ML20206H752

Further Comments in Response to Views of Brazos Electric Power Cooperative,Inc,Respecting Significant Changes Re Antitrust Matters & Wh Burchette .Supporting Documentation Encl

ML20206H752
Person / Time
Site:	Comanche Peak
Issue date:	04/13/1987
From:	TEXAS UTILITIES ELECTRIC CO. (TU ELECTRIC)
To:
Shared Package
ML20206H461	List: ML20206H752 TXX-6377, Forwards Further Comments of Util in Response to Views of Brazos Electric Power Cooperative,Inc,Respecting Significant Changes Re Antitrust Matters & to Wh Burchette on Behalf of Tex-La Electric Cooperative Texas,Inc
References
A, NUDOCS 8704150432
Download: ML20206H752 (129)

Text

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TXX-6377 April 13, 1987 Enclosura UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION in the Matter of )'

)'

TEXAS UTILITIES GENERATING )

' COMPANY, o Division of )

TEXAS UTILITIES ELECTRIC ) Docket Nos. 50-445-A COMPANY ) 50-446-A

)

(Comanche Peak Steam Electric )

Station, Units I and 2) )

FURTHER COMMENTS OF TEXAS UTILITIES ELECTRIC COMPANY IN RESPONSE TO THE " VIEWS OF BRAZOS ELECTRIC POWER COOPERATIVE, INC. RESPECTING SIGNIFICANT CHANGES RELATED TO ANTITRUST MATTERS" AND TO THE LETTER OF MARCH 6,1987 TO MR. JESSE L. FUNCHES FROM MR. WILLI AM H. BURCHETTE ON BEHALF OF TEX-LA ELECTRIC COOPERATIVE OF TEXAS, INC.

Set forth below are the further comments of Texas Utilities Electric Company ("TU Electric'9 in response to the '.' Views of Brazos Electric Power Cooperative, Inc.,

Respecting Significant Changes Related to Antitrust Matters", filed by Brczos Electric Power Cooperative, Inc. ("BEPC"), and to the letter dated March 6,1987, to Mr. Jesse L.

Funches from Mr. William H. Burchette on behalf of Tex-Lo Electric Cooperative of Texas, Inc. (" Tex-Lo'9.

8704150432 DR 870413 ADOCK 05000445 Al i -

PDR g April 13,1987 l l

I. General Comments TU Electric was told some time ago by both BEPC and Tex-La that they would not honor their contractual commitments to TU Electric by funding their respective shares of Comanche Peak Steam Electric Station ("CPSES") construction costs. Accordingly, BEPC has not made any of the required construction payments since May,1985, and Tex-La has not made any of the required construction payments since May,1986. Litigation among the CPSES owners regarding their rights and obligations with respect to CPSES is currently pending in the 14th Judicial District Court of Dallas County, Texas. Attached hereto as Exhibit A are relevant pleadings from that litigation.

It is to be remembered that both BEPC and Tex-La acquired the right to participate in CPSES as part of the antitrust review in connection with CPSES licensing. Now, faced with escalating costs associated with completion of construction of CPSES, BEPC and Tex-La are attempting to use the request for an antitrust update as a means to force TU Electric to re-acquire their CPSES ownership interests. Their claims are not only without merit but are based urea numerous misstatements of fact and on attempted misapplication of law.

TU Electric's "Information for Antitrust Review of Operating License Application" dated September 2,1986, and the " Comments of Texas Utilities Electric Company" dated December 22, 1986, faithfully track TU Electric's antitrust obligations and accurately demonstrate TU Electric's compliance with those obligations, including all of the License Conditions. But, because of the recent misstatements made by BEPC and Tex-La, these comments are filed not only to again " set the record straight" but to provide further assurance tc the Commission that TU Electric is honoring all of its antitrust obligations and commitments.

We believe it is clear that BEPC's and Tex-La's recent filings have no antitrust implications and offer nothing which would warrant or justify any action by the

Commission. BEPC's and Tex-La's filings represent nothing more than on impermissible attempt to involve the Commission in matters being litigated in Texas.

II. Further Comments in Response to the " Views of Brazos Electric Power Cooperative, Inc., Respecting Significant Changes Related to Antitrust Matters" A. BEPC alleges in its recent filing that " changed circumstances" necessitate a "new" antitrust review and " additional or modified" License Conditions. Without conceding that " changed circumstances," even if true, would, in and of themselves, be sufficient to trigger an additional review,I none of these so-called " changed I

circumstances"has any significance from an antitrust standpoint in any event.

First, BEPC complains that, due to rising construction costs, "TUEC's of fer to BEPC of 3.8% shares of CPSES Units I and 2 pursuant to its antitrust commitments has not provided Brazos with competitive, alternative bulk power supply sources." In complete disregard of the fact that the increased costs of CPSES also directly affect TU Electric, the majority and 87-5/6% owner of the project, BEPC seeks to make TU Electric the guarantor of its investment in CPSES. There is simply no such requirement under the 1

antitrust laws. License Condition D(2)(a) expressly provides that Applicants (i.e., TU Electric) "shall afford on opportunity to participate . . . to any Entity (ies) in the North s

Texas Area . . . on terms that will fully compensate Applicants for their costs." BEPC now seems to suggest that Section 105(c) of the Atomic Energy Act of 1954, as amended, (the " Atomic Energy Act"), should be utilized to require that TU Electric not, t be fully compensated by BEPC for its proportional share of the increased costs of CPSES, contrary to the express provision of this License Condition.

I We choose not to become embroiled in a debate over whether the Commission has the power to grant any of the relief sought by BEPC and Tex-La; rather, TU Electric expressly reserves that right to a future day should the Commission express any interest in the views of BEPC and Tex-La.

The next " changed circumstance" alleged by BEPC is the assertion that "TUEC is not planning to add any further nuclear capacity in the foreseeable future." BEPC, therefore, suggests that License Condition D(2)(n) be modified to require TU Electric to offer BEPC ownership participation in future non-nuclear generating facilities. The granting of this request likewise is not justified under either the antitrust laws or the License Conditions. To suggest that the License Conditions impose an obligation upon TU Electric to construct additional nuclear generation is preposterous and to suggest that a failure to do so imposes an obligation upon TU Electric to sell future non-nuclear generating capacity is equally absurd.

B. BEPC then goes even further to suggest that the Commission should inject itself into the private dealings with TU Electric by imposing "an investment cap and a

' sell-back,' . . . as license conditions . . . or equitable conditions under which TUEC would buy Brazos's interest in CPSES." This Commission is well aware that it is inappropriate to interject itself in such a dispute, particularly since that issue is subsumed in the many issues involved in the litigation now pending in the Texas Courts.

BEPC has also made numerous other allegations that stem from the increased costs of CPSES, which also totally lack antitrust significance. For example, BEPC's complaint about the Management Analysis Corporation ("MAC") Report and activities associated with a future but yet unfiled TU Electric rate case before the Public Utility Commission of Texas ("PUCT'9 essentially describe activities, such as retrospective prudence reviews, that are normal and necessary procedures before a state rate-setting agency in cases involving investment in large scale generating units, including nuclear plants. Such activities fall within the exclusive jurisdiction of state rate-making commissions, not within the jurisdiction of this Commission, a line of demarcation which this Commission has historically observed.

Moreover, a review of authorities referenced by BEPC in its submittal only serves to j underscore the lack of relevance and significance under the antitrust laws and antitrust

License Conditions of these complaints. BEPC's assertion that the decision in Horizon Corporation, 97 F.T.C. 464 (1981) substantiates an antitrust claim before the Commission in the context of changed circumstances meriting a second antitrust review of TU Electric is wholly without merit. Unlike the situation in Horizon, TU Electric made no sales pitch of any sort to BEPC. Rather, BEPC ovailed itself of the antitrust License Conditions to insist on the purchase of a 3.8% ownership interest in CPSES (a generating station which bud been planned to meet TU Electric's generation needs and which was already under construction at the time).

C. BEPC also relies on Raymond Lee Organization,92 F.T.C. 489 (1978) in support of its request for on antitrust hearing and further antitrust review. Raymond Lee is a

" false advertising" case which likewise provides no support for BEPC's assertions. BEPC also relies on the particulars of the refusal to deal allegations in Byars v. Bluff City News, 609 F.2d 843 (6th Cir.1979) in support of its generalized charge relating to the MAC Report and the prudency audit. Byars is wholly inapplicable to BEPC's argument in support of an additional antitrust review. Contrary to even the allegations in Byars, TU Electric d_id make available to BEPC on ownership interest in CPSES in accordance with, and in compliance with the terms of, the antitrust License Conditions. Now, almost a full decade later, BEPC is asking the Commission to reform the business arrangements made to effectuate that purchase and to involve itself in private litigation regarding contract disputes. TU Electric respectfully submits that the Commission should not permit the Atomic Energy Act to be utilized for that purpose --particularly in the context of reopening on agreed upon settlement that was found by this Commission to be " fair and reasonable . . . and in the public interes1." 15 N.R.C. l 143, at 1145 (1982). Such settlements are encouraged by the Commission's Rule of Practice and should not be " pried open" of the whim of a complainant who wants to retrade his bargain. See 10 C.F.R. S 2.759.

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, Ill. . Further Comments in Response to the Letter Dated March 6,' 1987,' to Mr. Jessb L.

; Funches from Mr. William H. Burchette on Behalf of Tex-Lo A. . -TU Electric's Alleged Refusal to Jointly Plan or Allow Tex-La Participation in 4> Future TU Electric Generation

, 'l. In' Sec tion 'I.A. of its filing, Tex-Lo once again asserts that-TU Electric lIs L

~ obligated to jointly plan or allow Tex-La to participate in future non-nuclear generation under the May 6,1980 letter of intent and License Condition D(2)(b),'and tha't TU Electric' -

has repudiated such obligations..

] ~ On pages 6 - 8 of its December 22, 1986 Comments, TU Electric documented the :

fact that the May_6,1980 letter of intent was expressly and unequivocally. just that -- a 4

letter of intent leading to the execution of " definitive agreements". Tex-Lo itself has

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clearly recognized the obvious fact that the May 6,1980 letter of Intent was only a letter-

, of intent-in filings with this Commission prior' to the existence of the disputes that are the I

subject of the litigation pending in the State District Court. For example, in - the .

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. " Statement of Tex-La Electric Cooperative of Texas, Inc." dated April 8,' 1982, Tex-Lo'-

l clearly refers to the May 6,1980 letter of intent as a " letter of intent" and states that, since the envisioned definitive contracts were executed "colling for Tex-Lo's purchase of -

an' undivided 2-1/6 percent ownership' interest in the Comanche Peak Project, fuel and 1

associated transmission facilities", Tex-Lo urges -"the termination of this antitrust i

! proceeding". It is, of course, beyond dispute that _ none of the ! definitive. contracts ultimately negotiated and executed obligate'TU Electric to offer Tex-Lo joint ownersh'ip . '

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of any future generation other than CPSES.2 i Further, on page 3 of Tex-Lo's filing, Tex-La makes partial quotations from the May-F l

6,- 1980 letter of intent in on effort to make that letter.of intent sound like the definitive i ,

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TU Electric fully recognizes that License Condition -D(2)(n) obligotes TU Electric ~ to allow ownership porticipation:in other future' nuclear generating _ units:and -

l. nothing herein should be construed in any manner other than that TU Electric 'will' fully :

honor License Condition D(2)(n).-

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, .. agreement itself; Of course, Tex-La falls to quote the foilowlng~ unequivocal statement of

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the parties' u'nderstanding .with.' respect to that Idtter of intent:'. '

if l . Subject to the execution of c' Joint Ownership Agreement and Power?

. Supply - Agreement, . hereinafter called? definitive agreements,";between the .

I" various affected parties, the undersigned intend that such ogreement(s) shall include the following terms and conditions: . . . . .

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Again, neither of the . two " definitive.. agreements", nor;any of the other ' agreements 1

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negotiated by the parties, speak to joint participation-in any future generation other than

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. CPSES. Moreover, the " definitive ogreements".as ultimately negotiated differs in many other respects, from the May 6,1980 letter of intent. For example, the proposed license conditions set forth in that letter of intent are materially different from the License

Conditions as ultimately negotiated and agreed upon.

I in summary, the May 6,1960 letter of intent has long since been entirely superseded j and merged into the definitive agreements as ultimately negotiatedf ond executed.

Furthermore~, as pointed out in previous filings, the nature and effect.of the May 6,1980~ ,

letter of intent is one of the issues which will be determined in the litigation now pending in Texas.3 Finally, the nature of the May 6,1980 letter of intent should be of no Independent concern to the Commission in view of the fact that specific License _ -

r Conditions have been promulgated which satisfy TU Electric's obligations with respect to l the antitrust concerns inherent in the CPSES licensing process.. There simply areino f antitrust implications to Tex-La's complaints.

i l 2. Tex-La also claims that TU Electric has repudiated Liconse Condition D(2Xb)

. by refusing to jointly plan with Tex-La. Tex-La's claim ignores the clear' provisions of f-p License Condition D(2Xb) and is, therefore, without merit.. ,;

[ Tex-La takes issue with TU Electric's position that there is no obligation to jointly -

plan outside of electric utility planning organizations of which TU Electric is a member.

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'. TU Electric denies that the May 6 letter of intent imposes any obligation on-TU '

Electric to permit Tex-La to participate in the combustion turbines or, for that-matter,

!= any of its future non-nuclear generation.

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License ~ Condition D(2Xb), however, verifies TU Electric's position.c The only obligation.

and commitm'ent with respect to joint planning is clearly stated as follows:

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The Applicants shallishore information with other Entitles with" respect to, ars!'

shall,' with' other 'such entities through any electric utility - plannina 4 - oraanizations (other than -one' involving only the Applicants) of which the ' '

Applicants ore members, conduct and/or participate in joint studies and:

if planning . of. future generation, . transmission ~ .and related :

facilities . . . .(emphasis added) .

. Clearly, the only obligation with- respect to joint planning is through electric utility

! planning organizations of which TU Electric is a member. The parenthetical statement -

was inserted in License Condition D(2)(b) specifically to dispel any notion that TU Electric -

is obligated to include others such as Tex-La in TU Electric's internal planning process --

the process which ultimately results in its annual system resource plan. TU Electric's t

resource planning data is made available to the E!ectric Reliability Council .of Texas.

("ERCOT") and updated quorterly. Additionally, the system resource plan is filed at least -

i biannually with the PUCT. Tex-La has unrestricted access to'this information.

Tex-La goes to great lengths in an effort to convince this Commission that TU!

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[! Electric has deprived Tex-La of information needed for Its own internal planning. This l assertion is without merit. As noted in its: December 22 , . 1986 comments (and-ocknowledged by Tex-La on page 6 of its March 6,1987 comments), TU Electric routinely.

shares information related to Tex-La's status as a wholesale customer and additionally,-

{ shares information concerning its-actions which might impact Tex-La's system (see, for i

example, Exhibit B and discussion 'at page 12 herein).

Therefore, what Tex-La really wants is not information but participation in TU j- Electric's internal planning process. License Condition D(2Xb) specifically excludes any such obligation.

-TU Electric's annual resource plan is prepared .in 'a manner consistent with- the ERCOT guidelines, which themselves, are the product of. joint planning within ERCOT.

Tex-La makes no assertion, and it cannot honestly make any assertion,' that TU Electric

, has refused to share information, conduct and/or participate in joint studies or plan future r

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generation, transmission and related facilities through ERCOT. Indeed,' TU Electric does just that on on on-going basis. Thus, there is' no violation or . repudiation of. License Condition D(2)(b). Tex-La has, of its own choosing, apparently elected to virtually ignore ERCOT by, for example, not even seeking membership until .1985.

Tex-La argues that because it was not a member of ERCOT at.the time of the 1980 Settlement, it is " absurd" to interpret License Condition D(2)(b) as applying only to ERCOT. Yet, Tex-La was eligible for membership at that time and TU Electric was coligated under License Condition D(2)(b) to support Tex-La for membership if it so requested. The clear words and intent of this License Condition was to assure the right of any eligible " entity" to seek ERCOT membership al that time - in order to permit that entity to reap the benefits of membership when and if it chose to seek membership. It was not until 1985 that Tex-La requested and TU Electric supported its membership in ERCOT.

3. Despite the fact that Tex-La's currently effective power supply agreement B

with TU Electric requires Tex-La to purchase from TU Electric all of its requirements at Tex-La's specified points of delivery over and above its purchases from the Southwestern Power Administration, TU Electric has agreed to facilitate Tex-La's purchase of economy energy from Houston Lighting & Power Company. Further, contrary to claims made by Tex-Lo in its March 6,1987 Comments, TU Electric has evidenced its willingness to enter into new arrangements with Tex-La that will facilitate Tex-La's purchase of electricity from others. Tex-La has chosen not to pursue such discussions. Instead, the only word from Tex-La on TU Electric's overture is the attempted castigation found in Tex-La's March 6,1987 filir:g with this Commission. Rather than negotiate in good faith, as would be expected in the event of any ini':al disagreements with the provisions of a specimen agreement fumished to Tex-La by TU Electric, Tex-La would rather complain to this

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_ Commission.0 For Tex-La to suggest that this' draft was somehow on effort to repudiate c

r the 1980 Power Supply Agreement is a good example of Tex-Lo's untenable ~ position'in'this'

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i entire matter. < -

4. - No additional response to Tex-La's assertions concerning TU Electric's future .

combustion turbine. generating capacity is deemed warranted. - The facts are 'cleaEly _

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delineated at pages 4 - 10 of TU Electric's December 22i 1986 Comments.L: Moreover, as - l previously documented, TU Electric'is under~ no obligation to offer joint' participation in!  !

future non-nuclear generation. Finally, TU Electric has faithfully adhered to its f . .

obligations and commitments concerning joint planning set forth in- License Condition D(2Xb).

1 - B. TU Electric's Alleged Denial of its_ Obligations to Provide Transmission i Services

l. In Section I.B. of its filing, Tex-La makes the argument that TU Electric-i renounces the l'980 Transmission Agreement-which, as Tex-La points-out, is "one of the .

. ' definitive agreements' contemplated by the May 6,1980" letter of intent. Nothing could . "

be further from the truth. TU Electric has been providing transmission services'to Tex-Lo L

{ since December 1986, pursuant to License Condition D(2)(i) and the Scheduling Agent i

! Agreement, and has not denied such services to Tex-La. Since TexiLo is receiving the --

i services it requested, its argument is nothing more than a " tempest in a teopot". Tex-Lo's.

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, assertion that TU Electric refuses to honor License. Condition D(2Xi) is potently false.

l Recognizing its flawed logic, Tex-Lo then argues that the terms of the Scheduling Agent ,

l Agreement are somehow unfair. If Tex-La did 'not believe the terms to be fair, Tex ~-La would surely have not agreed to them. We have already' demonstrated that there are -

constraints within TU Electric's transmission system which could offect power transfers.

'4 Tex-La was fully aware that TU Electric's proposed specimen ogreement was-intended to bridge the gop between the currently effective power supply:agr~eement ond-the 1980 power supply ogreement which will become effective one year 'after- the' commercial operation of CPSES.

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. The ' existence' of these electrical constraints have been well known to Tex'-La and other:

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. ERCOT members for a long period of time. The increased; loading on theLERCOT bulk

' transmission system has received a great deal of. attention, especially following the: -

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-advent of substantial and increasing levels of cogeneration, located predominatelyLin:

South ~ Texas.5 ~ This subject was also discussed as a major issue in the 1985 ERCOT' Annual:

Meeting and specifically discussed in the 1985 ERCOT annual report.-

- Against this backdrop of public knowledge and: concern, it is difficult to see how Tex-La could find it surprising to learn that its economy energy purchase from Houston j Lighting & Power _ might be constrained by transmission capacity limitations. Regardless of knowledge. or' lack of knowledge ' or when Tex-La ~ acquired understanding of the realities,-the constraints are Indeed real, not irnaginary, and License Condition' D(2)(i) limits the obligation to provide transmission services.to arrangements,' inter alia, that=

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" reasonably can be accommodated from a functional and technical standpoint". Moreover, i

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a there is no such obligation under License Condition D(2)(i) where the arrangement "wou!d~

j unreasonably impair system reliability or emergency transmission capacity".

2. Tex-La, on page 9 of its1 March 6,- 1987 filing, also claims a violation of f

License Condition D(2)(b) by reason of TU Electric's refusal to " reveal the actual. terms" 4 J

of its cogeneration contracts. TU Electric is not permitted to disclose the prices 4 .

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Issues and problems associated with cogeneration were the focus of a' Joint.

Special Committee on Cogeneration appointed by the Governor :in ~ 1985. Comments,

} solicited from interested organizations, were presented on January '17,1986. Texas Electric Cooperative, Inc., of which Tex-Lo is a member, and the Association of Electric Companies of Texas voiced concerns regarding transmission loading and reliability. (Mr.

William Burchette, counsel for Tex-La discussed issues of interest to " Paper" G&T's at i.

this same meeting.)

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negotiated with the cogenerators -- of the same time, prices at.which TU Electric purchases cogenerated power have absolutely ~nothing to do with the avallobility vg non of sufficient transmission facilities. As Tex-La has been informed, those cogeneration contracts contain- express confidentiality provisions,- which Tex-La would appear to

. request TU . Electric to violate. License Condition D(2)(b) expressly provides for the protection of " proprietary or other confidential business and financial information". - As concerns the transmission impacts of these cogeneration purchases, TU Electric has been advising Tex-La of the relevant data all along. For example, see the correspondence attached as Exhibit B. Tex-Lo's counsel, evidently,. is not familiar -with the

correspondence with his client. Such correspondence demonstrates that Tex-La has been furnished with relevant information regarding the impact of cogeneration on all electrical systems in ERCOT including Tex-La.

3. Tex-Lo next claims a refusal to honor License Condition D(2)(j)(a). TU Electric has no intention whatsoever of failing to abide by License Condition D(2)(j)(a).

That License Condition requires TU Electric to include in its planning and construction programs sufficient transmission capacity as required for transactions within License Conditions D(2)(i) and D(2)(k), provided that sufficient advance notice is given to accommodate such transactions from a functional and technical standpoint and that TU Electric is fully compensated. Contrary to Tex-Lo's assertion,- economy energy transactions, by definition, are those which take advantage of "as available" transmission capacity. While TU Electric in its December 22, 1986 Comments, did state that License 6

Tex-La makes an argument that TU Electric is required by state low (the Public Utility Regulatory Act, Article 1446c, V.A.T.S.) to file its cogeneration contracts i

with the PUCT. The PUCT has not required the filing of such contracts. The PUCT did consider the adoption of an amendment to its Substantive Rule 23.66(b)(4) which would have required the filing of cogeneration contracts. The PUCT, however, refused to adopt the amendment. It is, therefore, clear that the PUCT itself does not believe the filing of such contracts is either required or appropriate. In any event, this is a matter solely of

concern to the PUCT and has no antitrust implications.

Condition D(2)(j)(a) contemplated facilities for the transmission of firm power and energy, it will gladly provide firm transmission. capacity (within the limitations specified in License Condition D(2)(j)(a)) for "as available" economy energy transfers should anyone want to pay _ for same. Tex-La has made it clear that it does not want to pay the cost of firm transmission capacity for its economy energy purchases. TU Electric, in writing its December 22,1986 Comments, simply did not believe that anyone would want to pay firm transmission costs for economy energy transfers and,' notwithstanding the implication to the contrary in Tex-La's March 6,1987 filing, TU Electric still doubts that anyone would do so. Again, Tex-La's argument is beside the point for the reason that TU Electric is providing transmission services to Tex-La.

4. Tex-La closes this section of its filing with c, rehash of its misplaced arguments pertaining to License Condition D(2)(b). No further reply is deemed warranted since it has already been documented that TU Electric does engage in joint planning through ERCOT and in all other aspect- is in full compliance with License Condition D(2)(b).

C. TU Electric's Alleged Frustration of the Settlement of the Prk Antitrust Review

l. Tex-La's arguments concerning the increcscs in the estimated completion ,

costs of CPSES and delays in the estimated commercial operation dates merit no extended response. The increased costs and delays, of course, are applicable to TU Electric's 87-5/6 percent ownership interest. Further, these increased costs and delays are the subject of Tex-La's claims against TU Electric in the litigation pending in the State District Court. There are no antitrust implications and Tex-La does not, as it cannot, l

point to any alleged violation of the License Conditions by reasons thereof. I

2. For the same reason, no extended response is warranted to Tex-La's arguments -

conccming the disallowance by the PUCT of the "CWIP Credit". This PUCT rate matter is exhaustively discussed at pages 14 - 19 of TU Electric's December 22,1986 Comments.

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Again, there are no antitrust implications or any alleged violation of the License Conditions. Moreover, TU Electric has- the resp"onsibility under the Public Utility Regulatory Act, Article 1446c, V.A.T.S.,' to avoid unreasonable preferences, advantages, prejudices and disadvantages in its rates (see Sec. 45 of Article 1446c, for example) and no antitrust liability con follow from exercising one's constitutional right to petition .

governmentol ogencies.

IV. Conclusion As documented in TU Electric's previous filings and herein, it is manifestly clear that BEPC's and Tex-La's request for a further antitrust review should be denied. -

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- ' TXX-6377 April 13, 1987 Exhibit A-1 of 4 No. 86-6809-A TEXAS UTIIJTIES ELECTRIC S IN THE DETRICT COURT COMPANY, S S

Plaintiff, S -

S VS. S 5

TEX-LA ELECTRIC COOPERATIVE 5 DALLAS COUNTY, TEXAS OP TEXAS, INC., TEXAS MUNICIPAL 5 POWER AGENCY, and BRAZOS S ELECTRIC POWER COOPERATIVE, S INC., S ..

