webster, Jr.            .,

Mayor, City of Clarksdale cc: Robert C. McDiarmid, Esq. Mr. Robert E. 3athen, R. W. Beck & Associates David R. Hunt, Attorney Mr. L. L. Wilkins, Superintendent, Clarksdale Water & Light Depart =ent

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_g gg ca.sasso4.r.wississim sssu , l september 20,1973 " i SPIEGEL & McDIARMID INCOMitlG TELICC?Y i / / - 37p 'l/2/ / ) 1 Tl.5.lF ' 15 g g r,,, - - TO l "- pe c / m .. ,.c c e a c 1

- Mr. Tom Dallas, Manager

[ System Operations and Construction

• h- Mississippi Power & Light Company

. P.O. Scz 1840 Jackson, M!ssissippi 3920$

Dear Mr. DaI!as:

1 This Istier is to sudam our telephone conversations of September 20, 3 1978. In our first two conversations this morning and again this afternoon, you-indicated that you were drafting a Ictier setting forth in writing your company's position as we had requested.- [ You stated in our telephone conversation at ayymnaately & 00 P.M. i that immuch as your company's refusal to provide immediately transmission l service from your interconnection with Gulf states Utilities Company had Jong i range imp 1! cations, you could not write such a letter. I farmally request again a written explanation of your position.

,                                                        Yours very truly, mal Marvin L. Carraway B

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Mr. Tcan DaIIas. Manager k System Operat$ons and Constrxtbs 1 ls

     }.           Mississippi Power a Light Company                                                                   - ! Pl
    !            P. O. Box 1640 y'           Jackson, ut.a ippi 33203                                                                                      ;    z
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Dear Mr. Dallas:

h 5 j This Irtier is to concrm our telephone conversat$onz oT j Septembe 19. 1978. You informed me that the power purchased by the

    .i City of C!arksdale. Mississippi. from Lafayette, imMay. cannot Dow                                          ;

l [ untS Mississippi Power i Light Capany enters into femal arrangenents j [(a 4 with Culf States Utilities for interrupt!ble service and with T-Man = , j Power & Light Company for firm service. It was further my understanding- } ' that only interruptible servier could be C :-i across your interconnec- , M, 3 tion with Gulf States Utilities and that before this service could begin a  ! contract would have to be negotiated and signed between Mississippi Power .

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                 & Light Company and Culf States, which negotiations could be quite lengthy.                               #

It was also my undergsnding frcm our telephone conversation h y g that in order to obtain firm scryico the power purchased by us would have

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              , to be tranmitted to your ecmpany by Intisiana Power a Light Company                                               ~
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because Iazisiana Power & Light Company has metering and multiple cen- gg i i nections with Culf States Utilities inside Gulf States' contM area. There- ' Sj fore any traruction would affect fmW=na Power L Light Cmpany as a member of the control area. - g@

                                                                                                                            .L j                            We cannot understand this position of your company which i'             obstructa cur tmnuction with Lafayette, EmM=n=. since Lafayetts i                                                                                                                  ..

arranges delivery of 14.42 megawatta to your company at its point of ' j interconnection to the Gulf State: Utility system. It was also my undedamiing fr:xn our wum stfon that for  %

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the firm service Inzistana Power & Light Ccmpany would have to dellvor to your company 14.42 megawatts at the Mississippi State boundary line, k gg. If you are to deliver 14 megawatts to Clarksdale. Thus, if Iouisiana Power 1 a Light Company requires to bo dc!n' cred to !!s system 1001 cf the power y O

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g;' b .$ f: i [ g g Mr. Tom Dallas

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,          September 20,1978                .

s ( delivered to you, 14.3525 megawatts would have to be delivered to Louisiana 'I y Power & Ught Company, thus compounding losses. 3 j As I aplained to you, our consultants were confused by what -

i understood to be your csw's position. Therefore, rather than my i mislaforming them of your ccmpanyS position, I requested that you explain j

i your canpany's position in a letter so that I couki deliver this to our con-i sultants and thus avoid any chance of my misinterpretire our conversations. e Yours very truly, ( il Marvin L. Carraway e R et d M 11.7.'.t. . a- - u < 3rmgar t- ns, r? ". r.*tt " r r4 n t rv."~um. ~. s %N' ! Y 'i S"W O * - 'l

RzIn & PRIEST 40 WALL STRE ET NEW YORE N. Y.10005 stao w caso xtDToww omez wasassoTow omez 30 ROCXZFEMR Pf AZA

• CAmt.a ADomess. REIDAPT" tros E STREET N.w.

NEW TORX. N. Y.10020 1387E305ATIO:4 AI. TES EX: 235F te WA3MINGTON. D. C. 2 COO 6 Washington, D.C. September 25, 1978 Honorable John H. Shenefield Assistant Attorney General Antitrust Division

         .            Department of Justice Washington, D.C. 20530 Re:      Joint Request by Middle South Energy, Inc. and Mississippi Power & Light Com-pany for an Interpretation of the Grand Gulf Nuclear Station License Conditions -

Decartment of Justice File 60-415-57

Dear Mr. Shenefield:

This letter is an outgrowth of a meeting at the Justice Department on July 11, 1978 of the senior management and counsel of Mississippi Power & Light Company (MP&L) and . Donald L. Flexner, then Chief of the Antitrust Division's Energy Seccion. At Mr. Flexner's suggestion, MP&L and Middle South Energy, Inc. (MSE) , owner and co-licensee of the Grand Gulf Nuclear Station Units 1 and 2 (Grand Gulf) , hereby request an interpretation of the construction

                     'licensi'ng conditions negotiated between MP&L and the De-                                    1r partment of Justice. Specifically, MSI and MP&L (herein-af ter referred to collectively as the licensees) seek an interpretation of paragraph 4 (a) of the Grand Gulf license ennditions that would not require recognition of any expres-sion of interest in ownership participation by the City of Clarksdale (Clarksdale), made more than 90 days after publication of the '.icense conditions in the Federal Register.

The effect of this interpretation would be to limit ownership participation in Grand Gulf to the aggregate 10 percent par-ticipation currently in the final stages of negotiations with South Mississippi Electric Power Association (SMEPA) and West Mississippi Electric Power Association (WMEPA) and to exclude Clarksdale from such participation, inasmuch as it had not made a timely request. , Grand Gulf is owned by MSE and its construction is managed by MPSL pursuant to a contract with MSE. Both MSE and MPSL are wholly-cwned subsidiaries of Middle South Utilities, Inc., a registered holding company. ")&L is an electric utility subject to the jurisidiction of the Fedaral Energy Regulatory

Commission. MPSL was responsbile for the initial engineering and licensing work at Grand Gulf, but the cost of completing the project was beyond the financial capcity of MPsL alone. As a consequence, MSE was organized in 1974 (under Arkansas law) to construct and own electric generating facilities for the Middle South Utilities system, and in June, 1974 MSE pur-chased all of MP&L's interest in Grand Gulf for its costs incurred to that date, approximately S30 million. As of July 31,1978 MSE had expended approximately S0.9 billion of the

              $2.3 billion needed to construct Grand Gulf. Unit No. 1 of Grand Gulf was 70% completed at that time and scheduled for commercial operation in 1981.

1. STATEMENT OF FACTS .

The following is a brief chronology of events relevant to the licensing of, and expressions of interest in, Grand Gulf. MP&L began engineering studies for Grand Gulf in 1970, construction contracts were signed during 1971 and early in 1972 MP&L publicly announced the project. HP&L's announcement received extensive media coverage . throughout Mississippi (see Exhibit A). By letter of February 7, 1972, approximately two weeks after public announcement, SMEPA informed MP&L that it had heard of MP&L's plans to construct Grand Gulf from press reports and requested ownership participation in Grand Gulf. As you know, Section 105 of the Atomic Energy Act of 1954 requires that the Justice Department (Justice) advise the Nuclear Regulatory Commission (NRC), successor to the Atomic Energy Cc= mission (AEC) as of January 19, 1975, on whether the NRC should hold antitrust review hearings in connection with applications to construct nuclear facilities. Prior to rendering such advice Justice nor-mally reviews the applicant's pact competitive conduct in order to determine whether the proposed facility would create or maintain a situation inconsistent with the anti-trust laws. In anticipation of MPsL's application for a construction permit, Justice on July 17, 19,72 wrote each utility in western Mississippi (including SMEPA, WMEPA and the municipal systems of the cities of Clarksdale, Greenwcod and Ya:co City) asking whether any of these entities was intersted in, among other things, ownership participation in Grand Gulf (see Exhibit *3). */

              */

This correspondence was obtained by MPsL frem the Department of Justice under the Freedom of Information Act.

As a result of Justice's inquiry, WMEPA on August 15, 1972 wrote MP&L requesting ownership partici-pation in Grand Gulf. Clarksdale answered Justice's letter on August 25, 1972, but expressed no interest in participation. During the spring of 1973, MP&L and Antitrust Division staff attorneys negotiated policy commitments on the basis of which Justice on May 24, 1973 advised the AEC that no antitrust hearings would be required. These policy commitments were subsequently adopted as conditions to the Grand Gulf construction, license. Paragraph 4 (a) of the policy commitments provides that licensees shall offer an opportunity to participate in the Grand Gulf Nuclear Units and any other nuclear generating unit (s) which... (licensees] may construct, own and operate in the State of Mississippi... during the term of the instant license, or any extention or renewal thereof to any entity (ies) in the western Mississippi area by either a reasonable ownership - interest in such unit (s), or by a contractual right to purchase a reasonable portion of the output of such unit (s) . . .at the cost thereof... 38 Fed. Reg. 14,878 (June 6, 1973) (see Exhibit C). In March 1973, Ya co City made inquiries about participating in Grand Gulf during talks with MP&L concern-ing an interconnection. While an interconnection agreement was entered into in September 1975, Yazoo City expressed . no further interest in acquiring a participation share of Grand Gulf. In August 1973, the City of Greenwood expressed brief interest in Grand Gulf, but apparently lost interest after being furnished cost data by MP&L. On June 21, 1974, as noted above, MP&L sold its entire interest in Grand Gull to MSE. MP&L, however, continues to manage construction and, upon completion, will operate Grand Gulf for MSE. In late 1975 and early 1976, MP&L and Clarksdale negotiated an interconnection agreement entered into on Fectuary 13, 1976. */ Although Clarksdale thought of this

             */   In 1975 MP&L and Clarksdale already had a long history of contacts, dating back to 1964 when MPsL first raised the subject of establishing an interconnection with Clarksdale.

interconnection agreement as an outgrowth of MP&L's policy commitments, */ Clarksdale expressed no interest whatever in Grand Gulf during these discussions. Early in 1976, the licensees and SMEPA began active discussions directed at selling nine percent of Grand Gulf. These negotiations are now in the final stages, with closing scheduled for mid 1979.

                           .On December 8, 1975, three and a hsif years after publication of the Grand Gulf policy commitments in the Federal Register, R.W. Beck and Associates (Beck) informed MPSL that it was conducting an investigation of power supply alternatives for the City of Clarksdale.

Beck asked MP&L to provide financial information and cer-tain documents concerning Grand Gulf and asked whether MP&L would be willing to sell ownership or unit power participation to Clarksdale (Exhibit E). By letter of January 17, 1977 MP&L assured Beck that it fully intended to comply with the policy commitments and provided Beck with the requested data and documents. MP&L advised Clarksdale that it projected Unit 1 of Grand Gulf to become operational in 1980 and Unit 2 to become operational in 1984. Specifically MP&L

• stated:

                            ...our most recent estimate is that the Grand Gulf Nuclear Units will cost a total of $1,907,900,000 to construct.

In the absence of a specific request by the City of Clarksdale concerning the amount of power desired, the point of delivery and service characteristics it is difficult to quote terms and con-ditions. If you would like us to quote terms and conditions for one or more alternate proposals we would be pleased , to do so. (Exhibit F, p. 2) . In June 1977, MSE repaid all of the outstanding bank loans incurred to that date for the construction of Grand Gulf by selling mortgage bonds to a group of insurance companies. In view of the license conditions, these lenders required

                 */    Petition to Intervene by the City of Clarksdale in Mississippi Power & Light Company, Federal Energy Regulatory Commission Docket No. ER77-473 (July 22, 1977) (Exhibit D).

that, if more than 10 percent of Grand Gulf were sold by the licensees to unaffiliated utilities, the proceeds of such sales in excess of 10 percent would, at the lenders' option, have to be applied to the retirement of a proportionate share of outstanding bonds. This 10 percent limit imposed by the lenders reflected the anticipated maximum aggregate participat-tion by SMEPA and WMEPA. Because of the 10 percent limit in the bond mortgage, WMEPA and SMEPA have agreed to work toward a mutually satisfactory division of a 10 percent share of Grand Gulf. On July 19, 1977 without replying to the questions raised in MP&L's January 17, 1977 letter to Beck, Clarksdale wrote MPSL: So far as our records show, no offet of participation in your Grand Gulf Nuclear Unit or even a preliminary furnishing of data prior to such an offer, has been made to Clarksdale. When do you anticipate that you will begin this process, and how much capacity do you anticipate you will offer to Clarksdale? (Exhibit G). On October 18, 1977 Clarksdale asked MP&L for an " offer of participation" saying it could use at least 10 MW (Exhibit H). There have been subsequent meetings and - communications between MP&L and Clarksdale directed at developing a transmission tariff and partial requirements wholesale rates. These negotiations have resulted in MP&L filing a supplement to the existing interconnection agree-ment between Clarksdale and MP&L. Under the supplement, filed on August 28, 1978, MP&L will provide certain trans-mission services to Clarksdale. With respect to Grand Gulf, the parties have reached a stalemate. Clarksdale considers the Grand Gulf policy commitments to be open-ended and demands that MP&L unilaterally draw up a binding offer of ownership participation in Grand Gulf. The licensees take the position that Clarksdale, SMEPA and WMEPA were each afforded the same opportunity to participate. While SMEPA and WMEPA made timely requests for participation, Clarksdale did not. Thus the licensees will have fully complied with their policy commitments and resulting Grand Gulf license conditions by actually selling ownership shares in Grand Gulf to SMEPA and WMEPA.

2. RELIEF REQUESTED -

The licensees hereby request that the Department oc Justice interpret paragraph 4 (a) of the Grand Gulf policy commitments, which were adopted as conditions to the Grand Gulf construction license, as not r equ i. r ing licensees to now offer to Clarksdale an cpportunity to participate in the Grand culf Nuclear units inasmuch as Clarksdale has not made a timely request to participate.

3. DISCUSSION As noted above, paragraph 4 (a) provides that .

licensees

 .'                     shall offer an opportunity to participate in the Grand Gulf Nuclear Units and any
                       .other nuclear generating unit (s) which...

(licensees] may construct, own and operate in the State of Mississippi... during the term of the instant license, or any extention or renewal thereof to any entity (ies) in the western Mississippi area by either a reasonable ownership interest in such unit (s) , or by a contractual right to purchase a reasonable portion of the output of such unit (s) . . .at the cost thereof. . . 38 Fed. Reg. 14,878 (June 6, 1973) (see Exhibit C). The interpretation of paragraph 4 (a) proposed by the licensees would conform the license conditions to the intent and understanding of MPSL management at the time the conditions were agreed to, would conform them to other contemporaneous license conditions and to the Justice Department's previous interpretations. First, at the time it agreed to the license - conditions, MP&L understood paragraph 4 (a) of these con-ditions to commit it to of fering participation to those utilities which theretofore had expressed an interest in Grand Gulf. In support of its understanding, the licensees note that paragraphs 4(a) and 4 (b) provide three separate commitments vis a vis western Mississippi entities: (1) to offer opportunities to participate in Grand Gulf, (2) to offer opportunities to participate in future nuclear units constructed by the licensees and (3) to use licensees' best efforts to obtain participation in future nuclear facilities constructed by licensees' affiliates in which licensees have an interest. The licensees thus understand their first commitment, i.e., to offer an opportunity to participate in Grand Gulf, as limited to those utilities that previously expressed an interest, whereas the second and third commitments referred to utilities that would in the future express interest in future projects-constructed by MP&L, MSE or their affiliates. Please note that Justice modeled its proposed Grand Gulf license conditions after those of Fldrida Power Corpora-tion's (Florida Power) Crystal River Plant, Unit No. 3 (See Exhibit I) . */ Florida Pcwer, however, specifically declined

             */    Florida Power Corporation, Crystal River Nuclear Generating Plant, Unir No. 3. Deparrment of Justice File 60-415-38, 37 Fed. Reg. 3732 (February 19, 1972).

    . s. -

to commit itself to sales of unit power and to engage in joint ventures. It assured Justice that if it decided to engage in a joint venture, Florida Power would not discriminate against , smaller systems. Inasmuch as paragraph 4 of the Grand Gulf conditions had no counterpart in the Crystal River conditions, it is clear that paragraph 4 was thought of by MP&L and Justice, and should now be interpreted as a slight departure from Crystal River so as to allow some ownership participation to those having previously expressed interest, rather than as a broad swing to the opposite extreme, namely, a commitment to make specific offers of participation at any time during the license period. Moreover, because. financing agencies typically limit their financing to participation shares purchased at cost, it has been common practice to sell participation at cost. This is a further indication that the period during . which opportunities for participation would be made available was not intended to be open-ende3 An open-ended license condition would create the anoma7aus situation of rewarding delays in expressions of intere* in inflationary times. Thus the later an expression of interest and resulting sale of ownership participation were made, the greater the likeli-hood that the purchaser could reap windfall savings as a result of inflation in construction costs subsequent to actual construction of a nuclear plant. It is inconceivable . that the Justice Department intended this possibility. Certainly, MP&L did not. Second, contemporaneous license conditions adopted by other utilities also support the interpretation requested by MP&L. The license conditions then being negotiated by

           ~

Florida Power & Light Company (FPSL) for its St. Lucie Plant, Unit No. 2 also supports the licensees' proposed interpretation. The St. Lucie Plant license conditions pro-vide that FP&L would

                        ... seriously consider offering par-ticipation in St. Lucie Unit No. 2...

to the three utilities who prior to our [ Justice's] rendering this advice, have given [FP&L] notice of their interest in such participation.... Florida Power & Licht Comoany St. Lucie Plant Unit No. 2, Department of Jusrice File 60-415-45, 38 Fed. Reg. 32160 (November 21, 1973).*/ Although final agreement on license conditions for St. Lucie was reached after the Grand Gulf conditions were entered, the St. Lucie conditions were negotiated at approximately

             */   Justice Department file numbers are cited herein when they were cited in the Federal Register.

the same time as Grand Gulf's. The explicit limitation on those who qualified for participation in St. Lucie was left implicit in the Grand Gulf license conditions. In Texas Utilities Generatino Comoanv, et al., Comanche Peak steam Electrical station, Unirs 1 and 2, Texas Utilities committed itself to

             ... afford'an opportunity to participate in the Cemanche Peak nuclear units for the term of the instant license, or any extention or renewal thereof, to any entity (ies) in the north Texas area making a timely request therefor, through a reasonable cwnership interest. e . .It is understood that any request received prior to December 1, 1973, shall be deemed to be timely. Department of Justice File 60-415-74, 39 Fed. Reg. 3846 (January 30, 1974).

The Texas Utilities commitment strongly suggests that re-quests for participation made after December 1, 1973 */ would not be timely. **/ Thus, the Texas Utilities' commit- - ment supports the view that "for the term of the instant license" in the Grand Gulf license refers to the period during which participation nust be granted and not to the period during which requests for participation must be entertained by the licensees. Indeed, a=ong the conditions placed on the con-struction licenses of other nuclear plants, it is not uncommon to find deadlines for expressions of interest in ownership participation which precede the publication date

   */   This deadline was two months prior to publication and a month and a half prior to the formal adoption of the policy commitments on January 15, 1974.
   **/  See Virginia Electric & Power Co., Surry Power Station Units 3 and 4, Department of Justice File 60-415-75, 38 Fed. Reg. 32596 (November 27, 1973) in which Justice's advice letter to the AIC notes that certain of VIPCO's competitors are seeking ownership participation in Surry, reviews the pending discussions and concludes "if these discussions continued so that specific agreement among the parties could be reached as to VEPCO's policies of cocpera-tion and coordination, ne antitrust hearing would be necessary in.this proceeding."

                                                                     ~

_9 of the license conditions.*/ In Commonwealth Edison Co. Byron Station, Units 1 and 2, 39 Fed. Reg. 9852 (March 14,

 .       1974), Commonwealth Edison adopted policy commitments whereby it undertook to " afford an opportunity to participate" in the LaSalle County Station to those electric systems which indicated an interest by December 31, 1973. **/ In addition Commonwealth Edison's transmittal letter noted, in explanation of the word " afford", that "any initial offer or proposal for participation should emanate from" the interested systems.              39 Fed. Reg, at 9853. ***/

The most liberal notics provision c2 which we are aware for expressions of interest adopted as license condi-tions subsequent to the ads ' ion of Grand Gulf's license conditions require notice of interest to be given within 90 days of publication of the license conditions in the Federal Register. Wisconsin Electric Power Co., Koshkononc Nuclear Generatinc Plant Units 1 and 2, 40 Fed. Reg. 14809, 14817 (April 2, 1975). Clarksdale has expressed no interest in Grand Gulf which would be timely under this most liberal time provision for expressions of interest. Third, the Justice Department's own advice , letters recognire the burden on utilities interested in participation to make timely requests to avoid causing problems for licensees which have already made engineering, financial and operational commitments. ****/

          */       See Gulf States Utilities Co., River Bend Station Units 1 and 2, Department of Justice File 60-415-58, 39 Fed. Reg. 12374, 12376. (April 5,1974) ; Philadelphia Electric Co., Fulton Generating Station, Units 1 and 2, Department of Justice File 60-415-59, 39 Fed. Reg.

19531, 19532 (June 3, 1974); Public Service Co:npany of Indiana, Inc., Marble Hill Nuclear Station, 40 Fed. Reg. 18511, 18513 ( April 28,1975) ; and Public Service Company of Oklahoma, Inc., Black Fox Nuclear Generating Station, Units 1 and 2, 40 Fed. Reg. 28507, 28508 (July 7, 1975).

          **/      This deadline was about two months before the February 22, 1974 date of the letter adopting the policy commitments.
           ***/    See also Pacific Gas and Electric Co., Stanislaus Nuclear Projecc, Unit 1; 41 Fed. Reg. 20225, 20223 (May 17, 1976).
           ****/ Cincinnati Gas and Electric Company et al., Zimmer Nuclear Power Station, AEC Cccket 50-353, Letter of Assistant Attornev General Kaucerp.to 7M.(July   A. Rowden.

Associate General' Counsel, AEC'. 5, 1972)

e

• Parenthetically, the 10 percent provision imposed by MSE's bond holders presents the very problem that the requirement for timely requests was designed to avoid. Moreover, many of the advice letters sent to the NRC before the policy commitment-license condition procedure became widespread, reflect Justice's concern with granting access to nuclear plants to those smaller systems which had expressed an interest during Justice's investigation in preparation for its advice letter. These advice letters evidenced no concern with the treatment of utilities which might in the future express such interest. */

In summary, the Grand Gulf license conditions provide that the licensees will afford others an opportun-ity to participate in Grand Gulf. The license conditions, when read in conjunction with contemporaneous license conditions and Justice Department advice letters, places the onus on Clarksdale to make a timely request for participation. In order to be timely, Clarksdale's request must have been made before publication of the license condi-tions, or, at the latest, within 90 days after publication. There is nothing in Justice's advice letter to . the AEC which suggests a basis for treating the Grand Gulf licensees more harshly than other similarly situated applicants. Clearly, neither MP&L nor the Justice Department contemplated that the licensees would be required to offer ownership shares upon demand at any time during the operating life of Grand Gulf. For these reasons, the licensees respectfully request that the Justice Department interpret the Grand Gulf license conditions so as to conform them to the terms of contemporaneous license conditions and to MP&L's (and probably Justice 's) intent. In the event that the Antitrust Division staff attorneys recommend rejection of MP&L's proposed interpre-tation, the licensees request a meeting with you or your designee prior to your final action on this request.

