ML20003B516
| ML20003B516 | |
| Person / Time | |
|---|---|
| Site: | Three Mile Island  |
| Issue date: | 10/28/1980 |
| From: | PENNSYLVANIA, COMMONWEALTH OF |
| To: | |
| Shared Package | |
| ML20003B456 | List: |
| References | |
| NUDOCS 8102120318 | |
| Download: ML20003B516 (53) | |
Text
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Q E$ TIE FENHSYLVANTA FUELIC UTILI'I'? COMc!ISSIOU
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F f[Inre: t-R-80051196, etc . - Pennsylvania Public Utility ~
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Cecmission vs . Metropoliten _ Edison Comnanv. -
vv.- Investigation into a requested ??6.5 million e a nnua l ra te increas e ,
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I 14r THIS DOCUMENT CONTAINS !
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i POOR QUALITY PAGES be. J 4
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]I 1h oefore ;
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h,, 2 li THE PENNSYLVAHIA PUBLIC UTILITY COMMISSION l U I 3 --o0o--
4 f In re: R-80051196, etc. - Pennsylvania Public Utility
$ Commissi_on vs. Metropolitan Edison Company.
5j Investigation into a requested $76.5 million i annual rate increase.
6 j! -
Hearing.
Y[t r! --o0o--
G i
] Stenographic report of hearing held in 9 ! Hearing Room No.1, North Office Building, f Harrisburg, Pennsylvania, 10 Tuesday, 11 ql October 28, 1980 y
2 at 1:06 o' clock p.m.
ii.
--o00-- {
15 :
( f JOSEPH P. MATUSCHAK, ADMINISTRATIVE LAW JUDGE 14 i j --o00--
15 .
16p [ APPEARANCES :
g STWEN A. McClAREN, ESQUIRE B0HDAN R. PANKIW, ESQUIRE 17 { ,
. P. O. Box 3265, North Office Building 16 ; Harrisburg, Pennsylvania 17120 For - Comission Trial Staff
- 19) (l SAMUEL E. RUSSELL, ESQUIRE 20 l W. EDWIN OGDEN, ESQUIRE I ERIC L. B. STRAHN, ESQUIRE 21- 530 Penn Square Center i P. O. Box 699 22 j Reading, Pennsylvania 19603 4 For - Metropolitan Edison Company 23 3 i .
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'r ; i t.:CS!RC ACH O MArtMAL. fMC - 3? 't:. LtcewsLLew Ay - mant scue. PA. ? fi t:
61
. . _ -_ _ _ .- :--.-.a 9._.
i j 1 i APPEARANCES: (Continued) ;
'i 2$ McNEES , WALlACE & NUEICK
". P. O Eox 1166 :
3y Harrisburg, Pennsylvania 17108 l By: MAURICE A. FRATER, ESQUIRE 4e{ cor - St. Regis Paper Co.; P. H. Gladfelter Co.; '
0 National Gypsum Co.
_~. t
,g CRAIG D. BURGRAFF, ESQUIRE l DAVID BARASCH, ESQUIRE 5[ ASHLEY SCHANNAUER, ESQUIRE
{
7! 1425 Strauberry Square i h Harrisburg, Pennsylvania 17120 I Oh For - Consumer Advocate !
?lt DUANE, MORRIS & HECKSCHER l P. O. Sor. 1003 ,
10 y Harrisburg, Pennsylvania 17108 i 4 By: ROBERT E. KELLY, E5 QUIPS ,
11 0 For - Victaulic Co. of America a
13 l?. BERNARD A. RYAN, JR. , ESQUIRE l.
t 800 North Third Street l l* [ Harrisburg, Pennsylvania 17102 For - Bethlehem Steel Corporation ig i.
14 ;f ;
2 ROBERT JUDE JENISON, ESQUIRE 15 l R. D. 1, Bex 280-6 :
i Wellsville, Pennsylvania 17365 l' 16 j For - PROSE
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IISEX TO UITNESSES *
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SRESPONDENT DIRECT CROSS 3.D. ) L. Huff . . . . . . . . . . . . S7 108 t
k . . . . . . . . 88 104 9 [ John G. Graham t
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s Eugene F. Carter . . . . . . . . -
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g1 INDEX TO EXHIBITS s -
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i 12 4 MET-ED IDENTIFIED 33 2 B-131 Metropolitan Edison Company ;
(n R Income Statement 12 Montlu :
y !; Ended May-September 1980 . . . . 86 l
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! l l 18 j i s !
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25trt I t:a:mcfm o Mr.ncy.r.. tric. - M r:. coerms:.t.sw Av . - HARR!r3URG. PA.- 17111 -
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83 y .
I 1j THE ADMINISTRATIVE LAW JUDGE: Before we f>
5 get into the matter of temporary rates, there was a petition 2, k 3 filed with the Commission requesting the Commission to require 4 l the company to cease paying preferred dividends. The company 2
f g has made a response to that petition and the Commission Staff i
6 I has.
s 7, As we read the record the. Consumer Advocate a
S l requested the right to respond to that petition. We have not 8
9 g received anything. What is the intention of the Consumer il 10 s Advocate?
-l, la p MR. BARASCH: Your Honor, we will not be 13 i, filing any response.
b c 13 il THE AEt!INISTRATIVE 1AW JUDGE: In addition i
14 i to that the company at the prehearing conference requested a
Ig the right to submit testimony in regard to that matter.
16 What is the intention of the company in that regard?
F 17 k MR. RUSSELL: If Your Honor please, we 18 i have not as yet formulated what we would be putting in but i
19 j certainly we do very clearly intend to put in testimony which 8
20 jshowsthatthecessationofpaymentofpreferreddividends t
- 21) would have very serious effects with respect to the company's 23 L financia1 viability.
4 I
23 THE ADMINISTRATIVE LAW JUDGE: I note 2.'b that you have Mr. Graham here and I assume he would be cne g
25 - of the witnesses in connection with that.
9 U- to:me Acx o r.tAnsMst, ettc. - ? t:. Locrn:. LOW AYE. - H A WS ?tJ M. PA, 17112
5 I 2 MR. RUSSELL: I think Mr. Graham would be 5
3 the witness who in all probability would cover it. I have I not had a chance to go over in detail with him yet his 3
I 4 } response.
1 i
S o I would say perhaps after the afternoon 6 [ break if we had a few minutes to discuss it we could probably I
7 l put some testimony in immediately. -
0 THE ADMINISTRATIVE 1AW JUDGE: I was going 9 to say that I would not anticipate too much testimony of an I
10 extended nature.
11 l MR. RUSSELL: I don't think it would be i.
12 extensive, no.
13 MR. KELLY: Your Honor, I presume you are M j talking about Victaulic 's motion?
THE ADMINISTRATIVE 1AW JUDGE: Yes.
15l 16 MR. KELLY : We are not prepared today to 17 l cross-examine Mr. Graham on that. In fact our understanding
]
18 ' of the status of it is that it wcs denied by the Commission h
19, at public meeting without prejudice.
p 20 ' THE ADMINISTRATIVE IAW . JUDGE: They just
- 21) denied it as to that quarterly dividend. As we view it it 1
22 { is still open as to the general nature of it. l 23 i, MR. KELLY: The motion which we filed 5
24 ) referred only to the October 1 quarterly dividend.so we i s t l 25j were not cucre that that was considered still an open MGMRSACd f: T! AR$MA1 INC. - 27 f:. t.eC:N tr f.CW AVE. = > FARM! SEW, PA. 171:f
l 65 .