5 Defendants. 5 14TH JUDICIAL DISTRICT -

PLAINTIPPS PIBFP AMENDED ORIHNAL PRIT110N TO THE HONORABLE JUDGE OP SAID COURT:

}

COMES NOW Plaintiff TEXAS UTILITIES ELECTRIC COMPANY complaining .of i TEK-LA ELECTRIC COOPERATIVE OP TEXAS, INC., TEXAS MUNICIPAL POWER I

AGENCY, and BRAZOS ELECTRIC POWER COOPERATIVE, INC., and for causes of action would show the following:

PARTIES 1.

Plaintiff TEXAS UTILITIES ELECTRIC COMPANY ("TUEC") is a Texas corporation with its principal place of business in Dallas, Dallas County, Texas.

2.

Defendant TEX-LA ELECTRIC COOPERATIVE OP TEKAS, INC. (" TEX-LA")

is a corporation with its principal place of business in Nacogdochea, Nacogdoches County, Texas.

s 3.

Defendant TEXAS MUNICIPAL POWER AGENCY ("TMPA") is a municipal l

corporation, political subdivision and body politic and corporate of the State of Texas with its principal place of business in Bryan, Brazos County, Texas.

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4.

Defendant BRAZOS ELECTRIC POWER COOPERATIVE, INC. ("BEPC") is a corporation with itr, principal place of business in Waco, McLennan County, Texas.

BACKGROUND .

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5.

TUEC is engaged in the generation, ix jaw, transmission, distribution and sale of electric energy in the north central, eastern and western parts of the State of Texas through four divisions: Dallas Power & Light Company ("DP&L"), Texas Electric Service Company ("TESCO"), Texas Power & Light Company ("TP&L") and Texas Utilities l

Generating Company ("TUGCO"). On January 1,1984, DP&L, TESCO and TP&L which, prior to suc'h date, were separate corporate entities, merged into and became operating divisions of TUEC. At the .same time, certain activities of TUGCO involving the PLAINTIFPS FIRST A31 ENDED ORIGINAL PETITION - Page 1  !

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engineering, construction and operation of electrie generating facilities were transferred to TUIC and became the TUGCO division thereof.' As a result of such merger and transfer,.TUIC became the successor to au the rights of DP&L, TESCO, TP&L and the rights and activities of TUGCO involving the -g 14, construction and operation of electric generating fannities.

6. In the early 1970's, DP&L, TESCO and TP&L undertook the constructiort of two nuclear power generating units on a site located in Hood and SommervDie Counties, Tesas, known as the Comanche Peak Steam Electric Station (" Comanche Peak").

7. Subsequently, BIPC, TMPA and TEX-LA haan,ne undivided joint owners along with DP&L, TIBCO and TP&L in Comanehe Peak pursuant to the Joint Ownership Agreement, as modified and amended (the " Joint Ownership Agreemet"), attached hereto 1

as Exhibit A. '!he Joint Ownership Agreement, amorg other things, obligates each owner to pay its share of aR Costs of Construction (as defined in the Joint Ownership Agreement)in proportim to each owner's laterest, which in the case of BEPC, TMPA and TEX-LA is 3J%,6.2% and 21/6%, respectively. TUGCO was appointed the agent for an owners in the 11eensing, design, construction, operation and maintenance of Comanche -

Peak.

8.

A controversy has developed with respect to the obligation of the parties eder the Joint Ownership Agreement. Each Defendant has asserted or claimed, among other things, one or more of the following: (a) that there exists no further obligation to I payits proportionate share of the remaining Costs of of Construction of Comanche Peak';

(b) tint no further payments wSL be made under the Joint 0; .;Jp Agreement; (c) that TUEC has failed to act with due dDigence in performing its 'ot: ligations under the Joint

, Ownership Agreement; (d) that TUEC has failed to timely complete construction of

Comanche Peak and secure a lleense for its operation; (e) that TUIC has failed to employ Prudent Utility Practices (as defined in the Joint Ownership Agreement) in connection with its obligations under the Joint Ownership Agreement; (f) that TUEC has breached various claimed express and Implied legal obligations and warranties under the Joint Ownership Agreement, including an alleged implied " duty to perform in a workmanshiplike manner;" (g) that TUEC has failed to comply with numerous provisions of the Joint Ownership Agreement, 6 M"= Sections 1.19, 3.04, 5.01, 5.02, 5.03, 8.02, 8.03, 9.01, 9.03, 22.0 and 23.0 thereof; (h) that it is entitled to indemnifloation from TUEC for aspecified damages pesuant to Section 3.04 of the Joint Ownership Agreement; (1) that TURC has committed violations of the Texas Casumer Protection- Deceptive Trade Practices Act (the "DTPA"), Tex. Bus. Comm. Code $517.41.83 and (j) that its claims asserted against TUEC have not been waived, relinguished or barred by limitations.

PLADITIF7'S FIRST AMENDED ORIGINAL PETITION - Page 2

9. An ecoditions precedent to each of TUECh causes of action asserted herein have been performed or have coeurred.

M

10. '1he Joint Ownership Agreement was negotiated and signed by all the parties thereto in Dallas County, Texas. Au payments made by BEPC, TMPA and TEX-LA for the Costs of Construction of Comanahe Peak were received by TUEC in Dallas County, Texas.

._ FDttr CAUSE OF AC'110N ..

11. 'this is a cause of action against TEX-LA for anticipatory repudiation and breneh of contreet. BEPC and TMPA are necessary parties to this cause of action for the reason, inter alta, of their respective obligations to oover portions of TEK-LA% share of the remaining Costs of Construction of Comanche Peak pursuant to the Joint C;.

44 Agreement.

12.

TUEC reeBeges and kai-r.istes by reference herein paragraphs 1 through 10 hereof.

13.

TEK-LA has antielpatorily repudiated anc breached the Joint Ownership Agreement, by, M & absolutely and unconditionally renouncing, without just excuse, its legal obligation to make future payments as required by the Joint Cv.7 44 Agreement.

14.

TEX-LA has faded and refused to make peyments required of it for Costs of i

Construction of Comanche Peak pursuant to the Joint Ownership Agreement.

15.

By reason of the breach TUEC has been damaged in an amount in excess of the jirisdictionallimits of this Court.

SECOND CAUSE OF ACTION

16. This is a amuse of action against BEPC for breach of contract. TEX-LA and TMPA are necessary parties to this cause of action for the reason, inter alla, of their ,

1 respective obligations to cover portions of BEPCh share of the remaining Costs of  ;

Construction of Comanche Peak pursuant to the Joint Cwr 44 Agreement. ,,

17.

TUEC reenages and kav.vv..tes by reference herein Paragraphs 1 through 10 hereof.

a

18. Commeneing in late 1988, BEPC has failed and refused to make.

i payments required ofit for Costs of Construction of Comanche Peak pursuant to the Joint CT.. 44 Agreement.

4 19.

By reason of the breach, TUEC has been damaged in an amount in excess of the minimum jurisdictionallimits of this Court.

J PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION - Page 3

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4 TIERD CAUSE OF ACTION

20. *!his is a cause of action against BEPC, TMPA and TEX-LA for a declaratory judgment pursuant to Sections 37.001 .011 of the Texas Civ11 Practices and Remedies Code.

21. TUIC reaBages and incorporates by reference herein paragraphs 1 through 10 hereof.

22. Actual controversies exist between TUEC and Defendants with respect to the matters set forth la paragraph 8 hereof.

23. TURC eentends, and requests the court to declare, (a) that De'fendants have not been reHeved of their respective abilgation to pay their proportionate shar'e of the reenaining Costs of Construetion of Comanche Peak; (b) that one or more of the Defendants have anticipatorfly breached the Joint Ownership Agreement; (c) that TUEC has not failed to act with due sligence in performing its obligations under the Joint Ownership Agreement;(d) that TUEC has not faned to construct Comanche Peak or to obtain a Heense for its operation in a timely manner; (e) that TURC has not failed to employ Prudent UtfHty Practices la connection with its obligations under the Joint Ownership Agreement; (f) which, if any, implied obilgations and warranties exist in or by reason of the Joint Ownership Agreement and that TURC has not breached any such implied obligation or warranty under the Joint Owurship Agreement or otherwise, 2

including any implied obligation to perform in a workmaaahiane manner; (g) that TUEC has not failed to comply with any provistat of the Joint Ownership Agreement, including Section 1.19, 3.04, 5.01, 5.02, 5.03, 8.02, 8.03, 9.01,'9.03, 22 and 23 thereof; (h) that TUEC yls not obligated to indemnify Defendants for any damages pesuant to the Joint Ownership A'greement;(1) that TUEC has not violated the DTPA and that TEX-LA, TMPA and BEPC

' j are no't " consumers" within the meaning of $17.45 of the DTPA and (j) that an, or a l material part, of the claims asserted by' Defendants against TUIC are barred .by limitations or have been waived or otherwise relinguished, laaMag that Defendants have failed to timely and diligently perform their obligations as joint owners under the Joint Ownership Agreement. -

FOURTH CAUSE OF ACTION

24. This is a cause of action against TEX-LA for a declaratory judgment pursuant to Sections 37.001.011 of the Texas CivR Practice and Remedies Code.

i

25. TUIC reanages and 1..ewetes by reference the anegations of Paragraphs 1 )

through 10 hereof. i PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION - Page 4 I

l' r -

28. TEK-lab acquisition of an ownership interest in Comanche Peak was the culmination of the setthment of various disputes between TEK-LA and TP&L. h aanamation with that settlement, TEK-LA and TP&L esseuted the May 6,1980 letter of

~l Intent attaehod hereto as Exhibit B. 'lhe letter of intent' provided for TEK-lab acquisition of a joint ownership hterest in Comanche Peak,and, in addition, the potential l l

for acquisition of a joint ownership Interest in other ftsture generating stations to be constructed by TP&L provided that signifloant development of same had not occurred and that it was mutuaRy advantageous to both TP&L and TEX-LA for TEK-LA to acquire a '

joht-ownership'hterest la thces future generating statione. 'lhe htter of htent was not a binding agreement, but rather contemplated the execution of a formal definitive binding agreement, which was executed, and which provided for TEX-LAt acquisition 'of an hterest in Comanche Peak only.

27. k addition to asserting various claims under the Joint Ownership Agreement, TEK-LA has claimed that, pursuant to the May 6,1980 letter of intent (Exhibit B), it is entitled to an interest in eartain generating capacity which TUEC plans to install in the future.

28. Actual controversies exist between TUIC and TEX-LA with respect to whether the May 6,1980 letter of Intent (Exhibit B hereto) is a binding and enforceable contract which confers any rights upon TEK-LA or imposes any obligations upon TUEC; and if so, whether that letter of that intent confers upon TEK-LA any right to an ownership interest in the any generating station other than Comanche Peak.

I

29. TUEC contends and requests the Court to declare that (a) the May 6,1980 letter of intent (Exhibit B) is not a binding and enforceable contreet which in and of itself ~I confcrs any rights upon TEK-LA or imposes any obligations upon TUEC; and (b) the said letter of intent does r.ot confer upon TEX-LA a right to acquire an ownership interest in any other TUEC generating station as claimed by TEX-LA.

FIFTH CAUSE OF ACTION

30. TUEC reeHeges and :..wAetes by reference herein the allegations of Paragraphs 1 through 29 hereof.

31.

Pursuant to Sections 37.009 and 38.001 of the Tszas Civil Practice and j Bemedies Code, TUEC is entitled to recover its costs and reasonable attorneys' fees incurred in bringing this action .

WHEREFORE, PREMISES CONSIDERED, TUEC prays that TEX-LA, BEPC, and i

TMPA be efted to appear herein and that on final hearing TUEC be awarded judgments PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION - Page 5

l I

l 1

I. against TEX-LA for the damoges suffered by TUEC by reason of TEX-LA's i

anticipatory repudiation and breach of the Joint Ownership Agreement;

2. ogainst BEPC for the damages sufferred by TUEC by reason of BEPC's breach of the Joint Ownership Agreement;

3. against TEX-LA, BEPC, and TMPA declaring the matters set forth In i Nov. W. 23 above;

4. against TEX-LA declaring the matters set forth in parograph 29 above; l

S. awarding to TUEC pre.ed-post Judgment interest, costs of court and its reasonable ;; . y.' feest ed

6. awarding TUEC such other and further relief to which it is justly entitled.

Respectfully submitted, WORSHAM, FORSYTHE, SAMPELS

& WOOLDRIDGE M.D. Sampels State Bar No.175S7000 Robert A.Wooldridge State Bar No. 21984000 l Y.

, By: 'i su ,M M.D. Sampels <

3200 - 2001 Bryan Tower Dallas, Texas 75201 (214) 979-3000 ATTORNE S FOR PLAINTIFF TEXAS UTILITIES ELECTRIC COMPANY Of counsel:

Richard L. Adams Robert K. Wise l

)

i PLAINTIFPS FIRST AMENDED ORIGINAL PETITION -- Page 6

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CERTIFICATE OF SERVICE I hereby certify that a copy of the above and foregoing Phhtiff% First Amended Origina1 Petition was placed b the United Statso mail, postage prepald, certified maH, return receipt requested, to an counsel of record on this, the

' mst 41 day of July,1988.

R h i P. OHver I

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d PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION - Page 7

' .Tx -6377

?'. April 13, 1987 Exhibit A-2 of 4 NO. 86-6809 Texas Utilities Electric Co. ) IN THE DISTRICT COURT Plaintiff,

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v.

}

Tex-La Electric Cooperative ) OF DALLAS COUNTY, TEXAS of Texas, Inc., Texas Municipal Municipal Power Agency, and )

Brazos Electric Power Cooperative, Inc.

)

^

. Defendants. ) 14th JUDICTAL DISTRICT FTRET AMENDED C6un m CLATM OF DEFENDANT BRAZOS ELTCTRTC POWER C00PERAnvr. TNC.

TO THE HONORABLE JUDGE OF SAID COURT:

Brazos Electric Power Cooperative, Inc. ("Brazos"),

Defendant in the above-entitled action, now acting as Cross-Plaintiff, complains of Texas Utilities Company, Texas Utilities Ele'etric Company, Texas Utilities Mining Company, and Texas Utilities Services, Inc., Cross-Defendants herein, and for causes of action shows the following by way of counterclaim:

INTRODUCTION This is an action by Brazos Electric Power Cooperative, Inc.

("Brazos") against Texas Utilities Company and its subsidiary companies (identified below and referred to collectively as " Cross-Defendants") . Brazos's claims arise as a result of the Cross-Defendants' failure to complete in a timely fashion or within a reasonable cost the planning, construction and licensing of the Comanche Peak Steam Electric Station-(referred to as "the Project" or " Comanche Peak" throughout), a large nuclear generating project located near Glen Rose, Texas.

Brazos is a generation and transmission rural electric cooperative.

Brazos has an obligation to provide economical, reliable electric power supply to its member rural electric Brazos's First Amended Counterclaim--Page l' -

. ~ . .. .

cooperative systems which sell electricity at retail to rural consumers. In order to fulfill ~this obligation Brazos purchased from Cross-Defendants a 3.8 percent ownership share of Comanche Peak under a 1979 ' Joint Ownership Agreement' ("the Agreement').

Cross-Defendants comprise a major Texas investor-owned' utility.

Cross-Defendants own 87 5/6 percent of Comanche Peak.

The Agreement provides for the construction by Cross-

~ Defendants of two 1150 MW nuclear units. Under the Agreement,

- Cross-Defendants are effectively given complete contr'ol over design, licensing and construction of the Project. ' Cross-Defendants represented to Brazos that the Date of Commercial Operation for Unit I would be January, 1981 and for Unit 2 would be January, 1983, and these estimates were incorporated into the Agreement. To date, neither Unit is ready for commercial operation, and neither Unit has been licensed for full power operation.

The estimate for the total cost of the Project given to Brazos by Cross-Defendants in June, 1979 was $1.7 billion. While Cross-Defendants represented to Brazos that cost estimates given at the time of closing were realistic and current and that Cross-Defendants were able and contractually committed to meet such estimates, Cross-Defendants now take the position that they cannot predict what the final total cost of the Project will be.

i Cross-Defendants' most recent estimate for the total cost of i Comanche Peak was $5.46 billion, as reported to the United States l

Securities and Exchange Commission ("SEC') on November 20, 1985.

Cross-Defendants estimated then that their 87 1/6 percent share i

of the plant would cost $4.640 billion. However, Cross- .

Defendants effectively retracted that estimate in April, 1986, before the SEC, and now state that they are " unable to predict 4

how much additional time will be required to obtain license approval to permit the operation of Unit 1 or the extent to which the previously estimated construction costs of $4.640 billion 1 will be exceeded."

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l Brazos's First Asended Counterclaim--Page 2 l

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'p,.

Cross-Defendants contracted to perform the Agreement in accordance with specified standards. Among other things, Cross- ,

Defendants contracted to exercise due diligence and to use their'

~

best efforts to complete construction in a timely fashion and-

. within a reasonable cost. Cross-Defendants also contracted to design and construct the Project in accordance with Prudent Utility Practices, Nuclear Regulatory Commission ("NRC")

licensing requirements, and the principal architectural and

~ engineering criteria and environmental commitments made to the' NRC. Cross-Defendants are obligated under the Agreement to inform Brazos of all materi.a1 facts affecting the Project and Brazos's rights under the Joint Ownership Agreement.-

Brazos complains herein that, among other things, Cross-Defendants have breached their contractual ubligations to complete the Project in accordance with these and other i

standards. Cross-Defendants have failed to complete the Project within the time or cost specified by Cross-Defendants' 1979 estimates. Cross-Defendants have breached their warranty,and fiduciary obligations. Cross-Defendants have failed to construct either unit so that it is ready for an NRC operating license.

T Cross-Defendants have failed to inforr_ Brazos on a timely and accurate basis of basic cost and other essential information -

relating to the Project to permit Brazos to plan, finance and carry out its obligations. Brazos also complains that cross-Defendants have constructed tha plant in a negligent and grossly i

negligent manner, and that. Cross-Defendants have acted tortiously in other ways. Cross-Defendants' failure to disclose material information and their numerous misrepresentations constitute a fraud against Brazos. These same facts give rise to securities violations and violations of the Texas Deceptive Trade Practices-4 Consumer Protection Act, as described below.

f i'

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l Brazos's First Amended Counterclaim--Page 3 I ,

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PARTIES-1.

Cross-Plaintiff Brazos Electric Power Cooperative, Inc.

("Brazos*) was incorporated'in 1941 (pursuant to the laws of the State of Texas) for the purpose of furnishing dependable and economical wholesale power and energy to its customers. .Its headquarters are located at 2404 LaSalle Avenue, Waco, Texas.

4 Brazos is owned by twenty (20). member cooperatives which it serves.

Brazos and its members have facilities located in 66

- counties in the state of Texas. Those member cooperahives serve I more than 227,000 individual consumer members. Brazos also '

supplies power and er. orgy to seven municipal electric systems and i

to Texas A&M University. Brazos renders service in a geographic-area covering approximately 57,000 square miles. Nearly all of its sales "are at wholesale, principally to its member cooperatives. . Brazos seeks to provide power to its members and other customers at the most economical rates consistent with sound financial practices.

2.

Brazos seeks 'to obtt.in an economical, reliable power supply. Its resources include its own generation and purchases from other electric utilities, the Brazos River Authority', and the Southwestern Power Administration, a federal power agency.

3.

Brazos currently has generating capacity totalling approximately 716 MW, and had a transmission peak demand of 721 MM in 1985.

4.

Texas Utilities Electric Company ("TUEC"), a wholly-owned subsidiary of Texas Utilities Company ("TU"), is an electric utility incorporated in September, 1982 and-4 headquartered at 2001 Bryan Tower, Dallas, Texas, 75201. Both.

TUEC and TU are corporations organized and existing under the laws of the State of Texas. TUIC has four divisions: Dallas Power & Light company (*DP&L*), Texas Electric Service Company 1

("TESC0") , Texas Power & Light Company ("TP&L"), and Texas Utilities Generating Company. TESCO and TP&L were each separate, wholly-owned subsidiaries of TU prior to January 1, 1984; DP&L Brazos's First Amended Counterclaim--Page 4 1

. . - - - - - ,- , - .n,- ,,

wtc cn c1 mort wholly-owned subsidiary of TU prior to January 1, 1984. On January 1, 1984, these three TU subsidiaries were merged into TURC. Also on January 1,'1984, Texas Utilities Generating Company took over certain functions previously performed by two other wholly-owned subsidiaries of TU:' Texas Utilities services, Inc. ("TUS*), and Texas Utilities Mining.

Company (known prior to January 1, 1984 as Texas Utilities Generating Company). Both are corporations organized and

- existing under the laws of the State of Texas. Texas' Utilities Generating Company, or its predecessor. Texas Utilities Mising Company (hereinafter collectively referred to as "TUGCo"), have at all times material to this complaint acted as Project Manager for the design, construction, and licensing of the Comanche Peak Steam Electric Station. For ease of reference, TU, TUEC, TUGCO, DP&L, TP&L, TESCO and TUS will be referred to collectively herein as " Cross-Defendants," unless the. context requires otherwise.

SERVICE OF PROCESS 5.

The registered agent for. service of process for all Cross-Defendants is Mr. Peter B. Tinkham, who may be served with process at Texas Utilities Company, Texas Utilities Electric Company, Texas Utilities Mining Ccapany, and Texas Utilities Services, Inc., 2001 Bryar Tower, Dallas, Texas, 75201.

BACKGROUND AND FACTS OF VIOLATIONS ALLEGED The Joint Ownershin Actreament 6.

In or before 1972, Cross-Defendants began planning construction of a nuclear plant. As proposed, Comanche Peak was to consist of two units, each nominally rated at 1150 MW of capacity. Comanche Peak is located near Glen Rose, in the Counties of Hood and Somervell, Texas.

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i Brazos's First Amended Counterclaim--Page 5

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7.

Pursuant t2 c;nditions imposed on Cross-Defendants' construction license granted by the Atomic Energy Commission '

("AEC*)

in 1974,' Cross-Defendants offered Brazos an opportunity to' participate in the Project.' These license conditions were agreed to by TUGCO, DP&L, TP&L,' and TESCO, who were joint applicants for the required AEC license to construct the Project.

1 Thests license conditions arose out of the antitrust review included in the AEC licensing process to prevent nuclear project

, _ licenseesf from using licenses to create or maintain af situation inconsistent with the federal antitrust laws. Ras Atomic' Energy Act, Section 1C5, 42 U.S.C. Section 2135. The Nuclear Regulatory C6amission ("NRC*) now exercises these licensing functions of the former AEC.

8.

In order to furnish its member cooperatives ard other customers with reliable, dependable and economical wholesale power.and energy, Brazos is required to engage in long-term planning for the ac.quisition of power supplies, including generating capacity. Pursuant to these obligations, Brazos entered into negotiations with Cross-Defendants regarding Brazos's possible participat yn in the Project.

9.

Brazos funds its construction operations, including its ownership interest in the Project, principally through loans obtained from or guaranteed by the United States Govertuent, administered by the Rural Electrification Administration of the United States Department of Agriculture ("REA") pursuant to the Rural Electrification Act, 7 U.S.C. Sections 901 et meer.

Brazos's construction loans from the REA through the Federal F Financing Bank are fully guaranteed by the United States Government.

10. At all relevant times, Cross-Defendants halc *+Neselves out to Brazos as capable of designing and constructing the Comanche Peak units in a prudent, workmanlike, attentive, and safe manner, and represented that they would act with due diligence in performing their obligations and use their best Brazos's First Amended Counterclaia--Page 6

~ .. - - - --

9 cfferts ts timely completa cen tructicn af, cnd place into service, each unit of.the Project, that such construction would proceed without undue delay, and that Cross-Defendants would undertake the project'without' incurring any unreasonable or imprudent expenditures. Cross-Defendants also held thema21ves out as possessing the special technical and other ea1pertise-necessary to construct and operate a nuclear power plant. They represented ~that the design and construction would be in

, _. accordance with NRC licensing requirements and applicable Federal and state laws so that the Project would be licensed by the NRC.

11.

i- Cross-Defendants' advised Brazos'that Gibbs & Hill, Inc.

-("Gibbs & Hill"), headquartered in New Jersey (a' wholly-owned subsidiary of Dravo corporation, heat".g2artered in Pittsburgh, Pennsylvania), would be the Architect-Engineer and that Brown &

Root, Inc.

(" Brown & Root") (a wholly-owned subsidiary of Halliburton company, headquartered in Houston,-Texas), would be the construction manager for the Project. Cross-Defendants held out that Brown & Root and Gibbs &' Hill were capable of. performing the special tasks for which they had been selected by Cross-Defendants and that Cross-Defendants were capable of supervising and prepared to supervise these subcontractors. Brazos has never been a signatory to Cross-Defendants' contracts with Brown & Root and Gibbs & Hill relating to Comanche Peak, and Brazos has'no power to directly supervise, manage, or otherwise control the' actions of either Brown & Root or Gibbs & Hill.

12. On January 2, 1979, TUGCO, DPEL, TP&L, TESCO and the 2 -

Tetas Municipal Power Agency ("TMPA") executed a Joint Ownership Agreement (*the Agreement") for Comanche Peak. TUGC0 did not own any sha o in the Project; it was a signatory to the Agreement solely in its capacity as Project Manager. TMPA is a political subdivision of the State of Texas engaged in the generation and transmission of power and energy for its members, 'which are i

municipally owned electric utilities. Under the Agreement, TMPA e

! owns a 6.2 percent interest in the Project.

