ML20024D868
| ML20024D868 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 08/02/1983 |
| From: | Gary R TEXAS UTILITIES ELECTRIC CO. (TU ELECTRIC) |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML20024D866 | List: |
| References | |
| NUDOCS 8308080315 | |
| Download: ML20024D868 (16) | |
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of )
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TEXAS (ffILITIES GENERATING ) Docket Nos. 50-445 COMPANY, et al. ) 50-446
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(Comanche Peak Steam Electric )
Station, Units 1 and 2) )
APPLICATION FOR AMENDMENT OF CONSTRUCTION PERMITS TO REFLECT CORPORATE REORGANIZATION Texas Utilities Generating Company (TUGC0) is presently the holder of NRC Construction Permits Nos. CPPR-126 and CPPR-127 for the Comanche Peak Steam Electric Station, Units 1 and 2 (CPSES). The construction permits reflect the ownership interests of the co-pennitees, Dallas Power & Light Company (DP&L), Texas Power & Light Company (TP&L), Texas Electric Service Company (TESCO), Texas Municipal Power Agency (TMPA), Brazos Electric Power Cooperative (BEPC), and Tex-La Electric Cooperative of Texas, Inc. (Tex-La), as follows:
TESCO 35 5/6%
TP&L 33 2/3%
DP&L 18 1/3%
TMPA 6 1/5%
BEPC 3 4/5%
! Tex-La 2 1/6%
TESCO, TP&L, DP&L and TUGC0 are wholly owned subsidiaries of Texas Utilities Company (TUCO). The present corporate structure of TUC0 is depicted on Attachment 1 to this Application.
8300080315 830802 PDR ADOCK 05000445 A PDR
In May, 1982, the Board of Directors of TUC0 approved a reorganization of several of its subsidiaries through the.fonnation of a new corporate entity which has been established and named Texas Utilities Electric Company (TUEC). The reorganization is to be effected through a statutory consolidation of TESCO, TP&L, and DP&L.
Further, plant operation functions and personnel of TUGC0 and plant engineering functions and personnel of Texas Utilities Services Inc.
(TUSI) will be transferred to TUEC. The reorganization is depicted on Attachment 2 to this Application. All necessary approvals have been obtained for the consolidation of electric utility operations into one entity. On December 22, 1982, the Public Utility Commission of Texas, following a comprehensive hearing, approved the reorganization and found it to be in the public interest. A copy of the Final Order of the PUC is attached hereto as Attachment 3. Furthemore, all necessary stockholder approvals have been obtained.
The corporate reorganization will not affect the present staffing or corporate channels of responsibility for CPSES. For example, the President of TUGC0 will remain as the corporate officer with direct mar,agement and oversight responsibility for CPSES as the chief officer of the generating division of TUEC. The Executive Vice President of TUGC0 and the Vice President, Nuclear, of TUGC0 both will assume comparable positions for operation of CPSES within the generating division of TUEC. The Manager, Nuclear Operations and the Manager, Plant Operations (CPSES) will perfonn the same functions for the generating division of TUEC as they now perform for TUGCO. TUEC will retain responsibility for the design, construction, operation and maintenance of CPSES through its generating division, and will act as agent for all owners in connection with all aspects of NRC licensing and regulation.
The reorganization will become effective on January 1,1984.
Accordingly, as agent for these co-owners, TUGC0 respectfully requests by this Application that the NRC amend Construction Permit Nos.
CPPR-126 and CPPR-127, as necessary, ta reflect an internal reorganization of TUC0 to be effected on that date.
Pertinent additional information required under 10 C.F.R. 50.33 is set forth below.
- 1. General Information
- a. Name and Address of Licensee Texas Utflities Electric Company 2001 Bryan Tower Dallas, Texas 75201
- b. Description of Licensee The structure of the Texas Utilities Company, as it will be reogranzied on January 1,1984, is shown in Attachment 2. The reorganization will merge the traditional electric utility functions of the TUC0 subsidiaries into a single corporate entity named Texas Utilities Electric Company. TESCO, TP&L and DP&L, the present operating companies, will be retained as divisions of TUEC.
In addition, the power plant operations, engineering, and related activities of TUGCO, TUSI and the operating companies will be combined into a fourth division of TUEC. This division will be responsible for the engineering, construction and operation of all Texas Utilities Electric Company generation, including CPSES.