               */   See Toledo Edison Co. et al., Davis-Besse Nuclear Power Starion, 36 Fed. Reg. 17888, 17390 (September  4, 1971); Northern Indiana Public Service Co., Sailly Generating Station, Nuclear Uni: I, Department of Justice File 60-415-35, 36 Fed. Reg.,22326 (November 24, 1971).

We thank you in advance for your consideration of this matter. If you need additional information in con-sidering this matter, please call the undersigned at 331-1752. Sincerely ve rs, s l L. Peter Farkas Attorney for Mississippi Power & Light Company LPF:mac , cc: Donald L. Flexner Donald C. Lutken Sherwood W. Wise Charles A. Read Richard M. Merriman (all with exhibits) 4 9 4

Ilsity.> tate per l

                                          ?~~~            1
                                                                  .        The statement came ene day. It5yriday trallic acc1 dents                                                  ,

. 1. vwimi. were: ar rrrinnal out.i g& after he told businen in ro.n lu hage been re. "{ >f d UZ]lf ate mnre and enmtilain f. s if it U'" I'"*" *

• 8 wants current wace. price tr='J Tha\8"n*
• er m :o nthe- Ci*'r ,,e R. W Hiams. 7.'. of WASIlfNf7mN f 3P1 -- Pres.llations hfied.I Pnntoine. -

e ut Coast to i . dent Nixon has aued Inr im.l WASIIINf'a70N (AP)Kotiro - Stany Fujiwara, 3, of 3 dav, . is st3lti Xfird m some[ntediate action on a bill in endl white. collar l'nstal Serwee em. Kirkville. '3 ' Mo- * ,,,. eport al the West Cnast dock worrers playes have received large A mem'er nf the Starkville a ' ( walknut, but Congress savs it wa:e increases, far in eseeg of umt of the Mississippt National g etn,ed for.will be at least the meccie of Pay Hnara :uidrinnes, i Guard. Sar:us was on his way in tua duzen Ck : next ween before hearmgs are But nettner the Pay Board;to State Co'le:e for weekend enstics and aby be un. nor the Co4 of I.iving Councl. drill when the acedent oc. . .t buunessas m' Nixon sent legislatinn to Con. sttow any sa:ns of actirig an U:e. curred. . the state have * "tr t Fnday that -- uld form raises, j A sophnmore at Mississippi oually h:;n. In 13.000 workers brek in the piers! . State Universey. Sa:;:us was a *

• Ind.. where while a federra board :cttlesl . IIINUION I%P1 - II2V*' member of lambda Chi Aloha -

i ste caws of flu ltheir diff:rences with shinpersl tr t decounced the West Coast

• fratemity aad a student helper -

us month. Dr.i thrno;h bmdmg artstration. l duct workers' walkout. Pres - in the atSU ath!ctic publicly 5ee FLil, Pa:e 3 ' But two Senate and .I!nuseI dent Niann asks Con:ress for, offices. e ~ '

• Democrats whose pane!s willi immedute actina on a bill tn. He w:s an Imana ersdttste of '.

handle the le:: station indicated See DIGEST, Page s i See WRECKS. Page 8

• 11 may be at least Wednesday ,

before hearmes on it be::n. k/Q { , 4 )crats "" *3"'%Cx0aa IVO JL J nve*ns > .an See

      ~                                                                                                                                               t y

wt r*' a' ieS FOUR NATIONS n Or Nudear Plant 1 JOIN COMMON Site Near Port Gibson Chosen , ","'",La t.;= MART TODAY For Modern Generating Station smnin; in Au. BRUSSE:.S (AP) - De  ! a ca!!ed far the European Cam =ca Market 4 By THE ASSOCIATED PRESS e a voice in na. will be tentatively es:anced to ten nations today in cere- Plans of $400 million nuclear. fueled generatin:: sta. "I r disci.eed he monies in Brussels. antain, t!ca on the alississippi River near Port Gibson were I enunty leaders unveiled Friday by 1!ississipPi Power & Light Co- I Ireland. Denmark and Nor-to parti.-ipa:e in way will sign tresties to oEscials. 9 - nsentians nf the "" that enutd becerne members of the , Cor Ell! Watler made the an. said. "The huge investn:e::t to f ag political ei. mammoth tradmg block nouncement Fnday for MP!4 be made by MP&-L in this plant pending ratification by the $ in the state Senate chamber, ,f'Paf's th'at he other members. Prime Min. with ecmcany and Public Serv. indicates the faith this com. pan 7 has in Mississipci and

                                                                                                                                                    )

ed daal partici*  ! ster Edward Heath m!! Ice Comrnissica offic:als on particularly its operat=g area. * 'i represent Bntain in signing har.d.

.'                            the treaty fer his natica.                                                           **We c:mme-d the company           9

'k"".*I'T33 * [2 - De etrtmenies will take The proposed steam cener, and others cc:mected with this " ati::g unit. to be known as the project upon takime this for. f siennean"ceplace in Eg=ent Palace ~ Grand c!! Nue! ear Statien. will ward step to assure ample pow.

• ]o l y

, 4 1st af 3iM' Belgian gover:: ment for ma.

1. e rewe a Man to ecc. e W W gMMcg area of me truct and sr.c::fd go into oper. state.

*Q not ch j r international                        meetings.

g:an's pn=e m:mster ation in late 1973 if ;lans and "N:c! ear fueled power plants I clearty strategy oermhs are sec= red mthout 4 han been proven to be the cateme .t. will preside. De fear new lay. l gan,e 7 c2ndidates will become fuH power plants of the future a.d n

                                                                          " Plans for this new triodern this plant will prove an, eco.

s micM be e.y. members cf the market en generating plant herald a new gg,ug, p , Jan.Iofnc:tyear. day for the long-range devefoo. nemic boost for .Vississippi and

                                                                                                               %ss:ssippi people in the:r
                                          ,                           ment of liass:ssippi,** Walleri See MP&L, Page s
                                              +-

w ./ L 2;, A k a .

                                                                                     /-.22              72                                     -
                                                                                                                                                                       --Y'"

L

y - . . . .a , , , , , , , ,. ,,,,,., , ,

                                                                                                                                                                                               . u ws e mr tne
        .a vp and AppLret -

4ev furn:ture

                            ;ons as a;hant   result          of' eM the entry nf more new i andt h niles j re.-ntrant            unemploved htsayntisisix per hour. to v af rain M per cent instay, Prnha. la ~ bU3'3"'ptWs Junior hstit!c     (nrof.i g' "','{ ",'     '
                                - ~ ~ ~ , mtn the tar,or f<ne.                                     worrersi tonist and sunstay.                                                        I FJ are:        Pike      County                 s Junror3,,        chN a',,

Sfiss. Debra Lynn . Norman. REGULAR } crrently there are rc2 wor [l

                                                       .e-                   -aee m

d. ughter of .'.fr. and 3!rs. Hu:n f gg,, y; Norman Jr. af Sumsut:

3g Centinued From P::.chante ! Columnia = > nis rQ*MP&L in; a tahcover et loy;.hst ma"j  :.,premnle from Otw w. active file. l'h. This daughter .a of -Mr. ~Colum- and !frs%si,, j, ,

e. but there f annnued From P .# Trank

             .s that the ai n qaallyweg                   ber:n"but        bekwrepresents a drop of :3; homes and yus.ncsses anCon' nyl percent                                                                                                                                                                          Kempe was to budd a Ie:pt case for' im bbar sun:ly.the                                         Novem er.t De r famt Th:s supciv!                                                                            i Pr.mela Yvnnne umor Miu. } y,3y, ,y pre .entaLon to tne nat:enal                                                                                ^

convention for usegngy3 dann; ~ n,,,.gce{ gt gegcf merkersg would te Incated is suffie:ent tx

                                                                                                                                                                                /nr most; d be unW.

me $nt' wy C. LicFartand of DeKa!!):' MDonald e ammn.r 3, ' Band scatin:: challen:;e inat is ex 1 IU C.u. . pected, . .jnues a strnn: demand for ez.j *ve*J*CSI ' " mdes:

                                                                                                                                                                 "                      u* .e County'a Junior 5tiss. Karis                                             i sta j penened semng machme oper. n r's east bank.                                                                        C' hn Hamelin, dau;nter nf Dr., Teens.ha..

The approval of dual partici.! ' tv pation wriuld snow the reuutars' tershewd! ers, said. pn=er tne -c nvu steam wa 8 bnti.! and T2ce!o:Mrs. Rnnert L Hamblin Copiah Count cal r' . of! 5 sere not adverse ts w7tamgt,A , , h Lutken said ahnut 2.00t1 acres' ofM ss. E zabeth dau:thieri H .mtlin Jones,y's n: uth had the Inyahsts. and and t.bt m. ; tacy! AUC lil005 4,0T Str. and 5trs. Rnhert C.' erhdt Unh a broadminded >

                                                                                                                  *ad>"been     a out under eption                                                  fer! Jones o(Crystat spring clusive approach to par:y af.

gm The ene.structinn sayrnll williws Ju=- Mis .. nne. i s career r. e= He mhe g the peak, the er.struction for:0 total about ha mdho 7 Thts interpretarinn was hol ' y ,3 stered when WaHer issued a! l N I Q h j ,g mH nemeer abet W. . Deald g Sits,s J'by of Bonne.id:ework an hin } '.tiu .!nn... statement that everv 'fissmippan callin: it "eeent:all tic:pate" in the reaulars' pred 1i parJ U n t

                                                                     'gf h

t [? e sty,e cmd by In "w:th conecton. of ung Desch* e ca sj Mr. and Str.. Franit NmysBranc ' cinct meetines. ) i l l to start imn@N ahan lThe 5 ft. 4 That statement called Satur. . bitre - tI.ityThe plant w:ll have a canac .lJunier 5fiss. is 3 ft. Mss Nnt n ' of 1.250.600

'.ay a critical day and said byl                     f?e*!ERIDI.G - Auditions
                                                                 .                                                        for             #kiinwatts. mak.. hmwn hair ree

3. hasi w3o.3 w33

                                                                'feridian Junior Co!!e- i E "                                                                                                   .

es 4e can str c e # rcomolesion. She was vnted 5fostin eyes and 5tississipni Democratie partyt " 3g, ecow eg . .

hst is truly representat:ye ofl J.*n. E at

• p m de inonthe ju fn[I der:end.. m e .- w1tl be held Tu ~## # ^

cri 13 the people. " . . s The phrase **all the ;ee te"lI f*.!!e;t theater, according toI'% stat-d[t-' hand. SIedern Dance C:ub. Ten.! nf . l,*,

J%my Sm a frequently  ! n's t team. Powder Puff Fectba:D )hemism. a uy a of afiss'ssinns savin: both' eud ne eas:ith. directar.' ' D. WI Snyder. c'- str=an of ' ** S*!a t# .50- C:ub.

                                                                                                                                                                                                         * *CfeeN 'SC!un andt g3ggg.     ,

e w111 cons:st of mne the Public Service Commrssion. functi:n.ar'd whites are in'ated tol n:en and nine women in pancid said .$.,'E.g'

                                                                                                                                                                                                           #* *'"            '~54 vears. and

.lacks p the c:mnant

                                                                                                                                                                                     -         n         . <n[ had          de hall, twir.!
                                                                                                                                                                                                                                     ~

tu - State. Ih Ci!!'s g,,,, , . , 'ing. W!th the gover:er in effect! f extras. Parts are avadablei{ te':nis p>land play:n; c!ar., toroles auea.dalong w:th a num a rging blacks to take pat *. In t s s S e dans M. I , ttular events. the loyalists ! utility 3** "N"its , {,. kr sin'ers, actors, and dancersi that 'wdl "a'surt custome D s oNfor vis:en

                                                                                                                                                                                                                           *E' and               I faithi" IV-debt have a hard time ar.! as ned as backsta-a" help

• l2 dependable, safe su::ty n!! , h.e Madc.% a am teae.5er.

aina that bbces did not :et a e he three-act play is a satirel rDe 9l ant mt! hav ChoMa,s  : { M 8 dr deal fmm the re ulars. , Dis position ;lus thea! ara dl en the Eag!!sh and e em m e. e ag cacae.; AmencanlSnvder . ** ! favor:t'"nior Mss is a sedor cbss (Q% (.g.msa"d"this at C !cmhia Hight ,, 7 sr.out expected musicials of the 13*0s wit's !!ap.l alissMsipatans h 'ntentions mtcht for e:r-tre;':fari =..s and the Char!estan It was, caught short wnuldwould " net mean C 8 5chool member of the Peo} CCE e ' nicht at th' natt"a$8 f % a inO n-. . me scetions beieffDe hab.sePress C:ub. Future Teach.. cal stu amocnts 'sant . v.uented :n Lor. don .:n the i of tre nat:en." K+n:. cf America. Y.seens andj ture applicat:r.n eeteral votes. Wssistinnes; niid 19'As and was later showd eteam.electne 3lP1L cow onerates or Dramatics. De 5 ft. 3thne been ce particularly. in .cw seae-attag foure sta. 7nd Scauty has brown hair and eyes: Gaif Ccast olive coraniae nn. e-Res ice re utar. backed sted Ioyalist cader Chat'esiTalleri rews in the Icading part. d I watts. A plans York with Julie An-: e

                                                                                                                                                                                                                   . Mis i Kille:rew, a :-

The production w111 be a Jomt construction in Greenville.fifth 5:nt

ers by almo314 to I in the t effort involving the theater, ma.4 is und:r' Thrutsch to attent from tae Sce:n-wember governor's race. n _ _ . . -

l WilJ'am Carer CMiece to smdv {. ana J/ C  ? sneech therapy. Her hanties in. l . Kmebrewand l MJC. De shew witl be stagedls:e NJ and dance l c!ude decartments swimmtee, wate sk:ini. ati U! 5!r. and J.. afts.

                ,_.,m-by Smith with the orchestra!                                               egg % p                               i siartne, readth. :! ann:

ccedu  !! st the : who now resid:: time m .'uso- in eet: ciariner public speaking andl formerly lived

                     /

3CU37-M.A.-M~y,;;::rf d Jn"1

                                                  =' cted by Kern"*"                       P:P"and thei
                                                                                                                       " 6"i)$,. 0bi."A
                                                                                                                      ,;,                           t's.   "                                                              -- I years.

M' D*1h.'.2L ' P nduction dates for theINDOCHINA!$.!'M

                             ' %; are Staren :*. 24 and *3 in                                               ne sinke by t9 Inte ..

taci 12nesaaremen's nati nal show$l and: - Condnued r rom P;.I . t

                                         , , :'ot hmited to MJC students.eutlep theater.. LAuditions                                                                           #aan forcesaret Warennc*cmeG Uma M ,dC, 4,.          ,

htJ.i. tomi H.. '#~ E*d k3* 'h'ireca:tred -..

      . mem m.=                              ; u n r-                       y                      -!Taft.HaN!cv                                    Act a Mahc Sad.:!ast #E                                            '

Ju!v " 1.I.Nixo

   - m m ..h.e su m                                                                                                                                                                            "

l y [\ E, j\ nhe = wrmn re ttae:r y.es. tut ' n e'- rawa'c%m ,,m,- - m,[. , "y p.,,,,g a !, fre t MRS.,1 L.,

                  ,                                                                                                                                                                                  c? ' cr*h ..ic M m n. a ,. . e .

stnke l h!.mdar#rca . ad day c'i. din!. ' 00*""#"#C: 33d t3'U ' Pl

                                           ; Cadaway Continued From P:. I M'<                                       !'.t5cr 'M  r..een
                                                                                                                                              ~                                                                                  -

l memec n(Ni.:n Se .ont and a } off prind emrad. captured the inwn af sala pheui d.emeWs wL ts .WMem

                                                                                                                                                                 ""'I Outeen                   3 8Ec-n m 3.idt ~be ::eerfie l MetnNist Churen.e We. der United) De Pts Went didn't mm c.c.

l He is sWrtve'1 by his parer.t!. 1 pr:ce tag on 'ne ensts of te , W dar-a.a t.s said.P' D " W dO

                                                                                                                                                                                                      *f'!V IhJ1 i'its       remocratar:   ','" i On '

It.ttrment !!b,e1 2.m.

sir, ,nd urs. :am,5 S. sarzus :lri; ten -eu endsfrdhe .

savin" R I. MM north al8 (Urau m M ..he 's Saluday

• Stron; Itiver Cemerc., .. I'idi9

                                             "    .tn andWaverty    Pault Cr  two. two hrntners.1 Lans of dNmrten w hien                                                pre .! nas        hts i -.me        mm .iu-er.rie - en = =
                                                                                                                                                                                                      ,tnre2t-em
                                         , nnn ad Ann and : nnemoth-! t.ms."s:ste s. l stnte :s wreakm: upon                                                                            us dtatt f season ne. f 53Vi effen.6t. "Sc;*tntets mum Simpun Caunty '                    !07 in Shrevryrt                                                            but a Wnite Hn'tse' C3 under Communist enntrol. tut has
                                         . dna, La.                             and A:esan.i meman nd it runt                                        r
                                                                                                                                                                     ,,*         *                                        ! to sna w.                            -

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               , . . ...ds wicer nasionas. party l '.re ernmutte.                                                                        e.1ersemserve I at the preetac'    rncetin=s."turnnut!             W preetnet meeing Saturda)

• relahoasaips, udt take tne fer,t , "*"" I w ing.

steps Lturday inward anothef f retacnition battte. 'l * . . Both the enmanaat ret" afar ' h l ~* facuan and the civil rt:*ts

• orientH nyahsts wd! haid pre-

                 ' net comentions. the fsrst in a
                                                                    , ,                                            ,d                        ,,,

f h j

                                                                                                                                                                                             , " d1/

N 4 g rtcs of meet.ngs ! cadent tal .w. . 'l

               .he select.on of dett: ales to tacI                                                      .p Dcmocrat.c aasional conves.1 S                                                       .f,,                di rOM mbon.                                           s W

bb.t

                                                                                                         \

t $ l* The loyahsts wna recnemteon{ . M. k. 'L.s

                                                                                                                                                                                \       I b

by the nanonal party sn 1964 la./.hl. M. , 4 Tg aanrtly after Jorn Hell Wd.! y bams became 2% ersor, an, antw M'u's'2f98 I'*wr & Lent t'n. I permits are sceured esthout de e ment of Slississapri.* Walter nctas piam Frweay ta enn ilaw.

              ;tra.nds blads mere nat ade., atruct a Sinti mellaan nudear.                                                                                               # said. "The 'iuce tmestment to ton,           qualctr rtTreiente's by trel uetert                f                                                           Gov. NI u~Aler m:                                                                                         Mg

eneratinq anatwo acar 4de the and be made hv MPLI. in this plant

.an re:Wrs. Wdliams 2 net the aa.: Pnrt Getc.on. nouncement far 11I'if. ta newsa intricates the fadh this cnew a 'ge, tannd carty had feud-d wverall The prnpaied stesin-cener- me=t in the state he.: ate e'iam.; pany lias ;n 11ssissippi and years over ins support of COPl ating unit. In be %nnus as tae bef. wit's company arid Puelle particularly in its operating a)s candidates shile he was a'Gond Gull Nuc! car Stalinn, Service had. Comsniss4cm officals on area, Democratic cnneressman. I aill recorre abnut four }vars to ' FORWARD 5TEP* however. Waller has catteds canstruct and shauld :s sain ap- "Nans for tat $ new meutern, for full citizen partre pahan an errinn ;n late is74 a plans and' 1 the prneredines sie the re:ulars.' day for the loac rance deretop others connected'prnrencrating jeet upnn taktet this for. wit this plant herald a n shich he said will he ocen tai y all. And he has cal!cd for Mis l 1 g g y ward step to anure amp 4e pow

• er for Pus growtng area of 13e q n = c - m .l. I V e u e 1 Z C C 1 stat Kaller announir1 Fnday > " -

had given approvat to allowirry .,,. regular Democrat.s to partxt.. I tg

                                                                                                                                                                       %l:mmer                    ::cn     plants M the future a Y            pate in .ayanst comentions. l though he did tiot plan to atte td s.

them himsed. L v Q),. 'J s

                                                                                                                                                    .Q,
                                                                                                                                                              /
                                                                                                                                                                       ' L is plant will prnve an eco-n y      c toast far Stisstssipps and g      g,,

rats De new rsvernne. Instatied homes gy g7gyg pggy,,ggy g, and obusinesses and on sb i Ni ey d vntions aits enunty icartersi h Clarion-Led;er Staff )Yriter said . Latken, president @f3C5~ here for inau ural Pouce sur;:rised he white youths as part et a 5600 wouldof the utilitr. raid t'ie plant It13 and given clearance ta attead 3 - " be :oest-1 six t ules ine both sets of meetings. act2vit;esi a n

• supplv ofdenceat marijuar.;a a west Jacksort resi.i wasy,' D3"fc3 irt the , midst of betnr sorted p[nn

.'g* '

• 1 Friday 3 gu' ism w of,d $'L7"Fa"w '" '7,*.1TIllClp111 iut enly Demecrat2e party e iris.