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,I Brazos's First Amended Counterclain--Page 7 f

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.o . .

13.: To induce Brazos to enter into the Joint operating Agreement, Cross-Defendants represented to Brazos at all times-pertinent to Brazos's-entering into the Agreemnt, that the total cost for the construction of the Comanche Peak units would be i approximately $1.7 billion or less, including interest on funds used during construction. .In addition, Cross-Defendants agreed

~

that the Project Manager would "act with due diligence in performing its obligations and will use its best efforts to timely complete construc. tion of, and place into service, each Unit of the Project." Cross-Defendants represented to Brazos-that the Date of Commercial' Operation for Unit 1 would be d

January, 1981 and for Unit 2 would be January, 1983, and these estimates were incorporated into the contract. Cross-Defendants represented to Brazos that cost estimates given at the time of closing were realistic and current and that Cross-Defendants were -

able to and contractually committed to provide and meet such estimates.

~

14. After extensive negotiations, and reasonably relying on I the representations of Cross-Defendants recited in paragraphs 10-11 and 13 above, as well as other representations, on June 1, 1979, Brazos joined in the execution of the Agreement with DP&L, TESCO, TP&L, TUGCO, and TMPA for Comanche Peak. This contract (and applicable legal standards) set forth the rights and obligations of the parties.

15. The contract provided for Brazos's purchase from DP&L'of a 3.8 percent undivided interest in Comanche Peak Units 1 and 2.

5 Each unit was nominally rated at 1150 MW, so that Brazos's share was to be 87.4 MW, at a total estimated cost to Brazos (including interest) of approximately $64.6 million or approximately

$739/kW. In-1979, in applying for REA financing, Brazos estimated its approximate maximum cost for Comanche Peak, including nuclear fuel, interest, and a contingency, to be $96.1 4

million, or approximately $1100/kW. On June 1, 1979, simultaneous with Brazos's execution of the Joint ownership

'Brazos's First Amsnded counterclaim--Page 8

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Agreement,-0-Modification Agreement was executed which made explicit the requirement that the Joint Ownership Agreement and-the Modification Agreement would become binding upon Brazoc,g and that Brasco would hae=== obligated thereunder, 'only upon the written approval of this Agreement by the Administrator of the Rural Electrification Administration." On or about December 26, 1979, the Administrator of the REA approved the Joint ownership Agreement and the Modification Agreement solely,for the purposes

- of the loan contract referred to in the approval. -

16.

On De**==ha*- 9,1980, Tex-La Electric Power Coopeiative of Texas,-Inc., (" Tex-La') joined in the execution of .the .

Agreement with DP&L, TESCO, TP&L, TUGCO, Brazos and TMPA by Amendment of the Agreement. . Tex-La agreed to purchase from TP&L a 4 1/3 percent undivided interest in the Comanche Peak Electric Steam Station, Units 1 and 2. Tex-La's ownership percentage was-reduced by half, to 2 1/6 percent, by amendment to the Agreement dated February 12, 1982. As a result, TUEC'and its subdivisions currently own 87 5/6 percent of the Project.

17.

Under the Agreement, Cross-Defendants have retained sole-responsibility for the licensing, design, construction, l

operation, maintenance and decommissioning of the Project and 1

have retained complete possession and control of the Project.

g Brazos has no power to control or direct the Project, except as provided for in Section -4 of the Joint Ownership Agreement, which entitles Brazos to have a representative on the owners' Committee, with voting rights proportional to Brazos's ownership l percentage. Cross-Defendants have reserved to themselves the exclusive right to make changes in the concept, design, construction and operation of the Project at any time and to whatever extent they deem desirable, subject only to the"special review procedura established in Section 4.05 of the Agreement.

18.

The Agreement makes Cross-Defendants Brazos's fiduciary.

Because of Cross-Defendants' complete control over and superior knowledge of the design and construction of the Project, Brazos Brazos's First Amended Counterclaim--Pace 9 W

han pitced its complcts faith, trust.and contidence in Cross-Defendants.

Because of the complete trust Brazos has placed in Cross-Defendants and because of the complete control exercised by Cross-Defendants' over all phases of the Project, Cross-Defendants have occupied a' fiduciary relationship to Brazos,.in addition to. ,

. their other obligations under the Ownezahip Agreement. In recognition of Cross-Defendants' fiduciary obligations, at all' relevant times, Cross-Defendants have had an express contractual

_ obligation to keep.Brazos fully informed of all matez'ial facts that would significantly affect the cost of the Project t'o Brazos, including projected cost and scheduling information.

Cross-Defendants' Misrepresentations and Non-Dimelemures in thm Nanotiation of the 1979 Aerea==nt

19. During the contract negotiations leading to Brazos's execution and REA's approval of the Joint Ownership Agreement, Cross-Defendants represented that they were capable of performing the Agreement reasonably within the cost and schedule estimates provided by Cross-Defendants and that they possessed the requisite knowledge and skill to perform the' Agreement, 1

including, inter alia, the knowledge and skill necessary to supervise the work of the Architect =v.ngineer and the Construction Manager and to comply successfully with NRC licensing requirements and other applicable state and federal law. In addition, Cross-Defendants held out that the Architect-Engineer, Gibbs & Hill, and the Construction Manager, Brown and Root, possessed the requisite technical knowledge and skill to perform their functions, including to comply successfully with NRC licensing requirements and other applicable state and federal laws. These representations were intended to and and did in fact induce reliance upon the part of Brazos in executing the" Joint ownership Agreement in 1979.

20.

Cross-Defendants' representations regarding their' fitness to perform the Agreement and act as Project Manager for Ccuanche Peak were false c,r mistaken.

l' Brazos's First Amended Counterclaim--Page 10 I

.w ,

s Cross-Defendants' Material Breaches in the-Derformanca of the Joittt Ownershin Actr:r==Et -

21. Cross-Defendants have failed to perform their l obligations under the Agreement. Cross-Defendants were'under a contractual duty affirmatively to'isclose

~

d on a current basis all. 'I matarial,information which would significantly affect Brazos's 4

rights and obligstions under the Agreement. Bscause of the ,

-fiduciary duty owed by Cross-Defendants to Brazos, Cross-

~ Defendants were required to adhere to an even higher , standard of full disclosure than would ordinarily be applicable .

22.

Cross-Defendants failed to inform Brazor adequately or in a timely manner regarding cost increases and schedule delays; failed to provide Brazos with a copy of the May,.1978 report of 4

the Management Analysis Company ("the 1978 MAC report"),.or to inform Brazos of its existence, in'a timely manner; failed to inform Brazos adequately or in a' timely manner of problems with"-

the construction of Comanche Peak; failed to keep Brazos adequately informed of NRC licensing matters; failed to inform Brazos adequately or in a timely manner of any settlements and i

other waivers by Cross-Defendants of legal rights with

~ contractors, subcontractors, and others; failed to provide Brazos .

with any valid explanation for cost overruns and schedule delays; 4 and otherwise failed to inform Brazos adequately or in a timely manner of material developments concerning Comanche Peak.

) 23.

Cross-Defendants were under a contractual duty to maintain adequate records of matters affecting the plant, I

including, but not limited to, r,ecords of the cost and schedule t

for completion of the plant as well as records of matters affecting the licensing process and matters which would ,

a significantly affect Brazos's rights and obligations under the Agreement. Because of the fiduciary duty owed by Cross-Defendants to Brazos, Cross-Defendants were required to adhere to an even higher standard of record-keeping than would ordinarily be applicable. Cross-Defendants were also"under a contractual 4 duty to maintain adequate records concerning the design and Brazos's First Amended Counterclaim--Page 11

! r

_--~.,_-_

.a * -

i esnstruction of the plant in order to comply with applicable NRC' licensing requirements'and other applicable' state and federal laws. l

24. On information and belief, Cross-Defendants failed to maintain adequate records of material information regarding cost-increases and schedule delays and failed to make,available to Brazos records they did maintain.~

25. On information and belief, Cross-Defendants failed to

- maintain records adequate to detect problems with the' design and/or construction of Comanche Peak as required by the NRC. In addition, Cross-Defendants refused to. provide Brazos and their agents with information concerning the NRC's review ~of the design and construction of the Project and failed to maintain adequate records to satisfy NRC licensing requirements as is established by numerous NRC inspection reports on C. aanche Peak, including, for example, the Technical Review Team ("TRT") report of January, 1985.

26. Cross-Defendants' failure to keep adequate records to satisfy NRC licensing requirements has been a direct cause of the delay in licensing the plant.

27.

Cross-Defendants contracted to perform their obligations i, under the Agreement in accordance with prudent utility practices and in a workmanlike manner, exercising reasonable care, skill, and atter* ion, and Cross-Defendants warrar.ted that they were capable of doing so.

28.

Cross-Defendants failed to exercise prudent utility practices and failed to perform in a workmanlike manner, exercising reasonable care, skill, and attention, in , fulfilling their contractual obligations as Project Manager. Cross-

• Defendanta failed to use prudent utility practices and f iled to

• perform in a. workmanlike manner,. exercising reasonable care, \

l skill, and attention, in their selection of Gibbs & Hill as the Architect-Engineer and Brown & Root as the construction manager.

Cross-Defendants failed to exercise prudent utility practices and Brazos's First Amended Counterclaim--Page 12

, , , .--- , . - - . , - - __, .-, ~ , , . , , , . . ,. - -. -, - - . ,_ . ,

-failed ta perform in a worksanlike manner, exercising reasonable care, skill, and attention, in their supervision of Gibbs & Hill and Brown & Root.. Cross-Defendants' failures in this regard include their failure to detect or correct serious flhJns in Gibbs

& Eill's design of the pipe supports and cable trays and their failure to assure quality assurance / quality control in the design and construction of the Project. Cross-Defendants also failed to employ prudent utility practices and failed to perform in a~

4

- workaanlike manner and to exercise reasonable care, skill, and attention, by, among other things, failing to acquira tho' i

necessary managerial and technical. expertise to design and construct the project in accordance with prudent utility 4 practices and in compliance with NRC licensing requirements and couaitments and applicable federal and state laws. On-information and belief, Cross-Defendants, without notice to 4

Brazos, purported to release.or waive claims against Gibbs &

Hill, and perhaps oiiher contractors or subcontractors.

29.

i Cross-Defendants were under.a contractual duty to perform the design, construction, operation, maintenance and de. commissioning of the Project in accordance with NRC licensing I requirements and any applicable federal or state laws and regulations, and in the case of the design and construction thereof, in accordance with the principal architectural and engineering criteria and commitaants made to the NRC. Cross-'

4 Defendants were under a contractual duty to take whatever action was necessary or appropriate to seek and obtain all licenses, permits, and other rights and regulatory approvals necessary or appropriate to the construction and operation of the Project. In addition, Cross-Defendants were under a duty to ensure that contracts entered into covellin7 the design and construction of i

the plant shall comply with the Agreesent and with all applicable i

laws and regulations and to ensure that contracts awarded are consistent with the requirements of governmental agencies having jurisdiction.

Brazos's First Amended Counterclain--Page 13 i

. . -.~ , -

J

. l 1

-30.

Crom-Defendant 3 failed to perfarm the design and construction of.the Project in accordance with NRC licensing requirements and other applicable' federal and state laws and

~

regulations and the principal architectural and engineering-critaria and commitments made to the NRC. Cross-Defendants failed adequately to supervise compliance with NRC licensing-requirements and regulations by subcontractors, including Gibbs &

Hill and Brown &: Root, and by vendors. . Cross-Defendants failed

_ reasonably to satisfy the.requiraments of applicable tfRC regulations, including 10 C.F.R. Part 50, Appendix 5. Cross-Defendants have been unable to convince the NRC of their ability

_ adequately to design, construct, and, operate Comanche Peak.

Cross-Defendants' failures include but are not limited to Cross-Defendants' failure promptly to identify and correct design I deficiencies, cross-Defendants' failure to develop a quality assurance / quality control program adequate to detect and correct design and construction defects, Cross-Defendants' failure adequately to train.and certify quality assurance / quality control inspectors, and Cross-Defendants' failure promptly and adequately to address the concerns of the NRC Licensing Board.

31.

Cross-Defendants failed to complete the construction of Unit il of Comanche Peak prior to the expiration of the J

construction permit therefor on August 1, 1985. Although the 1 construction permit has since been extended until August, 1988, the Nuclear Regulatory Commission is presently reviewing whether goodcauseexistsforsaidextensibn,andmayrevokethe extension at the conclusion of those proceedings. Cross-Defendants may require an extension of the construction permit. l for Unit $2, and a further extension of the construction permit for Unit fl, and may be faced with further " good cause" Fearings. ,

32.

, Cross-Defendants allowed the construction permit for '

Unit #1 of Comanche Peak to expire without the filing of a timely application for extension. This action was deemed by the Nuclear  !

t Regulatory Commission to be "a regrettable and wholly avoidable l

I Brazos's First Amended Counterclaim--Page 14

-l l

l 1

omi Cion by the Texas Utilities Electric Company," representing i

• the first time in the history of the civilian nuclear power program that the holder of a construction permit allowed its  !

permit to expire without making a timely. request for an extension." Ta - neititima riactrie h , 23 N.R.C. 113, 115 (1986), natitian for review filed muh nom. citizens Ammociation-for sound unavery v. wac, No. 86-1169. (D.C. Cir. Nar. 13, 1986). .

Although an extension was granted by the NRC nune oro tune, the

- lawfulness of such an extension is presently being chhllenged by '

the citizens Association for sound Energy in federal court. The NRC is also considering taking enforcement action against TUEC i

.'or conducting construction activities for nearly six months 4

after the expiration date of the construction permit for Unit #1.

33.

As a result of such breaches of Cross-Defendants' 1

duties, Cross-Defendants have failed to secure regulatory approval for the Project despite the fact that Cross-Defendants had claimed that Unit il was complete.

! 34. At all relevant times, Cross-Defendants were under a duty to perform their obligations under the Agreement in good faith.

i

35. Cross-Defendants failed to perform their obligations under the Agreement in good faith. Cross-Defendants' failure to t

act in good faith is evidenced, among other things, by their failure adequately and timely to inform Brazos regarding cost 1

l increases and schedule delays, failure to inform Brazos adequately or in a timely manner of problems with the construction of. Comanche Peak, failure to keep Brazos adequately or timely informed of NRC licensing matters, failure to provide Brazos with any valid explanation for cost overruns and schedule '

delays, and failure adequately and timely to inform Brazos of material developments. In addition, Cross-Defendants failed to act in good faith in representing to Brazos that they were 1

{ capable of completing the Project within the cost estimates and i

time schedules established in the Agreement.  !

1 i

Brazos's First Amended Counterclaim--Page 15

, , . _ , . . , . . .. -. , _.- - - - . -. . - . - , . . < . , _ _ . , , _ _ _ ._ , _ _ . . . . _ - , , , , . . ~ - _ _ . . _ _ . . . . , . . . _ , . , - , , _ . . . - - , . - ___.....m,

36.

At all' relevant times Cross-Defendants have h'd a a duty

+

to comply with the Agreement, all applicable state and federal laws and regulations, fiduciary obligations, implied warranties,

/

and all other obligations imposed by law in connection with the Project.

37.

Cross-Defendants have breached the duties set forth in

-paragraph 36.

I b

ni. ant Statne of Proimet '

38. Cross-Defendants did not complete construction oi. Unit '

$1 on or before the contract date of January,1981, and did not complete construction of that unit within a reasonable time after

that date. Cross-Defendants did not complete construction of Unit #2 on or before the contract date of January, 1983, and did.

not complete the construction of that Unit within a reasonable 4

time after that date. Cross-Defendants have not completed i

q construction of either unit. In November of 1985, Cross-1 Defendants estimated that commercial cperation of Unit #1 "would he achievable in mid-1987 if the necessary licensing approval were obtained," and that " Unit #2 will be physically ready for commercial operation by the end of 1987." However, Cross-Defendants retracted these estimates'in April, 1986, as a result of preliminary findings from their ongoing reinspection and corrective action programs. Cross-Defendants are unable or unwilling to say whether or when they will be able to complete 4

the construction and licensing of either or both units or to say when they will have the units ready for commercial operation.

39. Cross-Defendan s have failed to complete the Project

! within a reasonable cost. The most recent estimate for the total cost of the Project was $5.46 billion. This exceeded the estimate given Brazos by the Cross-Defendants at the time Brazos entered into the Joint Ownership Agreement by $3.76 billion,'or 221 percent. In April, 1986, Cross-Defendants formally retracted j

their $5.46 billion estimate, and have taken the position that i Brazos's First Amended Counterclaim--Page 16

, ._ ..~ _ - . . , , , --- . - - - - , - - - - - - - , _ ~ . . - _ _ . , - ,.~-,.,m. .._, - - - ._ . _ . - - . .

they cannot predict the sagnitude of possible future cost overruns or what the final total cost will be.

Cross-Defendants' Petition 1

40. On May 29, 1986, Cross-Defendant TUEC brought the instant suit against Brazos in this Court. TUEC caused this suit to be filed by counsel presently representing all owners of Comanche Peak, including Brazos, in the licensing proceedings now

- pending before the Nuclear Regulatory Commission, inthe construction petuit extension proceedings also pending before the ^

Nuclear Regulatory Commission, and in the appeal of the Nuclear Km.Tulatory Commission's nunc nro tunc extension of the Unit 61

(

con.struction permit before the U.S. Court of Appeals for the D.C.

Circuit.-

1 I. BREACH OF CONTRACT Count I Failure to Conform to Prudent Utility Practices, Failure to Perform in a Wor 5 nlike Manner and l

Failure to conniv with NRc Licannim "Sauirements t 41.

The allegations in parag.aphs 1-40 are hereby realleged and incorporated by reference.

~

42.

By their acts and omissions as set fc.ch in paragraphs 21-40, Cross-Defendants have breached their contractual duty to

perform in accordance with prudent utility practices, to perform l i .

I l

in a workmanlike manner, and to exercise reasonable care, skill, l

and attention.

43. By their acts and omissions as set forth in paragraphs 21-40, Cross-Defendants have breached their contractual duty to perform the design and construction of the Project in accordance j

withNRClicensingrequirements,anyapplicableFederal[3rstate laws and regulations, and the principal architectural'and engineering criteria and commitments made to the NRC.

44. By their acts and omissions as set forth in paragraphs 21-40, Cross-Defendants have breached their contractual dut.y to 4

Brazos's First Amended Counterclaim--Page 17 i

. - - .,,.---r, , , -- , . - -,, , - - - , . - - - - - - - - , - ~ . - , - . - - , . , . - - , . . , -.-- , .. - ,, , . , . , , . . . , . . . , ,

.= .

take whatev r cctisn w 3 necessary or appropriate to seek and obtain all licenses, permits, and other rights and regulatory approvals necessary or appropriate to the construction and operation of the Project.

45.

By their acts and omissions as set forth in paragraphs 21-40, Cross-Defendants have breached their contractual duty to ensure that contracts entered into covering the design and construction of the plant shall comply with %e Agreement and.

- with all applicable laws and government regulations ahd to ensure that contracts awarded are consistent with the requirements of governmental agencies having jurisdiction.

46.

On information and belief, by their acts and omissions as set forth in paragraphs 21-40, Cross-Do?mndants have breached their contractual duty to properly train and supervise the personnel planning and constructing the Project and to assure that its contractors, employees and agents have properly supervised personnel in connection with such planning and cc.nstruction.

47.

On information and belief, by their acts and omissions as set forth in paragraphs 21-40, Cross-Defendants have breached their duty to operate a familiarization and training program and to maintain adequate staffing, engineering, and operation of the Project during construction in accordance with the contract.

1 count TT Failure to Keep Brazos Informed  !

and Failure to Maintain Adecn2 ate Racerds 48.

The allegatilons in paragraphs 1-40 are hereby realleged and incorporated by reference.

49.

By their acts and omissions as set forth in paragraphs-19-28, 35, and 40, Cross-defendants have breached their .

contractual duty to affirmatively disclose on a current basis all i

material information which would significantly affect Brazos's rights and obligations under the Agreement.

Brazos's First Amended Counterclaim--Page 18

3

50. By th0ir tcts and omissions as set forth in paragraphs 19-28 and 35, on information and belief, Cross-Defendants have breached their contractual duty to'asintain adequate records of matters affecting the plant, including, but not limited to

, records of the cost and schedule for completion of the plants as well as records of matters affecting the licensing process and matters which would significantly affect Brazos's rights and {

' obligations under the Agreement. On information and belief, i i ,

-- Cross-Defendants have also breached their contractual-duty to maintain adequate records concerning the design and construction I-of the plant in order to comply with applicable NRC' licensing requirements and other applicable state and. federal laws.- t l

4 Count III

' Failure to Complete Construction Within a Dammenable Time and Cast l

51. The allegations in paragraphs 1-40 are hereby realleged i

and incorporated by reference.

, 52. By their acts and omissions as set forth in paragraphs 21-40, Cross-Defendants have breached their contractual duty to

act with due diligence in performing their obligations and to use their best efforts to timely complete construction of, and to-1 F

place into service, each unit of'the Pro' ject.

j

53. By their acts and omissions as set forth in paragraphs 21-40, Cross-Defendants have breached their contractual duty to I complete construction of the Project within a reasonable cost, l

and to ensure that all costs incurred were reasonable.

a

54. Cross-Defendants' failure to complete the Project within a reasonable time, and cost is both an independent breach of the Agreement'and a direct result of Cross-Defendants' breaches of their other contractual obligations. '

i

+

'1 count IV Failure to Act in coed Faith ,

55. The allegations in paragraphs 1-40 are hereby realleged I

and incorporated by reference.

Brazos's First Amended Counterclaim--Page 19 i

+

r,-,--,..~+,v--a-n- e,,--, e ,- , - , ,,e--.--.... ,-,w--w. ., - - - - - .- - .,----,wn-,--w- ,, e-+- - , . -- -mn -- ---.,--e , , + ,.,

56.

By their acts and omissions as set forth in paragraphs

'19-40, Cross-Defendants have breached their contractual duty.to  ;

perform their obligations under the Agreement in good faith.

l II. BREACH OF IMPLIED WARRANTY Count V Failure to Perform in Wo*+=an141ra Manner 57.

'The allegations in paragraphs 1-40 are hereby realleged

- and incorporated by reference. '

58. By their acts and omissions as set forth in paragraphs 19-40, Cross-Defendants have breached their obligation under implied warranty.to design and construct the Project, to perform all other obligations under the Agreement in a workmanlike manner, and to exercise reasonable care, skill, and attention.

count VT tTnnuitshility of Plant for Purnosa 59.

The allegations in paragraphs 1-40 are hereby realleged 4

and incorporated by reference.

60. Brazos entered into the Joint Ownership Agreement for participation in the Comanche Peak Project for the express purpose of securing a safe and economical power supply available in the early 1980's more specifically, Brazos agraed to purchase a 3.8 percent interest in two nuclear units which were to be in commercial operation on or about January, 1981 (Unit #1) and January, 198'3 (Unit $2) at an approximate total cost to Brazos of

$96 million.(including' nuclear fuel, interest, and-contingencies). Brazos relied on Cross-Defendants' 4

representations regarding the cost and availability of the Project in its decision to purchase a 3.8 percent share from DPEL.

61. Cross-Defendants have failed to complete the Project within any reasonable range of the time and cost estimates upon which Brazos relied.in its decision to enter into the Joint l

ownership Agreement. Brazos has not received any power frem the Project, and there is no indication when or if it will.

Brazos's First Amended Counterclaim--Page 20

62.'

Becaus3 cf Cro xi-Def:nd nts' failure to perform their obligations under the Joint Ownership Agreement, the Project is clearly unsuitable for the purpose for which it was purchased by.

Brazos.

63.

By their acts'and omissions as set forth in paragraphs 19-40, Cross-Defendants have breached.their obligation under. .

implie d warranty to provide a Project reasonably-suited to the

~

. . purposes for which it was purchased by Brazos.

J III.

BREACRES OF FIDUCIARY DUTIES '

Count VII Failure to Parform in Wor 1rman111rm Mannaw

, 64.

The allegations in paragraphs 1-40 are hereby realleged and incorporated by reference.

65.

At all relevant times, Cross-Defendants had a fiduciary i

relationship with and were under fiduciary obligations to Brazos.

66.

By their acts and omissions as set forth in paragraphs 17-40, Cross-Defendants have branched their fiduciary duty to

{

design, construct and obtain licenses for the Project, to perform f

all other obligations under the Agreement in a workmanlike manner, and to exercise reasonable care, skill, and attention.

Count VTTT i

Failure to Keep Joint Owners Informed and Te Maintain Adacruata Racerda ,

l 67.

The allegations in paragraphs 1-40 are hereby realleged and incorporated by reference.

68.

By their acts and omissions as set forth in paragraphs 19-28, 35, and 40, Cross-Defendants have breached their fiduciary duty to affirmatively disclose on a' current basis all material i

information which would significantly affect Brazos's rigbts and obligations under the Agreement.

69.

By their acts and omissions as set forth in paragraphs 19-28 and 35, on information and belief, Cross-Defendants have 1

breached their fiduciary duty to maintain adequate records of Brazos's First Amended Counterclaim--Page 21 l

.-n- - - . . . -,n-r-, - - , - , . -y , , , v,,,-e.,--,.c .-_.,_,g,,_,v--- -m s,,------ , ..,m..,,,-,-, , , - , , , . - .nu , ee.,,,-, v.,,n .

mattnra affccting the plant, including, but'not limited to'

, records of the cost and schedule for completion of the plants as well as records of matters affecting the licensing process and matters which would significantly affect Brazos's rights and obligations under the Agreement.'