The corporate reorganization was approved and found to be in the public interest by Final Order of the Public Utility Commission of Texas, dated December 22, 1982. A copy of that Final Order is included herewith as Attachment 3. Necessary stockholder approvals have been obtained. The reorganization will become effective on January 1,1984.
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Effective with the reorganization, and as a matter of Texas law, all rights and obligations of DP&L, TESCO and TP&L will become the rights and obligations of the successor corporation, TUEC.
Thus, ownership shares (with appropriate entitlement to output),
when the reorganization becomes effective, will be as follows:
TUEC 87 5/6%
TMPA 6 1/5%
BEPC 3 4/5%
Tex-La 2 1/6%
i c. flames of Officers and Directors The names and business addresses of the principal officers and directors of Texas Utilities Electric Company, all of who are citizens of the United States, as as follows:
Principal officers:
J. S. Farrington Chairman Texas Utilities Electric Company 2001 Bryan Tower Dallas, Texas 75201 E. A. Nye Executive Vice President Texas Utilities Electric Company i 2001 Bryan Tower l Dallas, Texas 75201 S. S. Swiger Controller Texas Utilities Electric Company 2001 Bryan Tower l Dallas, Texas 75201 i
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P. B. Tinkham Secretary Texas Utilities Electric Company 2001 Bryan Tower Dallas, Texas 75201 Directors:
P. G. Brittain Texas Utilities Electric Company 2001 Bryan Tower Dallas, Texas 75201 B. B. Hulsey, Jr.
Texas Utilities Electric Company 2001 Bryan Tower Dallas, Texas 75201 J. S. Farrington Texas Utilities Electric Company 2001 Bryan Tower Dallas, Texas 75201 E. A. Nye Texas Utilities Electric Company 2001 Bryan Tower Dallas, Texas 75201 M. D. Spence Texas Utilities Electric Company 2001 Bryan Tower Dallas, Texas 75201
W. W. Aston Texas Utilities Electric Company 1506 Commerce Street Dallas, Texas 75201 W. G. Marquardt Texas Utilities Electric Company P. O. Box 970 Fort Worth, Texas 76101 R. K. Campbell Texas Utilities Electric Company 1151 Bryan Street Dallas, Texas 75266
- d. Foreign Ownership or Control Texas Utilities Electric Company will not be owned, controlled or dominated by an alien, or foreign corporation or a foreign government.
- 2. Financial Qualifications Upon reorganization, the divisions of Texas Utilities Electric Canpany will continue to perform the electric utility functions of OP&L, TESCO and TP&L. TUEC will file rate cases with the Public Utility Commission of Texas to recover the costs of the generation of electricity. See Texas PUC Final Order (Attachment 3). Thus, TUEC will be an electric utility as defined in 10 C.F.R. 50.2(x),and information to demonstrate the financial qualifications of the company need not be provided. 10 C.F.R. 50.33 (f).
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- 3. Agreement Regarding Classified Information This application does not involve Restricted Data or other defense i nformation. If it is found to involve such information, TUEC agrees that it will not permit any individual to have access to such information until the appropriate federal government agencies have made an investigation and a report to the NRC on the character, associations and loyalty of such individuals, and the NRC has determined that permitting such person to have access to the information will not endanger the common defense and security.
- 4. Request to Dispense With Advance Notice i
The requested amendment of the construction permits involves no significant hazards considerations. It is thus requested that the NRC dispense with advance notice and publication of the amendments as permitted under Section 189(a) of the Atomic Energy Act of 1954, as amended, 42 U.S.C 2239(a).
- 5. Communications The Texas Utilities Electric Company will be solely responsible for communications with the NRC relating to CPSES following the reorganization. Accordingly, after January 1,1984, all NRC communications pertaining to these permits should be sent to:
R. J. Gary l Texas Utilities Electric Company ,
f 2001 Bryan Tower Dallas, Texas 75201 i
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In addition, it is requested that copies of each such communication be sent to:
Homer C. Schmidt Manager, Nuclear Services Texas Utilities Electric Company 2001 Bryan Tower Dallas, Texas 75201 William A. Burchette, Esquire Law Office of Northcutt Ely Watergate 600 Building Washington, D.C. 20037 and to Texas Utilities Electric Company counsel:
Spencer C. Relyea, Esquire Worsham, Forsythe & Sampels 2001 Bryan Tower Dallas, Texas 75201 Nicholas S. Reynolds, Esquire Debevoise & Liberman 1200 Seventeenth Street, N.W.