5 11 13 question.
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5 If Mr. Graham is going to testify today. we $
.1 l uould reserve the right to cross-examine him further at a 4 la ter date, t
5l MR. RUSSELL: Is it Victaulic 's position 6 hythat they are not pursuing the matter apart from the October 7 1 dividend?
I MR. KELLY : I won't say that, but currently
? A our understanding was there is no current motion before the h
10 J Commission or before Your Honor.
11 h THE ADMINISTRATIVE LAW JUDGE: You could d
12 eliminate a problem for us if you say that your petition is U;consideredexhausted. $
I4 MR. KELLY : I don't want to mislead Mr.
n 15 Russell or Your Honor. I think we are going to file a motion 16 ! in the future dealing with further dividends.
17 THE ADMINISTRATIVE LAW JUDGE: Is it your i
16 position that your request under your petition is exhausted 19 ',' by the Commission's last order?
J 20 ,
MR. ELLY : With regard to the October 1 21i dividends only, yes.
4 22 f THE ADMINISTRATIVE IAW JUDGE: That was our l was 23 E impression. Our impression /it was still open but the r !
( .
24 n
Cocmission had to make an instcnt ruling because of the $
23 time involved, Gnd it has been indicated to us we are crpecteh M3MTtNI C; f.1 A?.CMAL.1NC. - 27 l'. l.SOKW1' :.OY/ " VC. " ht 4.3412 CURG. PA.
- 17110
86 cc- ,
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1 !! to rule on the thing.
i.
3 MR. KELLY : With regard to further dividends '?
3E THE ADMINISTRATIVE IAW JUDGE: With regard 4j to the request in general, yes.
1 5 MR. KELLY: I just did not want to have b
6j this our only opportunity on this question since we were not 7 k aware it was going to come up today.
l 8 .! THE ADMINISTRATIVE IAW JUDGE: Well, the 3
9 ) parties can discuss it and see what you want to do on that.
10 j MR. RUSSELL: -May we proceed?
q 11 j THE ADMINISTRATIVE IAW JUDGE: Yes.
I 12 r MR. RUSSELL: If Your. Honor please,~I have 15 handed three copies of a document to the reporter and ask to 14 have it marked for identification as Met-Ed Exhibit B-131 15 i and we will call briefly Mr. D. L. Huff to identify that 1
16 l exhibit.
T 17 j -
l 18 i (Met-Ed Exhibit No. B-131, document i entitled Metropolitan Edison Company 19 j Income Statement 12 Months Ended May-1 September 1980, was produced and marked 20 l, for identification.)
t 31 l 22-l, D. L. HUFF, recalled as a witness on 23 [ behalf of Respondent, having been previously sworn according 1
- u.i to law, was examined and testified further as follows
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aemeu c, nesw.t r:m. - n n cocmu..w m. - mmsm m me I
Huff-direct 87 DIRECT EXAMINATION r -1 BY MR. RUSSELL:
- l G Mr. Huff, do you have before you a document
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g.-
Q 4 ' which has been marked for identification as Met-Ed Exhibit 5 i B-Ul?
l 6?>1 A Yes., I do..
H 9 Q Was that prepared by you or under your I
g f supervision?
9 A Yes, it was.
pg f Q Would you state just very briefly what is !
e i:
4 gg $ represented on that exhibit? l A Yes , page 1 is a repeat of the income 12 j r' statement for the individual months May through September f 13 f,!- 1980 which covers the time periods
!G r
.A$ : i l
15 revenues due to TMI-1 starting June 1.
Q Is that income statement par books ? ;
16 h '
i
?
- A Yes, per books. Page 2 normalizes the l
, A7 ;
12 months ended September 1980 income statement for items 18 h 9
19 h that are covered in the petition for modification of the i
20 temporary rates .
I MR. RUSSELL: All right, thank you, Mr.
21h li
, is Huff.
y; .
THE ADMINISTRATIVE II.W JUDGE: Staff, any 2,e a I. cross-examuntion?
'? ,
0 gg'{ MR. PANKIW: We don't have any questions 5 nemuen a m ma m:. - a r:. toci:ven. cow Avr - **=xtrav=c. PA. ivi12 -
. Graham-direct 88
[- - - !
I f regarding this exhibit at this time 3 Your Honor.
% I THE ADMINISTRATIVE IAW JUDGE: Consumer I 3 i Advocate?
I4 4 l MR. BARASCH: We have no questions at this I
3 time, t
6Q THE ADMINISTRATIVE IAW JUDGE: Any other i-
? counsel have any cross-examination with regard to this 8 exhibit?
9 (No response.)
10 L MR. RUSSELL.: Thank you, Mr. Huff.
11 Mr. Graham?
l 12 ll L
r 13 !
JOHN G. GRAHAM recalled as a witness on j
( g l 14 ) behalf of Respondent, having been previously sworn according i
15 { to law, was examined and testified further as follows:
16 l DIRECT EXAMINATION 17 13 -
MR. BARASCH: Your Honor, before we proceed
.i 19 l with the apparent direct oral testimony of Mr. Graham, I have 20 two preliminary matters I wanted to handle. -
21 - THE ADMINISTRATIVE LAW JUDGE: Very well.
l 22 j MR. BARASCH: One is a rather simplistic On Friday, October 24 our office mailed out five 33gmatter.
h 241, interrogatories to Metropolitan Edison and three to N !
33 E Pennsylvania Elec tric Company. The numbered interrogatories N
?.1C?t"!B8.CH f P!ANS43.At tMC. - 27 *!. CCCmYt!.t.OW AV2. ~ MARTS 5trPI,, PA. timt 10 ,
Graham-direct 89 7
I j for Metropolitan Edison were erroneously numbered 40 through h
( ; ' 44 and should be corrected to be answered, hopefully, as 3 [ Interrogatories 106 through 110.
I t, ,f The three interrogatories mailed to Penelec s
3 )a were numbered 40 through 42. They should hold the numbers GI 106 to 108, 3
7 We will be sending out' a letter to the e j parties to make sure that there is no further confusion 9 j from this, o
l 10 i There is a second matter, Your Honor. Our i i
11 office is in receipt of Your Honor's order of October 16,
,t 12 1 1980 relating to the treatmegit of Metropolitan Edison's l 15 and Pennsylvania Electric Company's complaints against the i
y, y temporary rates that were set for them by the PUC's final I
15 l order of May 23, 1980 at Docket 1-79040308.
16 At this point in time our office would like gy l' to note formally on the record its exception to Your Honor's l
gg! October 16 order.
N 1p f Specifically, we except to that order insofar a
20 f as it concludes that it is legally permissible and proper t
21j! for the FUC to grant relief from its May 23rd order during 32 the pendency of a general rate relief request.
23 k,- The office has during the past several days i
g
'J considered petitioning Your Honor to certify this question g We have concluded that in view of !
25 ! to the full Commission.
W 17110 E 'te'mSACM e TI.ARSf1A4 IMO. ** 27 n. toccYt'.t.CW t.V2. - MAR 8**SBIJRG, !*A.
Graham-' direct 90 S
li g
5 the time constraints of the present proceeding and the ;
l g company's apparent readiness to go forward with their case ;
2j against the temporary rates at this tin:e that we will not 3 e n 4,[ request certification of this issue at this time.
5 ., However, the Office of Consumer Advocate 9
h 6 (, wishes to formally reserve its right to raise its legal n
7 l objections to Your Honor's decision at some point in the f
g future, if and when such becomes necessary and appropriate.