70.

By their acts and omissions as set forth in paragraphs-19-28 and 35, cross-Defendants have breached their fiduciary duty

- to maintain adequate _ records concerning the design and t

- construction of the Project in order to comply with'a'pplicable NRC licensing requirements and other applicable state and' Federal laws.

71.

! Cross-Defendants' failure to keep adequate records to I

satisfy NRC licensing requirements has been a direct cause of the delay in licensing the plant.

Count IX Failure to Act In cood Faith 72.

The allegations in paragraphs 1-40 are hereby realleged and incorporated by reference.

73.

By their acts and omissions as set forth in paragraphs-t i 19-40, Cross-Defendants have breached their fiduciary duty to perform their obligations under the Agreement in good faith.

I 1 IV. FRAUD l

Count Y Misranrementation and Non-Disclosure of Material Facts 74.

The allegations in paragraphs 1-40 are hereby realleged I and incorporated by reference.

75.

i As previously alleged, Cross-Defendants engaged in an i ongoing series of material misrepresentations and non- ..

4 disclosures, in disregard of their common law, fiduciary and i contractual duties, beginning as early as 1977 and continuing until at least the date of this action. Cross-Defendants l

withheld information, deceiving and misleading Brazos as to essential elements of design, construction, and licensing of the l

6 Brazos's First Amended Counterclaim--Page 22 4

i

-l

t Project. Such infaraation was essential for Brazos's financing of its Comanche Peak interest and its protection of its rights, among other things. Por example, Cross-Defendants withheld information or misled Brazos as to the following: Cross-Defendants' ability to comply with NRC regulations and'the terms of the Atomic Energy Act of 1954, as amended, 42 U.S.C. Sections 2011 31_asL, Cross-Defendants' ability to supervise f

subcontractors (incl'uding Brown & Root and Gibbs & Hill); Cross-

- Defendants' ability and competence to select subcontr' actors (including Brown & Root and Gibbs & Hill) Cross-Defendani:s' ability or intent to acquire the necessary managerial and technical expertise to perform the contract: Cross-Defendants' ability to design and construct the Project in accordance with industry standards: Cross-Defendants' ability adequately to supervisa subcontractors' and vendors' compliance with NRC regulations: Cross-Defendants' intent to keep Brazos informed of material developments affecting the Project, including any a,

settinnents and other waivers by Cross-Defendants of legal rights witn c.ontractors, subcontractors,' and otherst Cross-Defendants' l

i ability or intent.to complete the Project within the contractual ki schedules and Cross-Deft.ndants' ability or intent to adhere to cost estimates and representations.

76.

Said misrepresentations were intended by Cross-4 i Defendants to be relied upon, and were relied upon, in inducing i l

1 Brazos to enter into the 1979 Agreement and undertaking various  !

l

, l financing efforts to pay for its share of the Project. I 1

Thereafter, Cross-Defendants' misrepresentations and non- I disclosures were calculated to keep Brazos in the Project and.to I j

prevent or delay Brazos from exercising its legal rights in

{

j 1 connection with the Agreement and were also designed to conceal.

from Brazos Cross-Defendants' negligence, gross negligence, willful acts, incompetence, and breach of contractual duties, I

i implied warranties, and fiduciary duties in failing to meet their 1

obligations to construct the Comanche Peak Steam Electric Station -

4 i

l j

Brazos's First Amended Counterclain--Page 23 l 1

3 i I

,_ . , - - . - - -- - - - - - - - - - "~ ~ ~ ~ ~ ~ ^ ~ ~ ~ ~

I

in o' safe, efficient, workmanlike manner, and to exercise reasonable care, skill, and attention, while avoiding all-imprudent expenditures. Brazos did in fact reasonably rely to i

its detriment on these misrepresentations and non-disclosures which were false and misleading by, among other things, entering 1

into.the Agreement, obtaining financing to pay Cross-Defendants, 1

'and foregoing legal action against Cross-Defendants.

V. MISTAKE count II Unilmemeal winemira Tndiwad by Raer===ntations of crean-Defan g

77. The allegations in paragraphs 1-40 are hereby realleged f and incorporated by reference.

) 78. Brazos's decision to enter into the Joint Ownership  ;

1 Agreement was premised upon Brazos's assumptions that cross-  !

Defendants were capable of constructing the Project so as to i

complete it within a reasonable time (i 24., within a reasonable range of the contract dates of 1981 for Unit 1 and 1983 for Unit

2) and at a reasonable commercial cost.

79. Brazos was niistaken as to the fundamental assumptions upon which its decision to enter into tho' contract was cased.

t Brazos's unilateral mistake as to these assumptions was reasonably based on the representations of Cross-Defendants,'who possessed superior knowledge of and who had and continue to have

\

sole possession and control of the Project, and Brazos exercised

reasonable care in relying on the representations of Cross-4 i

Defendants. As a result of this unilateral mistake, the Joint 1

ownership Agreement cannot be performed as the parties intended.

VI. VIOLATIONS OF TEXAS DECEPTIVE TRADE PRACTICES ACT

80. At all times relevant to Counts XII through XV, Brazos was a consumer within the meaning of the Section 17.45(4) of the Texas Deceptive Trade Practices-consumer Protection Act ("DTPA")

i as the term " consumer" was defined prior to 1983. Specifically, Brazos's First Asended Counterclaim--Page 24-1 '

i t

-- - . - . n, v.en e,w- , - . , ,,-w,- .,,wg..- - - . , , ,m,-w w ny,4.y,. g p..y. .p.- , g-.,+_en-a- , , . - , . , ng-,

Croac-Plaintiff Brasco is a c2rporation that' acquired a combination of goods and services from Cross-Defendants, pursuant to the Joint ownership Agreement executed in June, 1979. 'The Joint ownership Agreement was executed prior the effective date

)

of the 1979 amendments to the DTPA.

i 81.~

Brazos entered into the Joint ownership Agreement for  !

. the purchase of a 3.8 percent interest in the Comanche Peak Steam Electric Station. ~As a part of this Agreement, Brazos contracted to purchase from Cross-Defendants and cross-Defendants promised to provide all necessary goods and services in connection'with the construction, licensing and operation of the Project. The construction, licensing and operation of the Comanche Peak

!~ Project constitutes the conduct of trade or commerce directly affecting the people of the State of Texas.

82.

Crosa-Defendants' conduct-in violation of the Texas 4

Deceptive Trade Practices Act described below was committed i

knowingly in that Cross-Defendants were actually aware of the falsity, deception, and unfairness of the conduct about which i Brazos complains, and were actually aware of the acts constituting the violations.

1l Pursuant to Section 17.50(b) (1) of the DTPA, Brazos is entitled to recover three times the. amount of its actual, direct and consequential damages attributable to such

, violttions. Under the version of the Act applicable to Brazos's claims (1977 DTPA), the Judge must treble the actual damages, without the jury being aware of the result and without any need i

for the jury to find that the conduct of the Cross-Defendants was committed knowingly.

83.

Cross-Defendants' violations of the Texas Deceptive 4

i, Trade Practices Act described below, and the resulting damages and loss to Brazos, have necessitated Brazos's retention 'of the i

attorneys whose names appear at the end of this petition.

Pursuant to Section 17.50(d) of the DEPA, Brazos is. entitled to recover from Cross-Defendants an additional sum to compensate their attorneys for a reasonable fee for their services in the f

Brazos's First Amended Counterclaim--Page 25 l

I

I pr par;tiin and pro ecutien ef this action, as well as any and all appeals to other courts.

Brazoo is also entitled to recover costs.

84.

Brazoa., more than 30 days prior to the filing of this lawsuit, sent a letter to Cross-Defendants, pursuant to section 17.50A of the Texas Deceptive Trade Practices Act,' demanding payment of damages and attorneys' fees from Cross-Defendants within 30 days.- Brazos, prior to the filing of this lawsuit,.

__ gave written notice to Cross-Defendants of a DTPA'cla'im.

Count XII Brameh of Tverama and Tan 11ad Warrantian 85.

The allegations in paragraphs 1-40 and 80-84 are hereby realleged and incorporated by reference.

86.

The breaches of express and implied warranties alleged ,

in CeJtnts I, III, V, VI and VII constitute a knowing violation of the :faxu Deceptive Trade Practices Act.

87 Cross-Defendants' knowing violation of the DTPA as described in this Count was a producing cause of actual, direct and consequential damages suffered by Brazos.

e count YTTT Failure to Dimelena Matarial In ferasation 88.

The allegations in paragraphs 1-40 and 80-84 are hereby realleged and incorporated by reference.

89.

The Cross-Defendants' failure to disclose material information alleged in Count II, which Cross-Defendants' had in their possession at the time of the execution of the Joint t ovnarship Agreesent, was undertaken with the intent to induca Brazos to enter into transactions with Cross-Defendants. Had Cross-Defendants made full disclosure to Brazos, Brazos w'ould not have agreed to purchase an interest in Comanche Peak. Cross-Defendants' conduct constitutes a knowing violation of section

17. 4 6 (b) (23 ) of the Texas Deceptive Trade Practices Act.

Brazos's First Amended Counterclaim--Page 26

_ __ , __. _ __ ._ _ ___- - - -- ---- - - ~~ }

l 90.-

Crost-Defendants' knowing violation of the Texas 4

Deceptive Trade Practices Act as described in this Count was a I

i producing cause of actual, direct and consequential damages '

suffered by Brazos.

Count XIV i 1rallure to Dimelena Material Information 91.

The allegations in paragraphs 1-40 and 80-84 are hereby  ;

realleged and incorporated by reference.

92.

The Cross-Defendants' failure to disclose materi.al information alleged in Count VIII constitutes a knowing violation of Sections 17.46(b) (5),17.46(b) (7) and 17.46(b) (21) of the Texas Deceptive Trade Practices Act.

93. n Cross-Defenda'ts' knowing violation of the Texas i

Deceptive Trade Precticas Act as described in this Count was a producing cause of actual, direct and consequential damages suffered by Brazos.

i

. count TV i Material Misranramantatiene 94.

The allegations in paragraphs 1-40 and 80-84 are hereby realleged and incorporated by reference.

95.

The material misreprasentations and nondisclosures I

alleged in Count X constitute a knowing violation of the Texas 4

Deceptive Trade Practices Act.

96.

1 Cross-Defendants' knowing violation of the Texas

]

Deceptive Trade Practices Act as described in this count was a j

I producing cause of actual, direct and consequential damages j suffered by Brazos.

4 count YVT i tineenmeionable courna of Action 3

97. r i

The allegations in paragraphs 1-40 dnd 80-84 are hereby realleged and incorporated by reference.

98.

Cross-Defendants' acts and omissions, as described in 4

this Complaint, constitute an unconscionable course of action and 4'

Brazos's First Amended Counterclaim--Page 27 2

- , _ . , . - - . , _ , _ , . . , - - . - - - - ~ - , - , - . . . . - . - . , , , , - - - - , . . - - . , , , - - - , . - . . - - , - - - - . , ,-n-,,- - . , -, , - . - . - . - . . , - . ,w,- , - , -,

e

• t '

violet 3 Ssctign3 17.50 (c) (3) , 17.45(5) (A) and (B) of the' Texas Deceptive Trade Practices-and Consumer Protection Act in that

, Cross-Defendants have taken advantage of.Brazos's lack of

. knowledge, ability, experience and capacity to a gr_ossly unfair degree both in connection with their conduct and representations to Brazos to induc,e Brazos to enter into the Joint Ownership Agreement, and in connection with their conduct thereafter,

-especially their failure to provide Brazos with current and accurate information relating to the cost and schedulu for completion of the Project and the adequacy of Cross-Defendants' 6

performance in the context of the licensing process and because there is a gross disparity between the value Brazos has received (to date none) and the consideration paid, such unconscionable course of action also induced Brazos to stay in the Project,'to continue to finance the Project, and to forbear seeking legal and equitable remedies for Cross-Defendants' actions and omissions.

99.

Cross-Defendants' violation of the Texas Deceptive Trade 4

Practices Act as described in this Count was a producing cause of actual, direct and consequential damages suffered by Brazos.

VII. TORT LIABILITY

~

Count YVTT Neolicence 100.

The allegations in paragraphs 1-40 are hereby realleged and incorporated by reference.

101.

Cross-Defendants' conduct as alleged in paragraphs 21-40 constitutes a failure to exercise due care in a competent, workmanlike manner, and to exercise reasonable care, skill, and attention, in the design, planning, supervision and construction of the Project and in attempting to comply with NRC lican' sing.

requirements.

Brazos's First Amended Counterclaim--Page 28 w - - - . . - _ - - -- -- - , ,y_. . _.., - , , - -,-.v.. - . . - . . . - - - . . _ , , , . . . , , - - ,,--._,--m wy+-,, , , - .,-,,, r--, v--

count YVITT cross Neolitrence 102.

Theallegations/nparagraphs1-40areherebyrealleged and incorporated by reference.

103. Cross-Defendants' conduct as alleged in paragraphs 21-40 constitutes gross negligence of their duties with regard to the design, planning, supervision, construction, and licensing of the Project.

Count XIX ~

Willful Mimeenduct 104. The allegations in paragraphs 1-40 are hereby realleged and incorporated by reference.

105. Cross-Defendants, by certain of their actions and caissions alleged above, including but not limited to their failure to disclose to Brazos the 1978 MAC report, budgets, cost and schedule estimates, and problems relating to the NRC licensing process, and by their having caused counsel representing Brazos in connection with the licensing process to sue Brazos, have willfully injured Brazos. In the event that it is shown that Cross-Defendants acted, condoned or failed to

. supervise their agents and employers to assure compliance with NRC regulations and assure fair reporting of violations of NRC regulations, such actions or failure to act would also constitute willful acts.

VIII. VICLATION OF TEXAS SECURITIES LAWS count YY 106. The allegations in paragraphs 1-40 are hereby realleged and incorporated by reference.

107. Cross-Defendants' misrepresentations with respe'et to their ability to design, construct and obtain a license for or to supervise the design, construction, and licensing application for Comanche Peak were untrue statements or omissions of material fact under Article 581-33 of the Texas Securities Laws, Title 19, Articles 581-1 et nac.

Brazos's First Amended Counterclaim--Page 29

i l

108.

Cross-Defendants' failure to disclose to Brazos the 1978 MAC Report was an omission of material. fact under Article 581-33 of the Texas Securities Laws, Title 19, Articles 581-1 at saa.

109.

I Cross-Defendants' failures to inform Brazos of material changes in the estimates.of costs or completion schedules and other significant matters affecting Comanche Peak are omissions of material fact under Article 581-33 of the Texas Securities Laws, Title 19, Articles 581-1 at ama.

110. Brazos relied upon Cross-Defendants' represe'ntations I

with respect to their ability to design, construct and obtain a license for or to supervise the design, construction, and licensing application for Comanche Peak in entering into and making payments under the Joint Ownership Agreement.

111. Brazos was not aware and through the exercise of due diligence could not have been aware of the material 1

misrepresentations and omissions of material fact by Cross-j Defendants described in Paragraphs 19-20 and 107-109 above.

4 IX. VIOIATION OF FEDERAL SECURITIES LAWS AND REGUIATIONS Count XXI 112. The allegations in paragraphs 1-40 are hereby realleged and incorporated by reference.

113. Cross-Defendants have utilized instruments of transportation and communication in interstate commerce and the United States Postal Service in the formation of and collection l

of payments under the Joint Ownership Agreement.

j 114. Cross-Defendants' misrepresentations with' respect to their ability to design, construct and obtain a license for or to j

i supervise the design, construction and licensing application for i comanche Peak were untrue statements or omissions of material j

fact under Section 12 of the Securities Act of 1933, 15 U.S.C.

Section 771, and Rule 10b-5 of the Securities and Exchange Commission, 17 C.F.R. Section 240.10b-5, and constitute a ,

manipulative or deceptive device or contrivance, a device, scheme i

Brazos's First Amended Counterclaim--Page 30

Er artifica t3 d frtud, or an act, practice or course of business which operates as a fraud ~or deceit ur. der Section 10 of the Securities Exchange Act of 1934, 15 U.S.C. Section 78j, and Rule 10b-5 of the Securities and Exchange Commission, 17 C.F.R.

Section 240.10b-5.

115.,

Cross-Defendants' failure to disclose to Brazos the 1978

, - MAC Report was an omission of material fact under Section 12 of the Securities Act of 1933, 15 U.S.C. Section 771, and Rule 10b-5

_ of the Securities and Exchange Commission,17 C.F.R. 'Section

' 240.10b-5.

4 116.

Cross-Defendants' failures to inform Brazos of material changes in the estimates of costs or completion schedules and i

other significant matters affecting Comanche Peak are omissions of material fact under Section 12 of the Securities Act of 1933i 15 U.S.C. Section 771, and Rule 10b-5 of the Securities and Exchange Commission, 17 C.F.R. Section 240.10b-5, and constitute a

a manipulative or deceptive device or contrivance, a device scheme or artifice to defraud, or an act, practice or course of  !

j business which operates as a fraud or deceit under Section 10 of the Securities Exchange Act of 1934, 15 U.S.C. Section 78j, and Rule 10b-5 of the Securities and Exchange Commission, 17 C.F.R.

Section 240.10b-5.

, 117.

The untrue statements and omissions of material fact by Cross-Defendants described in Paragraphs 19-20 and 114-116 were made knowingly and willfully or with severe recklessness.

118.

Brazos relied upon Cross-Defendants' representations 1

with respect to their ability to design, construct and obtain a license for or to supervise the design, construction, and

' licensing application for Comanche Peak in entering into and making payments under the Joint Ownership Agreement. .

119. Brazos was not aware and through the exercise of due diligence could not have been aware of the material i

misrepresentations and omissions of material fact by Cross-1 c

Defendants as described in Paragraphs 19-20 and 114-116 above.  ;

i Brazos's First Amended Counterclaim--Page 31

'l

l X. FAILURE OF CONSIDERATION e

\

count nti 120.

The allegations in paragraphs 1-40 are hereby realleged and inco'rporated by reference.

121.

By virtue of the failure of Cross-Defendants to perform their obligations to Brasos under.the Agreement, and to obtain a license for'and commence commercial operation of the Comanche Peak Steam Electric Station, there has'been a complete failure of

_ the consideration that is to flow to Brazos under thd Agreement.

s IMJURIES AND DAMAGES CIAIMED 122.-

Under section 3.04 of the Agreement, Cross-Defendants are contractually obligated to indemnify Brazos for any and all loss, damage, or expense resulting from a breach of the Agreement 4

i by the Project Manager, or their agents, servants, or employees.

123 Brazos has been or will be injured in the following ways as a direct and proximate result of its unilateral mistake, and of Cross-Defendants' numerous breaches of concract, breaches of implied warranties, breaches of fiduciary duty, fraudulent l misrepresentations and nondisclosures, tortious acts and omissions, and violations of the Texas Deceptive Trade Practices Act, Texas securities laws, and/or federal securities laws, and unilateral sistake, and other allegations, all as alleged in l

Counts I through XXII:

A.

i i

Brazos has been deprived of the benefits of its bargain.

B.

Brazos has been forced to pay unreascnable, unnecessary and excessive costs of construction (inc1'uding excessive and unnecessary interest and i other carrying costs) resulting directly f[om Cross-Defendants' conduct C.

Brazos has been deprived of the use and benefits of its share of the Project as a direct result"of the I schedule delays caused by Cross-Defendants' conduct I l 1 l Brazos's First Amended Counterclaim--Page 32 l

{

1 1

x . .

D.

Br m o has been or will be forced to enter into or to use costly short term alternative power supply arrangements to compensate for Cross-Defendants' failure to place the Project on line within any reasonable schedules E. Brazos has been foreclosed from pursuing long tera alternative power supply arrangements; F. Brazos has been prevented from_taking appropriate

, legal actions to protect its interest in the f Project and to enforce its rights under the' 4

contract as a direct result of Cross-Defendants' j failure to. inform Brazos at all or in a timel,y i aanner of material information regarding the Project; G.

Brazos has been prevented from obtaining financing necessary to pay amounts requested by Cross-a Defendants for costs of construction as a direct

' result of Cross-Defendants' failure to inform i

i, Brazos at all or in a timely manner of material information regarding the Project and other breaches.

H. Brazos has been deprived of effective I

representation before the NRC as a direct result of Defendants' causing suit to be filed against Brazos i

by attorneys representing Brazos before the NRC.

1 i PRAYER FOR RELIEF WHEREFORE, Brazos now prays as follows: ,

4 A.

4 For a judgment that Cross-Defendants have materially breached their contractual obligations

1. to esploy prudent utility practices and to perform I their obligations under the Joint ownership t

i Brazos's First Amended Counterclaim--Page 33 d

i

- _ . . . . - - . . . , - - - - .- - . . , _ - _ _ _ - , - - - - _ - . - - - - - . . - . . . . . - . - - , . . . . - - . + .

. l Agreement in a w2rkmanlike manner, exercising reasonable care, skill, and attention; 2.

to perform the design and construction of the 1 l

Project in accordance with NRC licensing requirements, any applicable Federal or state laws  !

and regulations, and the principal architectural and engineering criteria and commitments made to the NRC and to secure regulatory approval for the Project; ~

3.

to inform Brazos in a timely manner of mate' rial information regarding the Project and to maintain adequate records; 4.

to complete the Project within a reasonable time and cost;

5. to perform their obligations under the Joint ownership Agreement in good faith; and

6. to properly train and supervise planning and construction personnel.

B.

For a judgment that Cross-Defendants have materially breached their obligation under implied warranty:

1.

to design and construct the Project and to perform all other obligations under the Agreement in a workmanlike manner, exercising reasonable care, skill, and attentions and

2. to provide a Project reasonably suited to the purposes for which it was purchased by Brazos.

C.

For a judgment that Cross-Defendants have materially breached their fiduciary obligations 1.

to design and construct the Project and to perform l all other obligations under the Agreement in a  !

l worm anlike manner, exercising reasonable care.

skill, and attention;

2. to affirmatively disclose in a timely manner all material information which would significantly Brazos's First Amended Counterclaim--Page 34 4 .

affect Brazos's rights and obligations under the Agreement 3.

to maintain adequate records of matters affecting the Project, including, but not limited to records of the cost and schedule for completion of the Troiect as well as records of matters affecting the licensing process and matters which would significantly affect Brazos's rights and obligations under the Agreements 4.

to maintain adequate records concerning the' design and construction of the Project in order to comply with applicable NRC licensing requirements and other applicable state and federal laws; and

5. to perform their obligations under the Agreement in good faith.

D. For a judgment that Cross-Defendants have fraudulently induced Brazos to enter into the Joint Ownership Agreement, to undertake financing, to stay in the Project, and forbear exercise i

of its legal rights, by misrepresenting their ability to construct the Project within a reasonable range of cost and schedule estimates, their ability and intent to supervise planning and construction personnel, and their ability and intent to comply with NRC licensing requirements and other applicable Federal and state regulations, and by their failure to disclose to Brazos the 1978 MAC report, budgets, cost and schedule estimates, and problems relating to the NRC licensing process.

E. For a judgment that Brazos's purpose in entering into the Agreement has been frustrated as a result of unilateral mistake as to fundamental assumptions upon which its decision to enterintotheJointOwnershipAgreementwasbased,and5herefore that the Joint ownership Agreement cannot be performed as the parties intended.

F. For a judgar.nt that Cross-Defendants have violated their duty to exercise due care in a competent, workmanlike manner, Brazos's First Amended Counterclaim--Page 35 l_ __ _ _ . _ . _ _ -

--- - - - - -- - ~- ' - ~ ~ - = ^ " ~ ~~

t cx:rcicing reasonablo care, ckill, and attention, in the design,

!- planning, supervision and construction of the Project and in attempting to comply with NRC licensing requirements.

G.

For a judgment that Cross Defendants have been grossly i negligent in their duties with regard to the design, planning, k

supervision, construction, and licensing of the Project.

R.

For a judgment that Crosa-Defendants, by certain of their acts and omissions alleged above, including but not limited

_ to their failure to disclose the 1978 NAC report, budgets, cost i

and schedule estimates, and problems relating to the NRC

• i 4

licensing process, their failure to supervise and train their a' gents and employees during the construction phase of the i

Project, and their causing counsel representing Brasos before the NRC to sue Brasos, have willfully injured Brasos.

3 I.

For a judgment that cross-Defendants have knowingly g

i violated the Texas Deceptive Trade Practices and Consumer i

a Protection Acts

1. by their breaches of express and implied

• i .

warranties: '

2. by their failures to disclose material information

3. by their material misrepresentations and 1

' nondisclosures: and '

i 4.

by their unconscionable course of action.

J.

For a judgment that Cross-Defendants have made untrue '

' statements or omitted disclosures of material fact in violation of Article 581-33 of the Texas securities Laws, Title 19, t i

Articles 581-1 at. sam ,

K.

For a judgment that Cross-Defendants have made untrue.

statements or omitted disclosures of material fact in violation i of se.ction 12 of the securities Act of 1933, 15 U.S.C. "

4 Section 771 L. For a judgment that cross-Defendants have made untrue I

statements or omitted disclosures of material fact in violation

}

of Section 10 of the Securities Exchange Act of 1934, 15 U.S.C.

i i

i Brasos's First Amended Counterclain--Page 36 4

i 1

l

. . - - - . . - - . - - . , _ - . _ . ~ _ _ . - - _ . - . . - . _ - . _ ___ _ - -.- . _ .m.. _ -_ ~ .m._-

- . - - . . - - ~ _ . . . .