I authorities did.after:toon, j g,r for the steam hai:er* 1 ne said ahaut men., had - 3 at sissippi. are holding their pre ! W, j ) Patics said at ! cast nee at the; been put under optien fer :e cinct ennventions at 10 a.ss.! T T d Ib, 'vauths sat at kiteben tasle tor. Ef"ffCL and Lturday. De !nyahsts ares  ?.ng a frie hundred deltars! N MU IM ad. haetne theirs at t si m. .O us. Premset ennventions Y , twaane wracoed ": uhes. ids"morta of manjuana into ee!.lt:tatThe mestruct an pavTml w and delegates in county se! enn.: ret. M}(([lj}}jM idficers enterH the house. about $35 million and at 1 l Ute ;eair the emstmcon forts

!th

.:ns vent.nas.            which    in    turn  name:          it. T     Talker prise: pat af ft :sesseredDe rest of the ":ran' was; *til total aWt IR
',cs.

dde:StesDetastate cnnsent:on. ten s entinn de!egatet the state partylJuner 'tr:h at P4fnabeine erwd by ai De tentattre schedute ca:Is Academv 'Mur. dryer in a tedrnam mus to w se. along for plans am pe

                     '                  ser..e Mis i Hostnal a!!ct a !nnt 11rness-con 8 died .2t the Crewrt Ledore                                                                                          Iwith a small truantity of recJ cmd b

• by sisippi s!r. ILAional csave9 tion. s rentese'ttattv"s to the! Feneral services sii! Se atl"drut related'aad ycilow<ntortd capsules and y <sn unmeciatefy af 1

.g M %~ DEVE!.0P3 TENT i the First Unded 1!cffr*sist:n'ficers said. parapher:28.a." lit? 8( IO3 Of4 k'lawatts mac.The plant w,11 ;iare a ca .a Bah factions have said mem.j C :rrh saturdar. sah burial is! OfDeers said l' icy ra ded m ag hers st the other are scicamel 49d Km;'it in charae to take part in their actmttes.t . ith but the Wa!!ct a;c aval c(! ifr. Wder was born at !!ifeij ssr ant.203 p r:1. Fnday wata a saatta i Laiken said the 5400 mti!1 oft to nt his carty tde' l investment umuld be the bi;. as M re;ular canventiaca attendance represented a at g the .fam'oyald A .p,. rk. and s[onrier residet d;f est sa rrested on three counts, sn.l."gg :.ns:e!e incus a new demopeent.  ! unneuta. he has made hrs- '"* E "#* * # ML h$me here srnre IN3 * " " """ *t' SI8- atment ever made ::s

           *Te 3re f.vn: fo have aen 3, ,,gg g, ste enmndationg Il E 5""fff. ch3iman of si of d g,3c3,7;and pouession af deut-related,lthe Puchc 3cfwre Carnm:s n=                             % all the pengte; W

• st st 10 e clock." u alter said. "IfI Crn'tM psraanernalia t

was Paul C. Rer. see the enencnny had kept the t%cv want to to h iet at 3

       #c!oC2 it 8 63 I                                 Nc $cm He u as Mmti*28288 secretary of me Detta Fuottatt                        ;
                                                                                                                              *y. l. of 718 Brandan Ave. H:sj enmmiss.nn infar- *f Js it pr st thev *aat tn., Se alt rit;*.C 4 g.g 3g,g,                                                                                                                  .treded unn : fans and he                                  !              .

og se Char:ed on Sne count af pas.* reasted the camnany far its vi. The retulars* cnnventions air. Walker was active state < g,,ssinn af mar Juna and onet s.on anst fads that mil

• assure e w.

w.H bc at tMe sahne .M. ices :n. *'d' 18 488I#f'C8 ,g ,,issession g the presinet'. he uut wade thel C*ub and waI"""'" M"hff of3'id the was ConSi a; su,,,Nece E. of 1strers e e Nostec's  !!f.ntacicm 3 ' We d a*ue$v denendaeleaf en

• in sahszt are : cetme at sorin t s a : :tdaate oh.of N Narthr:cw Dnve. Sond' ut tne future , . *ce.'re e M he piaces a wme enuntin arJ at; s!'33'522998
• tate Unamty.

g. l 33, 33p wuM metsien g, g g, og M.

rentral IM2t'ans :n ataien. I Chsr:ed

• by De tr" ter"?or sud tacre had! 7tur's af Stewartis, was a rem. canet
• It[.asten 3. med35"sne de

      %ot                      any M me u         t hkeof              listnntre

• some sectiorts tre :A *.fethnetkt. he serv gg a*Jrtut fa@MfW !4:scutionsa vr af the c'imr and was aireed :.;.-da t. *t.;;cr. II, 4 : air sig st. ,,,,

a -ec~, ,J perviuge iICr SI musae for the men's di3fc f.*yftwand Or. and l ame n.m tl. *feant#ertr ; ,,,.a res four twin 3I me,y. 3. r lanavte._ _ .. ,_c r ..a

                             .* ? _a v n Mr. %*J(kce is survived by h1                                                                                               _ e9e*3 tin!_Ma.

w Urive. Dn*sc.Dont19 'Fre T d ,. see . n. s . n. "..

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b Q . '% . 3 h - Casernne Waller. center. h sisau.n at the pecu cnnterence omrunencm:: dan.t for MP&L's $4tx). millium electric station near Fort Cluon. In the riiato are, trnm lers: C. Lutken: Public Smica Commsuioner Julm Dale; Gacernor Wailer; Fuhiic Smsce Commininer Norman laivuon, Jr.; Joe H. Box, MEsL ssce-pressdent, engmecring and construc: ion; and Chairman D. W. Sty; der, Puisiic Sercsce Catamausener First nclustria JeveLopment AnnouncementMade By New Administration .s M4_'s Nuc ear ? ant

                 'The first industrial development announcement ma'de ccustruct the plant came after many months of emeful study as to the need, practicability, and safety of such by Coverncr Willi m Waller - three days after his inauguratica - was that Mississippi Power ec Light                                                         a unit.

Company will build a S400-million nuclear. fueled steam- Applicatien for a certificate of public convenience and electric generating station six miles northwest of Pcrt necessity is being filed with the Mississippi Public Serv-Gibson, on the east bank ci the Mississippi River. ice Commissien. In addition, application for a comkze. tien permit will be filed with the U. S. Atomic Energy It will be known as the Crand Gulf Nudear Station, Comnussica in Washington, and permits will be ught since its !ccation w11 be in the historie Cc2nd Culf frem ether regulatory agencies having jurisdictier. are2 en the River. The new governer said the announce, "Nudear. fueled power plants h:ve proven to

• ex-ment of the pl=t heralds "a new d:y of long-range tremely safe, clean and dependable, and have tF te ut 41evelopment in the state ~ Also participating in the an. enviremnental imp:c+. of :ny type steem electric : .:en,"

nouncement were members ci the Mississippi Public Mr. Lutken s:.id. ~Bec:use of strict AEC st:nd:rds :=d Service Cceminien. continuing supervision of a nude:r plant for its entire Den:Id C. Lutken. MF&L president. s:id the pI:nt operating lifetime, nuc!cer power plants are the most will have a capability of L"50.CC0 kilow:tts, one of the crefully and rigidly supervised projects in this enuntry.' The official peinted out that there cre over 100 largest in th n:rion. =d th:t the S400 million cost. nude:r. fueled units either iii cymtion or under een-represents the biggest single industrial development in- struction in the United States, adding that the MP&L

                .vestr s.nt ever m:de in Mississippi. He s:id decision to (Continued inside back cover)

. ' Jr .ssippi Power Cr Light Compsny. StJLX RATE P. O. Box 1640 U. 5. PCSTAGE Jackson, Mississippi 39205 PAID JACX5CN. W55.

                                                                                                    ><&r                lI                                                                           Permit No. M \

n .

e= i res i oaunders-2 JJSaunders:jf i Staff-2 .

JUL ' I. 7 .1972 . .. ~. _~  : .' : . -

TEc.:oJS ,

                                                                                 ~~
                                                                                                                            ~~
                                                                                                                                           .', ~C . .' . .f -I. . , .. i... U. . 'f' 60-415-57            . . .   -.."  ,
                                                                                              ~..
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                                                                                                                                   . -....        ..,_.2...o_....                     .
                                                                                                                    . . ' ' -- - ;. . -i.

r_ .tt' c.f _- _ . . .' Centerville L.1.ght- & Water Dep'a_ ' ent,

 . .; .                                                                                                                        " " -              ' f'.*':~;. i.'.' * :~ ~.C.-:

CenterviL1e, Mississippi 39631 '~'.c. Mississippi Power & Light - Re.: Grand Gulf Nuclear Pcwer Plant .

Dear Sirs:

( We have been infor=ed that the above-named electric

         ' .*g utility intends to apply shortly for a license to constructand operate t identified in the caption of this letter.

v Pursuant to Public Law 91-560 of Dece=ber 19, 1970, the Attorney General will be required to reviei the application and advise the Atomic Energy CL ission "whether activities - under the license would create or maintain a situation incon-sistent with the antitrust laws." As part of our review of this application, we will be attempting .to dete=ine whether the ownership and operation of this unit would have antice=petitive effects on smaller indepen-dent bulk pcwer suppliers orIndistributors in the region in which this connection, we would appre-the plant would be located. ciate infor=stion from you on the following points:

1. Have you indicated i$terest in bulk pcwer supply co-ordination with the applicant, including or but not limited to coordination participation in the above nuclear unit, with the app 14

• or others which would involve use_ of the applicant's transmission lines , or sought to arrange such participation or coordination with the applicant? If so, whator was the applicant's response to your erpression of interest, to your request for coordination? Plaase furnish all details.

2. Does your systen have bulk pcwer supp-ly expansion or purcEstc ad.te=atives under which you will be able to ccmpete wi' k[thd d$plibant for load growth in ter=s of cost of. pcwer and pcwd: '3bppty reliability?

D .

     '                              C       ~3       g           g I                                                                                  .

3. Dces the applicant centrol all or mest of the high voltage transcissicn in your area? Is its c.incrship or control - li of transnission a limiting factor in your obtaining bulk pcuer from alternative scurces or in ccordinating planned expansion . - l of your cwn generating capacity with other electric entitics? I If so, please explain. - -. .

f .f.., . . - .,!---'

                                                                        ...-   ^ . * *: -~ ::._..         ...

Have you any other facts which you believe would have

4. ~~'

a b' earing en the cc=petitive effects of a grant of the.. license- Q~. ,T .

    ~ ' ' t'o th6 appT.ica:it which we should consider before rendering our ..'.
                                                                                                         .-4*

advice? - - - We would appreciate your prompt attention to this matter. In replying, please use the above caption and Depart =ent of Justice filc nu=ber. . Sincerely yours, THOMAS E. KAUPER Assistant Attorney General Antitr.st Divisicn By: Joseph J. Saunders l-Chief, Public Counsel and Legislative Section e 4 e i, G i

I i '- Identical letters were sent to the follcwing co=panies:  ! Clarksdale Water & Light Depart =ent - l Third & Lefton . Clarksdale, Mississippi 38614 ,,.,, ... '. . .J. . . .. canton Municipal Utilities .-. .. . v.-

                                                                                                                                                              .a . . .

city IIall

                                                                                                                       . . .       .:-.             . f.                            . ..
             . . canton,111ssissippi                        39046      . . . .      , . ."
                                                                                               . . n T ? l. I'                  9 "         - . %-                    - --             -
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Ya=co City Public Service Cc==ission

       .           125 West Cc==ercial Street                                                                                                                        .                        i Box 660                                                                                                                .

Yazoo City, 111ssissippi 39394 . Durant Light & Water Plant Box 272 Durant, Mississippi 39063 Fayette Light & Water Plant Spring Street . Fayette, Mississippi 39069 Itta Bena Water & Light Department - Itta Bena, Mississippi 38941 - Kosciusco Municipal Water & Light West Jefferson Street Kosciusco, Mississippi 3909d .

                                                  ~

Leland Municipal Light & Water Division . 101 Deer Creek Drive, N. W. Leland, liississippi 38756 Mendenhall Municipal Light Depart =ent . Mendenhall, Mississippi 39114 Shaw Light & Water Depart =ent Shaw, Mississippi 38773 Woodville Light, Water & Gas Plant - Woodville, Mississippi 39669 Memphis Light, Gas 5 Water Division , 220 South Main Street Box 333 Memphis, Tennessee 33101 .

                           /
                         /          .

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Dolta Electric Pcwcr Association Post Offi.:e Dox 935 j Greenwood, Mississippi 38930 l c- l Pearl River Valley Electric _ . Power Association . . . .. .. - Colu=bia,!!ississippi 39429 .

                                                                                                    .         ,,..                         ,     l,.              .'

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            . . .     . South liississippi Electric Pcwer Association                                       . . .
  'a-
                 . post office Scx 2018                                  -
                                                                                   .     , ,;. - ~ -              ,,-  .
                                                                                                                            . . . ~ : ' , i"- y .                ,,,
                .:       Hattiesbu.7. ., Missinsippi . 39 401'                .
                                                                                                           '. T.1 . . ~     -
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Southern Pine Electric Power Association

• i Taylorsville, Mississippi 39168 '

i

                                                                                                                      -                                                        1 i

Southwest Mississippi Electric  : Power Asscciation , i Lerman, Mississippi 39096 i Coahama Electric Pcwer Association ' Waldron & Jackson i Corinth, Mississippi 38834 .

                 - Ncrth East Mississippi Electric Power Association 819 Jackson Avenue                                                                                                                         '

Oxford, Mississippi 38655 ,

                                                                                                               ~

Twin County Electric Pcwer Association Post Office Scx 158

• East Avenue No.'.-th Hollandale, Mississippi 38748 ,

Magnolia Electric Power Association Box 747 McCc=b, Mississippi 39648 . North Central Mississippi

                          ' Electric Power Association Byhalia, Mississippi 38611 Yasco Valley Electric Pcwer Asscciation 1408 Grand Avenue

• Yasco City,. Mississippi 39194 Tallahatchie Valley Electric Power Association 105 College street Batesville, Mississippi 38606 Central Electric Pcwcr Association Carthage, Mississippi 39051 Tennessee Valley Authority -

                      'New Sprankle Building Knoxville, Tennessee 37902

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($ ' O . ,. YEIVED g k A . fgw:c;L-CITY OF CLARKSDME' ' ' W ; r- MS Il 22 Alpn u ..-T,.y .f.,)} August 25, 1972 DEP,T.0F JUSTlC'e

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                                                                                    ~
                              'Mr. Thomas E. Kauper -                                             ".                                                            . .c. :, . ,. _ , . ; ,.g ,, ;
                                                                                                                                                                       . . r c. .
                         ~.. Assistant Attorney G.eneral Anti' Trust Division
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United States Department of Justice Washington, D. C. 20520 Re: Mississippi Pcwer & Light-Grand Gulf Nuclear Power Plant TEX:JJS 60-415-57

Dear Mr. Kauper:

This letter is in reply to your inquiry dated July 17, 1972, with reference to the above capi.ioned matter. Your letter asks infor-mation on four different points, andjhis information is furnished herewith in the numerical order of tne points stated in your letter. .

1. The City of Clarksdale, Mississippi, which is the cwner of an electric and water utility which generates its cm.n pcwer, during the early months of 1971, entered into negotiations with Mississippi Power & Light Ccapany with the goal of achieving an inter-connection or tie between Mississippi Pcwer & Light Ccmpany and the Clarksdale utility. The purpose of the negotiations was to provide a working -

agreement whereby Mississippi Power & Light, or the City of Clarksdale could exchange pcwer when either needed it. These negotiations did not result in a mutually satisfying arrangement and no further negotiations occured.

2. The electrical utility system of the City of Clarksdale has bulk power supply expansion alternatives under which we will be able to compete with Mississippi Power & Light Company for load grcwth within the City of Clarksdale, Mississippi, in terms of cost of pcwer and power supply reliability. Mcwever, the availability of these alternatives must be cualified to scme extent by virtue of the fact that the Clarksdale utility is cwned by the municipality and, there-fore, its expansion and gr wth is subject to political variables.

However, excluding any political censiderations, the-answer to your question number 2 wculd be yes.

                                                                                                          . -           .,-                   ,     /y
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 .                                                                  .                                       DEFAr.T:                         ca            .

C11Y MALL *sDvTON8 C005CN us,or 's= - PCSTCFDCf 301 940

CALE. w SSISSint Satta 00 u uiSSIC*e t A S.

W Pe CAA AETT. .R ,

t. 30 1EF p 8 THOMA$ [ CAAuON g ttCYO W Af t!S ,e 9 ,

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((. t~ i Mr. Kauper Page 2

3. Mississippi Power & Light Cccoany controls all or most of the .

high voltage transmission in our area, and this cunership or

• control is limiting factor in our obtaining bulk pcwer fremIt tities . By. .'f,, is al alternative sources. i

               . plant expansion of our utility with other electr c en any power- - - - - '
        '"      . controlling the high voltage transmission in our area,                           .. :-:  .

7 which we purchase from.other sources would have to be wheeled by'_2_ - l_-

      .: -g                                     ~

Missis'sippi Pcwer & Light Company on its transmissict lines, or, -- .; - the only other alternative would be a direct purchase frem Mississippi ccmpany. Power & Light Cemagny on terms agreed to and any electric utility other than Mississippi Fewer & Light Company woulc require the availability of the use o l k d le,

                 .4. The Water & Light Department of the City of C ar s a Mississippi dces not have any other facts within its the license to Mississippi Pcwer & Light Ccmpany.

We trust that this informatien will be useful to your Department in considering the grant of the license and, if you have any further _ questions concerning anything contained herein, we would be gla to attempt to clarify it. cerely yours,

                                       ,    j   Y~

Ne. cn B Do'eson, Mayor Ci y of Clarksdale NSD/abr

               .                                                           e G

e e 9

    .e                                                           .                      .                                                       ,                                                                                            f s7., ._                                                                                                   .

l . NOTICE 5 , M 77 i Arr== ^ Ap*Licant and it' *?d8

• t** 'D L t" *

    .

• ATOMIC ENERGY COMMISSION utssmatrra powra a ucwt co. canwe stn ,

Anausan.msmoun Pown W. 'h.'e man *

                                                                 * *

• WDCL.aAa eTaTsoM UNITS 1 AMe s eraune in soutn Central Unned as CONSOUCATED EDtSO*4 CO. OF (arc poexzTs teos am tea aan so-etta: base forcied the Sout.h Ccstrul Electric Co 1 gg g for purposes of e ntering =to mutually as.raaTasaur or JusTsez rttz ee-a s s-sf l Ceder Desig.tating Data and Place for Cral atar 24.1973.

D"I' W " "'" "4 ""'8 " * "' "'* 2'e"n*v"'a*s^e"e Val:cy Autterity. Ttata corntsetual Argument You have requested our aartce pursuant to armngement provides for coorsinated simi. On Aprt! 05. W3. st 2 session of evi- theEnern provtsions Act of of secuon 1954. tus or sne es amenced byAtornic Puc1:c ntne. cation;otnt stuotes of future on toadand f aculties, crowsn er.c :o-enoralmated dent:sry hearts;;in uns proceecang. the Law *l-W. In ngsrd to n2e a o"wapLoned matntenance schedutes. cacer use contract Atonue Saicty and L.censte: Board con. D*t*"n M and Qe associauon nam rs. sidered Wh tnc parties 2nd L11cre2Itcr

• EM***.ssippi P ""* " "*

Powa 4 wt Ca ( AppMcanO sCMu:ee am provided for eosioir.y enegy ord: ed "ist an oral ar ument sitouM h:1 applied for a construccon permit for tta sales, arm power purenases, emergency serv. bo convened, at a date and place later to Grand cutt Nuclest St.auon. Units 1 and 2. sees and ceterred civussty capacity.T c most be de::; mated. af ter the compietaon of the The tscinty sa.n be located tn C:attourn important item is tse esenance of 1.500 MW subrnatt:0 and r.iing of proposed findings County, huas. near the Lt.:.ssaastopt a.:ver. Co- of capscity made avaucste by the msossi ersuca or unts I has bem .cnedu:ed ter civnsity et lead. Under the escasce, tae { snd cccciu.stons. 1. Wherefore,it is ordered. In accordance July :279, mta unit 2 tciuowing in 'anuary .succie W A durts: soutaits setem summer recettespeaa.essof Mwwhictrecs Ap. with the Atemac D:er: / Act, as amended. Isal. Applicent.-.M:sstaanlrpa Power k IJght has pacant taxes t2 MW. and the rujes of practace of the Cennus. pousuon. transmimn, and a:stnmuuon Appucast is a me=ber of me soutasest I tion, that etul argument saa.11 he had in is411:nes prov: ding ret.ul electncal service Power Poot, a regional coord.icatar.g and this proceeding respectt:C the conten* w 4ts.comr=unaues and w:clesale electne pis.sning group (not. an ope-aune poon. tions of the parties. together W.th the:r servtce to 6 mun:c:paltues a=4 4 rural e:ec. ne southwest Power Poet is compcaed of 31 prepose,'*. *T sad concNsioc.s. and u.c cooperauns located in the western halt electnca2 systems. co= pan:es. t=clud1=g rurs! electric investor. cooperautes owned and

 <4 the sertica of th:s prece*d:ng for the cral of soc                  tre state       of acas.astppt. Appucint serses e 240.s78 customers tsrougs 1:nes con. munie: pal systems.

argn=:nt 2. nil ccnvece at 9 a :n. cn s:s.anc of ::.c27 pole =ttes of sustrans=us. In addinan to its atreet tsterecaneet:en 2 Monday, July 2.1372. at cot:rtreo= 2106 sson and distnnunon lines. 2co cat:e ges wtta T7A. Appitcast is directly 1stercon. k US.Di.traut Court. Third and Constitu- Cr unde ground distnbuuon lines, a.ad ...Q nected with M:.ssissippt Power Co.a ngs3 s.

 ! ';g                             gon Avenue g gw .,on.QC.                .
                                                                                                     =11as et ::s 'sv or above innsm:ss:on 1.:es.                    sappt Power Co. ts an operauss suosic:ars of 3                                   Issued '. fay 31. 1373.Ce. antown, Md. For                        tse hadyearsotal ending      cctacer
      ;                                                                                               ca.cs                      energy sales31.of 7.:sT:. Ancite 01.2:3 Mwbthe     soutaern holdt:q            Co. a res:

cec 2pasy.* Tusstared carectpuonc utgity taterec=nec. s- , ct w2tes 7.1-'t.13 Mwh were genented b? tion is maintaAned pursusst to a rei.acd4ty Armcc Sara-T AND 1.ZC:NS- ' . the 1.s:2 Mw available cependseie canc:t?' a*-angement between see southern system

       '[                                               2xc' Boars.

• 2.proeteed by its tour. cen=al gsseratin g (tmo southers Co.) and the Macce scuta

t. . , Satur:. W. Jr:4scst. #^582 ' system. -

CActr.nart. - Interconnection and coordinartei u,tr g;,2eu, of a, 3utu povy ,,,,n,. m

                                       .IFR Doc.is-1,.:l 7 Filed 6 5-73;8:ts am]                      other:Mppucant is an ooerating autsid- Jtt.rst.asnpsmin tem of bult poeter supply.

g, , tary of it:dce south Utust:es. Inc a twst sne sta:. og n;33,33 ppi = sy n, e,, c,4 tered toising company unoer ce Public rougsly in to three areas: ne scrtner.

        -                                    - [Docaeta Noe, so-4 8A. so-417Al . .                    Cttuty !!clong Ccmpany Act. The othu op*                        quann wrted by WA. Ce scuCesat qu; er "3csc sutsidiar:es et tae M:dd:e south 39                        ,,r,ee t.y Mississ::pt Power Co. sne scutn                             .
          ~

MISS!SS!PPI POWER & L GHT CO. tem an: Arbmm Power k :!ght Co.: 14u151 ngs.g3;;pg ggggnc Power AssocMuon. and Not,ce i of Receipt of Attorney Geners!'s ana Power 4 I.:gst Co.: New crieans Putt:c u halt pnanpany uned w Ap. co wu.,t.u7A 7;;gg M's t-Et pown to a ON.,e'me ar A44ca and T;ine !cr in;ng cf Pat tions service. Co. :nInc.: 19i2and tseArsansas.M:ssourt peau : cad for tue Power sn u:e og 3:e.,,me,2g og,=1 musing rung .

            ~.                            To inter <ene on Ant trusu. tat:ers                          souta Syetem was 3.*:2 Mw. and it had a                             omg;,e, ta con 3,2.,2                 g3,%,;g m The Com. mission as received. pursu- total dependante capac:ry of 3. : Mw. :s.                                                co.vA Itevenue 3ond Act et :ssa. n stat. :se.

{ act to tectica IMc of the Atc=uc E.nerg7 clue:g .1.413 Mw or arm power aradatte 16 UAC. s3154 pro =10tts.WA trs= wi;t < Act of 1954. 2s a= ended, a Ie:ter cf ady!ce useer contracts. Frem an e:ersuecal sts=d* cr interema=ging power w:ss s=s tect:.u.t i frc:n the Attcr:ey Cecersi of the Un:ted . south potat. systemeac suba:cary compnmig ce =cca system to ruica a cd =ct provide serien i consntutes a ecepccent et a ;nce to e=setment et tre act.) f- States, dated afay M.1973.' a cc7 of ' 11151:ssippt Power Co. su;pties teth w:ota.