9 4 THE ADMINISTRATIVE LAW JUDGE: Your exceptiop and remarke5 are noted on the record. We will grant your l gg , :
}
i request and reserve the right to state further objections to :
33 g,, i any parts of that order.
i pJ g3 ! MR. BARASCH: Thank you, Your Honor.
h 14 l BY MR. RUSSEL1:
i 15 l -Q Y u are John G. Graham, is that correct? :
l A Yes, sir.
16l 37 Q By whom are you employed and in what h capacity?
^g !
19 A I am employed by GPU Service Corporation.
g j I serve in the capacity of Vice-President and Treasurer of 4
3 1ji that company. I am also the Treasurer of General Public i 9 .
g C Utilities Corporation.
l l
~f
,1 j (Transcript continued on Page 91.) ,
l ~] Y ?
25 i ;l :
1.tottr 0Am: a ItAr.mML 1:Sc. - 27 F2, L.OC:t'AT.I.OW AY3. - HAMP.1SSt/Pt3. PA. 17112 L
2-1 Graham-direct 91 l
p ._- - ,
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Q Could you review very oriefly, Mr. Graham, El
% f the factual background surrounding and preceding the $
Ih[ establishment of the temporary rates which are the subject I
4 ' of the complaints that have been filed by Met-Ed at Se C-80072185?
I 6;h A Yes, sir. In Phase I of ths Commission's 4
a *
! 'l 3 l Docket No. 79040308, the Commission removed from Met-5d's E rates the capital and operating costs associated with f
9,j Three Mile Island. Unit 2. That took place in the spring 10 [ of 1979.
i 11 ,
In Phase II of that same docket, the Commission ,
13 Ilinvestigated certain matters including the inclusion of Il
^ II TMI 1 in base rates and entered an order on ' December 21 t
l M of 1979 in which it stated that the Commission does not yet h4ve i 13 [ before it the issue of finding just and reasonable rates for
$ i 16[ Respondents. By Respondent's, it was meant Metropolitan !
l'T [ Edison and Penelec. .
l 16 l6 Then, in that same docket the Commission entered l i 19 f @ crder on May 23, 1980 stating that the' Commission finds !
- p. . I 10 ) that it cannot now determine and fi,: the just and Y
2;[ reasonable base rates to be charged by Respondents, mes_ning s
t .
- 17. )' Met-Ed and Penelec . The Commission then went on in the i
r E case of Metropolitan Edison Company to prescribe temporary .
. I g( base rates on an annual level which were 26.9 million less !$
e I 27- } than the e::isting rates. for Met-Ed. That leads to the I ye*73cAmi ta fiAM A94*. $*C.
2 -
Graham-direct 92 5
i situation where Met-Ed is billing pursuant to temporary l t
O 2 H
. rates aaa ae =ot a a sa oevortuater ret to aad=e== th- ,
S levels of operating and capital expenses and costs which are 4.$ to be allowed to it to be able to maintain its service, '
5 maintain its credit and attract capital. I might say that 0jthepresent level of temporary rates was set based upon 7
j operating costs and levels of investment and capital costs 8 that applied to a test year which is now more than one and 9 y a half years old and when the Commission removed TMI-l from
- r 10'l the base rates, it did not make any attempt to change the l 11 levels of investment, that is the rate base or deal with the r
13 problems of inflation and attrition wh'ich have operated
( 13 f or affected the company since that time, l-14 :1 On the 29th of July of this year, in response 15 i to the Commission having set temporary rates, Metropolitan 16 .
Sdison filed a complaint against those temporary rates.
l l 17 , Q All right. Just focusing on the temporary 18 j rates so fixed by the Commission, can you describe briefly d
l I
19[theimpact, if any, which the establishment of those I o
20 f temporary rates has had on the results of' Metropolitan s -
21E Edison's actual operation?
I c
22 l A Yes, sir. If I can refer to Mr. Huff's sxhibit n
23 l B-131, which was just marked for identification, this is 14 the actual results of operations of Metropolitan Edison 25 ! Company since the tima of the Commission's. order last spring,
- gesscAcM L re A?tsHM., INC. ~ 27 M. LeC;;WILLOV/ AVE. - HA= PtsstreG. PA. ,7112
2-3 Gra. ham-dirne t 93 g
1 [5 which became effective for service rendered on or after t
- g
$ p, June 1st. You can see that in May, before the temporary 3 s G S ,, rates were set, that is before base rates were reduced 4 by someS26.9 million, the company had interest coverage i 1 5 l of about 1.55 times and preferred stock coverage of abcut 6 l 1.03 times and had a slightly positive return on total 3
4 e
? E cocmon equity of 1.27 per cent making the calculation of 4-4 8 jtherateofreturnontheaveragecommonequitydevotedto b
9 [ the rate base, and I will come back and er, plain what that ,
E 10
- means. The company was earning about 10 per cent. That l l
110 10 per cent should be compared with the allowed rate of 13, return for Metropolitan Edison on its rate base common i
( 13 i equity of 13.38 per cent which was set in the last base .
3 i
M [ rate case for Metropolitan Edison. i E i 15 f The calculation of tha rate of return on common l
! . i 3 16 l equity devoted to rate base includes at that point TMI-l ,
i 17 ! because in the 12 months ended May 1980, TMIal was in I
16 I because the calculation is on the average common equity. !
I f 19 g TMI-l comes out every month as one moves forward and you l h
{
a 2On [ can see the effect on the various financial indicators. !
I 1lCoveragefallsfrom1.55timestoabout1.22 times, l l I 22 t Preferred stock coverage falls from 1.03 times to .93 times.!
r 23 j The return on equity goes from a positive one and a quarter l n i
- g. per cent to negative one and three-quarters per cent on the 2;) total equity of the ecmpsny On the rate base common equity {
t I t
mnwen 1. unwe me. - a r . uc=.new ava - umsww. % m t-
~
24 -
Crnham-direct 94 1 l we fall from almost 10 per cent to a little bit under 8 e
J 2 (i! per cent.
,. e.
" I On the second page of that enhibit we have dealt 4
g with the question of what will happen with the kind of base 5l0 rat es that we are proposing in the petition to deal with the 6 5l temporary rates that were set. I might say that the
? l indicators set forth on the first page, which are the results of the temporary rates Met-Ed now has in effect, 9 '
, show that the company has no access to any permanent i
fcapital. There is very little, in any3 equity return.
o I There have been no common dividends paid by Metropolitan la j Edison since February of 1979. Debt coverage is clearly O
Q 13 f inadequate to be able to attract permanent debt capital.
~
'fPreferredcoverageislikewiseinadequate. The only form 15 f of capital that is available to Metropolitan Edison Company i
kh 'is the bank debt availabl'e to it under the Revolving Credit
- Y g
- Agreement. There is in the rate case, my Exhibit E-25, n
18 i c
which was a letter to the Commission dated September 12, 1
^9 [W signed by Mr. Smith of Metropolitan Edison Company, explaining C
20
^
the capital requirements, the short-term debt requirements 21j l for the' company under the projections that had been planned.