. 7*'

Sectitn 78j, and Rule 10b-5 of the Securities and Exchange Commission, 17 C.F.R. Section 240.10b-5.

M.

For an order rescinding the Joint ownership Agreement and discharging all remaining obligations of Brasos under such i Agreement, and requiring Cross-Defendants to pay to Brazos an i amount equal to all outstanding borrowings of Brazos associated i

J with the Project and interest payments made thereort.

N.

For an order enjoining Cross-Defendants from seeking

- additional payment for design, construction, operation' or decommissioning of Comanche Peak. '

O.

For appropriate reformation of the contract and whatever 3

I additional equitable. relief may be appropriate, including rights ,

to Brazos's contracted ownership share of power and energy for the life of Comanche Peak at the anticipated ccat under the Agreement.

j P.

i For an order requiring Cross-Defendants to pay Brazos its damages, trebied pursuant to section 17.50(b)(1) of the Texas Deceptive Trade Practices and Consumer Protection Act, or for i

1 compensatory and punitive damages for intentional violations of Cross-Defendants' common law duties and for any other damages

! determined as a result of the actions complained of herein.

Brazos's actual damages to date are at least $216 million.'  !

Brazos's present and future reasonably foreseeable damages i include, but are not limited tot 1.

Brasos's costs associated with Comanche Peak, I including interest paid and payable on leans I.

secured for the Project; 1

i

2. Brasos's costs associated with obtaining i

l replacement power necessitated by the delay of commercial operation of Comanche Peakt j

l

3. Brazos's lost opportunity costs; 3

4.

! All of the costs associated with Brazos's percentage interest in the Project (including

{

interest) necessary to complete and operate the i

i i

i

! Brazos's First Amended Counterclain--Page 37 I

h i

i t

r. . + ~ ----c-np=--*-- ---,4~+ - -- - - - ,.- - - . , - - . - . - - . . .,,.-r ,-,,y,.,,---- r-%- - - - = . , ,y y,- _,- - ----m,. -.,e-----+~.. - ----.-, ,- -. - - - -<-e

plant above those that would have been necessary had Cross-Defendants performed their obligations in a pru:*.ent manners and

5. Brasoe's power and energy costs in excess of those that would have been necessary had Cross-Defendants performed their obligations in a prudent manner. ,

Q. For an order requiring Cross-Defendants to pay Brazos's attorneys fees associated with Comanche Peak and this action.

~

R. For an award of interest computed from the time Brazos i

suffered damages to the date of payment.

t S. For costs of the Court.

T. For such other and further relief as shall appear just

{ and reasonable to the Court.

Respectfully submitted, i

Law Offices of Joseph Robert Riley P.O. Box 153 Waco, TX 76703 817-754-5456-A% >

ByI o p Robebt Rilky(f g ate Bar No. 16V29000 and spiegel & McDiarmid 1350 New York Avenue, N.W.

Washington, D.C. 20005-4798 202-879-4000 1

YYWl Byt ' Robert A./Jablon Ben Finkelstein

~

)

i 4

J Brazos's First Amended Counterclain--Page 38

- . _ _ _ - . _ _ _ _ , . . _ . . , - - , . _ _ _ . . _ _ . - , . _ . - . _ _ _ _ , ~_ _ _ . . . _ . . _ . . - _ . , _ . - . _ _ . _ - . . . . - - - . . _ . , _ . - ___

CERTIFICATT OF SERVICE This pleading was served in accordance with Rules 72 and 21a of the Texas Rules of Civil Procedure on september ./L.,1986.

Byt obeQ Rilet /

to Bar No. 16929000 1 --

1 e

i Brason's First Amended counterclaim--Page 39

TXX-6377 April 13. 1987 Exhibit A 3 of 4 No. 86-6809 TEXAS UTILITIES ELECTRIC 5 IN THE DISTRICT COURT OF

. COMPANY, 5 Plaintiff, 5 5

v. 5- DALLAS COUNTY, T E X A $

5 TEX-LA ELECTRIC COOPERATIVE 5 OF TEXAS, INC., TEXAS 5 MUNICIPAL POWER AGENCY and 5 BRAIOS ELECTRIT POWER 5 COOPERATIVE, INC., 5

_ Defendants. 5 A-14TH JUDICIAL DISTRICT FIRST AMENDED COUNTERCLAIM AND ORIGINAL CROSS-CLAIM TO THE HONORABLE JUDGE OF SAID COURT:

Tex-La Electric Cooperative of Texas, Inc. (" Tex-La')

and Texas Municipal Power Agency ("TMPA*) complain of Texas Utilities Electric Company ("TUEC'), Texas Utilities Company

("TUC"), Texas Utilities Mining Company ("TUMC')

and Texas Utilities Services, Inc. ("TUSI'), and respectfully would show the Court as follows:

A. THE PARTIES

1. Tex-La is a rural electric cooperative incorpo-rated under the laws of the State of Texas pursuant to the Electric Cooperative Corporation Act, Tex. Rev. Civ. Stat.

Ann. ast. 1528b. Tex-La is engaged in the purchase of whole-sale electric power and energy for resale to its members, con-sisting of seven rural electric distributien cooperatives located in the state of Texas. Tex-La's members sell the elec-tricity acquired from Tex-La and other suppliers to their approximately 151,000 customers / members in a 34 county region of Northeast and East Texas. Tex-La's headquarters are located in the City of Nacogdoches, Nacogdoches County, Texas.

2. TMPA is a municipal corporation and political subdivision of the State of Texas. Its headquarters are in Crimes County, Texas.

EXilHTA FIRST AMENDED COUNTERCLAIM AND ORIGINAL CROSS-CLA!H--Page 1

l^ '

3. TURC is an electric utility incorporated under the laws of the state of Texas. TURC- is a wholly-owned l subsidiary TUC.1/ TUSC was formed on January 1, 1984, by the merger of Texas Power 6 Light Company ("Tp6L'), Dallas Power 6 Light Company ('DP6L'), J and Temas flectric Service Company

('TESCO*). Through the merger, TP&L, DP6L and TESCO became +

separate operating divisions of TURC. Acting through these divisions, TURC transmits and distributes electricity 'in the Northeast and Central portions of the state of Texas to appr's- o instely 91 counties, providing retail service in 350 incorpo--

rated municipalities, the largest of which are Dallas, Fort Worth, Arlington, Irving and Waco. TURC also sella electricity at the wholesale level to Ten-La and others. Another division t of TUIC, Texas Utilities Generating Company ('TUGCC*), is re-spensible for the planning, engineering, construction and operation of all of TURC's electric generation stations. Prior to the merger, Texas Utilities Generating Company'esisted as a separate subsidiary of TUC. Certain responsintliti'es of the subsidiary were assumed by TUGCo.1/

4. TUMC and TUS! are wholly-owned subsidiaries of TUC.

B. FACTUAL BACXGAQUND i

(i) Early Licensing Proceedings and construction of the troiset

5. In 1972, TUtc announced its intention to design and build a nuclear-powered electric generating station in Hood ,

and somervell Counties, Texas, commonly known as the Comanche 1 TUtc and TUC will hereinaf ter collectively be referred to as 'TURC.'

2 Additionally, 'TURC' sometimes will be used to ref er to TP&L, DP6L, Texas Utilities Generating Company, and/or TESCO, TURC's predecessors in interest, when describing events in i j which they participated preceding the merger, as well as to l refer to TUMC and TUS! to the-estent that those two entities participated in facts and actions alleged as to TUtc.

1 e

l FIRST AMttIDED COUtlTERCLAIM  !

At3D CRIGINAL CROSS-CLAIM- Page 2 '

J Peak Steam Electric Station (' Comanche Peak' or the ' Pro-ject'). In 1972, TURC estimated the total cost for the '

l Project's two 1,150 megawatt units to be $764 million, with projected commercial operation dates oi 1980 and 1982 for Units t

1 and 2, respectively. TUnc selected Gibbs a mill as the architect / engineer for the Project and Brown & Root as the constructor of the Project. TURC retained to itself the

' function of project manager. *

, 6. On June 5, 1973, TURC applied to the Atomi.c Ene'rgy Commission for construction permits for Comanche Peak pursuant j to the Atomic Energy Act of 1954, as amended, 42 U.S.C. 55 2011-l g. gg. (The licensing and regulatory functions of the Atomic u

Energy Commission were transferred to the Nuclear Regulatory '

j Commission by the Energy Reorganisation Act of 1974, 42 U.S.C.

$$ 5001 g. gg. Moreinafter, both Commissions will be referred to as the 'NRC' or the ' Commission *.) With the application, TUIC submitted to the Commission its Preliminary Safety Analysis . Report ('PSAR'), which, as required by 10 i

C.P.R. 5 50.55(f)(1), contained TURC's commitment to . comply 1

with various NRC requirements on design criteria, construction,

, organisation, quality assurance and quality control.

7. On December 19, 1974, following a review of the l Project by the NRC staf f and the NRC's Advisory Cormittee on Reactor Safeguards, as well as hearinga before the NRC's Atomic Safety and Licensing Board ('ASL8'), the NRC granted construc-tion permits for Comanche Peak Units 1 and 2. As a result, j pursuant to 10 C.P.R.,8 $0.S$(f)(1), TUIC's undertakings in the

! PSAR became binding.

8. With the issuance of constrution permits by the 51RC,

] site preparation and excavation was begun for Comanche Peak.

] The first structural concreto for the Project was poured in By March 1974, the physical shape of major Unit 1 July 197$.

l but1 dings had become apparent. Shortly thereafter, >

i I

P!RST ANENDED COUNTERCLAIM

AND ORIGINAL CROSS-CLAIN -Page 3

installation of large piping began. In 1977, installation 'of cable tray and other electrical conduit was initiated.

9. In February 1978, TURC filed with the NRC an application for the issuance of operating licenses for the two Comanche Peak units. This set in motion the second phase of the licensing process, involving extensive operational, safety and environmental reviews by the NRC.

~ '

10. Included with TUEC's application for op'etating licenses was the Final safety Analysis Report ("FSAR*), c'on-taining, among other things, TUEC's final Quality Assurance Program. This program contained TUEC's detailed explanation of precisely how it intended to meet the Commission's various safety and other requirements, so that the Commission would be able to make the finding, required by the Atomic Energy Act, that there is ' reasonable assurance

• that the plant can be operated without undue risk to the public. An operating license may not be issued unless the program has been completed "in conformity with the construction permit,' including the I

Quality Assurance program. Once the FSAR was submitted to the NRC, the commitments TUEC made in the FSAR became binding on TUEC.

11. By July 1979, major concrete work was completed on Unit 1, while the reactor pressure vessel was set in place in the Unit 2 containment building. By January 1980, the startup transformer was energized and the Unit 1 control room was manned.

4 (ii) The Non-TUEC Owners' Par-ticipation in the Proiect

12. In January 1979 and June 1979, respectively, TMPA and Brazos Electric Power Cooperative, Inc. ("Brazos*) became additional joint owners of Comanche Peak by entering into a Joint ownership Agreement (the 'JOA*) with TP6L, DP&L and TESCO (TUEC's predecessors in interest), each of whom, at the time, FIRST AMENDED COUNTEMCLAIM l AND CAIGINAL CROSS-CLAIM--Page 4

._ . _ _ . _ ~

owned a separate interest in Comanche Peak.1/ Through the JOA, Brazos and TMPA acquired, respectively, 3.0 percent and 6.2 I percent ownership shares of the Project. In the JOA, TUGC0 (which previously had been the agent of TP&L, DP&L and TESCO for the design and construction of the Project, and which since

, then has become a division of TUEC) was designated 'as Project Manager responsible "for the planning, construction, and opera-

' tion' of Comanche Peak in accordance with Prudent Utility Practice, NRC licensing requirements and any applicable federal or state laws and regula-tions and, in the case of the design and construction l [of the Project], in accordance with the principal architectural and engineering criteria and environ-mental commitments made to the (Nuclear Regulatory Commission].

I The JOA stated that commercial operation for Unit 1 was esti-mated to begin January 1901 and for Unit 2 was estimated to begin January 1983. At the time that TMPA bgcame one of the joint owners, the cost of Comanche Peak was projected by TUEC to be approximately $1.4 billion. The JOA established an Owners Committee whose duties included, among others, the re-sponsibility to provide liaison at the management level and to '

1' review and act upon the Project Manager's reports and make such recommendations to the Project Manager as the Committee deemed proper. (),3,9, paragraph 23 of the JOA.)

13. In 1979, Tex-La determined that it would be in 4

the best interests of Tex-La and its members and' ratepayers for Tex-La to seek to purchase from TUEC an ownership share of Comanche Peak. Tex-La has no generation f acilities of its own r

and buys most of its bulk power from TUEC. TUEC initially opposed Tex-La's entry into Comanche Peak. However, in May 1980 Tex-La and TUEC reached an agreement in principle, subject to the subsequent execution of a definitive agreement, under

'{

3 At the request of the Court and by agreement of all par-ties, a copy of the JOA will not be attached.

FIRST ATTENDED COUtlTERCLAIM J

AND ORIGINAL CROSS-CLAIM--Page $

\

which Tex-La was granted the right to purchase a 4-1/3 percent ownership interest fin Comanche Peak. (Tex-La's share was de-ducted from what had been TP&L's 35-5/6 percent ownership share of the project.) At that time, the cost of Comanche Peak was projected by TURC to be approximately $1.7 billion. Based on

, this estimate, the cost to Tex-La of its 4-1/3 percent interest in Comanche Peak (including the cost of fuel, trentmission lines, overhead, and interest during constructid.) was L

! projected by Tex-La to be approximately $135 million. '

14. On December 9, 1900, T,e s-La , TUIC, Brazos and TMPA entered into an Amendment of Joint Ownership Agreement (as used herein 'JOA* includes all amendments),1/ under which l

i Tex-La formally agreed to purchase a 4-1/3 percent ownarship interest in Comanche Peak. At approximately the same time, Tex-La, in order to fund its purchase of Comanche Peak, applied j to the Rural -Electrification Administration ('REA') for a I

guarantee of a loan for $135 million to be made by the Federal Financing Bank. At REA's request, the loan guarantee was in-

creased to $180 million in order to cover any possible unfore-  !

seen cost increases.

/ ,

1 15. Pursuant to the Amended JOA, Tex-La, at a provi-sional closing on January 8, 1981, paid TUEC $90,419,549.50, constituting a portion of the purchase price of a 4-1/3 percent j

1 interest in the Project. Because the REA had not yet approved i

the requested loan guarantee, Tex-La made the payment using funds obtained on an interim basis from the National Rural i Utilities Cooperative Finance Corporation. Tex-La retained the '

right, if final REA approval was not forthcoming, to sell its share back to TUEC.

16. On August 3, 1981, the REA informed Tex-La that j

the $100 militon loan guarantee for which it had applied had i

f 4 See footnote 3.

4 t

i a

j

=

FIRST AMENDED COUNTERCLAIM AND ORIGINAL CROSS-CLAIM--Page 6 i

been approved. Thereupon a final closing was scheduled to enable Tex-La to acquire .a 4-1/3 percent interest in the Pro-ject with a loan guaranteed by the REA. Less than two weeks before the scheduled closing, however, TURC advised Tex-La that the total projected cost of Comanche Peak, which up to then already had risen to $2.2 billion, would further increase by more than 50 percent, to $3.345 billion, with a resulting in-

~

crease in the cost of Tex-La's share (including fuel,' trans-mission Innes, overheed, and interest during construction) f' rom

$150 million to approximately $240 million. Tex-La advised the REA that, because of this increase, the original $180 million loan guarantee commitment would not be sufficient to obtain a 4-1/3 percent ownership share, and that it would be necessary to reduce Tex-La's ownership interest to an amount that could be adequately financed. Tex-La then determined that, at the new price, Tex-La could finance only 50 megawatts, or a 2-1/6 percent interest in Comanche Peak.

17. On February 12, 1982, Tex-La, TUEC, Brazos and TMPA signed the Second Amendment of Joint ownership Agree-ment.1/ A closing was held on May 26, 1982, at which Tex-La acquired a 2-1/6 percent interest in Comanche Peak, a share then estimated by Tex-La, based on TUEC's cost projections for the entire Project, to cost $120 million, although the REA loan guarantee was kept at $180 million. The REA guaranteed Tex-La's loan f rom the Federal Financing Bank, and the interim loan from the llatig,nal Rural Utilities Cooperative Finance Corporation was repa'Ld. At the time the second m ndment of the JOA was entered into, in February 1982, construction of l Comanche Peak Units 1 and 2, according to TURC's represSnta=

l l tions, was 89 and 57 percent complete, respectively, and commercial operation of Units 1 and 2 was expected to commence

]

5 See footnote 3.

FIRST AMENDED COUNTERCLA!M AND ORfGINAL CROSS-CLAIN==Page 7

l in 1984 and 1985, respectively. In February 1982, it was also represented to Tex-La by TURC that TUIC's cost estimate was high and was designed to preclude any further cost increases.

Accordingly, Ten-La had no reason to expect that any further significant cost overruns or delays in completion of the Pro-ject would occur.

18. Tex-La and TMPA did not become, and currently still are not, a signatory to either the TURC-Brown & Root con-struction contract or the TURC-Gibbs & Mill design contract for l

1 Cosianche Peak, and Tex-La and TMPA have no power to directly I

I supervise, manage or otherwise control the actions of either trown & Root or Gibbs & Hill.

(iii) The Joint Ownership Aoreement

19. Under the Amended JOA, Te.x-La and TMPA became subject to all of the rights and obligations of a joint owner of Comanche Peak.

20. The JOA, in paragraph 3.04, names TUCCO as Pro-3ect Manager for Comarche Peak in order to provide ' unified management of the Project.' Under paragraph 3.04, the Project Manager is to design, construct, operate and maintain the Pro-ject 'in accordance with Prudent Utility Practice, NRC licens-i j ing totuirements and any applicable federal or state laws and j regulations and, in the case of the design and construction '

thereof, in accordance with the principal architectural and engineering criteria and environmental commitments made to the NRC.' Th e, Project Manager is to ' direct and control such activities on a day to day basis', and have ' sole responsibti-l ity for . ..

the licensing, design, construction, operati,on, maintenance . . . of the Project.' Paragraph 3.04 further' pro-vides that the Project Manager 'shall act with due diligence in i

1 performing its obligations and will use its best ettorts to timely complete construction of, and to place into service, each unit of the ProjeJt.'

FIHST AMENDED COUNTfRCLA!M AND ORIGINAL CR083=CLA!M -Page 4

21. Paragraph 5 of the JOA sets out other d'aties for i

the Project Manager as follows:

5.01 Reaulatory Approval The Project Manager, acting as agent for the Parties, shall take whatever action is necessary or appropriate to seek and obtain all licenses, permits, and other rights and regulatory approvale necessary or appropriate to the construction and opera':Lon of the Project and to the use of the Fuel.

5.02 Prudent Utility Practice: The Project Man-

- ager shall prosecute the construction and operation.of the Project and the procurement and use of the Fuel in accordance with Prudent Utility Practice. .

5.03 Duty to Inform The Project Manager shall keep the members of the Owners Committee fully in-formed of all matters significant with respect to the construction and operation of the Project and the ute of the Fuel and, if feasible, to do so in time for the members to comment thereon. The Project Manager shall not withhold from the Owners Committee any information necessary to the performance of its duties as set out in Paragraph 4.03.

22. The JOA defines ' Prudent Utility Practice' in Paragraph 1.19 in relevant part as follows:

" Prudent Utility Practice' meane any of the practices, methods, and acts engaged in or accepted by a signifi-cant proportion of the electrical utility industry (at the time the decision was made), or any of the prac-tices, methods, and acts that, in ty exercise of rea-sonanle judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at the lowest reason-able costs consistent with reliability, safety, and expedition. . . . Prudent Utility Practice is not intended to be limited to the optimum practice, method, or act to the exclusion of all others, but rather to be a spectrum of possible practices, j methods, or acts.

23. The J0A established an owners committee composed of one primary representative from DP6L, TP&L, TESCO, THPA, Tex-La, and Brazos. The surposes of the Owners Committee, according to JOA Paragraph 4.01, include ' securing effective cooperation, intercher.go of information, and providing consul- '

s tation on a prompt and orderly basis among the Parties.' The duties of the owners Committee are set out in JOA Paragraph

4.03 in relevant part as follows

4.0 3 ggM, ggt In order to insure that t!he Project is operated an accordance with Prudent Utility Prac-tice to provide safe, ef f tetent, and economical elec-tric power, the owners Committee shall FIR $f ant:4DED COUtiTERCLAIM AllD ORIGINAL CROS$=CLA!H-.Page 9 ,

(a) Provide liaison among the Signatories at the management levelt e ..

(d) Perform such other functions and duties as may be assigned to it in this Agreements (e) Review, discuss, and act upon any Matter in dispute among the signatories arising under- this Agreements (f) Review and act upon the Project Manager's reports as provided herein and make such recommenda-

. tions as it deems proper to the Project Manager; ,

e ..

1 (h) Arrange for annual audits of the records maintained by the Project Manager in its performance of Project construction and operation and other rec-ords maintained by the Project Manager in support of its billings to the Parties.

(iv) The Proiect's Difficulties

24. Under the JOA, TUtc owed a duty to Tex-La and TMPA to supervise, design, engineer and construct Comanche Peak in accordance with prudent utility practice, NRC licensing re-quirements and applicable federal and state law and to ' timely complete construction of, and to place into service, each unit 3 of the Project." At the times Tex-La and TMPA agreed to the JOA, and in the years that followed, they were repeatedly assured, through TURC's statements and in status reports sub-mitted by TUEC to Ted-La, Brasos and TMPA, that Comanche Peak was being adequately designed, engineered, constructed and man-aged and was capable of being timely licensed by the NRC.

Tex-La and TMPA further were assured by TUEC that TURC was in full compliance with the requirements in both the PSAR and PSAR which TUtc had filed with the NRC. In actual fact, however, at the times Tex-La and TMPA signed tre JOA, unbeknownst to Tex-La and TMPA, TURC already had identified serious deficiencies.witn the Project, involving particularly TUCC's Quality Assurance and Quality Control ('QA/QC') programs outlined in the PSAR and PSAR. The CA/QC program is a vital feature of the flRC licensa ing process, for it is through implementation of an adequate b

FIRST AMENDED COUNTERCLA!M AND Cd!Q!NAL CROSS-CLAIM--Page 10

QA/QC program that the NRC is able to develop adequate confi-dence that the commitments made by the applicant in the PSAR and FSAR have been fulfilled and the NRC therefore can gain reasonable assurance that the plant has been properly con-structed and can be operated without undue risk to the public.

25. The difficulties in TUEC's QA/QC program relating to the management, design and construction of the Pecrject, have iiubsequently become known to the NRC. ^

The NRC's discovery of deficiencies in TURC's QA/QC program, in the areas of b"oth design and construction, coupled with TUIC's actions since these discoveries, includ'ing its dealings with the NRC and its general mismanagement of the Project, have prevented the NRC from determining whether the Project has been constructed in accordance with TUEC's commitments and the NRC's requirements, and have caused the NRC to question TUIC's ability properly to supervise construction of the Project. They also have caused the NRC to question whether the Project ever can be safely operated and whether TUEC has the competence and ability to do so. Among the principal problems with the Project identified by the various studies'and reports were the f ailure by TUEC to meet its commitment in the FSAR to comply with industry design codes and regulations approved by the NRCs the failure by TUEC to analyze or explain deviations from design drawings involving concrete reinforcement in the reactor building that houses the nuclear supply systems the failure by TUEC to analyse possible damage to two of the four main steam lines in the plants the failure by TUEC to adequately verify whether some pipe supports were properly designed to withstand earthquakes and other acci-dents, requiring the review and analysis of over 9000)Lpe supports and the subsequent modification of over 30 percent of the supports in Unit 1 of the Projects errors in calculations used for the design of cable tray hangers, and subsequent modification of thousands of hangers in Unit 2 and extensive FIRST AltENDED COUNTERCLAIM AND ORIGINAL CROSS-CLAIM--Page 11

analysis to justify the design of hangers in Unit 1; lack of-documentation or analysis establishing that the building walls to which pipe hangers are anchored are adequate to bear the weight of the hangers; the failure by TUEC to justify the ade-quacy of the design of certain electrical conduit supports which assure that critical electrical systems remain functional in the event of an earthquakes the f ailure by TUEC to assure that the failure of non-critical plant equipment during an earthquake will not cause the failure of critical equipme'nts installation of defective containment building electrical pene-trations: recurring problems with document controls serious iradequacies with the training of the TUEC Quality Control per-sonnel who inspect the completed hardware; inadequate systems for corrective action; and many examples of incomplete and in-adequate workmanship and ineffective Quality control inspection.

26. Because of these and other deficiencies and TUEC's mismanagement, the NRC has required TUEC to undertake numerous redesigns and alterations of various parts of the Pro-ject so as to bring them into conformance with the NRC's re-quirements and TUEC's original commitments. The NRC also has undertaken, and has required TUEC to undertake, an elaborate series of inspections and evaluations of the Project and of the manner in which it was constructed, which will lead to still additional nodifications once the evaluations have been com-plated. TUEC has estimated the inspection program as requiring in excess of 1200 person-years for review alone. This does not include the correction of any further deficiencies which may be identified by the review.