• which is set forth below as 2;;end x A [s $*##cent " s a l ( e h' , e and

           .E'                       DCICW. Attached be!OW Ss 2ppendiX 3 is the M:dde south system and from =ortest sissippi..s,ntan                                                      .9'Ocw.o=es M.31c aas    p scumean en m ng ca-   ms.W
        '                             the let*cr cf the 2pplicant W.".ach inc!Udes to :necunt satisf.es the svttem's de:r.and by or 1.2 W *dh a pest : cad at W 5,..

( applicant's ccm:ntments. supplytag e'ittgy ava:Jable on the .Midd:e The .geneat:en and trar.sr= ss.cn :acut. f . Any persen whose interest may be souts sestem on' the bas:s of incre= ental ties of t'outh M:ssess:;p t I:ectne ? ewer af!ected by this proceed! ; =2ay. pt:rsuant genersuon and trsasm.tssten cost. Generst:rg ^"#*****'3 ^I'"***" "" 7 2 '"' M 41 5**'3 "" '*D1123 d f F 28

               '.                               11           "*'e Cer=,=,.issien's rules of systern as a whole, and reserves.'are avalg. In scutheastern Mhs:ssa;st

• a:c"cu L to i **"ce,413cfCHL ;2.,.

practi ce a ;et tics ame o esca eswary meut asa.w t**:s: mss:an unes an victs so re of m easternmcst cou=ttes et Mas:ssimpt seru d p for lesve to intervene and request a hear. to =eet ant contingency ott the Midme scuta by Appucant. EM7A v2.3 Organ =rd in W srstem. Cc=pr-hensive coordinued . plu,

                                                                                                                                                                       .my a numeer et estnbut:en ru-31 elecme
                -'e . in;: cn the 2ntitru.st as;ects of the 2p;11 ::ng of genuat:en, transm ssion and inter. cooperatives in south Mississippt and adia.

cat!cn. m.onons !cr leave to intervene connect:cn et the internted srstem mta its cent Lou;stsaa to provide a mere nasole

                 ;.-                   and requests fer hear:n shall be fL.:ed on taree : cad enswes esca suta:cury to scaave and ecccccise source et power. sMEn was
                        ,              or before July 6.1073. either ti) by de!!v. tte tenet:t of economies of scale. "rae prin. w ame to W.s cpeatwn ma m m try to the AIC ?"""c "cc cnt Rcom , ebst                                  mechantsm used is the snued ecc.

struction of renerstan tanuttes nts cen.

                   -                 at 1"17 H Stree '"# W2 stun;*.cn. D.C., comitant secrt-re                                        sales of surstus power <

• Por ce prtrnary wpose of **c,u,tt:'te r

[ or C) by = ail r tele am addressed to and purchases os def.c:ency poser. tne umange oc -ower een een ..a we Cuu states t:tuittes. Inc Ampuennt wa

                    >                   the Secretar7. D.S. A:ocue ":cr:;7 C0m*
                                                                                                             * !n 19": Appucant owned a generatico es. direct 30o 1 7 Interconnection w:m E!

mias!On Viashing*Qn. D.C. tl545, atten. St *'*S-tion: Chief. Public Preceec:ngs Srane::.  ?*c2 T of ~83 MW Cf a C3 183 MW8 r*

• For a estat ed 4:scuuton of the souti:en

                      ,                                                                                  committed to other ac.'::a:es m =rcer .o ca.

For the Atomic F.ner:7 Commasien. un sne separate :cao/capa.::tv raco required ' Co. srstem pieeo ref er to our :euer c' 46

                                                                                                         *o De mst:stainea 59 ea.cn Occr.*:=q cot pany vtce of Aukt. c. :S* . on :ne G; rM N* er Co. AEO Doeref s Vo1. S O.=h d a m. .%**M.

AstAM Alt .M.AIUt A'f in.the succ!e ses A;piicant scuta nosystem. warneteetre :acutttes: and our :etter of n.setce er Aug. 2. :a . on Chief. Ofice of Antitru.st a'nd crand Guar will se :ts Orst nue: ear tecera. . the Georgts Power Co. AIO :.)oe w t N o. Indemn:ty. I.':; rec: orc:a of !..- csnstng. uan. . so Ma.. N . {<. f t:ttAt Itcisite, vet. 3s, No. los.- *t:St!c Ay. Mt 5,1973 S .

                                                                                                                                              .t 1

b.- g.

4 ..

                                                                                                                                                                   =
                                                                                                                  /                                                                                                                                                     t NCTICIS                                                                                                                          . .

11573 l' (1) Applicant does not 1ste54 by theca capacity of a gefterstaat unit sha!! to upon tte memoore rios consist of sis rural elet. t's bas.s of a rate t st til recover to the Cor.Serstlees foCated ts sout3 ti;ssis. toc 1mj: cents *.o Decocae a O)mm ca.rr:er, (;) Appuesnt rewrves ut r%iste and pro. seiler tse pro rs:a part of the 1.ted camu 2:4 L. *hree memcers of SMI? % '.:s: .o*:.a taction e.!Jrded il 3714# wibs f*M* ".o r9 o*Ver1url( a'td "*443:e3asce eng**lseg o( trie 6 ( Sout3 mest M :.iintppi EP.A scd ;Wut3 ta.1 c;;Lrtautir,4 of bec*ricit7 l.31.".ose areas kn .*  ?*o'r**Eed. Cat. 13 circum 4tacces :n 4 Pt3e E'PA are loc 1 Led ;3 :out west W.3 t :ca app;;cas: sad crie er more ect.::es L.2, l

      . slopt. whics ADpt cant :erve" A p.!caCs LsCert;*.cate                       we'.ter's '.u.:4'.;sippt of P"Ao6Lc COttTe   !)r wMca      me'it ice hs:d.s and a neces. the waster 1 :.;'ts.as p;t tres *ada u u=ct.                                                      j roannues t01 app 47 ooser to L' acme <. Lettau*                                                                                                                                                                                                                 i lag =e%ers of $*.*E7.t l.s AppucLat's area. stry frorn 13e !.Ilsa.L.p p t P'43nc S etWee 71ded                                                              ccs:s  LCteres:           1!t & u 1%asa sad operanart              is fee. cons:Fuct;oa ma.2:ecamco             eg.

alL30ug3 S!d"JA sci 4 aa a purt:3.." g 24e31. CO(UmA4.oS G) A =&jor port;oS of wester 12.U.ss'.astpol peases acall be pa 4 ;ro rua. 71ere are three muDic pally owced ge n. coc.ste:utas : e escau.ssvo n:.a4 sare;ce uea 2. ( a ) Appuc==. saad ;s:cr:oc=ect wits , eranon sco 4'strioution. systec s 1.a Apple, of a 3u.:".tef of castr1Dunst e ecstte power asa coord!: ate re9erTe1 Dy means of Qe sMe Cant's are3. Greenwood 3a4 a tot.11 Cecer1&. a.&ocaa* ons and munic;3a4 c1&=. u*. ors G.L and purtnase QC eme*;er.c7 an3/ or sc3edu.!ed . lag capacity cf 67 ?.1W. Ctart.3 dale 3As 64 aerets scou;a r.,e coa. matstartasca bua cower w:3 20T enut7Ges) i M'#, and Yazoo C::7 has 31.5 51W. Caly noca;:; strued :o coat.Mried caas4e or dack:5 is any respect the 'a : q vesters !.;;ss .stoct ares es;s2ts3 'a or .  !

                                                                                                                                                                                                                                                                .j Yazoo C:ty has an interconnecuon wit.2 reta.1 service areas of other ocunes.                                                                              proposang to enate '.a e. ectr:c Quas po-ser Applicast, under wtucs 15 Duttasses ecoa.                                     (43 Idiastasippa Power as !Jiat Co. sad the suppl 7 on ter=.s : st 1:111 provide ice appu.                                                                                      ,

omy and emergency power. 50Q Ys.too City luscle Sou*.s System have a poucy, wh.ics cast's cosu is consectiori tacrewita and and Qreecwood are consec.e4 '.o adlacens al. low the other partytten 023 access to tuo a rural elec* rte cooperaures to whoci each, is erpected M cun:tsue, of locat:.:4 Lev -, wholesales a sm4G acount of power. C;ars.s.wt:a g carat; 3 escacay g*ner'.dy is sapetiance necedt2 ce demand is tse !?acecute respos.s of reserve (b) Imer;tccy coord :Anca. seretco and/or scheduled

     'date operates completely Lsosa:ed.                                          served by ocersua3 compas.es =.ar.123 up tas :'".a.stenssce sar7tco to to prvetced :y escs Jteeslas of ants:rsst- re. mete.-i.48 noted                                                                                                            party saad be fur:asted to tae fullest eJt.                                                 ,.

above. Appi.icist ts 3e dor = :sst bu;2 power _ of erMi ststemW All of the unders'.andists and com. tact setCAMe Dom Ce supplytat ps. 7 and . , . Supplier in westers !.1.s.s s. ppt and own.s and c=ents of *.te acccesst s:e contM ed a cesated by the ;sr*7 is need. A;pt;csst and - controls etztusut ad tas trm"nos fact;;. the c~~- -'m serets =sce and :32.s coter esca part7ttes) scan prov6de to ::aa.;ste. ocer ties is the area. h tue course o( our ssu:r::.st '38#E*A87 **fTk 8 20:1# ct scredu.ed reelev, certain mJant:cas were recetted. tre '858 f-

• geceral t=por* of w:acs was t at A;pucass shaa toIfoce (6) of *heas Com=11:2ents hereas tr.de La ce seM!ce ow generanac andif a04

                                                                                                                                                                                                          *:ots33e2         m.hcio cf genersuon              fro =% ,,        L3           i coc.s=ued               a wmver by sopacast has =aused its =ccono&T pc.iuos in gin,                                                                                                                    seters :o no ene=.: it ess co so w:::sut .m.                                                        I erstb n a=4 trans=:ession to rest.rsts tse of its rtgs:s M coctest w:etser er sot a                                                                                                          1* 8 C*utocers L cluc;=;                                          #

tuture tsc: usa situat:on *.s tsecca. stent with0"m= PST03 HMC8 elect.c 2 sys*.e=s 2 w:cas it iss .a =s { com;ettuve oppor:u=Auss of smader s7sta=.s Ce ^^'"-""*:*s herets =ade. 1s western Masstis:pDL Fer t:2 part. A;;ucast. t , ,- Pcc T C 'm or twwt Powts P a n,e,,e su . *.1:da,_,, the other ;stty(ies.) roc to es or o .e:S ta e . w emCo.:onA -rAn sC,rrrs m:-.m .

                                                                                                                                                                                             ',4. .: 7 ,,;,D      =8

• 22. .*

3 .. laws. .iovever. :.s orcer to el' anate asy ques. .

                                                   .                                   .o Gaa.vc G r N                                 ..        .f o.1 4:o          "=, t, , ~,                g               - g3
                                                                                                                                                                                                                ~       ~ ~*    _ . . . ' =*                         .i tions as to the ; otic es ca: .t :stacas to fot*
                                                                                       ?t        2 AI**
                                                                                                                                                           *W        TN" M                   h " M'U WM WM                                                      . -

A tow durt:g Os perted of t e Grand Cu;.! 4: 4 - [" * ." _

                                                                                                                                                                      --          ==t====              === o =e = :4 = =~-.                                              '

ucer.se. =mut = menu wm=rsemo '  :. .,.,* W ' 't " "$*N * = t* 3 formm3:e these pouces and to have taa:1 ~% 8408A'=I 'O Ef 3'd8 bd84

• 8 78"'4537 Of ' !

t= 1uded as ccccitior.s to the Wesse. 4.s -acounties""of: 1*3s.2ed W* 'ri

• K"'l.ml *~ e ats .m ,e power su;D1T to* *.La later cc. ec:eda- 37ste:::.s
• result of c'.acussioc.s wt'*- "e" WaltaM1, 'S.".awr#'$. ence. 4*ersss og . ~ s a -' es. *~* u *'t-- *a. '

these poucles han :een ar."ic.;1aeoar en*ted Sea *and are' 3 - *--@~ Cova C 3 -'*th- S.: "*- ::ar;'.s oc"& pcoled tasa w' ith oder 'M";2d's -

                           "'"*a                       t   he is:ter of 7Aske. A:tsla. Choc*.aw. Abn:gomery. Cre

• South 3rste:n com;as.es. the reserves jolstly at:ac =.est.T,o u d t,d".,I ***ifMM "^*;

                                                                                                                 ., ,, .,^@           . . ?"f6 f*

P

                                                                                                                                                                  ;$;-2ag=gegeg = 4:ef*=:

g

• e4 MAL,E.*G/sa

              "~ent.s.                A;;ticaat                    ai-__s ce.           e. thatt out                              ts.                            .
          .a[s        its co                                                         Cc;tah. *ecerso Cialberne. 3::cs Ran11a.
                                                                                                                                                                     =um              reserves                 shs3.,,,u, a

be ca.cu:ated a

                                                                                                                                                                                                                                                                   - i as g n    nu=uece.ouowm                           n:.orsin=o-               maacs.:uoo
          =enta em caer sua power su;;uen a n=;ar=7,. 3,1=,s. Car.:u. tee,re, sun.

wme=.-men. saun7 ,,.m,, ,.,.7 3 or ,,=., 2.,e ., ; e suo,2 ,,. ,3,a , wwstun a u w;;t: accus to tse ces:4 :2wer, wist;: roc. sounr. T e tesa, requ -

                                                                                                                                                                                                                           ,,ges --,-                                     .

ouir =ueuu ===: extemun a 4 au. ==a :. Cate=2 a=e w:22. .u m,r2 e-un m, . ,.ed to =2:n-a=

                                                                                                                                                                                     ,,,,,,,,       mm ,, r..,et
                                                                                                                                                                                                               .,,;, u,reu-                                               ,

1 or nunes: u=a po.e u... m a pur. m c se eees.ee .o 3. . . m ee -v. c.

                                                                                                                                                                                        . . . .          ,...._,.._..'5,."521,

_,, :n . - .! e :t 32s etece.. pown cnun wues woua reeuce cosu :ce u. Mas:um Are. . I g.,_..,.x.pg.

q. arm,.- u" ' c 's- ~ .g g/d, .;l,Of l~*-eN'c part:es: aca trs:s=:ssics umces over tu riceranen. =3:s=astos er eartnut:en :2 g ,,-,,_.

cua.estocue4 2w et.o,m pu.. 2 es

                                                                                                                                                                                         .e,'_.ou. ,uc ,g,g'                                                         .}

cmuu a,:ee ec=. a our om :os. neu nou:e ;,,. a30,e.co. w. ue m,,2. m. u,s . 3 . - . . .. _,_ , . - . y ,

                         ;eu wsetA;;uc,=t m a com:=u.                                                     .                                                                                                                       --- -                                   1 stu. 21:er:aure sui.c pown supply sour:es                                                             pow,,,         .,_,u,         e, , e,                =.3                                                                                                 !

and suestuusar eu==2t, : e grou tts on p m .3ua we... and a=y st:endas.. ene!T7. su;;ue-. m gcar-rovtas er pr"g7y for.as :ts ,g-(:te:.rt g ,- resaries

                                                                                                                                                                                                                                    *- ,-                     3
           ,yeg comPg..a -2 4 *% WPu* sect cr =sce aradable at 2"u- m o ce su.3                                                                                       sta t:11 smou:- is                                               -e
                                                                                     = = = = = =~a                               =r ~ e = =7 = - m =a : L ma                                          = s=uotrese
                                                                                                                                                                                               'cuaws::s                 s"-

• As.se=i 1g#.J=M'='el."r3*/'"O=fs=. = ' " " " - - . =====n== pror=e suca ==ou== a .

ets ne npec= aa un es Cc==mm '

                                                                                                                       " ' ' E*

• I* I E I' Of II"#' E '# N l' = 17 N 'M E8 wtitt3Clude the:2 a.s coGaltists to the 1; cease, I M 8 58"

                                                                                                      "       I       *E

• wW COAClude tha s scutrust heart =g vtn #3" 0 E".

s " a" .o .a. on W pg 's hc.g . *,0e .oc4 **

            =            ecessary    wt:3     respect     M the   L:staat      tic  =  OF Dus::ess      =*.Ls4" Cwn.12g. opers*.*cg. Or                      COC11 Cer.cles of open 2g 1*.s sysag=. Ecw.
           'gpp;gggg c4 be n. g                                                         f- propcstag M ott or C; erase equt;=e:S or                                       ever.         !s So      C:.r:O=.sta         ces:*1esaaJ       *.as.:ed ytare- ty reserTo          req'lirer".ett   eI red            iLsta                          *
                                                                         ' T '[ f.0cilities dis      *   :Dut:csIOr the of     ge er3u;C.Pomded elecir:cuy:             :r*-" ',. oft.

nat, ofserve requ:: ernest. . sc:sstsstret Mwra a ucw; co. uppt . (e)vottaats hterconnectio ca.vT) caus c: r stc_na star:o e. r,Trs *Ece?L fcr =u:.te:;aJ:.es or raral elec= c low w:e3 .s will 20tvot::ges 2.;gner te E=ited: ,tostaa. '*~ ecoperse:te. esttsv- a restri: ed 2 1 ose t aan s [ arc socxr- lctrxstas so-osa ara we.::3 in of w".11 ta ;ucti: 't:Wes ur44r We f-om sopucast s msa.ieu acu.nes . so-e tT A: s trutivtsT of 4 sites it;z eo.- ta :.ssi of taa Sta a :s vn:ca tue esury its tres waere later or.cecton is aestrid. 443-s7] ' trets or et:1 ntLsact business or u=cer 7:en :no proec.ec u-=ngemen ;s. toungg to Attached M th1.s lettee tre commst= eat.s , .a, yg, g p,.m g., gg y, g gg 9 3. .m 7 3g Coctrol wa *M=ete- r'g *:cc nes ses.1 w of MLinssioot Power ss :.;rnt Co.. :Se sopit. provta::t eA:-*c ser**.ce cen a coat :et . pree". ed. As rqmrett fx sale saa =r.::en: cast is tse soove s:vted saa nu=aerws w. et rsta sc e<:uie on le vt:a s:c sutfect :o voersuon 3t :ts .0:er onnee:eq 3,3:,n.s. whica we snee se te . set ,;aed s.a cocc - the ettuisson of a $ts:e' r:Mucry :=m=1s. ff) M:errnfinecnon t .41 0xec:.u.-

• g n coa.s to the Cons:Wct.on pe*mg s: i,1 rweg" skon Or te **Pde-3L P9wer CJ":. tisstra.

             .ng 1 cense to be issued at tre 4:omic E=e ;y                                  y          Cet* =cac.s                    7 o           ttM      1.nd       WT*2*'nt* C* i :ot c'". bod 7 sn7 *ewr:c::ve D'Wa!One ::*f"W4:4 :o 12cersure-n :wr a                                                            I
          ,Com=.s+ son a consecuan vita : e soon                                           g,. :s'asnce et ens-s .avoired :oatt.we rits
          ' referenced sooncst:on. nese ennun;:.=ents                                  3y y,                                         .e n.m ne aaat:co.               m, m ;,.m W n_.,

tacusm pne u -mm p y m , g 3 ,. re; resent s s:s.e= ent at sou.y fee the f uture , ,, g . , g

                                                                                                                                                                        ;. ret *eul as* 4- m pisen.
            <ttree-lon of ...ss.sgos ?o.ee = .ent a                                               ,                                                                         ,
                                                                                                                                                                                                                            *o*w e? 12 .J e o w:e w..a .                                      -           *ro 74tue 3:1.13e tagigged                        fJr icss c( reve-                  .. .t;otlC33t ' Vill sell bit C:

rsio .ue;st..,,,est s ..- of usnee

                                               ,re unu-mat           =a t-a wu! re:ommec1                     "" ," ' # # 2" # * *                          "* # # *" *                          "# # ""'C3 ^5* 3'"' 3 0* **  C

• to the A:omic I er-7 Co=u:ms;oa mas- to 4 *"* * *7 * * *" '" C" ue*s"en""mne":s' W C' ~ - - " h 3:'

y: oc.s u a ,n c e , 2 .t pe

            ,mau::      .iss nee.yrat.:;;ero6s via de trau;rm.                               ;stt7 =:n: einemse ans. 'ca.s es.. .a.2"f *"                                                                                                                                        I De es.missi:::                           :: te are suDject e!uce s . ensoc.so n e return on sooticis:1s ;ete succ vt meet- : .o                                                              pot reuua er vne;ae    . sucs our:J

nr .

to the followt:; uncerst and.:<s: tsvestmen'. te sale st a portion at ::e as::ons wou;3 aerve {

                                                                                                                                                                                                                                                        ..                  i-
                                                                                                                                                                                                                                                       . 2-           .9 Futa AL It01 Ult. VCt.                       *3,   *4c 108 WCNUOAY, d.lNI 4.19?*

gN

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                                                 -                                                                                                                                                                                                            14S73 l
                                                       -                                                                                         NOTICES                                            .

a

                             . meta or new. butt power to                            suriply   for !Velf orplentested 7. ""he foregoing conditions shall be Irn- certgjn of the infCrm2tlon UPeded by the

• t.be treWtion. in a ruanm er consistent with sta.2 In its rcVleW of LDplicitlCns Icf PCF-ggr gge of.3-r partyt Les) the proe:a: ens of the receral Power Act and ..

W Ikerm* rats refers spec 2 ca.;:y to the opportunny to the M sstsa: ppt Pubne :: tun:es Act of 1954 -" J.u- c new nude is in Otv:ston .

                                                                                                                                                                                                                                                               "Re.

J

                                                ,dinate in sne p;&=nacc or new genera. and all rstes taarces or practices :n con. search and Test Reactor Gu2 des /* Re::u-uan tra.nasnasion. se                   ac1construed
                                                                                     *etabcd rect::t.es.       Tuts    =ecuca         taerewsta      are  a  me      suoject     to  t   ,

proessaan asad not to require soprovm1 or regulatory agewes nartcg Jur:4

                                                                                                                                                                                                ! story Guido 2.1, "Sh:c!d Test Frecra n 1                                .,p;3 cans to purcase or seit unac po.er .c                                  4:ct:on over then:.

Icf Evaluat10n of Imtalled E4oicq:cci

s *nds such puttnase or sale Sniesstbae or Sh2eldin"in Researcn and T 2:nm Rc-

ta coste :.a corssecuan witu sucs purcha.se [T7t Doc.n-11:2G Fued 5-5 3: :ss a nl Actors." dCsCr:Ces a sllat:id te$k UTCgntn1 er sa;e would esceed . s DeceQL.s taerefrom.

4, 3 Appucast w. any succus =2r ta usa 2at is gene, rally acceptatie for esalu;6

                                    ,saaa ocer u :;;criunity .o paruc:pate is                                                        gpoeg,g yo, pugmy                                          g,g ,g * - - - - - . . ,             ,,
                                    . tse crand Guit auc2 ear u.:uta e.sa any otter                                                                                                             searc.h and traimng reactors.