22 ( We also reported to the Commission the changes in those 6
a 13fexpendituresthat'wouldbenecessarybecauseofthe in .V V -
M[; restrictions on bank credit that would be available to M '
Metropolitan Edison Company.
t manna n v asw_. nm. - e n.- c.e=mnu.+w Avr. - m.amma, n mu
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Graham-direct 95 I
B
- 1) By letter dated Septe:aber 5, tshich is marked n i as Exhibit E-19-1, the banks informed us that they had i
- O 1 { reduced the credit available to rietropolitan Edison Company 4 f from the $105 million limit. to a formuis which is the amount
!~
Skofdeferredenergyplus$20millionrepresentsthevalue 6 '2 of the pledged nuclear fuel plus approximately $20 million i
? represents the pledge of accounts receivable. In order to Elstaywithinthosedebt limits in Exhibit 25, we detailed t
G the cutbacks in capital and operating expenses that would 10 ] be necessary for Metropolitan Edison to be able to live 11 within its credit until next spring. ,
i 1 13 In Exhibit J-2, which is a letter to the
~ ~
13 Commission dated October 13, we gave a'n update of what 14,q we had 'seen since the September 12th letter.
That is, e
IExhibitE-25.
~
15 We said that because of the results of l
16 ( operations in August and September, we felt that there I !
17 [ could be some holdup in implementing some of those cuts, D
16 l although all of the cuts related to Three Mile Island Unit 2 19 were in the process of being accomplished, and I might say i V l
20 E that the cuts and the credit available were all described
?
21g on Exhibit E-26, which was presented to the Commission 22 Previously.
E 23 $ Q All right, pursuant to the Judge's recent 35j order, the proceedings with respect to the Metropolitan l's 25lEdisoncomplaintweredirectedtogoahead,wasthereany !h a
s - - en,, emu em.-aw.wew.zw
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2-6 Graham-direct 96 :
r :
1 I specific occasion for the filing of the petition which Met-Ed
- t 3 has filed in this proceeding?
3 .) A Yes, Jir. Because of our concern about the i
4 j credit availeble and because, very frankly, we do not want i
5 ! to make the cuts in service that had to be outlined in 6 Exhibit E-25, we attempted to respond to Judge Matuschak's g
7 f order as quickly as we could to attempt to have an early i
E ! disposition of the complaint against the base rates.- We 9 gave suggestions in our position with respect to the base 10 rates whi:: h we believed should be charged and several related 11 .. matters.
13 The first of those is we propose a level of 13
. base rates which would be an increase of $25 billion 141 annually over and above the temporary base rates which are 5
15 fnowineffect.
i The $25 million is an attempt to recognize 16 only the known TMI-1 capital and operating costs. We 17 i believe it to be a minimum amount that is necessary to 5
18 allow us to do the job. We believe it to be significantly 19 l below the amounts supported by our pending rate case. We 20 also believe it to be an amount that will allow us to do 21 f at least some of the things that we had to cut and I will 1
22{icomebackanddetailthemforyou.
l
' I 23 - Page 2 of Mr. Huff's Exhibit B-131 sets forth pJ 14fthemannerinwhichwehavecalculatedtheeffectofthe 25,f $25 million upon Metropolitan Edison Company. Whst we did-0 , _ m e m m m . m _ .,u. m .- - _ , .m
2-7 Graham-direct 97_
3 l is we simply took the company as it exists in the most I.
- 2. l recent 12-month period' that is available. That is 12 months S
3.j ended September 1980 That period also, incidentally, is
{ -
4 ' before the cuts in the operations and maintenance expense 5 [ on the transmission and distribution system and those things s
6 f' outlined in Mr. Smith's letter. We essentially made two
? j revenue adjustments. The first is we took out the revenues 8 associated with Three Mile Island Unit 1 to the extent they 9 l were not already reflected. That chcnge had been made for ,
3 i lo q June, July, August and September, but was not in for the i h
n gg c other eight months, so footnote A, first of all, takes out 1!
12 5 those revenues. Another way to put it is that that takes li,
- 15 $ out the part of the $26.9 million that the Commission reduced e
14 [ our rates for the rest of this period, G
t is j Second, we put in the effect of a $25 million 16 ky rete increase taking into account ::he gross receipts tax
~
, 1"/ ,: and then we net those to have a nce increase in revenues I
? !
l 18 j of about six and a half million dn11ars. We also made j 19 two accounting adjustments, which I will come back and f l I 20:, discuss. One is the cessation of depreciation of Unit 1 a
F j
y}t and the other deals with what I wf11 call the restart l
22 I expenditures associated with Unit 1 and we looked at the l
n [ effect of those adjustments upon the results of operations l
< 1
. g.g for 12 months ended September 1980.
i-
- g[ What we find is thrt the company would have l .
(Mt. - 27 M. CCCcItLLC%V AVE. ~ HAftFilEStlRC. PA, 17f12
- team 13tOK C t*A9?SMAt
2-8 Graham-direct 98 E g coverage of about 1.4 times. 1 might say that compares
_ W 2 uith the minimum coverage that would allow the issuance of 5 E new debt of two times. We have a preferred stock coverage l b i 4 f of 1.03 times which compares with the minimum of 1.5 times.
l 5
- We have a return on total average. cocmon equity.
6 (In other words, the whole company, including all o'f the b
7jinvestmentsofzero. The company would not be earning any 5 .
money. The company would not be losing any money from the i
9 I point of view of the return on total common equity. The rate 10 of. return on the average common equity devoted to rate base 11 ! excluding TMI, both Unit 1 and Unit 2, would be just about la f 10 per cent which compares with an allowed return of 13.38 O ""* ' ""'*-
i 14 ;1 From the point of view of cash, I would like to 15 f refer to my Exhibit E-26, which was submitted to the 16 h Commission at its hearing on September 23rd, and which l
17 explained the data contained in Mr. Smith's letter to the 16,jCommissionofSeptember12. Page 3 of that exhibit showed i n 19 the short-term debt position of the company with the 20 )reductionsinexpendituresthatwereoutlinedinMr. Smith's i 21 letter.
A Page'3 also shows the amount of credit available 22 l 23 to the company with the pledge of accounts receivable with l :
p.4 the annual and de[ erred energy balance'. Referring to the m g 25 g end of 1981, there is a gap between those two lines of Y uom.m e war.wa ma. -- =r re: ta=swn um m=. - unw.suna. n rm=
l i
1
2-9 Graham-direct 99 !
f I l
I h y $31 million. We would suggest by allowing this $25 million a
r \
2 j and to illustrate if it were becoming effective on December t
h 5 : 1st, that would provide $27 million of the gap ,that is 4 ) shewn on Exhibit E-26.
Sl A second proposal that we make in this filing l
6;,' is to restate the deferred energy balance consistent with the 7 statement on Page 17 of the Commission's May 23rd order, U t which was quoted by Judge Matuschak on Page 7 of his order 9j of October 16. By dealing, with the deferred energy balance a
!i 10 $ on the basis of $25 million per year for the months of 11 June, July, August, September, October and November, that j 12'j 8 six month period would produce an additional deferred energy !
p 15 ( balance of approximately $12 million.
R That additional 14 j $12 million would be reflected in the credit available to l l
15 ; Metropolitan Edison. The additional $27 million of revenue, i
16 plus the $12 million of credit that would be available, 17 would be enough to provide approximately $10 million that 10 L could be spent to eliminate many of the reductions that i
l 1
are set forth in Mr. Smith's letter to the Commission.
V 20 We said in that letter that we would go back to spending 21 that money in reverse order from the way that the 3
22 0 expenditures were set forth. i e
With the additional credit i i
22 3 and additional revenues from this petition, we would be able r.
to do the ~ work tbst is set forth in Items 12, 13 and 14 ig o ;
li!;i which are the personnel related operations and maintenance K
- mnum, c. mnex., ,=. - r m e.eema.cx m. - umsr.nm. m. im2
2-10 __ _
Graham-direct 100 erpense reductions and the reductions in the transmission !