27. On January 28, 1986, a member of the llRC taff discovered that, on August 1, 1985, TUEC's construction permit for Unit 1 of Comanche Peak had expired, and that TUEC since then haJ not filed a request for an extension. From August 1, 1985 until January 28, 1986, TUEC continued work at the plant FIRST AMENDED COUtiTERCLA1M AllD ORIG 111AL CROSS-CLAIM--Page 12

~

without interruption. On January 28, 1986, upon being notified of the lapsing of its permit, TUEC promptly suspended virtually all physical on-site construction activities on Unit 1, al-though it allowed its inspection program to continue. On Janu-ary 29, 1986, TURC filed with the NRC Staff a request for an extension of the expi, red construction permit retroactive to August 1, 1985. The NRC Staff granted TUEC's request on Febru-ary 10, 1986, whereupon TUIC resumed the construction activ-ities at Unit 1. On March 13, 1986, the Commission, responding to a pleading filed by an intervenor in the NRC proceeding, ruled that no new construction permit proceeding was required and refused to stay the Staff's extension of the original per-mit. The Commission, however, referred to the Staff the ques-tion of any enforcement action that may be appropriate in light of the lapsing of the permit, and referred to the Atomic Safety and Licensing Board for hearing the question of whether good cause existed for the extension of TUEC's original permit. . The NRC's order has been appealed by the intervenor to the United States Court of Appeals for the District of Columbia circuit.

28. As a direct result of the foregoing and other problems, as well as TUEC's overall failure to assure adequate quality assurance and quality control at Comanche Peak, TUEC has been unable to convince the NRC of TUEC's ability to ade-quately supervise design, construction and~ operation of Comanche Peak. This, in turn, has prevented the Commission to date f rom making the findings required by the Atomic Energy Act that it has " reasonable assurance' that Comanche Peak can be operated without endangering the health and safety of the public and that it will be operated in compliance with NRC regulations. As a result, although Unit 1 is claimed by TUtc to be complete, TUEC has no operating license and has no near term hope of octaining one. On November 18, 1985, TUtc announced that, assuming no further unforeseen difficulties FIRST AMENDED COUNTERCLAIM AND ORIGINAL CROSS-CLAIM--Page 13

develop, commercial operations of Unit 1 could not commence until mid-1987, with _ Unit 2 commencing commercial ' operations six months later. TUIC's announcement also noted the possi-bility that further delays coald occur, and, on April 18, 1986, TUEC announced that, because of new problems that had been uncovered through its reinspection program, the estimate for cosumercial operation made in November 1985 no, longer was

' valid. TURC stated that, because of various uncertainties, it would not then announce any new estimate for commercial ope'ra-tion of Comanche Peak and would not be in a position'to do so-for several more months. On July 14, 1986, TUEC announced that more corrective actions would be required at Comanche Peak than had been previously anticipated. As a result, TUEC admitted that Unit 1 would not be available in time for the peak load season of 1988.

29. TUEC's failures in constructing the Project, as described above, have caused, and continue to cause, the pro-jected cost of the Project to be far higher than it would have been had TUIC designed and constructed the Project in accord-ance with the requirements of the PSAR, FSAR, and the NRC, and far higher than was projected by TUEC at the times Tex-La and TMPA became owners of the Project.

(V) TUEC's Failure to Provide Information Recardina the Protect

30. At the times Tex-La and TMPA signed on to the Project, TUEC already had in its possession a report, prepared in 1978 by Management Analysis company (*MAC'), of San Diego',

California, which detailed numerous areas of ' deficiencies

• at Comanche Peak, including many of the deficiencies later to be uncovered by the NRC, and made numerous recommendations for  !

improvements. Although, by TUEC's own subsequent ad assion the MAC report should have been made available in August 1980, in l

response to interrogatories in the llRC Comanche Peak licensing I l

rtRsr AMENDEs CoutiTERCLAllt  !

AND ORIGI!1AL CROSS-CLAIM--Page 14  !

I

proceeding, its very existence was not disclosed to either the MAC or Tex-La and TMPA until May 1985, and it therefore was not available to either Tex-La or TMPA when they made their deci-sions to participate in the Project.

, 31. Once Tex-La and TMPA became joint owners of the Project, they began, through their designated representatives, to participate in the periodic meetings held by the Comanche

~ Peak Owners Committee established under Section 4 of the JOA.

As detailed in paragraph 22, above, the functions of the Owners i

Committee include the general monitoring of the Project and taking appropriate action upon any Project-related matters that are presented to the Committee. In the years following the signing of the Second Amended JOA, while TUEC was experiencing ever greater difficulties with its licensing efforts at the NRC and was being cited by the NRC for an ever greater number of deficiencies in the construction and management of the Project, TUEC generally failed to inform the Owners Committee of the many problems the Project was encountering. Instead, TUEC con-sistently presented the other joint owners with an overly opti-mistic assessment of the status of the Project.

COUNT I

32. Tex-La and TMPA reallege each and every allega-tion contained in paragraphs 1 through 31 as though set forth here in full.

33. As set forth above, TUEC, owed a duty to Tex-La and TMPA to supervise, design, engineer, and construct Comanche Peak in accordance with prudent utility practice, NRC licensing requirements and applicable federal and state laws, and to

• timely complete construction of, and to place into service, each unit of the Project.' TUEC, by f ailing to adhere to the required QA/QC program, its commitments to the NRC through the PSAR and FSAR, and due to the other deficiencies described above, has failed to carry out the foregoing duty and failed to i

FIRST AMENDED COUNTERCLAltt AND ORIGINAL CROSS-CLAIM--Page 15

L

+-

.J.

complete the Project in a timely manner. These - f ailures by TUEC constitute material. breaches of its contractual obliga-tions to Tex-La and TMPA under the JOA.

34. The failures and deficiencies of TUEC described above have caused, and will. continue to cause, the cost of the Project, assuming it is completed and licensed, to be .far in excess of what it should have been.. Such failures and defi-

~ciencies constitute further material ~ breaches by TUEC'of its contractual obligations to Tex-La and TMPA under the JOA.

35. Under the JOA, TUEC, as Project Manager, had the duty to take such action as is necessary or appropriate to ob-tain an operating license, including a duty to furnish Tex-La and TMPA with counsel before the NRC upon which Tex-La and TMPA can rely for effective, confidential, and proper legal advice-I and representation. TUEC has failed to take such action. Such failure constitutes a material breach of the JOA.

36. Under the JOA, TUEC had the duty as Project Man-ager to keep the Owners Committee, and therefore Tex-La and TMPA, informed of all significant matters regarding Comanche Peak and not to withhold from the Owners Committee, and there-fore Tex-La and TMPA, any information necessary for the Owners Committee to carry out its duties. TUEC failed to disclose licensing problems, the MAC report, and construction non-con-formities, as well as other matters which TUEC should have dis-closed. These failures to disclose constitute material breaches of the JOA.

37. Under the JOA, TUEC had a duty to Tex-La and TMPA a

to assure that Comanche Peak was designed, engineered and con-structed at the lowest possible cost, in accordance with HRC regulations and the commitments made in its FSAR, and TUEC has i the obligation to recover excessive costs f ecm Gibbs & Hill, Brown & Root, or both. By failing to pursue its legal remedies ,

i l

l l

I FIRST AMENDED COUNTERCLAIM l AND ORIGINAL CROSS-CLAIM--Page 16 l

against Gibbs & Bill and Brown & Root, TUEC has materially breached its contractual obligations to Tex-La and TMPA under the 40A.

38. Tex-La and TMPA have been requir'ed to retain the 3 undersigned legal counsel to prosecute. their claims. Tex-La and TMPA are entitled to recover their reasonable attorneys' fees incurred in connection with prosecuting : their claims.

Further, Te'x-La and TMPA' are entitled to recover additional.

attorneys' fees in the event of an appeal to-the Court of Appeals and/or the Supreme Court of Texas.

i COUNT II

39. Tex-La and TMPA reallege each and every allega-tion contained in paragraphs 1 through .31 as though set forth here in full.

40. TUEC, in paragraph 3.04 of the JOA, agreed to indemnify Tex-La and TMPA if the . Project Manager caused Tex-La ano TMPA *to sustain any damage, loss or expense by breaching this Agreement.' As set forth above, TUEC has breached the JOA and therefore Tex-La and TMPA are entitled to indemnity from TUEC for all resulting damages, losses and expenses Tex-La and TMPA have sustained.

COUNT III

41. Tex-La and TMPA reallege each and every allega-tion contained in paragraphs 1 through 31 as though set forth hero in full.

42. As set forth in paragraph 30, above, during the negotiations leading to the joining of the Project by Tex-La and TMPA, TUEC failed to disclose to, and knowingly and will- ,

fully withheld f rom Tex-La and TMPA, material facts in breach of its common law and fiduciary duties in dealing with Tex-La

. and TMPA, which _ nondisclosures were intended by TUEC to be 4

FIRST AMENDED COUNTERCLAIM AND ORIGINAL. CROSS-CLAIM--Page 17

relied upon, and were relied upon, by Tex-La and TMPA in enter-ing into the aforementioned agreements. Through such actions by TUEC, Tex-La and TMPA have been deceived and defrauded.

43. TUEC's knowing and willful concealment of material facts from Tex-La and TMPA were made with the intent to induce Tex-La and TMPA to enter into the JOA. Had the material f acts been made known to Tex-La and TMPA, they would not have executed such agreements and would not have st$ stained 1

any damages.

COUNT IV

44. Tex-La and TMPA reallege each and every allega-tion contained in paragraphs 1 through 31 as though set forth here in full.

, 45. Af ter the execution of the 'JOA, the Amended JOA, and the Second Amended JOA, TUEC knowingly and willingly with-held and continues to withhold material facts, information, and documentation f rom Tex-La and TMPA, not only in disregard of its common law and fiduciary duties to Tex-La and TMPA, but also in disregard of its contractual duties. In failing to disclose such material facts, TUEC, while administering its duties as Project Manager, created through its actions and statements a false and misleading impression that the design, engineering and construction of Comanche Peak were proceeding in a manner that would result in TUEC's obtaining an operating license from the NRC in a timely manner. -In fact, TUEC was not properly ' managing Comanche Peak so as to timely obtain an l operating license. Tex-La and TMPA have relied to their detri-ment on TUEC's false and misleading withholding of facts, '

\

statements and actions, and have been deceived, defraude'd and '

damaged thereby.

FIRST AMENDED COUNTERCLAIM AND ORIGINAL CROSS-CLAIM--Page 18 I

l

COUNT V

46. Tex-La and TMPA reallege each and every allega-tion contained in paragraphs 1 through 31 as though set forth here in full.

47. TUEC owed to Tex-La and TMPA, by victiue of TUEC's

contractual obligations under the JOA, the duty to use reason-able care and skill in successfully managing all phases of the

~

design, engineering and construction of Comanche' Peak.~

48. TUEC has breached tihese duties ~ owed Tex-La 'and TMPA by, among other things, failing properly, to organize and manage the Project, failing properly to schedule and staff the

~

Project, failing properly to schedule and - control the progress of the Project, f ailing to meet cost and. progress deadlines, and allowing the construction permit for Unit 1 to expire.

Such failures directly and proximately caused the delays and -

cost overruns set forth above.

49. TUEC, as Project Manager. had a duty to meet its contractual obligations, and TUEC knew or should have known that its failure properly to -perform its duties would cause damages to Tex-La and TMPA. Such damages were clearly foresee-able and did in fact result to Tex-La and TMPA.

50. TUEC's failure to meet its planning, supervisory, and construction duties constitutes ordinary negligence, - gross negligence and willful and wanton misconduct without regard for t the consequences resulting to Tex-La and TMPA.

COUNT VI

51. Tex-La and TMPA reallege each and every allega-tion contained in paragraphs 1 through, 31 as . though set forth here in full.

j 52. By reason of the failures on the part of TUEC to

, perform its obligations to Tex-La and TMPA under the JOA, as described above, and to obtain a license for and commence i

commercial operation of the Project, there has been a complete FIRST AMENDED COUNTERCLAIM AND ORIGINAL CROSS-CLAIM--Page 19

Cailure of the consideration which is to flow to . Tex-La ' and TMPA under the JOA.

COUNT VII

53. Tex-La and . TMPA reallege' each and every allega-

+

tion contained in paragraphs 1 through 31 as though set forth here in full.

54. -At the time of ' the negotiations leading to the JOA, TUEC had in its exclusive possession the report [ con'MAC indicating significant _ problems with the QA/QC program at Comanche Peak. TUEC also had in its exc1'usive. Possession other information that should have revealed to TUEC significant prob-lems at Comanche Peak with QA/QC and construction that ultimately would affect NRC licensing, and that should - have .

indicated to TUEC that its projected - commercial operation dates and projected cost for Comanche Peak could not be achieved.

55. TUEC's failure to disclose to ' Tex-La and ' TMPA such information, which TUEC had in its possession at the times of the execution of the JOA,' was undertaken'with'the intent to induce Tex-La and TMPA to enter into transactions with TUEC.

4 Had TUEC made full disclosure to Tex-La and TMPA, they would not have agreed to purchase an interest in Comanche Peak.

TUEC's action was in direct violation of. the ' Texas Deceptive Trade Practices Act" or 'DTPA". At all times relevant to this count, Tex-La and TMPA.each was a ' consumer" pursuant to DTPA $

17.45(4).

56. TUEC also violated the DTPA by its breach of TUEC's implied warranties under the JOA to perform its duties as Project Manager 1/1 a workmanlike manner and with the degree of skill, care and attention customarily required - and expected of a Project Manager on a nuclear project such as Comanche. Peak.

57. TUEC also provided Tex-La and TMPA with- in-i correct, misleading and untimely information about the status i

of Comanche Peak in meetings of the Owners committee, in FIRST AMENDED COUNTERCLAIM AND ORIGINAL CROSS-CLAIM--Page 20

l minutes of the Owners Committee, and otherwise, in violation of DTPA 5 17.46(b)(5) and 5 17.46(b)(7).

58. TUEC also violated DTPA 5 17.46(b)(5),

5 17.46(b)(7) and 5 17.46(b)(21), .w hich prohibit representing 1

goods or services as having characteristics, ingredients, uses, benefits, or qualities which they do not have, representing

-goods or services as being of a particular standard, quality or ~

, grade, or a particular style or model,'when in fact they are of i

another, and representing that work or services have been per-formed on, or parts replaced in, goods when the work or ser-vices were not performed or the parts replaced. -

59. TUEC's mismanagement of Comanche ' Peak, including l its failure to obtain and furnish material information to i

Tex-La and TMPA on a timely basis, is an'" unconscionable action or course of action" pursuant to DTPA 517.50(a)(3).

i

60. The law firm of 'Worsham, Forsythe, Sampels &

, Wooldridge ("Worsham, Forsythe") has been engaged by TUEC and

its predecessor, acting as Project Manager,. to appear and represent the joint owners,- including Tex-La and TMPA, before the United States. Nuclear Regulatory Commission (the "NRC") in proceedings concerning applications for Construction Permits and for Operating Licenses for Comanche Peak, as well as in

other forums in relation to other matters concerning Comanche Peak. Worsham, Forsythe also has filed this lawsuit on behalf of TUEC and against Tex-La and TMPA. Worsham, Forsythe has

unreasonably refused to withdraw from representing TUEC in this case, even though the-law firm has irreconcilable conflicts of.

4 interest in suing parties whom it has and is representing in matters arising out of the same events, and even though the firm has been called upon several times to so -withdraw.

Members of Worsham, Forsythe have denied and continue to deny that their law firm is representing and has represented Tex-La i and TMPA. If such denial are true and Worsham, Forsythe is not 1

l 4

i

)

FIRST AMENDED COUNTERCLAIM AND ORIGINAL CROSS-CLAIM--Page 21 l

1 I

and has not been representing TMPA before the NRC and in the other matters concerning Comanche Peak, then TUEC has violated 517.46(b)(5) and 517.50(a)(3) of the DTPA by falsely representing to Tex-La and TMPA that it engaged Worsham, Forsythe as lawyers to represent Tex-La and TMPA in joint-ownership matters pertaining to Comanche Peak and in licensing proceedings before the NRC, and in paying Worsham, Forsythe legal fees out of joint ownership funds for representing Tex-La

~

and TMPA in such matters. If Worsham, Forsythe has represented TMPA before the NRC and in other matters concerning Comanche Peak and before the NRC, then Worsham, Forsythe has irreconcilable conflicts of interest,- and TUEC in engaging in an unconscionable course of action by continuing to have Worsham, Forsythe represent Tex-La and TMPA and having Worsham, Forsythe prosecute this case on behalf of TUEC against Tex-La and TMPA.

61. Each of the above described violations of the Texas Deceptive Trade Practices Act was a producing cause of actual direct and consequential' damages suffered

• by. Tex-La and TMPA.

62. TUEC's conduct as described above was committed knowingly, in that TUEC was actually aware of the falsity, de-ception, and unfairness of the conduct about which Tex-La and-TMPA complain, and was actually aware of the acts constituting the breach of warranty, unconscionable conduct and conduct in violation of 5 17.46(b)(23), 5 17.46(b)(5), S 17.46(b)(7),

S 17.46(b)(21) and 5 17.50(a)(3) described above. Pursuant to DTPA 5 17.50(b)(1), Tex-La and TMFA are entitled to recover l three times the amount of their actual direct and consequential damages attributable to such violations. Under the - 1977 Act, the Judge must treble the actual damages, without the jury being aware of the result and without any need for the jury to find that the conduct of the defendant was committed knowingly.

FIRST AMENDED COUNTERCLAIM AND CRIGINAL CROSS-CLAIM--Page 22

63. TUEC's violations of the DTPA described above,-

and the resulting damages and loss to Tex-La . and TMPA have necessitated Tex-La's and TMPA's retaining' the attorneys whose names appear at the end of this petition. Pursuant to DTPA 5 17.50(d), Tex-La and TMPA are entitled to recover f rom TUEC an additional sum to compensate them for a reasonable fee for such attorneys' services in- the preparation and prosecution of this action' as well as any and all appeals to other courts.

Tex-La and TMPA are, entitled also to recover court costs.

64. Tex-La, more than 30 days prior to the filing of this lawsuit, sent a letter to TUEC, pursuant to 5 17.50A of the DTPA, demanding payment of damages and attorneys' fees from TUEC within 30 days. TMPA, prior to the filing of this coun-terclaim and cross-claim, gave notice to TUEC ' of its DTPA claims.

COUNT VIII

65. Tex-La and TMPA reallege each and every allegation of paragraphs 1 through 31 as though set forth here in full.

66. Tex-La's primary purpose in entering into the JOA, Amended JOA and iiecond Amended JOA was to obtain, without undue delay, a source of power costing less than the power it could purchase as a full-requirements customer of TUEC, and this purpose was known to TUEC. Similarly, TMPA's primary purpose in entering into the JOA was to obtain, without undue delay, a source of power costing less than the power it could purchase from other potential sources, and this purpose also was known to TUEC. The actions and events described above have caused the power from the Project to be far more expensive than estimated by Tex-La and TUEC at the time the JOA, Amended JOA

. and Second Amended JOA were entered into, or than estimated by TMPA and TUEC at the time the JOA was entered into, and have caused the licensing and commercial operation of the Project to FIRST AMEt3DED COUNTERCLAIM AtID ORIGINAL CROSS-CLAIM--Page 23 f

be delayed .many years beyond the date expected when the~

aforementioned . agreements were entered into. .As a ' result, Tex-La's and TMPA's respective primary purposes in entering into the aforementioned agreements have been totally frustrated and ~ no longer are capable of being fulfilled through performance of such agreements.

j PRAYER FOR RELIEF Ter-La and TMPA pray that- this Court enter an order requiring TUEC to appear and to answer, and upon trial.by jury.

to award against TUEC such relief as the Court and jury deem appropriate, including, but not limited to,.the following:

(a) Rescission of the JOA, and refund to Tex-La and TMPA of all amounts they have paid on account of-Comanche Peak, together with interest thereon;

(b) Modification of the JOA;

(c) Award of an amount of money which, if paid in i l

j cash, would reasonably compensate Tex-La and TMPA for their damages, including, but not limited to:

(i) Prudent Completion- Cost: The difference between what Tex-La and TMPA have paid for their ownership interest in Comanche Peak and the amount that would have been expended by them if TUEC had followed Prudent Utility Practices; (ii) Replacement Power Costs: The amount expended by Tex-La and TMPA, from the time Comanche Peak should have been commer-cially operating, to purchase power and energy at a higher cost than that which should have been available from Comanche Peak; 1

t FIRST AMENDED COUNTERCLAIM .

AND ORIGINAL CROSS-CLAIM--Page 24 l l

(iii) Punitive Damages: Such punitive or exemplary- damages as the jury deems appropriate on account of TUEC's gross negligence and willful' and heedless miscon-ducts (iv) Lost Opportunity Costs: The loss to Tex-La and TMPA caused by their

~

foregoing other sources of power and energy, e

4 such as a lignite unit, while it was pursu-ing and funding Comanche Peaks (v) Treble Damages: Three times the amount of all actual direct and consequen-tial damages under the DTPA (vi) Costs of Pursuinc ~ Their Claim

! Against TUEC: The amount of Tex-La and TMPA's reasonable and necessary attorneys' fees and all other erpenses reasonably incurred by Tex-La and TMPA in investigating and pursuing their claim against TUEC.

(vii) Preiudgment and -Postiudament Interest: Interest computed from the time Tex-La and TMPA suffered damages to the date of payment.

(d) Such other and further relief as'the court and jury deem appropriate and for costs of the Court.

Respectfully submitted, William H. Burchette Foster De Reitzes '

HERON, BURCHETTE, RUCKERT &

ROTHWELL Suite 700 4

1025 Thomas Jefferson, N.W.

Washington, D.C. 20007 1

(202) 337-7700 FIRST AMENDED COUNTERCLAIM AND ORIGINAL CROSS-CLAIM--Page 25

., -. . - - - - - , , - . - .r - - - - - - - - - _ - , - - - - - , .. _,,,m --._m .-

)

• Richard C. Balough State Bar No. 01658500 Mark C. Davis State Bar No. 05525050 HERON, BURCHETTE, RUCKERT &

ROTHWELL.

1400 Bank Tower 221 West Sixth Street Austin, Texas 78701 (512) 499-0606 Darrell E. Jordon State Bar No. 11007000 HUGHES & LUCE ..

1000 Dallas Building Dallas, Texas 75201 (214) 760-5756

~

Donald Adams State Bar No. 00854000

HUGHES & LUCE 1500 United Bank Tower.

' Austin, Texas 78701 (512) 477-9910 By: N' -

- burbm>

William H. Butchette Attorneys for Tex-La Electric Cooperative of Texas, Inc.

Blake Tartt State Bar No. 00000058

, William W. Vernon State Bar No. 20552000 Tom A. Cunningham State Bar No. 05244700 FULBRIGHT & JAWORSEI 1301 McKinney Houston, Texas 77010 (713) 651-5151 Hugh Hackney State Bar No. 08670000 FULBRIGHT & JAWORSKI 2001 Bryan Tower, Suite 1400 Dallas, Texas 75201 (214) 969-0022 By: - W '

Blake Tartt

> State Bar No. 00000058 Attorneys for Texas Municipal Power

, Agency i

J

! .FIRST AMENDED COUNTERCLAIM AND ORIGINAL CROSS-CLAIM--Page 26

_ _ ._= .

CERTIFICATE OF SERVICE This pleading was served in compliance with Rules -72 and 21a of the Texas Rules of Civil Procedure on October fE ,

1986.

- 1(lughe.E. BackneyQ A

. 0249a k

i I

i j

l FIRST At1 ENDED COUtiTERCLAIM At3D ORIGINAL CROSS-CLAIM--Page 27 l

, T X X'- 6377

. ' April 13. 1987 8

Exhibit A-4 of 4 NO. 86-6809-A TEXAS UTILfTIES ELECTRIC  : IN THE DISTRICT COURT OF COMPANY, a Plaintiff, e vs. DALLAS COUNTY, TEXAS TEX-LA ELECTRIC COOPERATIVE  :

OF TEXAS, INC., TEXAS MUNICIPAL  :

POWER AGENCY, and BRAZOS  :

ELECTRIC POWER COOPERATIVE,INC. :

Defendants.  : 14TH JUDICIAL NSTRICT ORIGINAL CROSS-ACTION OF TEX /.S UTI' aT1ES COMPANY, TEXAS UTILITIES MIND'O COMP. .Y AND TEXAS UTILITIES S'dRV*CEL. INC.

TO THE HONORABLE COURT:

Cross-Plaintiffs Texas Uti!Itfes Company, Texas Utilities Mining Company and Texas Utilities Services Inc. fue this Original Cross-Action against Cross-Defendants Tex-La Electric Cooperative of Texas, Inc. ("I'ex-La"), Texas Municipal Power Agency

("TMPA") and Brazos Electric Power Cooperative, Inc. ("Brazos"), and in so doing would show the following L

Cross-Plaintiffs are corporations organized and existing under the laws of the State of Texas, and each has and maintains its principal place of business in Dallas County, Texas. Cross-Defendants are partfes in this cause, and each has made appearance prior to the filing of this Cress-Action.

2.

On June 20,1986, Cross-Defendant Brazos joined Cross-Plaintiffs as parties through the filing of an original action for affirmative relief, thereby invoking the Court's jurisdiction. Venue of that original action is proper under Section 15.036 of the Tex. Civ.

Prae. & Rem. Code, and venue of the Cross-Action is thus proper under Section 15.062 of such Code.

3.

Cross-Defendants ar.d Plaintiff Texas Utilities Electric Company are parties to a Joint Ownership Agreement involving the construction and future operation of a nuclear-powered electric generating station commonly known ts the Comanche Peak project. 'Ihe Joint Ownership Agreement has been fully identified and described in previously filed pleadings and exhibits, and Cross-Defendants are minority owners under that agreement.