RAY BURNER CO. Comments and sug estions in ec::nec-

                            .- . ngs. sear generramg unas(s) weten user or
                                    . ,gg.            or tres. =ar coststruct. own, and                            Notce of M!irig of Petition for Rulema. .amg tion r:th improvement.s in eg'42 tory
                         .           6pmza m sne State of Sta.atmps. severaar                                                                                                                    guides are encouraged and snodd be sent or fornuy, dur r.g tse term or the :nsta.nt                                       Nouce is hereby given that the Ray to the Secretan of the Ccmm:.ss:en. C2.
                              .L ucanse, or any es:e=saan ce renewal, taereer. Bur er Co 1301 San Jose Avenue. San Atomic Energ7 Commasmon. Was.'ungton.
                                                                  "                                                Dnc=co. Calif., by letter dated May 13.

a man e o er 1973, has "!cd with the Atcmic Energy . D.C. 0545Sta!. attent:cn: Chief. for s:Fucac Fro-a t -

                            .a -                      re:
                                                                                                                                                                                 'e-r- ceedings                              Requests                  g!e copies
                   . --i ' saa,,et :n aucs unitis). or by a contractual Cc~*ics a pet: tion fer ral                                                                                              cf issued gn: des er for ;isc*.=ent on an r:gns to purenase a rusonssie parcon or sn.
                                  - ou:ptri or sucs us: stas at tse cost thereot it te pet:ticcer request.s that the Ccm. automst c distntutics list for s:ngle
                             .-          tne snutyties) so eact Os connection with miss:cs s=end 10 CFR 00.15 of tts rer.t. ccphs cf fu":re gusd*.s shouJd be ::tde in

v. - . suen acoes:. ap;ucast wu! also oder trans- ist ens to exe=pt grec 1:cens=g re. Tnting to te Di ectcr of Reg'42tcry

                   ,-                        :.aston seretco as clay be required for de- q.are=ents spark gap irradtaters cen.
                         . _ 'hfery of sucs pcwer to such ent:cy(tes) on .*'"~g tot more than 1 sCl Qf Coe:It-60 Standt.rd%                                                                                             US. Atc=ic Energy Comm:.s-s:cn. Wasc.! gton. D.C. 20545. Telechene y                       a                    a wut      .any      conspeuate         appucant         in  ;1ated        or   zuoy   for  =.  !ct    attac    =ent       reques'.s            ca.ta.ct       be acce=.modated. Regu-tear     spa.ric
                     ' .? ~ m ts tuo e,est that during the term of as elecinc ict.itors (s;a.ric ;1ugs) fer ;uel C--iss:ca 1;; rov          g2;s   used    for   st:cf2      pur;cses           lator7        Geices         3.re not copynghted a.=d A 7 t3e ;=s:ast 1 2nse, or a.s y erta=.s:ca or                                                                                                                                                                 21 is not requ:. red to
                       . . Hyenew31 theret. appucant obtaa:.s parue:paa bu:::. C equ2;=ent.                                                                                                      reproduce them.

t:cn in the centrs:1p or or ngats to a por* De petitiener states that the device Other Divis:cs : Regu.!1tcr7 Guides j' con oc the outaut ct one or mere nue:sar b M used fer 1 u=ter of years and uric t:7 telsg developed. inch:de the si'.s constrv.cuc. owned. a=d is c*' ded=1**e '*ene".* * " eiea* -- ^"7 .E. c,ol, co... nCe!c.~. t_.. Cg e3gety r.n.

4 g ascermung uopera:ed ty a:y ==lJate or sussic:.ary or tre Olied fuel c11 bur:Cr3 to e"h1=ce

                                                                                                                                                                                                 'ec;4. the .esfe- for apen=ents in Research Re-
                               **' - 1:yS. South Cicities Syste::2 o der thart                                                                                                                   v.
                           .                                                                                        U1bilit7 and safety dur:ng the ign; tics AEIOII*-
                         . Vacpu:sst or t; :.sy successer s ut:e to sae j              -      k- Grasi Gulf Nuclear C:Ats. appucast Ca3 sequence of such Durters en 02 7 types 1.b ,e s2.e.r$ 1*J best e*ct'.4 *.o cDtais partle'.petion of Detlers. EcWer711=ts, etc. He ;et!- (5 TAC. 3 :(a).)

in such nuclear unatts) by any ectityttes) t:ccer states further that the spark T3; "sted a* ~De^~esd 5'd ^is

                                                                                                                                                                                                                                                  '.     **

• d

                                         . :b *.he, westen itss;ssappt ares requestug g.Ndiater                is Ot.,sgyen in thi e s 1: stance, used o{$gg7*3f3.
                                       'such ps.rticipatics en ter=.s no less favor.                                        .e..ycc~..
                                                                                                                                 ,,,                          . , , es.
                                         ,as e :. ass the ter=s of appitsant's ps.ruct.
                                                                                                                    .u       .                                    ._

Fer ** A*""-- '*- - T eT3"e* C--W - -- - M A ccpy of the petit!cn !cr rule =sking l * .ve., pat:en thersts. is 17111able for public 1:s;ectica in the LrsIn EcctKs.

                                < h s. da)                   Aopucast          shan      facuitste    the   ex.                                                                                            Director of Regt:12tery stender:g.r.

l vitante or bu;1 power by :-a.:.smiastan over C-~4sion's Pub 11: Docu=ent Roc DC=.

             <         , , " . s treman f4-utties between or a= song                                                1~1" H Street NW ed             sm amI d

1i {- ..G::eo . ..s:seppi a es orwitsmore wstem ite==t:es

.s =termanecad: is the western

                                                                                                                    .g .**"z   ,
                                                                                                                                       " e Ru es M;s.

1:d A **- ca.;.7

• ece ed ~*s eg :3e pedtica =27 be 5:tcnWas

                                      ' a:d betwees asy suen estare(:es) s&d say ' 3T's" chat"'the below addres.s.

PCWER REACTOR Ct.l!OES 6 i carrttase a: gut:r :s buir pcwer :=pp27 A1 ! terested perscus who desire to- Not!ce of Issuance and Avai! ability

               !' ;. * -' cata:.a tte western v um.tpt area netween                                                                                                                                                                                                  s
                                   .t;whose faculties appucants trm~.on sut=: e.tten ec==ent.: cr suggestic s                                                                                          'Ihe Atc 11c E:er77 Cc==ission his 1
                          - *        . tbes and other transstaston ur.es would cc Cerni C thee peut!Qn !Of rule =1tng is3ued t'VO C-ndes in its rerditer7 g=de
                                         - tor =t a continuous elec.ncat psta: Pe:n.ded* shculd se=d their cen:::ent.s to the Rules
                                        . : hat: ft) Per=:ssica to utui.:e suca otter 1=d Proceedin;s 3ra:Ch. C:". ice of Ad. sents.                                                                          'Th:s sents has bets develc;ed !O descnbc and =ne avn:12cle to :he cuclic
                           . 3 r -t ,ut:n :es has been ootsised. 2sc (*) = =i3 rstics-Rerdstica U.S. Atc=:e metheds acceptab,e to the AE,,.,. re:-ic.

the arrasce=e ts reasacanty ens be accem. Enc 7 Cc--"s cs. WM -::cn. D.C. tory staf of ict;!e=cating s;ecdc parts . mad.sted :re=1 a ru. ct:enas and teens:ca:

                        .. . standpoint. Such transmiaston snail de on 0545, en cr be:cre Aug':st 6.1973.

Cf the Cc-* '";cn's regui10c s r.::d.1: a *3, b . f *4r=ts that fully compensate appucast for * *-*

• e,' 2ta cost. .u.y ennth:es) requesting such day of. day W3. . sc=e 37 ;3,C12.es. to deline3te 31% in ev11uiting technicues s;ec2.c  ; reb- used WD t'assmission ar-s=pments sama gtee res.sen. Ic=s or Xstulated accidents and to pro-

                                         -at;e adrasee notte et its (the:r) scuedut*                                       For the Ato=lc Ener;7 Cc--Wec.                                                                                                             t-
                           .         '. aad requ::e=e:.s. m:e foregateg appnas to
                             . O ss7 ent:tTP.est to w:cca appucast may de Gcucx 5f.CRANT.                                nde " - ca *o --alicants c~-k                                   3

• b:rreencected is the future as wen as stoa. ~. .. Acting Secretary Ce**t,a ,n hs jenew10;MCa s

                                                                                                                                                                                                               .                                  e4of ** e #c -"2,tie
                         . ;                                                                                                                            of ;3g com.n:,33;an,
                           ,         p. to whica *t is now tsterconnectee.)                                          .'                       ,.                                                  ,

c. ats- , - censes.

                                       - - (b) Appucant stau ::e:uee :s :ss pia ==.:rg                                                                                                                  'The near r. des are in divtsien                                 1.
                            -. d and construcuan pregram sue.est trans. - trP.coc.u-11:c3 rced Wc:s:ts aml ' . *'?ower Reactor G uides." Rec-i .t cry mar.s:cn caoacar as requirac ice tse en=s-                                          .
                                      ., , Ac ens refer es to in sutparscaon (al cf RESEARCH AND TEST REACTCR GUCES Guide                                                                                        1.50                                                  -t .

parstrap  : honded, r:st aar er::ty

                                                                                                                                                                                                    ;e*atu. e b -Cect        Ye'! ding  ^f F-*3*-*v.h'*

ei Icy 1, ts the western M:asissacet ares r.ve No* ice of issuance and Avadabiiity Steel." cestnbes z.: Acrectacle nethcd

                                           . j9puot- s--.,.ent acessee sotice as =ay                                                                                                               ,Or '.=Ple=c :::: *.he Oc=nussics a re;-

3

• 2"e25*. r to accor=moca:e :ts <their1 -e. ~":e Atcmic Inergy Cc==iss:cn has is. . '-c the ce!"rd Of 2 M CO3 5"th etard Wt.-e:1ests tr => a tu=cuensa tua tect:t.:a1 sued a ra:de in its rerdatery gn:de senes.

t- -pot:st a:a that suen ent:tvi tes) :2Mr as senes has been develc;ed to de. 'veldin- fcr Icmallcy steel ec=nenrnte. vnte 1".d =ne n:.1:Me to tne cu 'M: Rer4::cr7 Gu:ce 1.31. " .;ue-cre In-

                                                 '*:S      a.1 et                2c        o      s -          ns.         e *- . acce                  e '.c 04 C W 1- 50ection Of ASSC Cece CI3r.s 2 ?.nd                                                              3 22'8800 faco *:es wnfen wiu te et so demon.

• Ge-

                                                                                                                        *Cf7 510 CI 1CDi'C'OtCC 30'CCIC : I!3 v.-"y'.                                      -
                                                                                                                                                                                                                 -  o     ce, =- 9" t. C --vcnea ""
                                                 **r*318 cant.

pine:S cr :uture benect to appu. of ;te C;g=n33;cn 3 7er;gnons ang, in ser:ces acce;t.2cle ret;'.cds cf :~n;de. 8.Ap;ue.=t . w;;3 3,gg po ,,7 ge,.y ,, ,, sc=e cases. :o dennentc *ce .n: Cues .sec 7;cnnn; ;;e pened:C inse: *:cc utspecuen

                                         . Any isntyg,39 3 g3,                           ,,,,,r2    w,ss;s,i ,$          g7 ;3 ,3;.;; gn Cygy,;3gng 3 ,C;gC 2rC3,                                                                                    t.rs 2 end 3
                                      ** ,

• 28" e:cct:4 : rr pmpestne to ecgsp ic=3 or ? cst:113ted ace: dent.s and .c pro. ret.;rcmc=ts fcr ASLC

                                                    1"*14 stnsunou of elecst;e ;os er.                                 nce rci --ce to a;gi;can 3 c o n c = ==g componeng3, d

g * . . t

                  .I
                                            * '. r                    '
                                                                                                              =

ae

                                           **~*            .                                        .                                     .

FC 11At 11:15T12. YCt. 33, NC. Ic&-WCNHD AY, NNf 6,1973

                                                         .y               Pt. ~to              =

         ,                       ,. e               ,$
                               \
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                            'u,*
                                               / {,
                <     ./,'d")                            UNITED STATES OF AMERICA                                      *
                  *:                           /]                   BEFCEI THz                         JUL 2 % G77..

' FEDERAL PCWER CC0!ISSICN r TJM..A es 4:CC: U. .

                                                                                 )

Mississippi Power & Light Ccmpany ~

                                                                                 )      Decket No. ER77-473
                                                                                 )

PETITICN TO INTZRVINE The City of Clarksdale, Mississippi ("Clarksdale") hereby protests certain aspects of the Mississippi Pcwer & Light Interconnec-ion Agreement filed on June 27, 1977; and petitions to interiene as a full party in this proceeding. 8 i e

                                        .                                A.                                                  .

The name cf the' Petitioner is the City of Clarksdalc, Mississippi. . II. The names,' titles, and addresses of the persons to khem cc:nunications concerning this petition should be ad-dressed are: Robert C. McDia:=id, Esq. Robert A. Jablon, Esq. SPIIGEL & McDIAPJIID 2600 Virginia Avenue, N.W. Washington, D. C. 20037 . David R. Hunt, Esq. Sullivan, Smith, Hunt & Vickery P. O. Box 1196 123 Court Screet Clarksdale, Mississippi 36314,

• e 4

rr, . , . , - - . . . n r e III. is an outerewth ,cf

                /

This Intercennection Acreement Ligne Cc=capy Q _the coliev cetmitmencs of Mississippi t..e AEC Liranse c-Pcwer & its Grand Gulf accard=4 is conditions tc 4eff\ Nuclear Units 1 and 2 ( AIC Decket Nos . 50-416A and 50-417A). In the view of the Cicy of Clarksdale, this Interconnection Agree. m ent =eets seme of the requirements undertaken by MP&L, but by no means all. Thus, for example, these cccmitments the purchase of capa-require the sale of pcwer for resale, . t.,,.e c. revision c:. transmis-city. un er certain circumstances, sion capacity for the exchange of bulk power, and several other =atters not covered by this Interconnection Agreement. The City of Clarksdale has undertaken a study cf the alter-natives available te itand for itthe furnishing would appear of thatecenc=ic many of these ser-vice to its citi: ens, services net covered by the instant Agreement may be neces-sarv. The Citv has andertaken adda.taonal incuiry of MF&L which it anti-serv;.ce senecules .ceang cipates w#it esut' . - added to t.k.e instant Agreement Thus, in crder astothe make Agreement it adequate exiscs, to the needs of the situation. sive interconnection agreement it is by no means a "ccep-=ka . . . for t.ne establishment of an intercennectaan anc securing c:

                                                                                                                                                            . .        " as ecordinatics between the City and Ccmpany sv. s t ats .                                               .

stated in Para'rach 0. 6. - In order that its intentiens net be mistaker, -Clarks-

                                                                                                        " =. '. " '. e ? .. . *. e . .- . . =. '._' a . .

dale c.i.ves ..c -# ca e' _i's "e_'_#=" - . - m.. Agrea. d ent is inadequate and that it will seek the additional . .. . , service scyec.ules wnaca tt ,_e_3a. eves necessary anc wnacn it The

                       ' City hopes          will then be filed voluntarily by the Cc pany.at this ti=e, requese susp d es not, but if for any reasca a hearing is set, Clarksdale wishes to be a party thereto.

33'l~ ,y- .Y . a .

• e CONCLUSION ,

For the above stated reasons, if Clarksdale should be the docket is,for admitted as a party to this docket, any reason, to remain open. ,

        *

• Respectfully schmitted,

                                                                                      =
                                                                         ,4Y#ll Robert C. McDiarmic Attorney for the City of Clarksdale, Mississippi                      . .

July 20, 1977 . Law 5fficesOf: Spiegel & McDiar=id 2600 Virginia Avenue, hN Washington, D. C. 20037 b e e

CX.,

     .,7"'          '.                   .                      .

.y . . g . VERIFICATICN .. f e DISTRICT OF COLUM3IA, SS: . Robert C. McDiarmid, being first duly placed upcn affirmation, deposes and says that he is an attorney for the City of Clarksdale, Mississippi, and that as such he has signed the foregoing "?etition to Intervene" for and on behalf of said party; that he is authorized by the party so to do; that he has read said Petition and is faciliar with' the contents thereof; and that the matters and' things therein set forth are true and correct to the best of his knowledge, infor=ation and belief. . fx '0 'i 1 ., e Roberu C. McDiarnu.c Subscribed and affirmed

         .                  to before me this 20th                                                                       .

day of July , 1977 9 . n / fu. & 9 $.

                                      . Notary Pub l c                         -                                              -

Mr 0- '--in L-Jm Ic=. 31. tit: CERTIFICAT2 OF SERVICI I hereby certify that I have this day caused to be served the foregoing dccu=ent upon each persen designated on the official ser-rice list ccmpiled by the Secretary

              -               in this procccding in accordance with the require =ents of S1.17 of the Rules of Practice and Procedure.

Dated at Washington, D. C., this 20th day of July, 1977. 3  ?&

• Rober: C. McDLar=ac.

G e

• o g

e

                                                                             - - . _ . -                    - - _             - . w                      , , __ .
                                                   ~ R. W. BECK AND ASSOCIATES                                                                                                       /

INc3Ntk25 Aho CONSULTANT 5 p.Aa. innc 51A7Ttt. wA5 Min c C%

         *ts cN                                                        1510 LAST C0LoNAL Oa:VI O N t.C totAco sit $                                                                                                                                             PMCEN:2. AscoN A Po5T off ect ICI 6417 A% ALM 11                                                                                                                                           C ALANQo. ILCt30 A Ct W o.MCtCA W                                                                   Cotuaa8US. Nitta5a IVALVAftoss                                      ,

uAhAClu!NT TILIPaowt 305 8%-dt11 Witt!$ LEY, wA55ACW5m3 inosA=APot!5. thotANA

         'itt No.          FF-5168-IP1 -MX                                                                                            December 8,1976                                .

Mr. D. C. Lutken, President Mississippi Power & Light Company y $ P. O. Sex 1640 Jackson, Mississippi 39205

Dear Mr. Lutke=:

R. W. Beck a=d Associates has been engaged by the City of Clarksdale to make a preliminary investigation of the power suppTy alter-Tatives a'vailable to the City's electric system and possible arra=gements through which the various power supply alternatives =ight be implemented. In light of the planned interco:section betwee the City of - Clarksdale and Mississippi Power & Light Compa=y a=d your co==itments as conditions to the co=struction permit and operating lice =ses for de Grand Gcif Nuclear Statics, Units 1 and 2, all of the alternattve power , supply arrangements the City =ight co= sider involve MP&L in sc=e m a=n e r. For that reason, o= October 26 I contacted Mr. '-iarry Poth cf the law firm of Reid & Priest with whom I am well accuai=ted a=d that you engage on federal regulatory matters requesting certai= readily available i=formatien f c= the Company. I understand that request was made to the' Cc=pany by Mr. Merri=a=, his associate, and Mr. Poth

                      . has just recently i= formed me that the Cc=pany has decided any such request should come directly frc= me to you.

It would be extremely helpful and i.=portant to the City of - Clarksdale if you weeld provide the ic11owi=g i= formation:

1. A copy of your filing i=cluding testi=ony and exhibits in your most rece=t wholesale rate case which is in process before the Federal Power Cc== ission. an<i a copy of your latest Report to Stockholders if =ct included as pa_-t of your filing.

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Mr. D. C. Luthe=, President December 8, ic76 Page 2

2. Copies of the Company's Form 1 a=d Form 12 reports to the Federal Power Corr-i sion s for the years 1974 and 1975.

3. A copy of the latest prospectus issued by the Company in connection with the sale of its securities, i. e. , bonds, common stock, or preferred stock.

4. A copy of the lice =se co =itments made by the Company as a condition of license for the construction pe =it a=d -

the operating license on de Grand Gulf nuclear u=its.

5. The most recent estimates of the cost of construction, estimated date of completion, fuel cost and operation and maintenance costs on the Grand Gulf nuclear u=its.

6. A= answer as to whether the Company is wi1W3 to have the City of Clarksdale participate in some reasonable share of the Gra=d Gulf nuclear u=its by either a direct ownership interest in such u=its or by centractual right -

to purchase a portion of the output at the cost thereof.

7. As su=ing an = mrmative answer to 6 above, what would be the te.=s and conditions and cost of trans ission service associated wii such an ownership interest or purchase?

8. Sample calculations and a=y cost of service studies you

                                    =ay have in support of the rate schedules or for ulas embodied in the interco==ection agreement with the City of Clarkscale for various types of power exchange services, particularly fir = capacity a=d energy, under service schedule "C".

Your cooperatio= in supplying de above i= formation is vitally impo-*'-* ** "e City of Clarksdale for it to properly evaluate its power supply alter a:ives. In light of de t=ie dat has already elapsed, your prompt response will be grea.ly appreciated. Very truly yo.::rs~, ' R. W. 3ECK AND ASSCCIA~~ES

f. N RIS/ebf Robert E. 3athen ec Harry Poth, Esquire Manager, Orlando Regional Office

                                              ._       .4 _

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p=N MISSISSIPPI POWER & LIGHT COMPANY

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Helping Build Mississippi

                               < - - ' -    --i P . O . B O X 16 40. J A C K S O N. MIS SIS SIP PI 3 9 2 0 5 pl y         CC            W, "E" January 17, 1977 j                  ""D.C i

• RECElVEQ Hr. Rcbert E. Dathen, Manager JAt3,7 Orlando Regional Office i/' ~is//

R. W. Beck and Associates P. E & C. Post Office Sox 6817 IJ. P. i L CO. Orlando, Florida 32203 -

Dear Mr. 3athen:

                .        Pursuant to your request of December 8, 1976, we are attaching the following documents for your use in making a preliminary investigatien of .the pcwer supply alternatives for the municipal electric system of the City of Clarksdale:

1. A copy of the testi=ony and exhibits filed by the Ccepany with the Federal Power Ccerissien on July 20, 1976 in support of its -

proposed increase in wholesale rates, tcgether with our 1975 Annual Report to Stockholders.

2. A copy of our reports en Federal Pcwer Ccemission ,For=.s 1 and 12

                           .      for the years 1974 and 1975,.

3. A copy of the Company's Prospectus dated 1.ugust 26,1975 issued in connection with the offering of 525,000,000 of First Mortgage Bonds, our last securitf offering.

4. A copy of the license ce=mit=ent made by the Cc=pany as a cendi-tien of license for the c=nstruction permit and the operating license on the Grand Gulf Iluclear units. (This is in the form of a letter of transmittal, dated May 22, 19 7 3, to Mr. Thc=as E .

Kauper, Assistant Att=rney General and the policy cr=mitrents o f our Cc=pany, dated May 22, 1973, to be appended as license cenditz.cas in this matter.) . In respense to the fifth item of infer =atica you have requested, e;r ecst recent estimate is that the Grand Gulf Nuclear units will ecst a total of

                 $ 1,00 7,900,0C0 to ccns truct. 'ntis is exclusive of the costs cf acquiring nuclear fuel. The first unit is expected to be ccmpleted in 1980 and the second unit in 1984.             The ecst of fuel and the operatiett and :.aintenance expenses expected             are not available at this time. Because cf the icng lec,d time and the many uncertainties inherent with nuclear plants ycur guess, bas +d upcn industry-wide experience, would prebably be as gecd as curs.

iM yr . MISSISSIPPI POWER & LIGHT COMPANY p *, 2 Januarf 17, 1977 Mr. Rchert E. Bathen t Responsive to your sixth and seventh in,quirf, the Compa,ny does expect fully comply with the Policy Commit =ents whien it Item has made and which are set 4 of the appendace to t.h:t forth in the license for the Grand In Gulf Units. of a specific request by the city the insence license addresses this matter. of Clarksdale concerning the a= cunt of power desired, the point of deliverf and service characteristics it is difficult to quote ter=s and conditiens. If you

  -       would like us to quote terms and cenditiens fer one or =cre alternate pr=posals we would be pleased to do so.