1 I cad distribution construction expenditures, both for 3lpersonnelandassociatedcosts.
I 4i We would also do as many of the Item 9 through 1
5 ? 11 expenditures as we would be able to if we had more d
6 f revenues or more credit as a result of the rate case. The i
7 kind of expenditures that would impact the ability to 6 hook up new customers would be able to be made with the 9 .! higher revenues and the higher credit that we are suggesting.E C
i 10 j The other.two changes that we are sugg'esting 11 linthispetitionare,firstofall,toceasedepreciating i
la i TMI Unit 1. The addendum to the September 18, 1980-order 13 l raises this quest. ion. We are focusing only on U. nit 1 in E
14 i 'this proceeding because Unit 2 has- other considerations i
15 l and problems associated with it. .
2 On Page 8 of your petition,'we have set forth 16 l 17 the requirements as we understand them from our discussions t
18 k with the FERC and with our auditors with respect to the i
19 cessations of depreciation. We suggest that TMI-l be 20 $ transferred to plant held for future use, that there be h
21 y assurances as to the recovery of the investment in the 22 j future and that there be assurance with respect to the Q .
23 y level of depreciation reserve when TMI-l returns to rate C -
M.[, base. ,
25.'i I might say that this would not in any way ,
menneacu :. unn me. .,. n. ue:newv uew ave. - umizavna, n. rn=
2-11 Graham-direct 101.
t I
1 j affect the current level of rates and it would not reduce j
3 { the effect of THI-1 being removed from Met-Ed's earnings but g 3 h it would associate that investment with the time when the
? -
4 f plant would be reducing electricity for our customers.
l 3 i Further, we are asking that we be allowed to I
6 l accumulate TMI-l restart costs that are necessary to comply fi VfwiththeNuclearRegulatoryCommissionrequirements. This S f includes capital costs that have incurred since March of I
9 1979 and operating and maintenance expenses incurred only 10 '
since May 31,of 1980 when TMI-1 was removed from rate base I
11 4 and the operating expenses were disallowed to us. These ,
la . are not in any way costs that are related to the TMI-2 13 g cleanup. This would not affect the current level of rates $
.14 but it would significantly reduce the adverse effect of -
I 15 3 TMI-l having been removed from our earnings and we ask that
! i 16 l those costs be amortized over a reasonable period after l
. l U i 17 l TMI-l has returned to service. j 1
3 i l 18 h i l B !
.t 19 l h
zo a B
21 l s
22 1 5 23 r M( a ,
Q 25 a i uenreacn a ruesam mt:. - a n. t:oecur :.ow Avr - wAamesvw. PA. m ic
Graham-direct 102
~~l E
g Q Could you review briefly the effects as you
^
gfseeit, that would result from the granting of the petition, y
k on Met-Ed's current financial picture? )
f
- 1 1
4, A Yes, sir, those are set forth on Mr. Huff's 3
' Exhibit 5-131, page 2. I think they introduce an element of f 6 g stability in that the constant downturning in interest 7 j coverage, preferred stock coverage goes away, the loss ;
g ] position is eliminated. With respect to return on rate base
?
9 j there is at least some level of earned return.
I: 1 I might say the changes which we are i 10['
proposing,would not increase in any way the level of revenues >l u,
sought in our pending rate case, and in fact these revenues O 9;. are part of what we ask for there.
We do not intend that this petition in any y
g way be determinative of any of the issues in that docket and 16 1 we w uld not in any way affect the position of the Commission q- i or Met-Ed or any other party with respect to the order that l
g f we cease and desist from using operating revenues from the i n 3 TMI-2 clean-up as set forth in the September 18 and September i
~g W 26 orders,
^O i
I have tried. to set forth a plan that shows 21[
b l g g how, completely consistent with the material we submitted to
- y l g g the Commission in Exhibits E-25 and E-26, we would be using 2'r, k these revenues to serve the electric system and to avoid the (D
s) i; g . problems related to service and new customer hookup that we
~~~
f movmen e arr.smi me. - = n. i.ecovr i. eve m. - w.msans, PA. iviu l
L
Graham-diract 103 1
y iforesce if wo do not hava these revenues and cannot do the d
3!.activitiesthataresetforththere.
- I might also say that we would consider
- 9 3
this petition as dealing with the comphint againstthe 4
g j temporary rates.
We would not see it to be necessary to i
6 continue with our appeal from the order denying extraordinary y rete relief.
3 As I said, we would be able to restore the p cutbacks in transmission and distribution areas.
I 10 !
We would withdraw the proposed tariff rider 11 ) which would have prioritized new customer hookups.
12 We will take all reasonable actions that we 13 l can to live within available resources and credit pending the
,e) completion of the rate case, and after that, pending the g
g return of TMI-1 to service.
15
.16 l MR. RUSSELL: I believe that is all we f
37 I have of Mr. Graham at this time.
t l
gg j THE ADMINISTPATIVE LAW JUDGE: Commission 19 Staff?
20 E . BAFASCH- Your Honor, if I could I
}
i 37 l would like to pose a question of counsel to clarify exactly I
22 j what is transpiring this afternoon.
Mr. Russell, by Mr, Graham's presence here 23 nf y f today does this constitute what the company would put. forth
~- t e 23l as its direct case against the temporary rates? '
MC4mpACM t *TA.*tsN#f fMC. - 21' ft LL'M !Cl.LLOW AVI. - HARPISBU M PA. 17532
l '
t
_ crnham-direne 104 if 1j i MR. RUSSELL: This is the principal thrust 3
-t
- of the support for the co
- nplaint, yes.
3j MR. BARASCH: Is there going to be another witness?
4.]N 5l IG. RUSSELL: We had indicated that Mr.
I 6 t,Dieckamp would be here. Mr. Dieckamp had a conflict and Mr.
i 7 jGraham has covered basically the area that we had contemplated a having Mr. Dieckamp cover if he were here, namely, the p commitment to restore the contemplated cutbacks in the T&D l ICr , areas if the petition were granted.
4 1;
L MR. EARASCH: So then by Mr. Graham's 13 i testimony today this would constitute the company's direct f i
i is case against the temporary ecmplaint?
.24 f MR. RUSSELL: The additional testimony that I
13 e is contemplated is basically that of Mr. Graham.-
1 16 MR. BARASCH: Mr. Hafer is not appearing Q
17 j this afternoon? >
1 18 0
^
MR RUSSELL: At least I am not aware that i k
19 3 he is going to.
't 20 i THE ADMINISTRATIVE IAW JUDGE: Mr. Hafer l -
31 ( is here.
22 MR. BARASCH: Thank you.
I 2h CROSS-EXAMINATION :
E O
" : 8' "
p
"'"etw:
25 l Q Mr. Graham, I have a few clarifying i
?
um ma e nesnt me. - ar m seemvtu..w m. - wwwma. m. m :2
Graham-cross 105 1,y questions I would like to put to you about these financial r 7 l statements if you can answer them.