EQlBIT A ORIGINAL CROSS-ACTION OF TEXAS UTILITIES COMPANY, TEXAS UTILITIES MINING COMPANY AND TEX AS UTILITIES SERVICES INC. - Page 1

. . - . .~. -- - . _- -. - - . .- - . ..

, j

. i

. t i

i 4- 1 h the action fuod by it in this cause, Cross-Defendant Brazos asserts that Cross-i Plaintiffs have contractual obligations and fiduciary duties to Crose-Defendant Brazos l under the Joint Operating Agreement. Cross-Defendant Brasos further seserts that Crose-Plaintiffs, along with Plaintiff Texas UtDaties Electrie Company, have breached contractual and fiduciary duties, thereby entitling, Cross-Defendant Brasos t') rescission or reformation of the Joint Operating Agreement, as well as damages and other relief.

4 4

5.

~

{ k addition, Cross-Defendants Tex-La and TMPA have asserted claims that Cross-Plaintiff Texas Utnities Company, through its aBeged control and direction of the actions of Plaintiff Texas UtDities Electrie Company, owes contractual and fiduelary duties under the Joint Operating Agreement and has breached those duties.

i 6.

Cross-Plaintiffs deny that they have any contractual or fiduciary duties to Cross-Defendants under the existing Joint Ownership Agreement and further deny that they

.have any liabuities or obligations to Cross-Defendants in connection with the Joint J

Ownership Agreement or any performance or future performance of same.

- 7.

Cross-Defendants' allegations have created uncertainty and insecurity with respect to the rigits, status and legal relations of parties under the Joint Ownership Agreement, and a conflict exists between Cross-Plaintiffa and Cross-Defendants regarding existing and continuing rights and duties under that Agreement. Accordingly, pursuant to Chapter 37 of the Tex. Civ. Proc. & Rom. Code, Cross-Plaintiffs are entitled to, and hereby seek, I

4 a declaratory judgment that they have no contractual or fiduelary duties to Cross-Defendants under the Joint Ownership Agreement and that they have no !! abilities or obligations with respect to performance of that Agreement.

8.

Pursuant to the provisions of Section 37.009 of the Tex. Civ. Prac.;& Rom. Code, i

Cross-Plaintiffs say that they are entitled to have and recover of and frqm Cross-Defendants, and each of them, reasonable and necessary attorneys' fees and costs, for ,

which Cross-Plaintiffs sue.

WHEREFORE, PREMBES CONSIDERED, Cross-Plaintiffs Texas Utilities Company, 1 Texas UtQlties Mining Company and Texas Utilities Services Inc. pray that upon hearing, they have and recover declaratory relief against Cross-Defendants as pled and that they further have and recover reasonable and necessary attorneys' fees, costs and such other relief to which they may be justly entitled.

i ORIGINAL CROSS-ACTION OF TEXAS UTILITIES COMPANY, TEXAS UTILITIES MININO COMPANY AND TEXAS UTILITTES SERVICES INC. - Page 2

o Respectfully submitted, M. D. Sampels Robert A. Wooldridge -

Richard L. Adams Robert K. Wise WOBSHAM, FORSYTHE, SAMPELS

& WOOLDRIDGE i

2001 Bryan Tower Suite 3200 Dallas, Texas 75201

, (214) 979-3000 f - ,

4 -

f.

T /.

By: > . . 6 ~ i <a a s' -/_

t'-----

Richard L. Adams .

State Bar No. 00874950 A'1"It)RNEYS FOR CROSS-PLAINTIFFS TEXA8 UTILITIES COMPANY, TEXAS '

, UTILTf!IS MINING COMPANY and TEXAS UTILTTIES SERVICES INC.

J CERTIFICATE OF SERVICE

'this is to certify that a true and correct copy of the above and foregoing 1

Original Cross-Aetion of Cross-Plaintiffs has been mailed, certified mail, return receipt requested to all counsel of record on this /f d day of September,1986.

\

s'-c c ./, , i /

s PM. c. ."-

Richard L. Adams i

l J

i l

1 i

ORIGINAL CROSS-ACTION OF TEXAS UTILfr!ES COMPANY, TEXAS UTILITIES MINING COMPANY AND TEXAS UTILrrIES SERVICES INC. - Page 3

TXX-6377 April 13, 1987

• Exhibit B-1 of 17 TEXAS UTILITIES GENERATING COMPANY

.xvwAr towan .0. nourn ouva srnsar. L.s. 1

• DA1.LAS,TsXA8 M301 January 30, 1987 Mr. John Butts Tex-La Electric Cooperative of Texas, Inc.

P. O. Box 1623 Nacogdoches, TX 75961

Dear Mr. Butts:

We have completed the preparation of the 1987 Mw-mile Impact studies for our cogeneration purchases: Enron Cogeneration One and Texasgulf Chemicals Company. Enclosed are summaries of the Impacts and microfiche copies of the studies, including our Zero Transfer Case.

The have

. Impacts for Enron Cogeneration One been calculated based on the types and levels of transmission wheeling service requested in H. A. Bunting's letter of December 22, 1986.

Please contact us if you have any questions on the Impact calculations.

Yours truly, 1.

e r;c B. Herri In er-Utility Services JBH:ma Enclosure EXIllBIT B

,, A DIVESION Ur TEXAS ETTELITIES ELECTRtC COMPANY

t l

l 1987 MW-MILE IMFACT STUDY C TUEC IMPORTING FROM ENRON (ACW)

DURING STARTUP PERIOD i

l IMPACT (MW-MILES)

ENRON OUTPUT COMPANY 150 MW 350 MW 450 MW TUEC 18927.6 41951.5 55304.2 HLP 9847.6 23447.8 30234.4 CPS 2729.9 6775.4 8673.3 WTU 401.0 879.5 1170.0 LCRA 1074.4 2581.1 3332.7 CPL 1403.0 3512.4 4570.0 COA 807.3 2016.5 2574.6

( 413.2 BEPC 1035.0 1344.3 TMPA 136.1 651.6 773.2 STEC 126.6 308.8 396.4 MEC 39.7 85.4 115.2 0.0 COB 0.0 0.0

• TEX-LA 2.2 12.2 19.8 l

l

• TEX-LA ownership in Comanche Peak transmission lines (Comanche Peak -

to Cleburne Jct. and Cleburne Jct. to Everman 345 kV circuits). i 1/26/87 I

t

,my -

9 m-- cm w - - w y - m -

1987 MW-MILE IMPACT STUDY

, TUEC IMPORTING 393 MW FROM ENRON (PCW)

IMPACT COMPANY (MW-MILES)

TUEC 47393.0 HLP 26345.01 CPS 7617.1 WTU 1002.2 LCRA 2914.5 CPL 3983.5.

COA 2266.7 BEPC 1165.'1 TMPA 737.0 STEC 347.9 MEC 98.6' COB 0.0 TEX-LA 15.9 *

• TEX-LA ownership in Comanche Peak transmission lines (Comanche Peak to Cleburne Jet. and Cleburne Jct. to Everman 345 kV circuits).

1/09/87 i

• • , e 1987 MW-MILE IMPACT STUDY TUEC IMPORTING 57 MW FROM ENRON (ACW)

IMPACT COMPANY (MW-MILES)

TUEC 8774.0

~

HLP 4492.8 CPS- 1056.2 WTU 170.8 i

LCRA -577.3

{ ..

CPL 589.3 COA 307.9

BEPC 212.6 TMPA 74.3 STEC 48.5 MEC 16.9

COB 0.0 l

j TEX-LA 5.2

• TEX-LA ownership in Comanche Peak transmission lines (Comanche Peak to Cleburne Jet. and Cleburne Jct. to Everman 345 kV circuits).

4 e e 1/09/87

/

• - ". JCil

~

Mld - MILE Inst'Ac,T ( Pa:or svi? DgFFEREuct wernoD ) POC. tex-LA Somte op connaeag p(AK - Ct.660ttNE Jer. -EvomAd L t"E"

. YUEC PUA. CHASE op- /S~0 MgI pgem Enaoa Oeub i e l I l

m'* cm, ,i i

c%

DesMoov4 ,)q,g g 133.7-

(({ l i

( l e o ggg e i i

• • clases~a 7r.

_ ,, y ca m Za-I t- '

EEE III '

, 37 ,

Q ~.

CNS l w.svs eggg g

l y,,,, g

-I 3

-l

" , *,,,, utrH TEAasrce nenancot, n.a srwa a r i, -

hlnM C0K OdColeDoJA - CGurt.sAV' Liac = I 34 l> NsJ -

I31*2 M LJ = IO M U<

~ 7"rX-LA Owus I.40 m st.Es la rxe cc.ccutad 7Cr. - GuetmA*) scerrod of YHfS Loac~ ,

pa mosi t entser geg russ gee.rsea :

(nun c .ren - lo d (I t.o) - 214 " ~ ' *

• Ahw Fort Com Ascar ftAt - Venus t sne = IG n,a - - _ 't 1 i>,a ~ 2. I

~ Tex - L.A 0uai /, Slo ln Le: tu 9WE CPSez - Ct 62TutaE 7t r. Jgencd OF THis L la g . -

S o *Le D e rFestae e o a mAtuoivor oF Case 4 * *T1# TM'atfem Auh CASE Go *WouT* TWhat/*t t I$ N etAirV6 , 1Mt*ACT* ll EOto 50 4 7741J ZEtT7pn .

.o "I0' "f: )?u - n*sta / n. f,a # 7 ::: 2. 2 51kl- W

• WS

+ J-2be97

. xa Mu - Mite imenc7- ( PaserivE D FFEREMC6 Ws7N00 ) 902 TEX -LA SHALE oF comaneac NAK - Cl.EdORM JCT. -GvctmA H L t HG" T*uec. PurcxASE of _ 350 uu hecar Eanaa ( Acu)

I i I I n' ew I cru,,a, I I am m M'd'*d

130 0 Dseases 4 13J.2 1  % f f I i s e

4 i .

4 y, $- M

• k

• IsT*

I' casaveusJa*

EEE I /

fit i

CPsgs I t

i

%7 7 i ,

23 I V'd" 5 C%

~'. ms 133I L UoTW 12Aa3FC4 L

• area a r* rthusFCt.

4 h l+f M CDA DdCoxDcJA - C6HT1. JAY Llu[ = l30* O Md -- I 3I* 2- M U = ~ I*E lAU

, re x -LA o,.a us j,g,o ,,, segs su ryg ceggugue :Tcr. - EvebM Seenod Of THl$ LINe~ . =

$suse DIFFentset on inAGuarv06 of CASE ~ usTN TRA*ossvt 14a0 cArg C ta r,you T 714pspayg o s NEGAT/vG", ImMCT 13 Efec fot TNit KGC7704 ,

h bu.J fog Com AHCHd" fEAK = LIEnug 4, tug = lI*$-(HQ ~ 3i Inu ; I 9' WU

~ Tet - LA Olan S 1, SCe hriLc1 tu THE C PSet - CLEZ?c.' enc ~ RT. Jceirou OF THrs L ta g .

~ jn La - m o uf /MNCT FOR. 7 Nil CEC 7?cb :

(swu ) { m a u. )

• l ' ? ) ( !.C:. ') ~

j 2, y ~1 rn u. os.o ua s

.', ~~.T ? L /yu - mic.+~ t m 4 m 12,2 M U'I"E S

=

,=

v , a _4 u

.* . . y 1

MM - MllE IMPe *,T* ( Pasorsvi!? DuFFEtencC &cTN0D ) pot. ' TEX -LA SHAG os comnnegg pen - cc.eevor Jer. svermaa Loue~

"f"UEC. PUR.CHA3C cp _ t150 M s.,.s pgo s,,  % Rao ( Ace sh I

i l i I

I N*w cem I em m 08'** *

134.7 cae.sas.4 IJ3 2 I

g '

i t

s c,. 4 e

casedua Ar.

i a

s g erg I > etreueug Ja-i- <3 7 ,

' ek: I y,,yg g

' 8 I

... 3

~-3II Us ?"H 12AaJSF64 ta orwo o r~ roas FCt.

i -

i b htM f0K Od'coxpovA - CaurvAv' Lsat = llo-[ M sJ - 133 2- MO ~2 ' Mt

, ~ Y O ~LA Os.a us 1. 4,0 mis.E: to.s rue ~ ct.edvauf Tct~. - Gvramed see.1704 of TH15 Lisse~ .

S tas,c vn!!nute ou mesaa rvot of caw ssorn rateatfert Aau cme C Larrwoor 7tnatt ert. I s NtOTusE , ownc r- o s festa Cort. Init !6'M0"

• Ahw FoK Com A~ckr FEAR - Venus Li~e = I!* A ma 3

_ rrrra n 12. ~1 m

~ Tet - L.A OwHS l. Cle herLg: tu 71*E CPse: - Ct E2fuenE A7 J6cT704 O P 77/1 $ L IH E . '

rseno wos,.E ImFA sr Pod Ms SveT)e a .'

44 (~,m S = ( #2.7 3( i..n. ) : /7. Fl n. <> . , . . m i

I

. ' , 77/:- n u - m,c.+- i~ nn  := / 9. [ Mt u ~ '* '

1

,. , t o' 7 7Ett Mid - tAILE Ineser ( Pas,r vE DIFFEREuci We7 nod ) Pot. ~ REX -l.sf SnME os= conAncy; f(Ax - CLEdvRST JCT. -Everman Ls"E" C /197 .

TUEC. f0ACHA15 of 393 hou flo m ENROM { feu )

I r I i

' I "8 8* i i cru,,43 g% wy M *****'A 121.~1

== cosene,n 833.2 i l t I r v 8 e I t

'*- cas.aua zr.

13. 9 e _ ,ra

I > t 3.~t fit i a u I ,

i Q CN1 vtus,s. Cht1, i l Vaws  !

b5I Y ut 7"H 7EAasFct la arwe a r- rt huwet.

$l l Ana Fog VccenooaA - cr.a7vav uas a i 21.~1 o.u - 13 3. L n u = - 3 . S > <.3 ,

I

• ~

Tct LA 0u23 1 (oO J+etLES oU TMc CLEdu w e TcT. ~ Evsts**1N ZELvio*J

( ~

oF THs3 t/ae,

$iace 01ffencacE tu tvACnirvDE oF eAli u 1771 7masArot Au r)

CAte wirwour 7xisaspyre 13 pgg,syygg , t s., pp er- 12 ksea fort 77//s ZLc77 w .

b h1L) FCA (C WuCMC ?G M = V C N u s L.i a c - 13.9 mu - 3.7 r,,w :- lo,2 .)

75 y . LA 0ua: I,5% Mors s ,fa rH6 Cf3cT. - Ct.ct on a s- Tc7 , $t,c,2seJ Or: TP ri 1 ,,, E , -

~

hu M'LC t u ff tT fort 1741) 4cc71w *,

( b M u) ( w,LE:, ') = (lo2.)(/.sc,) = / S.d/ n u . s ,a.es

. ' , TOT / t. In u . tw o LE gn.pp e r l$,9 pu , p,, g g3

la u -s t JEtn' Mu - Mit E ImpoeT* ( Pa:srtve DIFFEREMCC WeTNoD ) Post. TEX -LA SriALE oF conwea; AcAt - cc.eduene Jer. -Ewet,Ad L t"E" T~uec. PurcHA.se of 57 ut1 fxem Entoa (ACO h I

8 e

l t-l

"** cams l l 7

e% w M esessed 130.5* IM e*7

, m I e i i

m f lH y It,,sj M" U*

I > y y3,9 taseveut3W E ' l > I ,

• 8 l ' l q "5 CA%

l v w ss

! iiiin!

~l

?

worn 7Enasrc< u urre a r ro wet h hfM COK WCotDoVA - C6HTUAY Laut = E50*$ bisJ ~

I29*D MG = 0* W lAU

, ~ 7 e-x LA ouus j,t,o y osars tu rple creducar Tct~. - EvatmM ses. nod of THl5 Leac~. .

~ juu .m o s.c n m H LT~ Fort Titt5 SEr710n .*

( hua) (noses h = (c.t')( t.e.o ) = 1.28 t"w -'"usn I

k k ht L.J Fort Com AHCHe' fEAM = \/CNUS LINC = ll'

• fHU '- I3*S _ pnu v. 2

• 5" pd

~ Tev -LA ocans I.St, hvo<,e: tu ,we cpse: - Ce.cuuant :t.r. Jeerroa OP THis L la E .

• neu. meut imner roa ruts : e e.r>a n :

( s w W,en 5 : (i. r ') ( e. ro = 3,9 s u . ,,, , cn l

. ' . ma mJ - an.e i n n - ~- == t.22 e.s.9 ,

s*.i? \

S*, 2 ntu - n o e.e .s

1987 MW-MILE IMPACT STUDY

- TUEC IMPORTING 70 MW FROM TEXASGULF (PCW)

C IMPACT COMPANY (MW-MILES) s' TUEC 4792.4 HLP 3363.6 t

CPS, 1431.1 WTU 94.4

~

LCRA 727.6

> CPL 970.5 COA 584.4 BEPC 352.3 TMPA 68.8 STEC 208.8 MEC 6.2 0.0 COB

) TEX-LA 0.0

• 1

• TEX-LA ownership in Comanche Peak transmission lines (Comanche Peak I

to Cleburne Jet. and Cleburne Jct. to Everman 345 kV circuits).

i i

~

1/09/87 i

i e

i I

,,,y. ~

1987 MW-MILE IMPACT STUDY TUEC IMPORTING 12 MW FROM TEXASGULF (ACW)

IMPACT COMPANY (MW-MILES) j TUEC 1680.9 HLP 618.3 CPS 206.3 WTU 39.7 LCRA 145.5 CPL 171.0 COA 84.0 BEPC 58.8 TMPA 17.5 STEC 34.9

( MEC COB 3.8 0.0 TEX-LA 1.0

• TEX-LA ownership in Comanche Peak transmission lines (Comanche Peak to Cleburne Jct. and Cleburne Jct. to Everman 345 kV circuits).

r 1/09/87 j

1 l

4-

'T i

m v --- -

. &N 1

MW - Mil C IMPeer ( PasarsvE DsFFEREucE weTHoD ) Poe TEX-1A SHALE oF connuenc PCAK - Cl.E60RST jct. -EvCRMA d Li*JG~

C I18~7 .,

TUEC PuncgAJE~ of go pu f,g a n yyg3Gug p ( g,u )

I e i I l

eva r**J cc q g l e%  %

DCast*d 121.7 necease,4 83**1

(({ l i

%_ t I w g gg '

e i e L

,3,9 CLS8* M ?J.

,4 ., ersevout Jer EE I > I' s j i III B ,

Q~.

C9'ES g

vs.ou s, Q I g l

mas IIII L.Jo rH TMAasFER ta orpo se r ru.4 FCt.

I a fnu foot DecotDavA - CEuntry A.we a 129 .'1 M u -

o30 2. u - 0. T rn u

~

7tnf.L A ownt I.too MesCS 1*J voe CLccoA e JLY * -EucRMAM J 6'T'0 *J of Tuo S Ltd .

~

S ed LC O tFff3tEHe c~ t*J Mn Gov t TVO G*

• Q}c CA SE sarru ritea t Fs"rt Aun C CA*e LitTH007 75thatffft tt MEGA Ds!I , I MACV $3 Eg3ta FOk 7Hl.$ $flTiera

• nmu ' fo K Connaent fear . venus List = 13.9leu - 14.~1 m u * ~0*?

~

(1nt .LA cans f.Cle tw a t CS IH T!tC C R E';, - CLEGdnC sT. SteTr4*J of THf5 Lent .

~

$raec orr m ence~ sob mps aso noc' oF cese t.>oTH TumfdYL s?H n C A;E' sJrTuour TRAn:ftn Is '/k4ATT *)6, unfAcV 1 26E0 FOR, 7n/s Sect 7cy; .

i

. ' . fo7A L,, fML) - MILE /m f/?CT =

I

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TEXAS UTILITIES GENERATING COMPANY SKYWAY TOWER

• 400 NORTH OtJVE WFREET. L.B. 31 e DALLAS. TEXAS 7530 8 C

January 22, 1987 Mr. Nohn Butts Tex-La Electric Cooperative

. of Texas, Inc.

P. O. Box 1623 Nacogdoches, Texas 75961

Dear Mr. Butts:

We have conducted transmission impact studies at Utility

. Consulting Services using the ERCOT data base for the 1987 portions of the Dow 350 MW and the Cogen Lyondell 400 MW transfers. Attached are tables summarizing the megawatt-mile impacts determined for these transfers.

Information regarding the planned purchase of 100 MW of cogenerated power from AES Deepwater, Inc. is not enclosed since, as of this date, this purchase has not been consummated. We will notify your company as soon as this planned purchase is C finalized.

If you have any questions, please call me at (214) 979-8667.

Truly yours, Sh& \

Richard L. Casey l Inter-Utility Services RLC/jb I Attachments  !

c: H. A. Bunting

• l 1

I A osvsstos or Texas urturies erzcraic contrany

.a -, m .A- E O

e 1987 MW-MILE IMPACT

SUMMARY

C TU ELECTRIC IMPORTING 350 MW FROM DOW l

i IMPACT' COMPANY (MW-MILES)~ ~

i TU ELECTRIC 56288.2 HLP

. 22525.5 CPS 8616.3 WTU 1222.3 LCRA 4

4464.3

) CPL 4605.4

' COA 2257.1 BEPC 1758.3 TMPA 1007.4 STEC C. MEC '

5 329.4 113.0 COB 0.0-TEX-LA 26.1 1/21/87

• 9 h

i v, , - - - - - -, -.,-,,...,-c., - -.- - , , , , - --- - , -, - -

7

1987 MW-MILE IMPACT

SUMMARY

C TU ELECTRIC IMPORTING 400 MW FROM COGEN LYONDELL IMPACT COMPANY (MW-MILES)

TU Electric 62426.3 HLP

, 21070.1 CPS 6602.1 WTU 1134.5 LCRA 3902.2 CPL

-- 4037.7 COA '

1995.4 BEPC 1875.3 TMPA . 1110.7 MEC 107.7 COB 0.0 TEX-LA 30.5 1/21/87 t

l l

l l

l l

i

TXX-6377 .

Apr.il 13, 1987 l Exhibit B-2 of 17. i TEXAS UTILITIES GENERATING COMPANY 1

, SKYWAY TOWER

• m NORTH OUVE STREET. I,.B. 81 e DAW.AS. TEXAS 78308 HENRY A. SUNTING J..'t..#,'.".

, December 30, 1986 Mr. John Butts Tex-La Electric Cooperative of Texas, Inc.

P. O. Box 1623 Nacogdoches, TX 75961

Dear Mr. Butts:

In accordance with Section 23.66 (d)(4)(F)(ii) of the Substantive Rules of the Public Utility Commission of Texas, this will serve as notification that Texas Utilities Electric Company (TUEC) is planning to purchase 100 MW of cogenerated power from the AES Deepwater, Inc., Harris County, Texas plant for the period from January 1, 1987 through September 30, 1988. It should be noted that.this

( particular transaction is to replace in the purchase from Dow Chemical Company.

the 100 The transfer of this power to TUEC during this period MW reduction may have an impact on Tex-La Electric Cooperative's transmission system.

Please furnish us the terms and conditions under which as-available wheeling services will be provided for the aforementioned power' transfer. A 1987 Impact Study will be , prepared and forwarded as soon as ERCOT data becomes available.

appreciated.

Your prompt attention to this matter will be greatly Should you have any questions or need additional information, please call Rick Casey at 214/979-8667.

'Very truly yours,

3. A.1%h:,/V2 HABunting/ma

)

A osvtston or vnxAs vris.srses es.scrnsc contraur

e  ;

7 TXX-6377 j 2' April 13,1987 g Exhibit B-3 of .17 TEXAS UTILITIES GENERATING COMPANY exvwAv rowsm . . nomru ouva sneer, r_m. 1 e DAI.1.As. TEXA5 M301

{A HENRY A. SUNTING

$ $," December 22, 1986 Mr. John Butts Tex-La Electric Cooperative of Texas, Inc.

P. O. Box 1623 Nacogdoches, Texas 75961

Dear Mr. Butts:

We corresponded with Tex-La Electric Cooperative of Texas, Inc. by letter dated June 11, 1986 concerning transmission wheeling service for the Northern Cogeneration One project in Texas City. This project is now known as Enrcn Cogeneration One.

( of Attached to that letter was a schedule indicating the levels service which we were requesting.

determined that higher levels of service will be needed during trial operation. We request that the revised levels of service, Recently, Enron has as shown on the attached schedule, be provided. Also, we ask that you provide us with a written response to these revisions regarding your ability to provide this service.

Thank you for your continued assistance with this project.

Please contact Jeff Herring at (214) 979-8613 if you have any questions on this matter.

Yours truly, HABunting/jb Jh Attachment l

fXlBffB

+ A DIVISION OF TEXAS (ITIEJTIES ELECTRIC ContPANY

, -\o a g '. 4 in d

ENRON COGENERATION ONE I- - (current projected schedule)

I(

1987 AATWS (MW) PCTWS (MW)

January 150 0 February 350 0 March 350 0 April 450 0 May 450 0

. June-December 57 393 4 ,

NOTES:

( l.

2.

Enron Cogeneration One is expected to be' undergoing trial operation during the months of January, 1987 - May, 1987.

PCTWS is requested to be provided when commercial operation begins. Commercial operation is estimated to begin approximately June 1, 1987.

3. The levels of AATWS and PCTWS could vary for the period June-December based on the results of performance testing of the units.