Regarding item eight of your inquiry, the Ccmpany has not develoced any formal ca.lculations or cost of service studies in sucport of an interconnection agreement with the City of Clarksdale. Since the sa=e Schedules are available to Clarksdale as we have filed in cenne:tien wish the proposed intercennection agreement with the City of Greenweed, a copy of our Greenwood filing made with the rederal Pcwer Commis:icn is attached. The letter of transmittal sets cut the manner in which these charges were conveived. A deficiency letter received f cm the Federal Pcwer C =missien regarding this filing and our respense is enclosed for your further infor.atien. . As you are aware, our wholesale rate filing with the Federal Fewer Co=u.s-sien was made fer service to individual named customers who have been ee-ved uy our Ccmpany in the past. Thus they have been included in the Cc=pany's load projections both past and future. the Ccmpany would not propose to ser te any new custc=ers on this same basis. Sincerely, ORIGIML SIGNED dr D. C. LUTK..N CCL:jls cc: Mr. Richard M. Webster, Mayor C'ity of Clarksdale - Post Office Box 940 Clarksdale, MS 38614 bec: Mr. S. w. wise Mr. J. H. Sox Mr. F. S. York, Jr.

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bih0 'fGT 2Sdale, , FfiGEBEMMED FGRFRGEREES!

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July 19, 1977

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sUL , ) * % h g . Mr. Donald C. Lucken /..' R [g'##'rF - President Mississippi Power & Light Comp *..f/

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Re: City rksdale, Mississippi Dear Mr. Lutken-

• Now that the City of Clarksdale's Substation and Interconnection with MP&L has gene into operation, we have exasised the City's electrical operations in order to find' =eans to reduceWe thehave costasked of electric power our engineering and energy to the citizens of Clarksdale.

consultants, R. W. Beck and Associates, and our legal censultants, Spiegel _

                  & McDiarmid, to examine the City's operaticas and status in this regard.

Both consultants have suggested that it should be possible to work out , a more economic program for the City's energy needs, and suggested that - we meet with you to discuss the means of accc=nedating this end. Consequently, we would seek to meet with you, or your designated repre-sentatives, to d'iscuss several alternate approaches to the problem which have been suggested. In this connection, we would appreciate your attentien to several questions:

1. So far as our records show, no offer of participation in your Grand Gulf Nuclear Unit or even a preli=inary furnishing ofWhen data prior to such an offer, has been =ade to Clarksdale. *

  -                            do you anticipate that you will begin this process, and how much capacity do you anticipate you will offer to Clarksdale?

2. We note that you have new concluded a settle =ent of your wholesale electric rate case at the FPC in Docket No. ER76-830. In light of the high energy costs which Clarksdale has been forced to incur since the effective gas cut-off, we would be interested in purchasing a portion of our necessary We assume, in this regard, capacity and energy frca MP&L.

that your energy rate is likely to renain substantially below our cost of fuel, but veuld appreciate advice as to If we were to your esti=ates of energy costs in the future. assume a " base lead" =ade of operation in purchase frem MP&L, at what rate would MP&L capacity and energy be availa' ale? Clarksdale has capacity excess to its needs under

3. In any event, the Interconnection Agreement, and will have such capacity for a substantial p.Griod into the future. That capacity, at current oil prices, is probably best suited for peaking purposes if

                                                                                                                  "'dd'e viewed in an area-vide context. Would MPSL or othe South operating ecapanies be interested in purchasing unit power frca such capacity?
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. .W7 4,. What transmissic.n rate would be applicable to a sale of unit capacity by Clarksdale to other entities interconnected with the Middle South transmission system? '1 hat transmission rate would be applicable to a purchase of capacity by Clarksdale from other entities interconnected with the Middle South transnission system?

5. Is MP&L obtaining or does it conte = plate obtaining a portion of the output of the other nuclear units on the Middle South System such as ANO, either directly or through the Agreement Among Middle South operating companies? If so, has any effort been made to allow participation by Clarksdale on similar terms, and _ what was the result? .

6. What do you anticipate the energy rate under Service Schedule C of our Interconnection Agree =ent to be in the next few onths?

We would appreciate a meeting with you to discuss the various alternatives available to Clarksdale, after you have had a chance to consider the specific questions here raised. Obviously, such a =eeting would be = ore productive if it were possible to have responses in writing in advance, but we are prepared to =eet with you, together with our advisors in these natters, at your convenience. . We will appreciate your early response. Yo '-s very truly. 5 I

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[.,/ tzt. d ,1.C b / 4 Richard M. Webster, Jr. ,j Mayor, City of Clarksdale . cc: Robert C. McDiarmid, Esq. Mr. Robert E. 3athen, R. W. Beck & Associates David R. Hunt, Attorney Mr. L. L. Wilkins, Superintendent, Clarksdale Water & Light Depar: ment . G

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d* . . d ff O 'fGTf?S Gf6 FRGERMED FGB FRGEBEEE! PCST OFF.C L sten 940 RICHARo M. WCSSTER, JR. CLARKSo ALE. MisSI5s4PPI 38614 s.=s to ne October IS ,1977 g Y,. , L'.!'i Gy' G / , ,, - N on m ,3, Mr. Donald C. Lutken Mississippi Power & Light. Company P. O. Box 1640 Jackson, Mississippi 30205 -

Dear Mr. Lutken:

This will confirm our meeting with you and your staff scheduled for October 26 in Jackson, and attempt to specify more precisely what Clarksdale seeks to accomplish at that meeting, as you suggest in your letter of August 18. Ishare your view that we , as reasonable people, should be able to work out a mutually ' beneficial arrangement to the end that all of our State might have an adequate power supply at the lowest possible cost without having to resort to litigation. As we have noted, the current fuel situation makes the Clarksdale generation capacity more useful for peaking and reserve capacity and energy production than for the base load energy production it now serves in partin meeting all of the City's loads. We note, in this respect, that Clarksdale is capabic of providing energy at a substantially less expensive rate than the peaking enargy costs you have shown in your last statements, and thus it would seem that the use of the City generating units in this peaking fashion would be desirable for your customers or the customers of other entities in Mississippi and the mid-South cres as well. On the other hand, it also seems clear that the MP&L wholesale rate is profitable to you, would ou a desirable source of base load capacir/ and energy for the City , and would mesh well with the City's own plant to serve the needs of Clarksdale. Because of the vagaries of the fuel market, we both would seem to have something the other could profitably use--we have relatively efficient and low cost peaking and reserve capacity excess to our needs , and you seem to have relatively efficient base load capacity excess to your needs. We propose the obvious " swap" or turn-around sale. In any event , we are prepared, and wish , s v. - .. : , i 3 c .o , , ..s ..v

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5D< vf. F . - < c. v ,, Mr. Donald C. Lutken Page 2 October 18, 1977 . to purchase power under your MW 15 rate presently on file at the FERC in the amount of 19 to 20 megawatts of annual peak demand. We suggest that, in order to assist your planning personnel, we buy under your filed tariff, with adequate notice period for change or canec112 tion (one year). We would, of course, give you the same notice and cancellation provision on the peaking and reserve capacity you might buy from us. If , It may be that your system would not wish to purchase all of the peaking capacity which would be excess to our needs. In order to give us the opportunity to dispose of that capacity to those who might need it, and also, frankly , to give tis the opportunity to plan for our future power supply in such a manner as to best protect the people of Clarksdale, we request that the Middle South System, which we understand operates what is in essence a single transmission system, file a " postage stamp" transmission tariff that would enable us to work with whatever other entities may wish to join us for the benefit of the entire middle South area. Obviously, we cannot work out any arrangements of this nature before such a transmission rate is available, and since we understand that you are willing _ to file a transmission rate, we are sure that you will not wish to put us in a " chicken or egg" situation. . As to what your letter indicates may be a " difficult" problem, we have examined our files, and find no evidence therein that MPEL has ever made the offer of Grcnd Gulf participation to Clarksdale which we have understood you to have promised the NRC. While we understand that there was no restriction placed upon the time within which MPLL was required to make such an effd, we would assume that you would wish to try to tie down these matters now rather than wait until the plant was complete or nearly complete. We would, of course, be pleased to have If Our engineers advise that on a conservative basis we have o minimum, of 54 MW of dependable capacity (net) available to meet our summer peak of 32.5 MW. Assuming 25% reserves, this peak would require 40.6 MW of capacity, thus indi-caring an excess of more than 13 MW. If we purchase 20 MW of capacity and energy under your MW-15 schedule, this would free an additionni 25 MW of the City's capacity for a total of 28 MW. Our engineers have suggested that $13 per KWOur year ($1.50 per KW month) would be expected to be an at:rac:ive rate to others. current fuel costs are $1.S3 per MMSTU for #5 cil and $2.73 per MMBTU for #2 oil. I believe that the specific characteristics of our units are known to you , but will be pleased to furnish additienal data if requested.

.ym - , [.j.lV s - Mr. Donald C . Lutken Page 3 . October IS , IL77 i h to formally our engineers discuss your projected coal units, but we do i iw s amount request as well that an offer of participation in the Grand Gulf ld un ts n an of at least 10 MW be made to Clarksdale. Our estimate indicates t well use at least that amount. fair share allocation to us from these units , and we understand that MP&L be preparing to offer some of these units to others. Finally , we would like to inquire whether anything f in the MP&L valuable tariff or other contracts would preclude us from offering some odour t peaking and reserve capacity (and energy) eeking current the non-affiliated Middle South customers who If nothing weld pre-understand ar to assist ycu in providing for their power i supply in the f nd energ'f?I , these cusic=ers from acce.pting and purchasing such capac ty a h ld note that we cre allin the Southwest Power Pool ar ~ Pool seems adequately to handle the TVA-SCEC seasonal exchange. I hope that this letter will assist in expediting i our discussion en the 26th. We lock forward with pleasure to a productive discuss on. Y urs very truly, > i-Richard b.SL.0drt:de/ M . Webster , Jr. v Mayor cc: D avid R. Hunt , Esq. Robert C . McDiarmid , Esq. Mr. Robert E. Bathen O

7, EXHIBIT I This is a contemporaneous document used by MP&L during the negotiations of the license conditions. O 9 e e S

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• 1701 E STMEET. N. W.

NEW TORE. N. Y. 20020 Twz m 7tosenerna WASHINGTON. D. C. 20004

               "'**"a*=                          Washington, D . C .-               *"***-**

October 16, 1978 Md Janet R. Urban, Esquire Antitrust Division Department of Justice Washington, D.C. 20530 . Re: Mississippi Power & Light Company Grand Gulf Nuclear Station, Units 1 and 2 NRC Dockets 50-416A, 50-417A Decartment of Justice File 60-415-57

Dear Ms. Urban:

This letter will respond to the concerns you expressed in our telephone conversation of October 2, 1978, respond to Mr. McDiarmid's letter to you of September 22, 1978 on behalf of the City of Clarksdale (Clarksdale) and supplement my letter to the Antitrust Division of September 25, 1978 on behalf of Middle South Energy, Inc. *(MSE) and Mississippi Pcwer & Light Ccmpany (MP&L) . We welcome this opportunity to address your concerns and refute Mr. McDiarmid's allegations. Both MP&L and MSE are committed to faithfully ad- _ hering to the policy commitments adopted by MP&L and imposed by the Atomic Energy Commission (now Nuclear Regulatory Commission, NRC) as conditions to the Grand Gulf construction license. MP&L and MSE believe they have abided by both the letter and spirit of the license conditions. This letter will show that Mr. McDiarmid's allegations on behalf of Clarksdale are unf'ounded and, accordingly, your concerns about MP&L's dealings with Clarksdale, in regard to (1) Grand Gulf access, (2) transmission and (3) wholesale ' bulk power supply, are unwarranted.

l. Grand Gulf Access There appear to be two separable issues concerning access to Grand Gulf. The first issue, which was anticipated by cur letter of September 25, 1978, is whether MP&L and MSE have lived up to their license conditiens en af fording Clarks-dale an cpportunity to parricipate in Grand Gulf and, indeed,

_. if at this late date Clarksdale were to request access, whether the license conditions would require MP&L and MSE to make it available. Although MPEL's conduct and position are thercughly

dccumented in our letter of September 25, 1973, we will comment briefly on Clarksdale's allegations. Mr. McDiarmid's letter to you of September 22, 1978 confirms what MPEL had begun to suspect; that the issue of access for Clarksdale is a red herring designed by Clarksdale to pres-sure MP&L on other pending negotiations. Mr. McDiarmid's letter, while it articulate? no specific complaint, suggests by innuendo that Clarksdale has been refused access to Grand Gulf. It has not. Note, however, that while he refers at least four times to a lack of " offers" of participation, not once does Mr. McDiarmid state that Clarksdale would like to participate in Grand Gulf. At least since January 17, 1977, Clarksdale hds had all the information it requires about Grand Gulf to make a decision con-cerning participation. Significantly, at the meeting of May 26, 1978 between representatives of Clarksdale and MP&L, Mr. McDiarmid, aside from lecturing for five minutes on the hornbock law of

             " offers," made no mention of any interest in participation          .

by Clarksdale. Indeed, neither Mr. McDiarmid nor Mayor Webster of Clarksdale made any other reference to Grand Ghlf in the day-long meeting. In short, MP&L has afforded Clarksdale ample opportunity to participate, but Clarksdale has refused to seize it. MP&L feels that the time has come for it, with Justice's concurrence, to close the door on those opportunities. In addition, MPEL and MSE's. agreement in principal to sell 10 percent of Grand Gulf to South Mississippi Electric Pcwer Association. (SMEPA) and West Missisippi Electric Power Association (WMEPA) which had indicated a desire to participate ' over four years ago is proof positive of MP&L and MSE's , full ccmpliance with the license provisions on access. The second issue with respect to access, one which you raised, involves the desireability of amending the Grand Gulf license conditions to eliminate their obviously unintended open-ended nature. MP&L and MSE agree with you that this may be desireable and are currently studying your informal suggestions as to how this might be accomplished. We feel strongly, hcwever, that this is a matter to be resolved solely between MP&L and MSE, on one hand, and the Departmenc of Justice, on the other.

2. Transmission -

You have expressed concern, founded en the allegations in Mr. McDiarmid's letter, that MP&L has not lived up to its com-mitment 5 (as listed by Mr. McDiarmid) providing that MP&L will s facilitate transmission "over its transmission facilities."

Among other things, Mr. McDiarmid alleges that MP&L has somehow impeded Clarksdale's purchase of power from the City of Lafayette. Nothing could be further from the truth. Commitment 5 of the license conditions (which incidently are incorporated in MP&L's filed transmission rate) requires that (1) there be a continuous electrical path between the supplying party and MP&L's transmission lines; (2) that permission to use these lines has been obtained, and (3) that the transmission can be accomodated from a functional and technical standpoint. Despite the fact that MPEL believed there was such a technical problem with the delivery point requested by Clarksdale, by its letter to Clarksdale of September 14, 1978 MP&L advised that it would work out the problem on either a firm or an interruptible basis. MP&L operating people thought that the problem had been solved and that the City of Lafayette (Lafayette) could work through Louisiana Power & Light Company (LPEL) to affect delivery to MPEL. It was, therefore, surprising to find Clarksdale complaining about this very situation. , Clarksdale first expressed interest in a transmission rate by its letter of-September 8, 1977. MP&L's president, Mr. D.C. Lutken, on January 18, 1978 confirmed MP&L's intent to provide transmission service and gave Clarksdale a progress report on the development of such a rate. By letter of March 2, 1978, MP&L distributed to Clarksdale and its consultant a draft Schedule E to the Clarksdale Interconnection Agreement, providing for trans-mission service. Clarksdale rejected the proposed rate schedule and the subsequent exchange of letters and meeting of the parties produced no mutually acceptable schedule.

                                                                                  ~

By letter of August 14, 1978 Clarksdale advised MP&L that it had the opportunity to obtain purchased power if MP&L would provide transmission services. In an effort to accomodate Clarksdale, MP&L on August 28, 1978 unilaterally filed with the Federal Energy Regulatory Commission (FERC) Schedule E to the MPEL-Clarksdale Interconnection Agreement and requested waiver of the 30 day notice requirement so that transmission could begin immediately. The rate tendered for filing reflects the extensive negotiations between the parties and tracks the terms of the Grand Gulf license conditions. It is new up to the FERC to determine if the filed rates are just and reasonable and any excess not supported by MPEL's cost of service will be ordered refunded. Clarksdale's ccmplaint to the Antitrust Division on this score is at best premature. Inasmuch as Clarksdale has intervened in the FIRC proceeding, it will have ample opportunity to air whatever

   ~

competitive allegations it has with respect to this rate schedule. Certainly, Clarksdale's mere disapproval of the transmission

me rates, which is all Clarksdale has so f ar alleged, does not amount a violation of either the license conditions or the anti-trust laws. Moreover, as for Mr. McDiarmid's complaint and your concern about MP&L's insistence that Clarksdale 1:self deal with LP&L, MP&L is aware of no requirement, whether under the antitrust laws, MP&L's license conditions or under the regulatory scheme in general, that MP&L interfere with the internal business decisions and otherwise make commitments on behalf of any independent third party, simply by reason of its corporate affiliation (LP&L) or by reason of its being joined electrically (Gulf States Utilities, Inc.). Again MP&L suspects, and the following chronslogy suggests, that Clarksdale.is trying to fabricate its own

           " inconsistent. situations."   Late in the afternoon of September 19, 1978, after several conversations that day, Mr. M.L. Carraway of Clarksdale's Water and Light Department advised MPEL's Mr. T.A. Dallas by telephone that Clarksdale's consultants could not understand the two alternative transmission -

arrangements proposed by MP&L (one using LP&L, the other using Gulf States). Ee requested that Mr. Dallas answer his questions in writing so that he could get the correct information to his consultants, since he was having difficulty explaing MP&L's proposals to them. Mr. Dallas said that he would see what he could do and would begin working at once. At approximately 5:00 p.m. the next day, September 20, 1978, after several more con-versations that day with Mr. Carraway, Mr. Dallas offered written answers, provided that Mr. Carraway would put his questions in writing. Please note that at this time _ (approximately 5:00 p.m., September 20, 1978), Missisippi Pcwer & Light Company had not received a written request for the information referred to by Mr. McDiarmid's letter. Two letters frcm Mr. Carraway to Mr. Dallas were posted September 20, 1978, and received September 21, 1978, one of which requested MP&L's written position as to avoid any chance of "misinter-pretation". Mr. Lutken answered both letters by letter to Mayor Webster dated September 21, 1978, which summarired the factual situation and again offered the two alternatives; either for Clarksdale to arrange wheeling by LP&L from Lafayette to MP&L or for MP&L to enter an interconnection agreement with Gulf States. On September 22, 1978, Mayor Webster wrote Mr. Lutken saying, in effect, that he did not believe Mr. Lutken's representations and threatening to complain to the Antitrust Division. The fact that Mr. McDiarmid's lengthy letter to you was hand delivered on September 22, 1973 suggests that this whole charade was contrived to pressure MPsL to submit to Clarksdale's terms on partial requirements service.

The charade continues. On September 26, 1978, Mr. Lutken wrote Clarksdale saying in effect: tell us what you want and when you want it and we will transmit it as scon as the FERC waives the 30 day notice requirement. On Monday, September 29, Mr. Lutken notified Clarksdale that on the previous Friday, September 27, the Ccmmission had granted the requested waiver and reiterated MP&L's readiness to wheel for Clarksdale as soon as Clarksdale decides the length of and schedule for deliveries and whether it wants firm or interruptible service. On October 2, Clarksdale wrote Mr. Lutken that Clarksdale had made all necessary arrangements with Gulf States and Lafayette, and that it wanted firm service for one year for delivery of up to 14 megawatts. Clarksdale, hcwever, found new cause for delay by withholding an updated transmission schedule until MP&L once again reaffirms its agreement-to transmit. On October 3, Mr. Lutken advised Clarksdale that the of fer to transmit for them was still open, but that in checking with Gulf States, he learned that Clarksdale had yet to make arrangements with it and that ' Clarksdale had not taken up MP&L's offer of September 21 to make such arrangements. On October 6, Clarksdale responded that they have finally contacted Gulf States which would draft an interconnection agreement between MP&L and Gulf States and forward it to MP&L. On October 10, MP&L advised Clarksdale that it is standing by ready to wheel as soon as the papers are executed. This most recent round of correspondence, copies of which are attached, shows that MP&L has been most cooperative and cordial in trying to serve Clarksdale in spite of Clarksdale's contentiousness.

3. Wholesale Sulk Pcwer surelv As to Commitment 6 of the Grand Gulf license con-ditions which commits MP&L to selling power for resale, Mr.