S. t n
First of all, with respect to the expenses le i
H 4
0 that are totaled on these two pages of Exhibit B-131, am I 3 { correct that these expenses exclude the clean-up expenses i
6 $ associated with TMI-27 ej k, A Not entirely. There are some TMI-2 expenses 3 j that are being charged to income. .I would not call them i
ggclean-up expenses. I would rather call them operating and Q
l go $ maintenance expenses. Those are the only expenses that are i
gg charged to income on this exhibit. j l 12 The clean-up expenses in the various periods being viewed here are virtually entirely covered 13
. e l 14 fbyinsurancerecoveries.
g Let me just clarify that. If I were L
16 l answering your question as to clean-up, my answer would be 17 they are all excluded but there are some TMI-2 operating and I
t IS maintenance expenses that have been charged to income.
19 Q With respect to insurance recoveries they 20
- ! are excluded from these financial statements ?
37 [ A Yes, sir, they are handled through a eferred account, 22p p
23 n[ Q The item you identify as interest charges Y and preferred dividends, are those the capital costs that q
24g g g f are associated with all of the company's capital investments?
ne:muen e wnne me. - a n. c cmu.ow m. - umismc. % ime
Graham-croso 106 f
7 lIn other words, plant investmant that includes both IMI-1 and y TMI-2. !
A They are the entire capital costs associated y, ]
4 Luith the company, yes.
5 Q In determining this item referred to as 6 frate of return on average common equity devoted to rate base, I
y gis that a return calculated on the company's rate base which 0
f excludes both TMI-l and TMI-2 7 A It excludes entirely TMI-2 because that was 9}
10 (never in rate base during the period. It includes TMI-l for l
gg }12 months in the 12 months ended May,11 months in the 12 months ended June,10 months July; in other words, it goes
~
12 L ,
f l .
p 13 J out one month each month on page 1 of the exhibit because it
\
l 34 !was in the rate base during some of those periods and it would 15 jbegoingout.
16 'l On the other hand, on page 2 on line 25 i
17 iue made a calculation that entirely excluded both TMI-1 and 18 lTMI-2, just like the Commission did it in'its orders, so that i
19 f{what you have there is an average return on average common i
20 l equity other than T4I-1 and TMI-2.
21 j Q I have one other question. Perhaps you I
22 f explained it earlier but I am not clear with respect to your 33 reasoning process for normalizing Adjustment A wherein you 24 deduct the annual revenues associated with TMI-1 and then add 25 ( back the proposed annual revenues associated with the petition, d
i !;OWT3ACt! & Y.A*.tSHA!.. titC. - 27 ff. LeCM".YfLLoV? AVI. - HAMMtsarVPC. PA. t 7 2 i *.
P
Graham-cross _
107 3 $ for a net increase of $6 million.
I e-- 2J Could you explain the rctionale for that i
j again, please?
O 3
3 4 l. A Sure. The Commission deducted $26.9 S llmillion from our rates. They did that effective June. For f
6 q' 12 months ended September there cre stiill eight months of the time when the TMI-1 rates. were in there. So we wanted to 7[L g make 12 months ended September look just like the Commission p p intended that they look when TMI-1 revenues were taken away.
10 - So we took away the $26.9 million but i
11
$7.8 milli n f those had already been taken away because t
l we did not have them in the months of June, July, August and 12
(
13 September.
.)
- p. j
.s So to annualize the effect of the l
gg j Commission having takensway $26.9 million, you take away
'l 16 3$19.1 million.
17 n Then the proposal we are making here is to 10 That is the second line.
fadd$25million.
19 I can put it another way. Four of the 1
20 i months that are included in 12 months ended September 1980 I
21 already do not have the IMI-1 revenue in them. We took the TMI-1 revenue out of the other eight months. We then added 22 23, in the proposal tha~t we are making here.
h y[ Q Mr. Graham, getting back to the operating l O
n 25 f axpenses , you testified that certain TMI-2 expenses were i _ . _ - . - - - . .- -,.
Graham-cross 103
., linclud:d in these financial statements and thet th:so ucro
.a
, anot related to the clean-up, is that correct?
P .: p' d j A That is right, y ;
3 1 4j l Q Could you describe with some more particulcrity n
, !what kinds of expenses you are referring to?
3
- g. l A It would be better if Mr. Huff did'that.
M He, I think; can give you a more exact detail of the eract 7 )i p 3 nature of the expenses :at Three Mile Island Unit 2' that are ;
p jcharged to income, and those that are deferred.
5 gg, MR RUSSELL: May we recall Mr. Huff and gg I
have him respond, if we could?
g THE ADMINISTRATIVE LAW JUDGE: Why don't !
s n 13 y y u have Mr. Huff set there.
U ! .
14 15 i gg I THE ADMINISTRATIVE LAW JUDGE: Direct your h
77gquestiontoMr. Huff.
ggfBYMR.PANKIW:
2 Q Did you hear that question, Mr. Huff?
19 )1 g
- A (Huff) Let,me rephrase it.cy way. What you are g j asking for is the type of expenses that would be included U
g in the income statement which is not chargeable to the recovery?
gfOrtotheinsurance--
.c :
_ . fi Q Which of the expenses cre TMI-2 expenses i 2:
g[ that are included in these particular financial statements.
I u -c ,- n_. n. -- =, u . -n -- . - u - n. ,.,.. ,,,,e l
Graham-Huff-crms 109 i i 5l A (Huff) During the ' course of ' operation 'at Three E
'~-
% l Mile Island, particularly Unit Ho. 2, there are a variety ;g 3 f of type of expenses which do occur as a normal function of k
4 [ che plant and not as a function of the recovery effort itself.
5 k Such things, to my recollection would be the maintenance and 6 keeping running and the operation of several of the out t
7 f buildings which are not used in the clean-up, effort.
9 S Certainly the guard force, the normal j
9 i operations of the guard force that they are guarding the 10 fences, et cetera, are not part of the recovery.
11 The overtime and the additional staff that i
i 12 I has to be required during the early part of the stages of the I
13 recovery effort was but not the normal force and the normal g 14 h complement of guard forces that were there.
15 { Maintenance of outside fences. Mail runs
, 16] and ndministration costs, et cetera that would be for the 17 normal operation. The normal time of some of the oprators l -
10 / would be included as a normal operating expense and not F
19 5 chargeable to recovery.
20 BY THE ADMINISTRATIVE I#4 JUDGE:
1 l 21( Q Could we quantify the approximate amount of
- l 22 f those costs with respect to TMI-27 l i
! 73 A (Euff) Included in the,0&M expenses in this state 7
.. 24 ment as of September 1980 -- g G l .
293 MR. ?ANKIW: Yes. }
nennew c. runsw um - a n. Lockwittow avz. - namerseumc. PA. iris:
8-
. Graham-Ruff-cross 110
, ] THE WITIESS: { Huff)"Is $1.7 millien for payroll l
i
, f' and $4.7 million for other 0514 or a total of $6.4 million pre-!
- I ,i
_ : tax.
a' ],
. !BY MR. PANKIW:
4 i Q That is for TMI-2 only, non-recovery 3 f 6,lrelated expenses ?
I A (11cff) That is. correct. ,
,f. l2 ,
e g ; MR. PANKIW: That is all we have, Ycur !'
i
, j Honor, at this time.
- C 14
!i THE ADMINISTRATIVE 1AW JUDGE: Mr. Barasch?
i
!! I g MR. BARASCH: Perhaps we could have about j fa10or15-minuterecess,YourHonor7 THE ADMINISTRATIVE IAW JUDGE: Yes, we will os 13 ,
- take a 10-minute recess.
A, .
I -
5h 3 (Short recess.) t i
16 ]
i
.I i 17 i l (Transcript continues on Page 111.)
18 l 19 i
i f
21 ;
22 .