O 9

M e

4 d

e

?

' ..TXX-6377 c, April 13,1987 Exhibit B-4 Of 17 TEXAS UTILITIES GENERATING COMPANY SKYWAY TOWER e 400 NORTIO OLIVE STREET L.B. S t

• DALI.AS, TEXA8 78301 C

December 22, 1986 Mr. John Butts Tex-La Electric Cooperative of Texas, Inc.

P. O. Box 1623 Nacogdoches, Texas 75961

Dear Mr. Butts:

Tex-La Electric Cooperative was notified by letter from H., A. Bunting to your office dated December 15, 1986 of Texas Utilities Electric Company's intent to purchase 350 MW of power from the Dow Chemical Company for the period December 15, 1986 through September 30, 1988.

We have conducted a transmission impact study at Utility

( Consulting Services using the ERCOT data base for the December, 1986 portion of this transfer.

is for this transfer.

Attached for your information a table summarizing the Megawatt-Mile impacts determined If there are any questions, please give me a call at (214) 979-8667.

Truly yours, 0e.b Y' ^-l Richard L. Cacey Inter-Utility Services RLC/jb -

Attachment c - H. A. Bunting A 198 s'l'il0N IH' TE:XAS LITII.iTil:3 KIEL7titt* t *UntVAN Y

[I .'

u g .-

1986 MW-MILE IMPACT

SUMMARY

TUEC IMPORTING 350 MW FROM DOW C

' IMPACT COMPANY (MW-MILES)

TUEC 55261.6 HLP 14314.6' ,

CPS 9694.5 WTU 1428.9 LCRA 5505.8 CPL 4696.1 COA 2374.4' DEPC 1387.6 TMPA 1222.9

( STEC MEC 253.5 128.3 COB 0.0 TCX-LA 36.3 I

I j

I h

1 4

i t

i -

l 4

TXX-6377 April 13, 1987 Exhibit B-5 of 17 TEXAS UTILITIES GENERATING COMPANY C SKYWAY TOWER e 400 NORTH OtJVE STREET. L.B. O t e DALLAS. TEXAS 75308

"'""Lt"f.""* December 15, 1986

""J:%7."

Mr. John Butts Tex-La Electric Cooperative of Texas, Inc.

P. O. Box 1623 Nacogdoches, TX 75961

Dear Mr. Butts:

In accordance with Section 23.66_ (d)(4)(F)(ii) of the Substantive Rules of the Public Utility Commission of Texas, this will serve as notification that Texas Utilities Electric Company (TUEC) is planning to purchase 350 MW of cogenerated power from the Dow Chemical Company, Freeport Plant for the period December 15, 1986 through September 30,,1988.

( It should be noted that this particular transaction represents a modification to the Dow Purchase Agreement which reduced the maximum contract capacity from 450 MW to 350 MW.

The transfer of this power to TUEC during this period ma-y have an impact on the Tex-La Electric Cooperative of Texas' transmission system. Please furnish us the terms and conditions under which as-available wheeling services will be provided for the aforementioned power transfer.

An Impact Study for the 1986 portion of this purchase will be forwarded shortly. A 1987 Impact Study will be prepared and forwarded as soon as ERCOT data becomes available.

Your prompt attention to this matter will be greatly appreciated. Should you have any questions or need additional information, please call Rick Casey at 214/979-8667.

Very truly yours,

. A. LLaag' HABunting/ma EXlRT B I

A DIVist0N OF TEXAS UTit2 TIES ELECTRIC COMPANY

TXX-6377 April 13,1987 J. /-nc 3 /

Exhibit B-6 of 17 tex.LA ELECTRIC COOPERATIVE OF TEXAS,INC.

July 21, 1986 Mr. H. A. Bu ing Texas Utili es Generating Company Skyway Towe '

400 N. Oli e Street, L.B. 81 Dalias v T xas 75201

Dear Mr Bunting:

This letter is in response to your June 11, 1986, letter

.- to Tex-La Electric Cooperative of Texas. Inc. (" Tex-La")

notifying Tex-La of the plans of Texas Utilities Electric Company ("TUEC") to purchase an additional 12 MW of cogenerated power from Texasgulf Chemicals Company in Newgulf, Texas. In your letter, you requested As Available Transmission Wheeling ("ACW") Service from Tex-La.

,> Tex-La does not presently seek to collect impact charges from TUEC's proposed purchase under Section 23.66(d) of the

~ Substantive Rules of the Public Utility Commission of Texas.

Tex-La has filed no ACW tariff and has no present plans to do so. Under Section 23.66(d) (4) (E) (1) of the Substantive Rules, only a utility which chooses to charge for impacts is obliged to file an ACW tariff. However, Tex-La reserves the right to later file an ACW tariff and collect charges, prospectively from the effective date of the tariff, from impacts arising from TUEC's proposed additional 12 MW purchase.

Tex-La's position is based on impact information supplied by Jeff Herring of TUGC0 on July 14, 1986. Based on this information, we understand there should only be a minimal impact on Tex-La's ownership share of transmission lines.

We anticipate, but do not know that the impact will remain minimal during the duration of TUEC's contract with Texasgulf Chemicals Company.

yy r

[ Very te \ J, \

John

'W

. Butts ( g ,T' ' ~

Mana er G36 cc: Ms. Lisa Menchaca, PUCT Mr. William H. Burchette N' g, Y,5, py.G P.O. 80X 1623

• NAC0GDOCHES, TEXAS 75963

• 409I560 9532

' 'f TXX-6377 April 13,1987 b hM U

'

• tex LA ELECTRIC COOPERATIVE OF TEXAS, INC.

L' June 18, 1986 Mr. H. A. Bun ng Texas Utilit es Generating Company Skyway Tow 400 N. 01 e Street, L.B. 81 Dallas, xas 75201

Dear Mr,

. Bunting:

/

- This letter is in response to ycur May 8, 1986, letter to Tex-La Electric Cooperative of Texas, Inc. (Tex-La) notifying Tex-La of the plans of Texas Utilities Electric Company (TUEC) to purchase 300 MW of cogenerated power from Cogen Lyondell, Inc. In your letter, you requested Tex-La's terms and conditions for planned capacity transmission wheeling services as they may apply to EUEC's proposed purchase.

Tex-La does not presently seek to collect impact charges for TUEC's proposed

( purchase under Section 23.66 (d) (4) of the Substantive Rules of the Public Utility Commission of Texas. Tex-La has filed no planned capacity trans-mission wheeling service tariff and has no present plans to do so. Under Section 23.66 (d) (4) (E) (1) of the Substantive Rules, only a utility who chooses to charge for impacts is obliged to file a planned capacity wheeling service tariff. However, Tex-La reserves the right to later file a planned capacity transmission whe.eling tariff and collect charges, prospectively from the effective date of the tariff, from impacts arising from TUEC's proposed 300 MW purchase.

Tex-La's position is based on impact information provided by Rick Casey of TUGC0 to our consultants, GDS Associates, Inc. on June 2 and June 9,1986.

Based on the TUCCO supplied information, we understand there should only be minimal impact on Tex-La's ownership share and transmission lines. We anticipate but do not know that the impact will remain minimal during the duration of TUEC's two year contract with cogen Lyondell, Inc. l Very truly yours, y &Wn ..

ohn H Butts Manager cc s. Lisa Menchaca, PUC Mr. Bill Burchette l

P.O. B0X 1623

• NACOGDOCHES, TEXAS 75963

• 409/560 9532

TXX'-6377 April 13, 1987 Exhibit B-8 of 17

• TEXAS UTILITIES GENERATING COMPANY MKYWAY Te tWLH

• tetu Ne sNTil tit.tVM MTHEET. L.11. pol

• DAl l Ah

.. , TE.%AM 73208

""!f.;jf.""

~

'"H *,1,IT." June 11, 1986 Mr. John Butts Tex-La Electric Cooperative of Texas -

P. O. Box 1623 Nacogdoches, Texas 75961

Dear Mr. Butts:

We corresponded by letter dated March with10, Tex-La Electric Cooperative of Texas 1986 announcing our intent to purchase in Company 70Newgulf, MW of cogenerated Texas. power from Texasgulf Chemicals Capacity Transmission Wheeling Furthermore, Service we requested Planned and (PCTWS) for this amount you have been providing this service since April 15.

Your cooperation has been much appreciated.

However, since our first letter of notification to you, we have reached an agreement with Texasgulf regarding our purchase, the firm 70on MW.an as available basis, of 12 MW over and above times'of the year. This energy may be available at various We are now requesting that you Available Transmission Wheeling Service provide 12 MW of As to the 70 MW of PCTWS. (AATWS)

An Impact Study h;.s been done for in addition the 12 MW and the associated microfiche is enclosed.

Please contact any questions or needJeff Herringinformation.

additional at 214-979-8513 if you have Yours truly, f

/

HABunting/jb Attachment bc: D. C. Edmiston K. D. Bishop I M. S. Greene J. Herring I .

TRIC COMi*ANY

y -

4TXX;B377 o,, .,

April 13,1987 '

9, ,* u, , ,

4 . J; ,

Exhibit B-9 of 17 a al U .; j ,

y TEXAS UTILITIES GENERATING COMPANY envwar rowsm . .no noaris oomym erusar, o.ii. .i . naccas, raxas vason

(

""$",ab,'[."

June 11, 1986 Mr. John Butts Tex-La Electric Cooperative of Texas P. O. Box 1623 ,

Nacogdoches, TX 75961

Dear Mr. Butts:

We corresponded with Tex-La Electric Cooperative of Texas by letter dated June 21, 1985 announcing our intent to purchase 393 MW of firm cogenerated power from Northern Cogeneration One in Texas City. We requested that Tex-La provide 393 MW of firm transmission wheeling service at that time. Firm transmission wheeling service, for power j( originating from a Qualifying Facility, has been subsequently defined as Planned Capacity Transmission Wheeling Service k (PCTWS) by Public Utility Commission Substantive Rule 23.66 as amended and effective October 23, 1985.

However, since our first letter of notification to you, we have reached agreement with Northern Cogeneration One regarding our purchase of energy on an as available basis over and above the firm 393 MW, based on the attached schedule. This energy may be available at various times of the year.

We request that you provide As Available Transmission Wheeling Service (AATWS) based on the attached schedule.

Of course, we will prepare the appropriate Impact Studies at the proper time.

Thank you for your cooperation in this matter. Please contact Jeff Herring at 214/979-8613 if you have any questions or need additional information.

Yours truly, M

HABunting/ma bc: Jay Berriman M. S. Greene Jeff Herrin9 uc cowm

. A.. m lC MORTHERN COGENERATION ONE

(~

1987 AATWS PCTWS January 150 MW February 150 MW

• March- '300 MW April 450 MW May 450 MW ., ,

June 450 MW July-December 57 MW 393 MW 1.

C NOTES: Northern Cogeneration One will be undergoing Trial Operation during the months of January

- June, 1987.

2. Commercial Operation is expected July 1, 1987.

3. The levels of AATWS and PCTWS could vary .for the period July -

December based on the results of performance testing of the units. .

• g.

a

TXX-6377 April 13,1987 Exhibit B-10 of 17 TEXAS UTILITIES GENERATING COMPANY

.KYWAY TOWER e 400 NORME OUVE STREET, t 5. St

• DAMAS, TEXA5 78901

=' June 11, 1986 Mr. John Butts Tex-La Electric Cooperative of Texas P. O. Box 1523 Nacogdoches, TX 75961

Dear Mr. Butts:

i This letter serves to amend our May 8, 1986 letter concerning notification that TUEC is planning to purchase cogenerated power from the Cogen Lyondell, Inc. , Channelview Plant. The maximum contract purchase amount has been increased from 300 MW to 400 MW and the contract now covers the period June 1, 1986 through April 30, 1988. The other

( details of our previous letter including the request for written confirmation of intent to wheel, and request for terms and conditions for as-available wheeling services remain the same.

We have conducted a transmission impact study at Utility consulting Services using the . ' 70T data base for this transfer. , Attached for your 1r *ormation is a table summarizing the megawatt-mile impaces determined for this transfer.

If there are any questions, please call Rick Casey at (214) 979-8667.

Very truly yours,

[iI IIABunting/ma Attachment ct M. S. Greene L

A asvusson or rexas nmt.mes etxcrnsc courAur

F

.~ .

j 1986 IMPACT STUDY TUEC IMPORTING 400 MW FROM LYONDELL IMPACT j COMPANY (MW-MILES) l TUEC 73750.2 I

HLP 19013.3 l

! CPSB 7463.8 WTU 2309.4 LCRA 4862.1 CPL 4587.9 COA 2086.7 BEPC 1607.3 TMPA 2688.6

( STEC MEC 336.4 157.8 COB 0.0 TEX-LA 44.2 l e i

i

\ '

O l .

l l

{

1 I

...i,,...

...s.....

g,1 1 n,1 TXX-6377 -

April 13,1987 Exhibit B-11-of 17 2. /7 c h

/

tex.LA ELECTRIC COOPERATIVE OF TEXAS,INC.

May 12, 1986 Mr. H. A. Bunting Texas Utilities Generating Company Skyway Tower 400 North Olive Street, L. B. 81 Dallas, Texas 75201

Dear Mr. Bunting:

This letter is in response to your March 10, 1986, letter to Tex-La Electric Cooperative of Texas, Inc. (Tex-La) notifying Tex-La of the plans of Texas Utilities Electric Company (TVEC) to purchase 70 MW of cogenerated power from a Texas Gulf Chemical Company plant located in New Gulf, Texas. In your letter you requested Tex-La's terms and conditions for planned capacity transmission wheeling services as they may apply to TUEC's proposed wheeling of power from New Gulf, Texas.

Tex-La does not presently seek to collect impact charges for TUEC's proposed wheeling of cogenerated power under Section 23.66(d)(4) of the Substantive Rule of the Public Utility Comission of Texas. Tex-La has filed no planned capacity transmission wheeling (service tariff and has no present plans to

(

so.

that chooses to charge for impacts is obliged to file a planned capacity transmission wheeling service tariff. However Tex-La reserves the right to later file a planned capacity transmission wheeling tariff and collect charges, prospectively from the effective date of that tariff, for impacts arising from TUEC's proposed 70 MW purchase.

Tex-La's position is based on an analysis of the impact information forwarded frrm Jeff Herring of Texas Utilities Generating Company (TUGCO) to our con-sultants, GDS Associates, on April 8,1986. Based on the TUGCO-supplied information, we understand that there should be only a minimal impact on Tex-La's ownership share in transmission lines. We anticipate, but do not know, that the impact will remain minimal for the duration of TUEC's ten year contract with Texas Gulf Chemical Company.

Very truly yo rf, .

ohn .

hBu ts Manager JHB/ dss cc: Ms. Lisa Menchaca, PUC Mr. Bill Burchette Mr. Hewitt Rose W' E b.,;gE.O gg(1 JB,o, g, A. ButM P.O. BOX 1623

• NACOGDOCHES, TEXAS 75963

• 409/560 9532

TXX-6377 April 13,1987 Exhibit B-12 of 17 TEXAS UTILITIES GENERATING COMPANY MMYWAY TOW ER

• 44DO NOHTit O LIVE antr EET. L.B. 81

• 17ALLA >. TEXAm 73308 HENRY SUNTING

""EEE" May 8, 1986 Mr. John Butts Tex-La Electric Cooperative of Texas ,

P. O. Box 1623 Nacogdoches, TX 75961

Dear Mr. Butts:

In accordance with Section 23.66 (d) (4) (F) (ii) of the Substantive Rules of the Public Utility Commission of Texas, this will serve as notification that Texas Utilities Electric Company (TUEC) is planning to purchase.300 MW of cogenerated power from the Cogen Lyondell, Inc., Channelview Plant for two years covering the period June 1, 1986 through May 31, 1988.

The transfer of this power to TUEC during this period may have an impact on Tex-La Electric Cooperative's transmission system. Please furnish us, at your earliest convenience, written confirmation acknowledging Tex-La Electric Cooperative's intention to wheel any power transfer associated with this purchase beginning June 1, 1986 and prior to consummation of a transmission service agreement. Additionally, please furnish us the terms and conditions under which as-available wheeling services will be provided for the aforementioned power transfer. An Impact Study will be prepared and forwarded shortly. It should be noted that this particular transfer was included in the 1986 and 1987 total TUEC off-system cogeneration capacity described in Mr. Ted Hatcher's letter of March 17, 1986 to ERCOT Engineering Subcommittee Members.

Your prompt attention to this matter will be greatly appreciated. Should you have any questions or need additional information, please call Rick Casey at 214/979-8667.

Very truly ours, 2

HABenting/ma ',- ; .

A I)ll'lu te D V n9' TF'KA N f *Til.lTI,:M ,:1.rt'T9t tt * ,'Itst reA x}-

j p,,. Y TXX-6377 April 13, 1987 Exhibit B-13 of 17

-[,l,]

.I* 'O

!y Q g

TEXAS UTILITIES GENERATING COMPANY -

eurwAr Towen . 4eo nonTu ouve sine T, s.. . si . DA1.E ts.TEXAH T3208 April 9, 1986 Mr. Hugh Baker GDS Associates, Inc.

2525 Cumberland Parkway Suite 450 Atlanta, GA 30339

Dear Hugh:

Enclosed is a statement showing the calculated MW-mile impacts for the 70 MW purchase of cogenerated power from Texasgulf Chemicals Company by Texas Utilities Company.

Electric The Tex-La impact is for Tex-La Electric Cooperative's share of the Comanche Peak-Cleburne Jct.

and Cleburne Jct.-Everman 345 KV line sections.

Also, enclosed are microfiche copies of the loadflow cases used and the impact study.

If you have any questions please contact us.

Yo is truly d ( /

B. Herriqg/

Tra smission Services Consultant JBH/ma '

Enclosures c - John Butts Tex-La Electric Cooperative of Texas, Inc.

H. A. Bunting l

x;f; iH . j . , , -. '

A DEV88 EON UP TEXA8 l*TILITREN ELECTRlC COMPANY

N ..bes \

( 1986 IMPACT

SUMMARY

TUEC~ IMPORTING 70 MW FROM TEXASGULF IMPACT COMPANY (MW-MILES)

TUEC 13693.9 HLP 3127.6 CPS 822.2 WTU 571.9 c' LCRA 1252.6 2

CPL 1346.8 COA 452.5 hEPC ,475.2

( TMPA STEC 133.4 412.5 i

MEC 35.8 COB 0.0 TEX-LA 7.5

. l i

! )

g he

TXX'-6377 -

April 13, 1987 Exhibit B-14 of 17

/

( TEXAS UTILITIES GENERATING COMPANY orw4r rowen . wo unnen nuva minur,6.n. an . o4i.e.4., reu moi

" * ""LW.""" March 10, 1986

";3 !7."

Mr. John Butts Tex-La Electric Cooperative of Texas P. O. Box 1623 Nacogdoches, Texas 75961

Dear Mr. Butts:

In accordance with Section 23.66 (d) (4) (F) the Substantive F.uler, of (ii) of the Public Utility Commission of Texas, this will serve as notification that Texas Utilities Electric Company (TUEC) is planning to purchase 70 MW of cogenerated the power for a contract term of ten (10) years from Texasgulf Chemical Company plant in Since this is r.n existing cogeneration Newgulf, Texas.

( like to facility, we would pursus wheeling negotiations as expeditiously as possible in order to enable TUEC to begin receiving power as soon as possible, but no later than May 15, 1986.

Houston Lighting & Power company will be designated the sole contract path utility. However, the transfer of this power to TUEC during this on period may have an impact Tex-La Electric Cooperative's transmission system. An Impact Study will as soon as completed.

be prepared '

and the microfiche forwarded As TUEC transmission will be wheeling responsible for the negotiation of all service agreements per our contract with Texasgulf Chemical Company, please furnish us with the terms and conditions under which planned capacity transmission wheeling services will be provided for this power transfer.

Your prompt attention to this matter will appreciated. be greatly Should you have any questions or need additional information, please call Jeff Herring at 214/979-8613.

Very trul yours,

/

,iHS g

(/

HABunting/jb '

c: K. D. Bishop - Texasgulf Chemical Company A istVinitDN 09* rKMA N t'rli.ITIMM Mt.Kt't=It Ct1hlPANr

TXX-6377 April 13, 1987 Exhibit B-15 of 17 CDY/' TEXAS UTILITIES GENERATING COMPANY seKYWAY TE) WEN

• 400 Nellt fit () LIVE WTHEET, L.D. M4

• DALLAN. TEXAM T3208 HENRY A. SUNTING

";'O,;7," November 22, 1985 Mr. John Butts Tex-La Electric Cooperative of Texas, Inc.

P. O. Box 1623 Nacogdoches, TX 75961

Dear Mr. Butts:

In accordance with Section 23.66 (d) (4) (F) (ii) of of the Substantive Rules of the Public Utility Commission Texas, this will serve as notification that Texas Utilities Electric Company (TUEC) is planning to purchase 450 MW of cogenerated power from the Dow Chemical Company,

. Freeport Plant for the periods December 15, 1985 through 4 Meruary 14, 1986 and June 1, 1986 through September 30, C% 1986.

may have The transfer of this power to TUEC during those periods an impact on Tex-La Electric Cooperative of Texas, Inc.'s transmission system. Please furnish us the terms and conditions under which as-available wheeling services will be provided for the aforementioned power transfer.

An Impact Study will be prepared and forwarded as soon as ERCOT data becomes available.

Your prompt attention to this matter will be greatly appreciated. Should you have any questions or need additional information, please call Rick Casey at 214/979-8667.

Very truly yours,

!!ADunting/ma *

[ s' ( \., N A SDIVin tesM in,* TV. tan (*Til.ittVN kl.Kt*TNtt* t',ptrAN y

P. "(

tTXX-6377 April 13,1987 Exhibit B-16 of 17 /

( TEXAS UTILITIES GENERATING COMPANY If MYWAY TOWER

• 400 Not*TH OLIVE ETMEET, L.B. et

• DALLAm, TEXAN 13308 HENRY A. BUNTING

"'[hh June 21, 1985 Mr. John Butts Tox-La Electric Cooperative of Texas P. O. Box 1623 Nacogdechos, TX 75961

Dear Mr. Butts:

Texas Utilities Electric Company has executed a contract to purchase 393 MW of firm cogoneration capacity from the Northern Cogeneration One Company facility to bo located at the Union Carbido Corporation , Plant in Texas City, Texas beginning July 1, 1987 and continuing through June 30, 1999.

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The transfer of this power to TUEC may have an impact on Tex-La Electric Cooperative's transmission system.

In this regard, please furnish proposed terms and conditions under which firm transmission servico will be provided.

Additionally, please furnish us, with associated costs, a list of transmission facilities which could be constructed by TUEC in lieu of payment of wheeling chargos for this firm transmission servico. For your further information and use in studying this request, please considor that TUEC is currently planning for the total transfer of approximately 800 MW, inclusive of the aforomantioned 393 MW, of cogonorated power from the Gulf Coast area by the '

summer peak season of 1989.

The studios being prepared for the Public Utility Commission of Texas (PUCT) staff by the ERCOT Engineering

, Subcommittoo for the 23.66 rulomaking proceeding includo a 400 MW transfor from IIL& P to TUEC and will represent an estimato on the MW-Milo and boundary flow impacts for the proposed TUEC transfor. A copy of thoso impacts will EXilBli B A...-..-........-..._

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Mr. J hn Butts June 21, 1985

( Page 2 be sont to you as soon as they are available. We would expect the final methodology for firm transmission service for cogeneration as approved by the PUCT to apply to this request for firm transmission service. We will be glad to meet with you and discuss this matter further at your convenience.

Your prompt attention to this matter will be greatly appreciated. Shguld you have any questions or need additional information, please give me a call at 214/979-8354.

Very truly yours, f /

11ADunting/ma

/

c: T. M. Ozymy 6

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o TXX-6377 4 April 13, 1987 Exhibit B-17 of 17 TEXAS UTILITIES GENERATING COMPANY SKYW AV TOWER e 400 PdOR tit OL4WM STREET. L.ee. Si e DAL8.Am. TEM A5 78804 December 22, 1986 Mr. John Butts Tex-La Electric Cooperativo of Texas, Inc.

P. O. Box 1623 .

Nacogdoches, Texas 75961 Daar Mr. Butts

, Tox-La Electric Cooperative was notified by letter from 11 . A. Bunting to your offico dated December 15, 1986 of Texas l Utilition Eloctric Company's intent to purchano 350 MW of power from the Dow Chemical Company for the period December 15, 1986 through September 30, 1988.

We have conducted a transmission impact study at Utility l ( Consulting Sorvices using the ERCOT data baso for the Documbor, 1986 portion of is a for this transfor.

this transfor.

table summarizing the Mogawatt-Milo impacts datorminod Attached for your information If thoro are any questions, plaaso givo mo a call at (214) 979-8667.

Truly yours, 0e.b

• Richard L. Cacoy i

Intor-Utility Gorvicos RLC/jb '-

Attachmont c - 11. A. Dunting i

EXEli B A fle s l'et0N Utt I?L%M Lt t 89 8 t II:M g.;t.S tltttH' t 'ebAf t*,1N Y

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1986 MW-MILE IMPACT

SUMMARY

TUEC IMPORTING 350 MW FROM DOW IMPACT.

COMPANY (MW-MILES)

TUEC 55261.6 HLP 14314.6 CPS , 9694.5 WTU 1428.9 LCRA 5505.8 CPL 4696.1 COA 2374.4 DEPC 1387.6 TMPA 1222.9

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STEC MEC 253.5 128.3 COB . 0.0 TEX-LA 36.3 t

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