McDiarmid has complained and you have expressed concern that MP&L is offering Clarksdale partial requirements. service at rates based on marginal costs. In addition, Mr. McDiarmid has alleged that MP&L has refused to sell to new wholesale cus-temers and that MP&L has refused to sell base load power to and to purchase pcwer from Clarksdale. Clarksdale and MP&L have been interconnected since August of 1977. Prior to that time, Clarksdale did not request service from MP&L and MPEL did not serve Clarksdale. Accordingly, MP&L did not take Clarksdale into consideration when fore-casting its future base lead capacity requirements. Inasmuch as Clarksdale's purchases from MP&L new impose marginal costs on MPEL and because, as a partial requirements customer, Clarksdale will continue to impose such marginal costs, MP&L will pass those marginal costs en to Clarksdale, subject to FIRC

approval. We are aware of no legal prohibition on dis-tinguishing between classes of custcmers based on actual dif ferences in the costs of providing service to those classes. To the centrary, both the FERC and the antitrust laws recognize cost-justified price differences. See initial decision by Judge Gordon (formerly acting section chief in the Special Trial Section of the Antitrust Division) in Southern California Edison Co., FERC Docket No. ER76-205, (Slip opinion p. 71 June 1, 1978); see also 15 U.S.C. 513 (a) . The full Commission currently has before it this very issue in Florida Power & Licht Comoanv, FERC Dccket ER78-19. MF&L is following this proceeding very closely and if the ultimate outccme is a broad policy statement on the appropriateness of marginal cost-based rates for partial requirements service which fits the MPSL-Clarksdale situation, MPsL will abide by it. In any event, at this stage neither ccmplaint to the Antitrust Division nor, indeed, to the NRC are the proper means to raise this fundamental rate-making issue. , Mr. McDiarmid's allegations of MP&L's refusal to sell to new wholesale customers and refusal to purchase frem Clarksdale are easily refuted. As MPSL's letter of December 8,

 \-

1976 bears out, what MPsL refused was to serve new partial requirements customers at rates based on embedded costs. This is simply a restatement of Clarksdale's first complaint on partial requirements rates and need not be dealt with separately. Moreover, Clarksdale's suggestion of something sinister about MPsL's termination of Yazco City's partial requirements rate is equally inapt. This " partial requirements" rate for Ya:co City was the rate schedule for the exchange of reserved capacity and off peak energy under MPsL's Interconnection Ageement - with Yazoo City dated September 26, 1962. These were rates fixed for the life of the Interconnection Agreement, adjustable only for increases in fuel costs. Changing costs due to inflation resulted in these rates beccming an unfair burden en other MP&L customers. Therefore, MPSL on June 14, 1973 gave one year notice of its intent to cancel the agreement effective June 14, 1974. Yazoo City subsequently agreed to the with-drawal of these partial requirements rates and to the substitution of mcdern ones. It is entirely coincidental that the effective date was so close to the initiation of the latest round in a long series of negotiations with Clarksdale for an initial intercon-nection agreement. (See MPsL's response to Questien 13 of Con-struction License Application, pp. 4-5, September 22, 1972.) Finally, Clarksdale suggests that MPSL has refused to purchase pcwer frem Clarksdale er to sell base lead pcwer to Clarksdale under its FERC filed rate. This is simply nce true. Frem July, 1977 through August, 1973, MPsL sold Clarksdale

6,341,800 kWh of energy for scheduled maintenance and 1,552,200 kWh of emergency energy under Schedule A of its Interconnection Agreement. During the same pericd, MPSL purchased 237,810 kWh of emergency service frem Clarksdale. In conclusicn, MP&L has at all times dealt with Clarksdale on the basis of good faith. With respect to access to Grand Gulf, Clarksdale, despite having been provided with cost estimates alnost two years ago, has yet to express any interest. With respect to C.~.arksdale 's transmission ecmplaint, Clarksdale as a party to the FIRC proceedings can litigate the justness and reascnablenesu of MPEL's transmission rate at the FERC, the forum that has jurisdiction over such rates. As far as partial re-quirements service is concerned, MP&L will abide by both generally applicable final proncuncements on the subject and by any particu-lar FERC findings as to the justness and reascnableness of MPEL's cost-justified rate differences. , If you have any further questions in this matter, please let me know. Sincerely L. Peter Farkas Attorney for Mississippi Pcwer

                                           & Light Ccmpany LPF:mac Enclosures cc:   Donald A. Kaplan Donald C. Lutken Sherwcod W. Wise bec:    Frank S. Ycrk Charles A. Read Richard M. Merriman

O O I _f_! k MISSISSIPPI POWER & LIGHT COMPANY L Helping Build Mississippi "O m P. O. 5 0 X 16 4 0. J A C K S O N. MISSISSIPPI 35205 ocuato c. LUN EN September 29, 1973 uwa Pcnorable Richard M. Webster, Jr. Mayor City of Clarksdale Post Office Ecx 940 Clarksdale, Mississippi 38614 Cear Mayor Webster: In my letter of September 26, 1978, I told ycu that MC had not yet acted on cur request to waive the thirty-day notice requirement so that Service-Schedule E cf our Intercennection Agreement could be activated and transmissien service could be immediately available to Clarksdale. We explained that the FERC's public agenda shewed that action was scheduled at its public meeting of Wednesday, September 27th. Mr. R. M. Mer:4 - = 1, our Washington Counsel, has advised us thr.: MC yesterday issued its Crder, dated Septe=ber 27th, accepting this rate for filing and fixing the effec-dve date (after a ene-day suspersien) as of August 29, 1978. They also granted the waiver of notice we had requested in order that you would imediately have this transmission option available to you. All of the arrangements necessary for you to receive power frem Lafayette, I2uisiana are new in place and available to you. We understand that Louisiana Pcwer & Light Ccmpany has tendered to the City of Lafayette an agreement providing for the use of their trans=issien facilities in effecting , the proposed transaction. I would assu=e that the City of Lafayette is await-ing your approval to ccmplete these agreements. When you have arranged to get the power to us please so notify us in writing, giving us a preposed heurly schedule of deliveries to Clarksdale, the length of time the use of cur transmission system is desired and your choice of inte m ptible or firm service. We can furnish either frem this scurce at this ti=e, but reserve the right to re-deter: tine availability if your request is not processed within a reasonable time. We again affirm cur willingness and desire to furnish service under any of the ecmprehensive and varied schedules available to you under terms of cur Intercennecticn Agreement. , Si~erely,

                                                                                        /

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CCL:jls Member Midcle Scuch Utilities System

J. SSISSIPP! POWER & LIGHT CCN ANY Mcnorabic Richard M. Webster, Jr. 2 September 29, 1978 Mayor .. ~ City of Clarksdale bec: Mr. Con Col =er Mr. F. S. York, Jr. Mr. D. E. Meiners Mr. N. L. Stampley Mr. J. D. Holland Mr. T. A. Pa l ' " Mr. J. W. Schimpf' Mr. R. M. Merriman Attorney at Law Reid & Priest 1701 K Street, NW Washington, DC 20006 Mr. S. W. Wise Attorney at Law Wise Carter Child Steen & Caraway Post Office Box 651 Jacksen, Mississippi 39205

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sys;eci ::aw 1:ees ='de a::xi ycu advise I:s sencher tbe pcw.r is fi:n cr interrg:ibic. Its py: cc t!:n pe:;er is to tu . . deliwred, its w. ate pc'er ,. ri- '=. 2: Lm. tr, Sc.%.t.219 10:iic2:1'::q *be :2r C'::F:Lt~.s CI .e:Cr to I:e C:3DO C7 Os:tsiale 1.tt: cur systa= cy tr.e bc::r sad stle czy, a:a the T

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cada We I.st:wta .=:1 Gulf S:2:.es. sad e:=fi:=ed c7 tairJz:ce -":-s.* @ : .i# ccawrssiter. vi:22 2: . Esyier f:cs G:.lf SN Utilities 2:d 'M.  :.-3 7 $7 - Ri' *- -i L.-: = tim Ci:7 c 1Ada, ::To . ~~ h Pc=== 22 U. te:;;in. to ficw xd-+ 2.L h:::s c' p:tc v--.u to Ic=r:.ve dis ww . ' . ' ' 7 - 7.Q

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O O . by 3uzr t;:=m:ss2m tarif f. ::e br.12 ftreni.soti 3t:u a roser scMala hxiicati::; tt:e c cutts of praer to ber 1:2.ea try Chrir.:c::.1e fra: p:r systtri by tM 2x:ur acd (27. delniersi fmn Pr.18. Caramy iiie w:.11 te pi20.:m of Ch:rc:Ge to Tc: Caf % of E.L 1:7 letter of Sct to fum:rn p:4 = c:pi.:cc =r-a-'1 e q:cn p:r s..mK:s:nt to ::-' m-'t. - 1 d gi':L:: '.:s 1 da.e '-~ c.n me:1 .~ .~s:. sw.cn c:n bes:in. 't . Ca.mvay is is a p:siti.c to t. ..::. rz:u:-s* t2:is 1.sfe::n:=.:1 by tele;&:ne

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1ccg ss Su:r d :c:r.tc.iem ' caw this c.- +,te, we do act percelm an7 , addi?* nwd fcr i=tc:::sticn !:f pa. ... ,. . . Tit.h .wn to p.= letter of Sec*er 29, neitter w =cr hfsntra acr Oalf States *caelime t!:st :.=7 :n- cice by !.ad is -m c:- des:.r::21e cr any :n.sca ctbar :ts: to ~ nse 22 c=:s:.:s to "C a.> v ite ur.cc,w MIT, shile s1:s:1:: .ect:s17 i ., - - W-- .M :=ctits of O. Ie cote that se dM

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{ Mr. aichard Mer:f

                  !    b  MISSISSIPPI POWER & LIGHT COMPANY EbiU{P Limms Helping Build Mississippi
                           . C. S O X 16 40. J A C K S O N, MIS SIS SIP PI 39205 Cet:ber 3, 1978 m3..e .a, mn Mcnorable Richard M. Webster, Jr.                       .

Mayor, City of Clarksdale P. C. Sox 940 Citeksdale, Mississippi 28614

ear Mayer Webster:

I have ycur letter of Cctcher 2, which was hand delivered at

    . pp cxi=ataly 5 p.m. the .same day. Your. letter indicates Lafayette and Clarksdale are ready to preceed with "            ^4s transacti:n . . ., " which we understand to =ean the deliver / of power to Mississippi Pcwer & Light C:=pany frets Lafayette for tr m m hsien to Clarksdale. 2.is, of c urse, i= plies you had =ade the necessary arrange =ents with Gulf States Utilities for transmission of pcwer fr== Lafayette to our C:=pany. 2.is necessary step was pointed cut in cur letter to you of Septa =her 26 and etriier.

We called Mr. A. E. Naylce, Executive Assistant to de president, of Gulf States Utilities, at appr=xi=ately 5:15 p.m. , cct:bar 2, to determine the status of ycur arrange =ents with them, since we had net been contacted by them. .t. Naylcr advised us dat Clarksdale has still not c=ntacted Gulf States Ctilities ner had any arrange =ents been made by Lafayette whereby Gulf States Utilities ceuld deliver pcwer fren Lafayette : Mississippi Pcwer & Light C:=pany. Mr. Naylor reiterated the face dat the intercennectica agree- .

    =ent between Lafayette :nd Gulf States UM 'i ties provides that Gulf States Utilities will culy transmit pcwer f .a Iafayetta to an entity with whcm Gulf      .

States UH'i ties intereennec r ud has an intereennectica agreement. Missis-sippi Pcwer & Light C:=pa=y hal u inter ==ccection agree =ent with Gulf States Utilitien, but in my letter of Sapte.&er 21 we effared to enter into negotia-tiens wit" them if ycu desired us to pursue the interruptible service approach. You have A asked us to proceed so we assu=e you are net inserested. Mr. Naylor was at a loss to understand and cculd net agree with de stata=ents in your letter of Cet:bar 2 that:

                "We note dat transac.icns between Gulf States and Mississippi Pcwer & Light and other MSU enti.ies take place daily as arranged by d e system dispatchers and understand ca: Gulf States is wi"g to execute a letter agree =er.      wit you fer this transac icn if necessary.
                "Wi.h respect t: ycur letter of Septa =ter 29, neither we acr Lafayette acr Gulf States believe dat any ser r-ice by *2&L is necessa f er desirable f : any reasen other than to increase

  /

M SSIPPI PCWER & UGHT COM Ecccrable Richard M. Webster', Jr. 2 Cctnrer 3, 1978 the costs to r" "tsdale u=necess' d 'y, while si=ultanecusly i=cceasing the p2:= fits of MSU.* . Further, Mr. Naylcr stated that Gulf States C*' ties has no inter-cennectica agree =ent with Pd dd's Scuth U*d ' ' ties , and ycer understandd ag of Gulf States U*d18 ties ' # ' gness to execute a letter agree =ent Wd Missis-sippi Power & Light. Cc=parf for ". . . this transactica . . .

• is W2 cut any basis in fact. Mr. Naylcr ceiterated that tha enly way Gulf States C-dt' ties can *:raned : Lafayette pcwer to r" "ksdale at *ki
• ti=e is by way of Lcuisiana Pcwer & Light r'~-a y with whcm Gulf Statas tilities does have an inter-connection agreement. .*..erefera, centrary to ycur letter, Gulf States C** ' ' ties dcas believe ". . . service by L7&L . . .
• is necessa_f.

Cur een*d-"d g effars to tra- ed t Lafayette pcwer to Clarks' e s~di sta:id. We suggest you have Gulf States U*d-les centact us as seen as you have ce=pleted arrangements with thes fer delivesf of Lafayette's pcwer w us.

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4 1/ 9 w- - - q bec: Mr. f. S. Ycrk, Jr. Mr. W. D. Colser - . Mr. D. E. Meiners . Mr. N. L. SM-" ley Mr. T. A. Callas Mr. J. W. Schi=pf Mr. S. W. Wise Attorney at Law Wise Carter child Steen & Caraway Post Office Ecx 651 Jacksen, Mississippi 39005 Mr. J. K. & d ' d Attsrney at Llw Wise Carter &d 5 teen & Caraway Mr. Richard M. Merr d -' Attorney at Llw Reid & Priest 1701 K Street, NW Washington, CC 2CCC6

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                              ~a        P. O. S O X 16 4 0, J A C K S O N, MISSISSIPPI 39205 October 10, 1978 wuo. c. wnan                             ,

The Honorable Richard M Webster, Jr. Mayor, City of Clarksdale P. O. Box 940 Clarksdale, Missis sippi 38614 . Dear Mayor Webster This will acknowledge receipt of your letter of October 6,1978 We shall await the receipt of further correspondence ('-' and information.

             . .                                               Sincerely DCL/dbr RECENED

• i0 1978 .

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             . -     -.                        law caricts SPEGEI. & MCDLLR31ID 2600 VIRGINIA AVENUE. N. W.
                                                                      ~~

WASHINGTON. D. C. 20037

• TELEPMcNE (202J 333 4500 RC8ERT C. MCQfARMID SANDRA J. STRESEL DANIEL J. GUTTM AN RC8ERT A. sASLON DAVID R. STRAUS JAMES N. HORWCCD BCNNIE S. SLAIR ALAN J. RCTM ROSERT MARLEY SEAR THOMAS C. TRAUGER RRANcES E. rRANeis October 31, 1978 O ANIEL 1. DAVIOSCN '

AMES CARL POLLCCX THCMAS N. MCHUGM. JR. Richard M. Merriman, Esq. Reid & Priest 1701 K Street, N.W. Washington, D. C. 20036 Re: Grand Gulf Nuclear Station Unit 1 and 2, NRC Dockets 50-416A, 50-417A, Department of Justice File 60-415-57. --

Dear Dick:

This will confirm my statement to you on Friday that I am distressed by your Mr. Farkas' letter of October 16, to the Justice Department in the above noted docket which you sent to us on October 23, and which I view as a) per-sonally insulting, both to me and to Clarksdale and b) misrepresenting facts. I do not appreciate your suggestion that I should be used to being accused of actions such as conducting a " charade", I attempt to conduct both my personal and legal life with some regard for decency and ethics, and I see no reason why I should not be able to expect the same attention to ethical practice from you and your firm. In particular response to Mr. Farkas' letter, you state Clarksdale " suggests by innuendo that Clarksdale has been refused access to Grand Gulf. It has not." You also, incredibly, assert that since January 17, 1977, Clarksdale has had all the information it requires about Grand Gulf to make a decision concerning participation, and that at the meeting of May 26, 1978, between representatives of Clarksdale and MP&L, we "made no mention of any interest in participation by Clarksdale." You then go on to assert that "in short, MP&L has afforded Clarksdale ample opportunity to participate, but Clarksdale has refused to seize it." In the first place, the January 17, 1977, infor-mation apparently is that contained in Donald C. Lutken's letter of that date to Robert E. Bathen of R.W. Beck and Associates, stating your then anticipated total cost estimate for the Grand Gulf Nuclear Unit, exclusive of fuel and Stating thz.t "the cost of fuel and the cperation and main-tenance expenses expected are not available at this time . "

Richard M. Merriman, Esq. October 31, 1978 I cannot imagine that you would advise a client of yours to commit tens of millions of dollars on the basis of this sort of data or suggest that this was "all the information it required ... to make a decision concerning participation." Specifically, while we have asked your client on numerous occasions for an offer which would contain the necessary terms and conditions of ownership, transmission and operation of such unit, your client has adamantly refused. I note in particular that our correspondence with MP&L (of which Mr. Farkas should be aware since it was attached to the copy of my letter to Ms. Urban of the Justice Department furnished you on September 22, 1978 and which he was apparently attempting to answer) has several times requested the detailed offer necessary before we could undertake to expend large amounts of the City's money. In particular, Mayor Webster's letter of October 18, 1977, stated:

                "As to what your letter indicates may be a
                ' difficult' problem, we have examined our files, and find no evidence therein that MPEL has ever made the offer of Grand Gulf participation to Clarksdale which we have understood you to have promised the NRC. While we understand that there was no restriction placed upon the time within which MP&L was required to make such offer, we would assume that you would wish to try to tie down these matters now rather than wait until the plant was complete or nearly complete. We would, of course, be pleased to have our engineers discuss your projected coal units, but we do wish to for-mally request as well that an offer of car-ticipation in the Grand Gulf Unit in -     amount of at least 10 megawatts be made to Cla; taale. Our estimate indicates that we could well ase at least that amount. This represents a conservative evalu-lation of a fair share allocation to us from these units, and we understand that MPEL may be preparing to offer some of these units to others."

Mr. Farkas also makes certain assertions as to sta-tements made by us at the May 26, 1978, negotiation meeting in Jackson. We had refrained from going into the details of those negotiations on the assumption that they were privi-leged. Since Mr. Farkas has chosen to break that privilege, however, I point out to you that in the first meeting between

Richard M. Merriman, Esq. October 31, 1978 Clarksdale and Mississippi Power & Light on these matters, on October 26, 1977, at which both you and I were present, Clarksdale made a conscientious point of stating that we were serious about wanting to participate in Grand Gulf, and MP&L representatives took the stro.<g position that the original agreement by MP&L and the Justice Department constituted your

    " offer" to Clarksdale, and that we had therefore waived our rights under the NRC License. In fairness, you stated that while that was your general position, you were willing to reconsider so that we should not take your position as final.

My letter to you of November 14, 1977, confirmed our understanding that you would respond to our request for your offer as to Grand Gulf, as well as the other matters involved. Fursuant to your telephone inquiry, I furnished you a copy of a holding company system transmission rate by letter of December 16, 1977 (that for Northeast Utilities), and reminded you that you had assured me that we could anti- , ,, cipate reasonably rapid action by MP&L in response to our request. Mayor Webster again expressed desire for your response in a letter of January 10, 1978, to Donald Lutken, responded to by letter of January 18, 1978. By letter of March 2, 1978, Donald Lutken sent Mayor Webster a draf t of a service schedule for transmission, and Mayor Webster responded on March 17, requesting the underlying cost of service study and also requesting confir-mation of our understanding that MP&L declined to sell power to Clarksdale under its filed wholesale rate and reflecting his understanding that MP&L was investigating a proposal to us on Grand Gulf. In response _- Mr. Lutken on March 31, fur-nished the requested cost of service study and noted that your study of other proposals Clarksdale had mentioned to MP&L "had been postponed and we are unable to give you a definitive answer at this time. We would expect to resume our consideration of these following the receipt of the information you had asked Mr. Bathen to furnish us." On April 27, 1978, Mayor Webster furnished Mr. Lutken an explanation prepared for him by R.W. Beck of why the purchase of base load capacity from your Company by the City would be economically advantageous to the Company, as would the sale of peaking capacity by the City to the Company.

Richard M. Merriman, Esq. October 31, 1978 There was a further meeting of the parties on May 26, 1978, in Jackson, which was begun, contrary to the suggestion in Mr. Farkas' letter, by a statement of Clarksdale, according to my notes , that we were interested in discussing the transmission rate, the status of your con-sideration of making a Grand Gulf offer, and the effect of the Florida Power & Light litigation on your apparent refusal to sell to Clarksdale at your wholesale filed rate. With respect to the Grand Gulf Unit, Mr. Wise requested what

       " learning" we had on NRC definitions of " offers", and we offered to furnish him the NRC's Louisiana Power & Light order, which addresses the issue of what constitutes an offer. That was furnished to Mr. Wise by my letter of May 30, 1978. In the May 26 meeting, as you will recall, we pri-marily discussed the design and cost incurrence of the transmission network resulting from the Middle South System and SCEC operations.

I regret having to detail the above matters dealing with Grand Gulf. I do believe, however, that Mr. Farkas should check his facts before commiting pen to paper, espe-cially when addressing matters in which he seeks to contra-dict someone else's assertion. In addition, I am advised that the City of Greenwood in 1972, and again in 1974, requested information as to the status, price and conditions of Grand Gulf, which it was never furnished. All in all, I think it is clear that MP&L has not afforded Clarksdale any opportunity to participate, although Clarksdale has repeatedly requested it. With respect to transmission, Clarksdale's interest was expressed at least as early as July 19, 1977, rather than September 8, 1977, as Mr. Farkas suggests. We cannot understand how your erection of additional hurdles for Clarksdale to cross before it can receive energy from Lafayette under your filed tariff can somehow be turned into a " charade" by Clarksdale. You have conceded that MP&L is connected to Gulf States by a 500 KV line, and that MP&L and Gulf States are partners t- a " coordination agreement". You have declined to explain in what meaningful fashion a

       " coordination agreement" differs from an " interconnection agreement", but have stated that you would not transmit from Gulf States unless Gulf States enters into an " interconnection

Richard M. Merriman, Esq. October 31, 1978 agreement" with you. Gulf States has assured us that they will furnish you the draf t which your personnel have agreed upon. On Friday, however, you asserted that we are somehow derelict in our duty to the citizens of Clarksdale by not accepting your suggestion that Louisiana Power & Light, which would perform no function whatever, also be paid its full transmission rate, thus making three transmission rates we would have to pay, and committing ourselves to LP&L's " tender mercies" for a year regardless of the fact that LP&L does nothing whatever for such a transaction. We regard this as rather akin to economic blackmail, especially taken in con-nection with your suggestion that it might take MP&L a substantial time to agree to the " interconnection agreement" which you believe necessary with Gulf States. With respect to wholesale bulk power supply, your suggestion seems to be that any new wholesale customer will

                                                                  ~ ~ ~ ~

be treated on an incremental cost basis. This is utter non-sense, and supported by none of the cases cited by Mr. Farkas. While we understand that you represent Florida Power

   & Light Company, we find it difficult to understand why anyone else, not already having committed the acts which have placed FP&L in what one would assume to be an embarrassing position, would wish to follow that example.

Finally, Mr. Farkas states "Clarksdale suggests that MP&L has refused to ... sell base load power to Clarksdale under its FERC filed rate. This is simply not true." It may be, of course, that Mr. Farkas does not. understand the difference between emergency energy and base load power. As he notes, MP&L and Clarksdale have both sold each other emergency energy under the interconnection agreement. We do not understand, however, how it is that this emergency energy transaction is transmuted into " base load power". Clarksdale has repeatedly sought to purchase base load power from MPEL, but has been refused. If Mr. Farkas is authorized, on the other hand, to represent a change in Company policy and you intend to state that it will sell base load power to Clarksdale under its FERC filed Rate MW-15, we would have anticipated a somewhat more formal method of advice of the change.

Richard M. Merriman, Esq. October 31, 1978 With the above matters called to your attention, I would think perhaps you and Mr. Farkas might wish to review the adequacy and correctness of your representations to the Department of Justice. I am attaching, in this regard, each of the alements of correspondence referred to not already attached to our earlier inquiry. Since Mr. Farkas has seen fit to contradict matters contained in our inquiry to the Department of Justice, I am taking the liberty of furnishing a copy of this letter directly to Ms. Urban of that Department. Yours very truly, Robert C. McDiarmid cc: Janet Urban, Esq. Department of Justice David R. Hunt, Esq. Mayor Richard Webster Mr. Charles Matthews Hardy Lott, Esq. Attachments RCMcD:jbs

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wAsHINGTCN. C. C. 2CC37 TELEP6*CNE (2C2J 3J3 ASCO G8CRGE $8'f GEL

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THOM AS N. M CMUGM. JR. Sherwood W. Wise, Esquire Wise , Carter, Childs, Steen

                        & Caravay P.O. Box 651 Jackson, Mississippi 39205 Re:       Clarksdale-MP&L Negotiations
                                                                                                                   '~             ~

Dear Sherwood:

At the meeting held between Clarksdale and MP5 L on May 26, you asked if we could furnish you some of the " learning" on NRC (AEC) holdings with respect to " offers". I enclose a full copy of the " Order Denying Applicants' Motion for Summary Disposition . . ." and the " Memorandum of Scard with Respect to Appropriate License Conditions. . . " , which were filed by the Licensing Board in the LP&L Waterford docket on October 24, 1974. The particular portions wnica you may find relevant are at pages 48-49 of the Memorandum and are reflected in the license provisions at Schedule 3, Condi:icn 4, page 7, footnote **/. I am providing a full copy, as well, to Dick Merriman. You will note that the Ecard found that a one-year peried was appropriate after adequate financial data sufficient to enable an entity to make a feasibility study as to participation was provided. The 3 card also provided, that the Company could start the ene-year period running by supplying the data to any entity without waiting for an inquiry. Unfortuhately, I will be out of the office for the remainder of the week, but I have seen to it that the Beck personnel have begun the process of accumulating the data necessary to furnish a transmission schedule of the sort they believe appropriate. I understand that Messrs. Saffer and Guarriello may call Frank York directly if they need any additional data frem the Company. With respect to the Ccmpany's pcsition en sale of whole-sale pcwer to Clarksdale, we understand tha t ycur pcsition u that you will do so enly if the transaction as a whole turns cut to be advantagecus financially to the Ccmpany and/cr i:s ratecayers. We have undertaken to do a somewhat mere ceph'isticated study en this point, and will furnish it : icu as quickly as pessible.

e,_ . .. ,

                                                                          ~~
                                                                                        ~

I understand that Dick Merriman will send us a copy of the SCEC tog e th e r'. filings, for our use in putting these packages -

                                                           -  very trul lhy t    '

Robert C. McDiarmid cc: Fred Saffer Nick Guarriello

  '                      David Hunt, Esquire Hon. Richard Webster, Jr.                                            _

Dick Merriman, Esquire O

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                    -.                                                                                                  Maren 31,1978 A. 3           i1973
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                                                                          ..~ t ..~ <..:.3 Rennrable 7.idard M. Webatar, Jr.