I 23l: !
i Q
- ul l
s7, ;
E ume.m ,. tansus me. - n u. wama.Lew Avr. - umse.mo. m. non !
4-1 Grahrs/ Huff-cross 111 b
l 1 MR. BARASCH: Your Honor, the Consumer Advocate
^
0 at this juncture is not ready to proceed with cross-5 ,
' examination. We woald suggest, as far as our cross-(
4 { examination is concerned, to pass at this time and if we ;
5 f could have tomorrow morning to prepare, thct by tomorrow 6 il af ternoon, hopefully, we would be able to conduct cross-il 7 j examination of them then.
G -
TIE ADMINISTRATIVE LAW JUDGE: Mr. Ryan.
9 MR. RYAN: I would like to ask a few questions 10 now because I probably will not be available tomorrow.
11 , BY MR. RYAN:
12 .Q Mr. Graham, I am Bernard Ryan representing
^ 13 , Bethlehem Steel Corporation.
I heard you discuss several g 14 .e aspects of the petition that was filed yes*,crday with 4
15 ! respect to a proposal' for a $25 million increase in annual l
16 5 revenues in the form of a revision to the temporary rates 17 L now in effect. I assume that would be revised temporary l
I .
l 18h rates. Is that how you view that question? l t
19 A (Graham) No, sir. If granted by the Commission, l
20jit would be our understanding that this would be permanent i
21 rates pending the completion of the pending rate cases.
22 ; Perhaps Mr. Russell should address that rather i
i 23 f than I.
F m
L.t !
MR. RUSSELL: I would have nothing further to g 25 contribute. It sec=s to me the claim in effect on the M e " 5'.s Att: 4. *1AtitSilAb. IMC. ~ g BL 1;CCOYt:.f CW AVE. - H/ R Ft:SSiJ*C. PA. 17110.
U
4-2 , _
Graham / Ruff-cross 112
> \
?.f.temporaryrateswouldhavebeendeterminedandthenew l
- . 5 !
q rates would be " permanent rates" pending any subsequent {
V 2(i !
.; ( change in the rates pursuant to the company's rate filing, l!
c,'. j primarily certainly. l 0 i 5( THE ADMINISTRATIVE LAU JUDGE: I think, Mr. Ryan, 6 f I think if no complaint hsd been filed, those temporary f j ,
? ) rates would have been considered as permanent rates under l
0 i the Act. Since a complaint was filed, then we think that E .
9 g= those would be the permanent rates exclusive of any general 1
.i I i 10 1 rate increase application. The general rate increase !
i
)
11 ( application would have to be somewhat modified because the l 1
l 12]figureswouldbedifferent. l n 13 ;D l MR. RYAN: Actually, I may have spoke to something (J l C i .
t l
.141 I was not intending of doing, but I always thought of them -
15 as temporary rates which were subject to certain provisionc ,
a i 16 in the Code. For instance, six mouths maximum renewal ;
I 17 [., expiration, but let 's pass that. I was not trying to get i 4 1 9
i ICl into a legal debate. !
y ,
19 l THE ADMINISTRATIVE LAW JUDGE: The temporary C
20 y rates were set for six months. t i
F MR. RYAN: But the idea of the cost, at least j 21 { i n ,I in making the proposal, would be that if these rates were i 23 allowed to go into effect pursuant to the requests in the i
(o )
p.. j petition, they would come to be the base rate of this v t :
35 [ company until such time as there is a decision in the pendingI
- mm e mm ma. - w- n. csaa.r.w.v e.-. - nmewca. v mn \
4-3 crcham/ Huff-cross 113 a f f i 5{generalratocase,isthatcorrect?
u j
~
MR. RUSSELL: I think so. ~I S o BY IG. RYAN:
)
e,'- Q Now I heard you describe the reasons that you l
5 f sau why this increase should be made at this time, but I l 0
6 2 did not hear you describe how you propose to implement that I
? ( $25 million increase if it were permitted. Would you do L
0f.thatinbricfformforus?
x Yes, sir. That is set forth in the 9l ,1 A (Graham) 10 l petiticn. We would propose to do it on a per kilowatt hour l' 3
11l basis.- That is in Paragraph 9 of the petition.
In the f' 6
13 first sentence it says: "And that such increase be applied p 13 as a uniform charge to each kilowatt hour of sales subjcet M j to the jurisdiction of the Cozmission." {
t i is $ Q Now would you explain to us why you chose to I r ;!
4 .
16 i use that method of cllocating this increase among the :
0 ,
li f various customer classes of Metropolitan Edison Company? l t 1 16 j MR. RUSSELL: Mr. Carter is here and I think l 1e Mr. Carter, at the conclusion of Mr. Graham's testimony, i ,
20 ;t can respond to that with greater particularity.
t g.g j MR. RYAN: All my questions have to do with that.-
l ,
THE ADMINISTRATIVE LAW JUDGE: Mr. Carter, j
- 21. ]
a rg3 j can you pull up a chair there? l i
- i
- ( I i
2.3 i i
.M@*f tt AS*: r: tit.RcfA,. 002. - 27 I1. WOW 1' !.GW A".T. - HAMiC:l:itM. PA. 1711a - - - -
s
1 4-4 -
_ . . 114 a f <
'$ EUGENE F. CARTER, called as a witness, having I
.. g l '
^
2I b een previously sworn, was examined and testified as l j
1 follows: I
- ! j 1
CROSS-EXAMINATION k BY MR. RYANi 6'
- Q Maybe I should start again and I will make a 7 +[-
i
!commentnottogetintoquestionsofwhetherornot t here .'
8 ,
8 f, is a recession, Mr. Carter, and get directly to the crea 9d B of my interests.
10 l As Mr. Grabam explained, and as set forth-in '
11g l '
Paragraph 9 of the petition presented yesterday, the 12 L intention of Metropolitan Edison, if it were granted the 13 l S25 million increase, would it seeks
, , g. be to apply that as
.A t ;
h., a uniform charge to KWH of sales. Can you explain for me 15 ;
solwhyyouchosethat method of distributing this rate increase
< among the various customer classes?
17 .
5 A (Carter) Well, there are two reasons, 13 0n N Mr. Ryan. In the interest of presenting a number, which is 19 3 ti j a very simplified calculation, the total request divided l 20p l j by total kilowatt hours will produce a mill per kilowatt 21) i hour nucher. If we are interested in getting into an
! 22 h j alternative method of allocating an increase, obviously 23 3, l
'. there are an infinite number of combinations and as . I believe 1 24 [
- ' i you are aware, we cent through this back in one of the other 1 25 !!
b
- mmm c. eum:4: me. - w n. t.ocar tove we. - mnmsnna. n. m tz l
l4-5 Grahcm/ Carter-cross ils i Ijproceedingsinwhichwedidnot come to any specific i I
- b 2 conclusions.
3 [. For instance, you could have any cross-the- I l 4 l boaro percentage increase. You could have different mills l
5 il per kilowatt hour increases for each of the rate classes.
P d5 You could go through some fully allocated cost of service e
f 7 E and di: tribute it on that basis, all of which would become I
OE very cumbersome in terms of consuming hearing time and in l
9ltermsofgettingmutualagreement, I suspect, from among 10; the parties.