Washington, D.C. 20036 l
l Until January 1,1984, all NRC communications regarding these permits and the requested amendment shall be sent to those individuals already designated in the construction permits, as amended.
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I DOCKET NO. 4713 APPLICATIONS OF DALLAS POWER AND LIGHT PUBLIC UTILITY COMMISSION COMPANY, TEXAS POWER AND LIGHT COMPANY, AND TEXAS ELECTRIC SERVICE COMPANY FOR OF TEXAS CORPORATE REORGANIZATION FINAL ORDER I. Procedural History L
on September 7,1982, the applicant corporations Dallas Power & Light Company (DPL),
Texas Electric Service Company (TESCO), and Texas Power & Light Company (TPL), each of them a subsidiary cf Texas Utilities Company, filed with this Comission a report describing a proposed corporate reorganization and req'uesting that the Public Utility Commission find this proposed reorganfration to be in the public interest.
The proposed reorganfration would cause a merger of the three a'pplicants into a new corporation to be designated Texas Utilities Electric Company (TUEC). In this reorganization the power plant operations of the applicant ctvnpanies and of Texas Utilities Generating Company (TUGCO) together with certain accounting, engineering, construction and procurement functions of Texas Utilities Services, Inc. (TUSI) would be combined into a division c'f TUEC to be named Texas Utilities Generating Division. (TUSCO and TUSI are also subsidiaries of Texas Utilities Company.)
The electric utt11ty functions of the three applicant companies, except for power plant engineering, constructica and operations, would be centinued under their present names to serve their present operating areas as divisions of TUEC.
On October 7, 1982, a prehearing conference was held in this docket nith Examiner Jacqueline S. Holmes presiding. Motions to intervene were granted to Southwestern Electric Service Company (Frank Cain, attorney). TESCO Cooperatives (Cap Rock Electric Cooperative Inc., Lone Wolf Electric Cooperative, Inc., Lyntegar Electric Cooperative.
Inc., Midwest Electric Cooperative. Inc., and Taylor Elecfric Cooperative, Inc., Earnest Casstevens, attorney), the City of Dallas (Galen Sparks, attorney), the Cities of Haltom City, Richland Hills, North Richland Hills, and Lake Worth (Rex McEntire, attorney), the ,
City of Andrews (Don Butler, attorney). Tex-La Electric Cooperative of Texas, Inc.
(William Burchette, attoeney), Texas-New Mexico Power Company (Michael Shirley, attorney). The Public Utility Commission staff was represented by General Counsel Allen
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King. The Applicants were represented by Robert Wooldridg3 and Dan Behanno.. Frotests were received from the City of Minera; Wells and the City of McClendon-Chisholm.
A hearing on the merits was conducted before the Commission on November 17,1982 at 10:00 a.m. At the hearing on the merits the Texas Municipal League (Don Butler, attorney) was adnitted as an additional intervenor.
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Docket No. 4713 Page 2 II. Jurisdiction The Public Utility Comission has jurisdiction to consider the report of the applicants of a proposed merger of utilities and to make a determination whether the action is consistent with the public interest under Sec. 63 of the Public Utility Regulatory Act of Texas. TEX. REY.CIV. STAT. ANN. art. 1446c(1980).
III. Discussion At the hearing on the merits, the applicants presented two witnesses, each of whom had prefiled testimony: Mr. Perry Brittain, President of Texas Utilities Company, and ,
Mr. Erie Nye, Executive ,Vice President of Texas Utilities Company. Each witness was cross-examined by the intervenors and the staff, and was questioned for clarif16ation of testimony by members of the Comission.
The City of Dallas presented pref 11ed testimony by Mr. Thomas James, Director of Public Utilities for the City of Ds11.s. This testimony was admitted without protest and Mr. James was not cross-exanined by the parties.
No other witnesses were presented.
The parties were invited to file, post hearing briefs and replys to briefs which the Comission has received. i ISSUES:
- 1. Demenstration of Benefit in the Public Interest Witnesses for the applicants preseited a general description with charts and l diagrams depicting the proposed reorganization. In response to Requests for Information ,
from the Tex-Lv Cooperatives, and in cross-examination, the applicant witnesses denied
- the existence of any detailed studies defiaing cost savings or employee reduction or any j I
other written material supporting the general assertions of the two applicants that the proposed reorganization would produce material cost reduction.