Mayc City of 'larksdale Post Of cm Scz 940 Cladsd. , Mississippi 3S614

Dear N.ayer Webster:

Thank ycu fe your letter of Mard 17, 1978 ack=cwledgi=g recaipt of &e p cpestd transmissics service rate whid we had develeped in accord- , ance with yet= request and had fe: warded to ycu fer ts pric: to . .. _ f'" g with the Federal Energy Regulate:7 Cem =issien. Ycu have stated dat ycur censultants have questic=ed ce ***"

                       , feat =es of this prepesal a=d have asked fc.e the ecst cf se.t rica suppert-ing this t=sns=issica :sta. We had develepad this in anticipatica cf a filing with ."'*.3.C            and, as you have requested, are f="d i"d'g a ecpy to Messrs. Badan a=d Mccia==id.                                     If there are a=y questiens regarding ~$ d * ,

please actiff ca. We de net ==derstand de questien :sised i= the third sents=ca of ycur Mars 17e letta: and ask fer furder clarificatien. Ceuld ycu please give us sc=e esa=ples of a :angements you have in =ind? This wculd ce "- ly help us is =aking a p cper :sspense. In cur recent ev'= ge of c===espondesca, we *ald ycu we were cen- . centrating en da develep=ent cf a t='-"4 asica rata which you had indicated to us was your pri=ary a=d i==ediate ccace==. "."..e present Ister-connectics Ag *a-=nt between Clarksdale and Mississippi 7cwer r. I.ight Many pe==its you to:

1. Buy Reserve Capacitf f ::2 cu Cc=pa=y to previda capacity t= der emergenef conditiens and during pericds of scheduled ==4-tanance.

2. Buy Fi = CapacitI fec= ct= Cc=pany to suppf a-at de generati=g cay =bd ' ' tf cf the Citf 's f'ed ' ' ties .

3. Z.xdange Ecccc=y Isergy wid cur c---=- y en a

                                               " split the savings" basis.
                                      "".e ,. rcsed ::a=s=issien rate will give de Citf de added eptien

~ of : sing MPr. .'s trans=issics lines (capacity p-it ing) if dey can =ake

                        =cre attractive a :ange=ents vid eder systa=s. We feel dat dis wculd give the Citf a full =easure cf 1:=ediately available alter =atives.
                                                                                       -Cc :istad-Member Middle Scu:h U:ilities Sys:em

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5 . MI551551PP1 PCWER & UGHT COMPANY o Ecccrable Richard M. Webster, Jr. 2 Mard 31,1978 Because of the concentratica en the transnissica =atter, cur stucf of the other propcsals ycu had menticned to us have been pestpened and we are unable to give you a de'dadtive answer at this time. We would expe c to resume our censideratien of these felicwing the receipt of the infer::n-tien you had asked Mr. Bathan to fei ih us. We would be glad to meet with ycu and your consultants to ft Ler discuss the . yesed transmissica rate. Incidentally, den't ycu think it would he desirable for us to sit dcwn sometime in mid-April and censider scan of the new cpticca cpened up by expected actics of the 1978 Legislative Sessicn. Pe: haps we c=uld begin working new ca a jcintly-cwned generating faH 14ty in Nord Mississippi. nis would start our joint rt = d g to assure that ene.gy recui.uts of i the western ha.L* cf Mississippi vill be adecuately =et. S' emel* D. C. Lucken DCLsjls cc Ecucrable F""f Finch Mr. Rcher C. McDia mid Mr. R. E. Bathan . e __e. .e ..-e . , e e. ep. =

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p.:,3 1] r 9 M ,a n i (L n a 11' MAR 201970 Ifl - O o GT 2S G 6 _ _ . _ . _ . m' E n c u t ,t D,an --- c _ _ m- Ent : : ., RICre A Ac M. WESSTEM. J A wavcm CLARKSO ALE. MISSIS SIPai 38614 March 17, 1978 g 7 1 ACT10f COPY Mr. Donald C. Lucken DOES ROT NEED TO SE FILID President Mississippi Pcwer & Light Cc=pany P. O. Box 1640 Jackscu, Mississippi 39205 Re: Clarksdale/MP&I. Negociacicus

Dear Mr. Lucken:

                                             'Je do appreciate receipt of your let er of March 2, 1978, with the proposed transmission service rate                                                                                 ~

schedule. Our consultan:s have advised us dat the preposed races seem high and have questioned the appropriateness of the interruptible feature which you have included. Do we understand that pcwer received frcm others under such a ::ans-mission schedule by an entity with an intercennec:icn agreement with MP&L or other Middle South ma-kers would be useable in (- making up de capacity obligations under the intercennecticn agreements? Cur censul: ants have requested a copy of de cost of service study supporting these races. I would appreciate it if ycu could furnish a copy directly to Messrs. Sa: hen and McDiar=id. In response to your January 13, 1978, letter, I apologize for not having caught the significance of that portien of the carry-over sentence a: the ecp of page rwo. I a= asking Mr. 3athen to see what can be dcne to respcud cc that request.

                        'Je had unders cod frem the second paragraph of that letter tha:

you were developing rates for trans=issien, investigating whether or not ycu were willing to serve power to Clarksdale under ycur - standard filed wholesale rates , as we had requested, c develop-ing a proposal to us for acquisi: ion of a part of the Grand Gulf Nuclear Staticn, and were investigating de needs of the Middle Scu d System for excess capaci:7 which Clarksdale =ay have available. 3ecause of the press of ti=e, we wculd recues ycur confi_._a:icn of our understanding f cm your le::ers of January 13

         ,              and March 2, da: MPFJ declines c sell pcwer :c Clarksdale under i:s filed wholesale ra:e. As you '.tnew, we are a::e=r:ing Oc explore as -' y al:e acive courses of ac:icn as possible, and need to knew what cur optiens may be.

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                                                                                                                                                             ~
                                                                                                                                                 ' -')

Hencrable Richard M. Webster, J~ ~ ~0

• t .F Mayor City of Clarksdale '

Pest Office Sox 940 00E3 NOT NEED TO BE FILED Clarksdale, MS 38614 i Cear Mayer Webster: In cur letter tc you dated January la,1978, we stated we were c:ncen-trating all cur efferts to develep a trans=1ssien rate. We are, therefore , attaching a draft of Ser rice Sc.hedule E to be =ade a par. cf the Inter ==nnec- - - - tien Agree =ent between the City of Clarksdale and Mississippi Pcwer & Light Cc=pany, and the Letter Agree =ent which would amend he Inter ==nnection Agreer.mne. After you have had time to review this draft, I suggest that we senedule a :neeting to disc.:ss the transmissica service schedule in order that we =ay both have a clear understsnding cf i.s previsiens.

 ,                                    You will recall that, in cur Janua:7 la,1978 letter, we requested that
           '-          you furnish us with your findings to supcort your request for base lead capability. *de don't recall havtag received a respcnse fren ycu in this regard.

Please let us knew when it would be convenient f=r ycu to =eet with us. Sincere'-

                                                                                                                       ./l
                                                                                                                    / 7:.

DC*.:JWS jls 'O. C. Lucken Attacn=ent cc: Hencrable M i "f Finch Covernor, State of Mississippi

                       ,        Walter Sillers Suilding, :Dth Ficcr

- Jackscn, MS 39202 Mr. Rcher. C. McDiarn d (with attad-ents) Actorney at

• aw Spiegel & Mc01ar=id 2600 Virginia Avenue, N.*d.
• Washingt:n, OC 20037 Mr. R. I. Eachen, Manager R. W. Beck & Asscciaas 1510 East Calenial Or ve _

Pest office 3cx 6217 Criando, il 2:503 Memter Mictie Scuch Utilities Sys:em

E I MISSISSIPPI POWER S. LIGHT COMPANY Helping Build Mississippi P. O. S 0 X 16 4 0, J A C K S O N, MIS SIS SIF PI 3 S 2 0 5 January 18, 197S -- -

             "CNALD c UJTMEN
                         .~

Hencrable Richard M Webster, Jr Mayer, City of Clarksdale Post Offics Box 940 Clarksdale, Mississippi 38614 Cear Mayor Webster: Your letter of January 10, 1978 requests a " progress repert" cn varicus proposals you had asked us to consider which you thcught wculd be beneficial to the City of Clarksdale. These included: a blanket transmission rate permitting unrestricted use of de Ccmpany's lines by third parties; a rate under which we could serve a specified, base lead, part of your power requirements; a basis under which you could acquire a part of the Grand Gulf Nuclear Station, and cur help in =aking a market for excess peakicq capacity which Clarksdale =ight have frem ti=e to ti=e. We assured you of our intention to address each of these as *~ - rspidly as we could reasonably do so and on a basis which wculd be fair to our wholesale and retail customers as well as yours. Cur cbjective has been and will be to work with your system and other electrical systems within the State to the end that all Mississippiana will have an a=ple supply of electricity at the lowest possible cost. All of the arrangements which you have ask2d us to c=nsider are different in concept frem any of our filed rates. We have assured you, however, that we in-tend to proceed as fast as practicable to develop a . ate which wculd be applicable to these options you wish. I am sure that you are aware that each of these =ust be filed with and app:cved by the Federal Eneryf Regulatcrf Cc ~issica pric to their application. Such filings =ust be develeped, dec==ented and supported befere dat bcdy. This requires ti=e. As we indicated to you at our earlier meeting, we have had several dis-cussions with Scuth Mississippi Electric Pcwer Associatica regarding arrange =ents for the transfer of pcwer between their sfstem and curs. We had hcped to be able to file a single trand ssion rate applicable to pcwer flcws between all sen-affiliated systems in the State of Mississippi. Recent newspaper articles have indicated that your municipality is = cst interested in a tranmissien rate applicable to your own sitcation. We have, therefore, cencentrated all of our efforts to develcp such a trwMssion rate and expect to have ene ready to file with de Federal Inerrf Regulatory c--aissica shortly after the first of Fabe.a.' f. In your letter of Cetsber 18, 1977, and in our =eeting of Cctcher 25, 1977, your censultants indicated dat Clarksdale was capable of providing energy

             *st a substan" y less expensive rate than the peaking energy costs . .. (we)                ...

have shewn in ... (cur) ... last statements." Ycu have also stated dat it is to cur =utual advantage that we sell ycu part of cur present " base lead" capability. Cur analysis af the facts do cet suppert either of desa stata=ents. We are Ms.mcer Middle Scu:h U:ili:les Sys:em

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MISSISSIPPI POWER & UGHT COMPANY Ecnorable Richard M Webster, Jr January 18, 1978 certainly interested in fur her explanation and ask that-ycu furnish us with ycur - findings which would suppcrt this. We must otherwise assu=e that the special treatment being requested by Clarksdale wculd be at the cost of cur present 3C0,0C0 plus wholesale and retail cust==ers. Cur C =pany is deeply sympathetic with the positica you are in with respect to the withdrawal of your fuel gas supply. Cur cust==ars had the same thing happen to them three years earlier. O.en cur ceses and ratas went up in advance of yeurs because the cur---nt categories exempted yeur system due to its sine. Cur e--any went through seme difficult and trying circumstances in seeing that cur cust mers' energy requirements were met in an enviren=ent which we could not have foreseen. While we are willing to share the rescurces develcped for the benefit of cur wholesale and retail cust mers, we do not think it defensible that they bear more of the present energy c=st than they new do. Accordingly, any participatien in cur rescur:es must be on a full replacement cost basis to p=tect the legi"-= ta interest of these cust==ers. Prior to writing this answer .o" you, I reviewed cur file on prior nege-tiations with de City of Clarksdale. Since 1964, cur C mpany has been attempting - - to negotiate wholesale power and/or intere=nnaction agree =ents with yeu. Cur present intereennection agreement was not. accepted by ycu and filed with the Federal Pcwer F - ission until June, 1977. Al=ost simultanecusly with dis, we began hearing frem you through newspaper articles prescsing varicus arrangements with us. .treover, you asscciated Washington c=unsel and began to negotiate with I us in an at=csphere which was far Ad *"erent frem cur long ti=e efforts to werk with you as set out abcve. We do not new n r'a-stand saveral statements attributed to ycu in the January IS,1978 article in the P--"ercial Appeal and cannet believe feu were cor-rectly quoted. T.e state =ent infers that ??A pr:duced energy is being transpcrtad and sold by de C =pany as far to the West as Ck' o c=a. I assu=e that ycu refer to the Diversity Interchange Agree =ent between 77A and Missirsippi Pcwer & Light C:mpany. S.is is an even exchange of pcwer in which our C =pany sends pcwer to 7/A during de Winter =enths (*7A's peak pericd) and receives a like a= cunt of power fr:m "JA during the Su=mer =enths (MPGL.'s peak peried) . S.is has resulted in both systems saving =cney by not having a ins *'1' expensive generating facilities and instead to substitute icwer c=st transmission inter-ties. Mereever, this diver-sity interchange results in no =enata=7 pay =ents for pcwer wha scever. Since the City of Clarksdale is interested in working cut an equitable ' solution to its pcwer supply problems, it seems to me that a =cre p=ductive app =ach would be for us to sit dcwn and discuss infc-21'y cur problems and seek to deter-sine hew we can work :=gether in the interest of all cur cussers to best serve this State. I would cer '4-17 he glad t: seet with ycu for this purycse and plan to c=ntact ycur effica early next week to sa* a =utually ac . C-le date. S' ? eLy, . C *atken,

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        ,.                                                              President cc: Ecnoranle Charles C Finch, Gover:cr, State of Mississippi Walter sillers Building, 20th ricer Jacksca, Mississippi 39 00

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m et errect som sao RicHARO M. WESSTER. JR. tsavCR cl.ARMSCALE. mss $1S$3PPl 38614

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T0: e ACT ON, COPY Janua 7 10, 1978 00ES NOT NED TO BE RLED W. WT A C. r"*'<an, President MLssissippi Pcur & Light Cgcy P. O. Ecx 1640 Jacksco,15 39205

Dear W. Intkan:

I L.kly had espected to rara %e by =cw ycur Cccpa=y's respcese to de request made by the City of Cladsdale in ec: unecing this past. Cc=ber 26, 1977. ( W are, in yect wrds, "h+' g 5: the s '-=n" each day. I had bcped that ebcse of us in ac = + ra at that enecing en Oc=ber 26, are a

              =istaken in accepting ycur suggestica tha: w "cculd star: Iccking m...J' for ycur respense.

m any evene, I t=ust that ycc Ca:r.any has had s""#ciene "-= to eval-uate a=d c::nsidcr the peints raised in cur caecing. 2:e Ccie==cr has asked da: a keep hin advised of cc p:cgress in dese mb e.C . to alleviate cc: high "H13:7 ccses. ' h"-, a ecpy of this lec:ar is being sent to hi:1 fcr his ' ~ #m. Please lac us hear f :2:1 ycu. Y m very e m ly, l--\

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Th--d M. Ebster, Jr. Maycr, City of Cladsdale ec: Ecccmble Charles C. Fi=ch bec: W. L. L. ' Ail"<i=s, Superintenden: M:, Ecber: I, 3athen

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CLziscale Wacer & Lip.c Depc m.: a, 'g,' 3eck & J.ssced: x M:. :ess L. Ealey M:, Scce:. C. McD' 'A Jess L Ealey & Asscciates, 7-d, Scei 'd c -mi s .g r 3 o.- s Ai-- gelays & at

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WASHINGTCN. Q. C. 20037 - *~ ~ TTLE9MCNE (202J 333-ASCO SECMGE $9'EGEL mCSERT C. MCCIAAMIO PETIA E. WATT SANC AA J. STRE SEL C ANIEL J. Gum AN mC a g NT A. JAS LCN QAv10 4.STMAus JAMES N. peC AWCCO SCNNat 3. SLAIA ALAM J. RCTM QAVID A. GIACALCNE 9RANCES 8. 9*tANCJS ACBERT MAALEY BEAR cANi L . cAviasC" TMCMAS N. MCNOGN. .R. Dece=ber 16, 1977 J^"'8*^""*** Richard M. Merrd-an, Esq. Reid & Priest 1701 K Street, N.W. Washington, D. C. 20006 Re: Clarksdale/ Mississippi Power . - and Light

Dear Dick:

Thank you for your assurance that we can anticipate reascnably rapid action by MP&L in response to our requests. I enclose a copy of the Agreement for Transmission between Western Massachusetts Electric Company and Westfield, Massa-chusetts. 1/ You will note that, as seems appropriate for a holding company system which is centrally dispatched, there is a pos.tage sta=p transmission arrangement for all the North-east Utilities'. System. The i=portance of the requested transmission rare to Clarksdale is underscored by the fact that after Clarksdale had been requested by TVA to furnish capacity and energy during the TVA crisis, your operating people declined either to trans-mit such capacity and energy or to buy and resell such capacity and energy for T7A's account. In the spirit of the season and in order to be gcod neighbors, we would have liked to be able to help =eet the capacity needs of the region as requested, and we are sure that you wculd not wish the absence of this sort of ce==en agreement to preclude our being able to help in similar situations in the future. May we assu=e that you will 1/ See pages 5-13 of Appendix A.

1M, , - _ Richard M. Merriman, Esq. Decerter 16, 1977 have a copy of your draft of such an agreement when you ccme to our Christ =as party? Yours very truly, f J Robert C. McDiarmid Enclosure cc: David R. Hunt, Esq. *' Mr. Robert E. Bathen - Mayor Richard Webster Mr. D. C. Lutken Mr. Sherwccd W. Wise RCMcD:jbs

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2600 VIRGINIA AVENUE N. W. WASHINGTCN. O. C. 20C37 GECRGE SyvE*3EL TELEPNCNE (202J 333-A300 RCgERT C. MCCIA RMiG PETER K. MATT SANCRA J. STRESSL OANIEL J. GUTTM AN RCSERT A. JAELCN DAvtO R. STRAUS JAMES N. MCRWCCO SCNNIE $. SLA3R ALAN J. ACTu DAvtO A. GIACALCNE FilANCES E. FRANCIS RCSERT MARLEY BEAR CANIEL L OAvtOSON rwCMAS N. McNuoN. JR. November 14, 1977 JAMES CARL PCLLCCM Richard M. Merriman, Esq. Reid & Priest . . 170'. K Street, N.W. _ i'c ' i n g t o n , D . C. 20006 Re: Mississippi Power & Light Cemeanv/Clarksdale, Miss.

Dear Dick:

As we agreed at cur meeting of October 26 with ycu and the MP&L management, I am transmitting herewith copies of relevant pages of Florida Pcwer Corporation transmission rate and the Virginia Electric and Pcwer Company transmissien rate. I understand that you have in your office the Louisiana Power & Light transmission rates which, as I recall, you filed. In additien, you have in your office the transmissien arrange-ments pursuant to the " Agreement A=cng. . . ". According to cur notes, you will respond to our offer to sell capacity, and will respond to our. W. for transmission rate, and will respond to our request for your offer as to Grand Gulf, and to our request for the sale of wholesale power. Ceuld you let us k=cw when we can e.rg:ect a response? We get tired of waiting for the pestman every morning. You s very truly, Rchert C. McDiarmid Enclosures cc: David R. Hunt, Esq.

  "4                             Mr. Rchert E. 3athen Mayor Richard Webster Mr. D. C. Lutken Mr. Sherwced W. Wise
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, ?. ~ . . RECElVED >> ;s e,, Re t n & Pur esT fu g, ,t , q Hav 201978 40 m u. manier - NEW YOttK. N. Y.1000n SplEGEL & r.h:CIARM!D ala s.ss.euuo . MID70WM OFF1CE WAMit!NOTON OFTICE 30 leOCMEFELLZit PtAZA CAmLE ADDREsa:"It EID AFT" 1701 E ST1(E ET. W. W NEW YORE. N. Y.10020 Twx WOt7tosesetaa WA5112NOTON. D. C. 200>6 Washington, D.C. November 17, 1978 TO:N9 Janet R. Urban, E : quire Fa0;N COP / Antitrust Division Department of Just. ice DOES iiOT NEED TO 3E FILED Washington, D.C. 20530 Re: Mississippi Power & Light Company Grand Gulf Nuclear Station, Units 1 and 2 NRC Dockets 50-416A, 50-417A Deoartment of Justice File 60-415-57

Dear Ms. Urban:

This letter is in response to Mr. McDiarmid's letter of October 31, 1973 to Richard Merriman, a copy of which was sent to you in apparent response to my letter to you of October 16, t 1978. Mr. McDiarmid's letter reconfirms that the proper forum for Clarksdale's complaints is the FERC, where in fact two of the three issues he raises are already pending. With respect to Grand Gulf, Mr. McDiarmid, for the first time in almost two years, states that MP&L's January 17, 1977 letter to Clarksdale's representative was not sufficient for Clarksdale to nake a decision on participation, because Clarksdale demands to know the exact cost of maintaining and operating Grand Gulf and the cost of supplying it with fuel. While Mr. McDiarmid chides us for expecting Clarksdale to make a substantial investment without such information, this is exactly the posture MP&L was in when it made the decision to construct Grand Gulf and the posture it will probably con-tinue in until GJar.d Gulf operations are well under way. As Mr. Lutken's January 17, 1977 letter to Clarksdale's consul-tant points out, Clarksdale's guess on these costs is as good as MP&L's. Clark sdale , in short, does not want to be on equal footing with MP&L, SMEPA and WMEPA, but wants the far superior stance of participation in Grand Gulf without the concomitant risks taken by the other participants. As far as the debate over transmission rates is con-cerned, their reasonableness is now before the FERC. We stand by our previous characterization of che ever-changing impediments Clarksdale raises to the consummation of its purchase of power _ _ from Lafayette.

g Janet R. Urban November 17, 1978 So too is the issue of marginal cost pricing before the FERC. Moreover, the new energy bill provides that marginal pricing is proper for co-generation and small power production (Public Utilities Regulatory Policies Act, Conference Report

p. 31, October 6, 1978). Clearly marginal costing is not the bete noire that Mr. McDiarmid, quite understandably, would like it to be. Our letter did non confuse base load and emergency power, but merely sought to point out that MP&L was dealing with Clarksdale in every manner they had previously agreed to.

Those areas in which MP&L has not acceded to Clarksdale's demands involved matters where there continues to be honest disagreement as to a reasonable rate, a disagreement which the FERC is bound to resolve. We regret that you find yourself immersed in this unsolicited controversy. However, where one party makes al-legations in what amounts to a complaint, that party should hardly be surprised to see that complaint answered in like terms. Your expressed reluctance to assume an adjudicative role in this matter underscores the fact that the Antitrust Division is not the proper forum for this " litigation." If you have any questions in this matter, please let me know. Sincere,', ,/

                                           '                4 L. Peter Parkas LPF:mac cc:   Donald A. Kaplan, Esquire Donald C. Lutken Sherwood W. Wise, Esquire Robert C. McDiarmid, Esquire o

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