The Comission finds it is left with these general assertions as its only support for approving the merger and declaring a finding that such a merger is in the public interest. A concise example of such assertions is quoted below from the Applicants'
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Reply to the Request for Information of Tex-La Electric Cooperatives of Texas, Ir.c.
(P. 2, last peragraph).
1 t Applicants expect that substantial cost savings will result to the benefit of the customers of all of the applicants. The proposed reorganization, when approved and implemented, will facilitate t
improved efficiency, avoid any unnecessary duplication of effort,
- improve managerial control and responsibility, and ultimately
- require fewer employees and facilities than would otherwise be
- ntCts5ary.
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- Docket No. 4713 Page 3 While all of these statements satisfy an intuitive feeling that coesolidation of functions should result in reduced expenditures, the lack of specific estimates of savings or of detailed manning tables leaves this Comission with little f actual data on which to base an opinion. ,
I It is clear that corporations,have a right to restructure their organizations for ;
improved efficiency of operation and control, and in the absence of serious objection from any intervenor, there is no reason to find that the proposed reorganizatien is not in i the public interest.
- 2. Filino of Rate Cases The applicants' witness Erle Nye has proposed that each of the new electric utility operating divisions shall file separate rate case applications, continuing separate rate design patterns as are now the practice of the three operating corporations, rather than a single rate case for the consolidated company.
The applicant argues that there is substantial difference in the nature of the three divisions in terms of customer six and in terms of rates.
Commission records do not support these assertions. The number of residential customers is 85.4% of TESCO total customers,85.5% of TPL total customers and 87.5% of DPL total customers. Residential revenues as a percentage of total revenues is 35.8% for TESCO, 34.4% for TPL and 32.6% for DPL.
A review of residential rates for 1000 KWH for each month of the period June 1982-
[; Nov.1982 shows that of the three operating utilities DPL was lowest two months and
{ highest three months. TESCO was lowest one month and highest two months and TPL was lowest threa months and highest one mo6th. It is apparent that although rate design is slightly
- different, there is no significant and persistent difference in the custoner impact of
- j. the rates of the three utilities.
I J Although DPL does not have any transmission voltage customers or wholesale customers and the other two units do have these additional classes of customers, current rate design for all classes in each division produces relative rates of return for each class i j of approximately 1.0. The greatest discrepancies are 0.84 RROR for Large General Service I customers of DPL and 1.08 RROR for transmission voltage customers of TPL. These Classes >
represent only 3.0 percent and 5.g percent respectively of the total revenues of these l
two operating utilities. It is apparent that a change to a single rate structure could be l
made with minimum customer impact.
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- [ The Comissioners questioned the witness Erle Nye about statutory authority for
.p filing divisional rate cases, and the pa ties were invited to comment on this issue in the i post-hearing briefs and reply briefs.
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L Docket No. 4713 Page 4 The applicants in their brief made three principal arguments based upon p*ecedents of this Comission and of the Railroad Commission of Texas which is governed by the same statute in regard to retail gas rates.
- 1) Rate cases were filed by Comunity Public Service Company in Docket 3093 and Docket 3370 for rate increases by divisions. The applicants fail to note that these applications were accepted as transitional cases in concert with a mandate to file a
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company wide rate case, whic$ has been filed and implemented (Docket 4240).
- 2) Several rate cases are cited for Gulf States utility Company, Southwestern Public Service Company, Southwestern Electric Powe, Company and El Paso Electric Company, each of which operates in Texas and at least one other state, and therefore has operatiers ,
not subject to the jurisdiction of the Texas Public Utility Comission. Also, in the 3 instance of Southwestern Public Service Company several cases were filed in which rates f had been set under original jurisdiction by cities, and those rates were not appealed by j the utt11ty, resulting in different rates for those localities.
Presently this Commission determines revenue requirements on a systemwide basis and then makes allocations of costs for determination of rates within jurisdictional boundaries. Thera is no such jurisdictional problem presented by the proposed three operating divisions of TUEC, and therefore no need for and no authority for different rate schedules. .
- 3) The applicants argue that precendent set by the Railroad Comission of Tcas in setting retail gas rates for localities or by division is applicable to Public Utility Comission rate procedures. There are substantial differences in that the Railroad Comissiton is dealing with distribution of gas purchased at explicit fixed rates at the division gate or city gate while in the instant case the Public Utility Comission would be setting rates for three operating divisions by allocations of investment and operating expenses of generating and transmission facilities operated for comen use by a single generating division. The continued arbitrary allocations of interests among divisions would perpetuate after consolidation unnecessary costs associated with allocations of expenses.
l The analogy to the Railroad Comission is not appropriate.
The applicants anticipate that all necessary corporate stockholder approval may be completed during calendar year 1983 and the probable effective date of the merger would j
! be January 1, 1984 .
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l ; During 1983 the present operating companies could file rate change requests with the j objective of moving rate designs toward a comen rate design. Following the effective date of the merger only a single rate case for TUEC should be filed.
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a Docket No. 4713 Page $
Findings of Fact
- 1. On September 7,1982, the applicant companies Dallas Power and Light Company, Texas Electric Service Company and Texas Power and Light Company filed with this Comission a proposal for merger of the three companies into a new entity Texas Utilities Electric Company (TUEC).
- 2. In the reorganization the power plant operations of the applicant companies and cf Texas Utilities Generating Company together with accounting, engineering, construction, and procurement functions of Texas Utilities Services, Inc. would be combined into a division of TUEC to be named Texas Utilities Generating Division, g
- 3. The electric utility functions of the three applicant companies, except for power plant engineering, construction and operations would be ' continued under their present nsnes to serve their present operating areas as divisions of TUEC.
- 4. At a prehearing conference on October 7,1982, the following intervenors were amitted: Seuthwestern Electric Service Company TESCO Cooperatives (Cap Rock Electric Cooperative, Inc., Lone Wolf Electric Cooperative, Inc., Lynteger Electric Cooperative. Inc., Midwest Electric Cooperative, Inc., and Taylor Electric Cooperative, Inc.), the City of Dallas, the Cities of Haltom City, Richland Hills, North Richland Hills, and Lake Worth, the City of Andrews, Tex-La Electric Cooperatives of Texas. Inc., and Texas New Mexico Power Company. At the hearing on the merits Novenber 17, 1982 Texas Municipal League was amitted as an intervenor.
$. Based upon the assertions of company witnesses that the merger will result in substantial cost savings, improved efficiency, and improved managerial control, and in the absence of any protest by the various intervenors, the Comission finds that the p*oposed merger is in the public interest.
- 6. The Comission finds that there is no statutory basis for filing of separate rate cases by the electric utility divisions of TUEC and the Comission finds that any rate case filed by the applicants subsequent to the effective date of the merger must be a single rate case filed by the surviving corporate entity Texas Electric Utilities Company.
p Conclusions of Law
- 1. The Public Utility Comission has jurisdiction to consider the merger of uti,)ities under its jurisdiction and to make a determination of whether such merger is in the ,
public interest. (PURA Sec. 63.)
- 2. The Public Utility Regulatory Act requires that a utility may make changes in its rates by certain filing procedures prescribed in Sec. 43 PURA, but makes no provision for separate filings by operating divisions of the same utility.
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. Docket No. 4713 Page 6 It. Order In a public meeting at its offices in Austin, Texas the Public Utility Comission cf ,
Texas af ter finding that statutory notice was provided to the public and interested persons, and after public nearings on the application, issues the following Order: ;
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- 1. The application of Dallas Power and Light Company, Texas Electric Service Company ?!
and Texas Power and Light Company to merge into Texas Utilities Electric Company is APPROVED and is found to be in the public interest. ,
- 2. Any rate case filing made after the effective date of the merger of these applicant corporations into Texas Utilities Electric Company shall be filed as a single rate case affecting all of the electric utility divisions of TUEC.
- 3. As a part of the first rate case filed by TUEC, the company shall prepare testimory which will demonstrate any actual savings or increased expense which may have resulted from the consolidation of the applicant companies into TUEC.
RENDERED AND $1GNED AT AUSTIN TEXAS, on this the day of December,1982.
PUBLIC UTILITY COMMIS$10N OF TgxAS SIGNED:
, H. M. R0su h5 /
SIGNED: . O Gi,0RGE M. CGnuiN h U k
SIGNE T. 6. SMITtt yI i 1 h ATTEST:
- P E
- r l_bn _b D_ bat v ACTING SEJ ETARY OF THE COMMIS$10N S~ .
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