11 Q Well, when you apply the increase as you seek i
12 I here, if you were to do that, I should say, would that have l 1
c II the effect of producing a different rate structure for g
14 :
l Metropolitan Edison Company after the increase were put into 15 j effect that existed at the time this Commission ordered all ;
E i I
16 ] costs associated with TMI-l to be removed from rate bcse?
l'l - , A (Carter) Well, to the extent that when TMI-1 IG f costs were removed, some costs were removed from demand as I E
19 ! well as energy as I recall, yes. 1 believe there isanother a
il 20.] aspect in perhaps completing the answer to your earlier
?
n j question.
If we are interested in tracking the related 22 revenues associated with any increase of the nature contained; a
(
23 h in our patition, the mill per kilowatt hour basis is a l 4
,. p. or in a mill por kilowatt hour basis is much easier to g 25j track as opposed to percentage number or change in rate !
- x. mua e . -a m . - a n.- wew ww ,wc. - w.nmaux. m. mu $
4-6 .
._ Graham / garter-cross 116_
9 i*
S 2 L structure in demand energy and customar costs.
J
- H q
V Z '(' Q Well, I certainly would not quarrel that it-is l
- 2. Sj o simpler procedure, but isn't it correct that.if you take j
4 j this approach in alloccting a $25 million rate increase 5 k among your customer classes, you are in fact changing the e
n d [ relative relationships among the customer classes as far as, i
? I 7 { for example., their contribution to rate of return? If you f
- i t E6 were to do a cost of service study? i I i 9 } A (Carter) Well, I would tend to agree with you !
l 10 > and it is for that reason that I stated earlier I suspect it we would have difficulty getting a mutual agreement among l 1% !thepartiestothecostofservicemethodologyandthe m 13
- b !..spreadofanyincrease.
14 i Q Is it correct that the cost that you are trying I
IS :t t o cover here are the revenues that you were trying to earn .l l
26 { by this request for $25 million increase are not in any 1 i
17 i way or at least in any direct way associated with energy h.
It 5 costs to this company?
i 19 A (Carter) Generally, the costs are related to 2G. ;.I the additional rate base that the company has that would be a
al g non TMI related. Those dollars, while I have nemade a 22 f specific analysis, would be in the area of transmission
(
n [ plcnt, distribution plant, items of that sort, along with 3
2.s j increases in 0661 costs, payroll related type costs.
k 5 25 ll Q Your energy chcrges are being covered under t
- 3*taCAc't
, C, MAM6F.AL. n% - M !!. LMrl.T.LW.Y A*.T 'AUGWM. P A. imO
4-7 Graham / Carter-cross 117 l
1 h other mechanisms in your tariff, aren't they?
i 21 A (Carter) The fuel component to the extent en lg 3 3 operations and maintenance cost is related to a function 4 { that we might allocate on an energy basis and cost of H
Sl service. Then you would consider that an energy related elg cost.
}
4 ?
7j Q If you were to do a cost of service study using G l( the same methodology that is used in your Exhibit C-3, I N
9j think it is, and then to reflect this $25 million increase 5
10 l which you propose to allocate on a KWH sales basis, would j R t y.1 j that not change the rate of return contributions on various la customer classes?
B 13 [ A (Carter) It would change the returns. I have g h
24 4 not made the computations to know whether it would bring i
l 15 g the returns more nearly to a uniform level or more divergent 5
164i level.
! on 17 f Q But it would not converge /the existing conditions?
16 i >
.A (Carter) No.
h 19 9 k
20i E
N 310 -
E 22 [
35 }
a 1
- t eewen c insw u:c. - :- m. tecm: ow Av:. - EAnmwr<c. n- in sa
118 s
1 i: MR. RYAN: I have no further questions.
i<
3 % THE ADMINISTRATIVE LAW JUDGE: Mr. Frater?
- - l MR. FRATER
- I don't wish to ask anything )
I 4 1 this afternoon if we are coming back tomorrow, Your Honor. ,
1 ,
4 l
5 THE ADMINISTRATIVE 1AW JUDGE: Mr. Kelly ? I 6f MR. IGLLY: I will also usit till tomorrow, s i
? ( Your Honor. !
E j THE ADMINISTRATIVE IAW JUDGE: Do you have 9 any?
10 MR. JENISON: I will wait till tomorrow. l I
11 j MR. McCIAREN: Your Honor, could I clarify 12 one procedural aspect? I think perhaps possibly there is a 13 b y little uncertainty here as to what it is the company is 14 presenting by virtue of this petition.
15 i Is it Your Honor's understanding that what i
16 you have before you is a petition to determin'e the complaint 17 filed by Metropolitan Edison Company against temporary rates ? l t t 16 i THE ADMINISTRATIVE 1AW JUDGE: That is the !:
i r 1 19 g issue, the complaint itself. As I view it, .the petition is C
f 20 ; a proposal to resolve that complaint.
4 21 Am I correct, Mr. Russell?
4 l
g r. MR. RUSSELL: I think yes, it is intended 23 to help give some suggesticas and prcposals as might help t
g implement the determination of the complaint, and in the c3 0 process of doing so, raises jointly with the basic complaint I l
I No!!.".2ACH a M A*rtSMA1 IMC. "- 2T M.- EG 2Y1"40W AVZ. - MA2F.tSti!!% PA. 17112 t
119 g s several other related matters that arise out of the same l !
^
g 'i order which fixed the temporary rates, nscely, out of th: ;
j removing of TMI-1 from base rates. :
- S g
It therefore provides a vehicle to raise, 4f t
5 g in connection with the determination of the complaint, these ,
e g collateral mstters or related matters , namely, the cessation j l
7 ll!; of depreciation on TMI-l which has also been raised by the lCommhsioninthisproceedingaspartofthisconsolidated g
g i picture, and also the possible accumulation of certain TMI-1 10 restart costs, but in no way to try to amend the complaint or i
i 3 j otherwise change the complaint.
13 j It is simply an effort to provide a frame- l l
-i l ,. s s
13 l ( uork within which the complaint may be determined and decided ,!
,g THE ADMINISTRATIVE LAW JUDGE: As I view itj
. I 15 ; the issue is the complaint itself and I view this petition as [
i 16( a suggested basis for settlement or disposition of that E
g,7 l complaint. I don't think it has varied any of the allegations.
i l gg lAmIright,Mr. Russell? I don't think it has varied any of
- i 19 l the allegations that are contained in the complaint itself 20 which is the cornerstone of this proceeding as I view it.
gg MR. McCLAREN: Does Your Honor have in mind time frame for a decision on the petition?
22 23 THE ADMINISTRATIVE LAW JUDGE: We indicated
~ 'A. l that we would give staff an opportunity. Idon'tbelieveyoulQ y .
25 [ were here yesterday, b wem e rei,v en:. - n r . s.e wru..w me. - wutwsuu a nra
120 w
I $
,i MR. !!cCIAPIN: I am aware of that. i ,
~$ "
i l
- THE ADMINISIPATIVE IAW JUDGE: We set the i O *!.i14th for the other parties to respond. !t
.* 4 i 4 1 4g Actually we would like to have a dispositionj r.1within the trial period, if possible. !'
1 J
MR. BURGRAFF: I am sorry, Your Honor, I 6y 7 f did not hear the end of that.
8 THE ADMINISTRATIVE LAW JUDGE: We would g llike to have a disposition of this matter wittiin the trial a
g period if possible. It may be that we may have to suggest r
.s1. to the Commission that they extend that some time. 9 12 l Under the act the Commission set the temporary rates for a six-month trial period and they have O 13 j d
the right to extent that.
A4 gg l Now I am not sure, with the other parties 5
- submitting their testimony on November the '14th, that we can y$
~
G g reach that deadline of December the 1st and giving the parties 6an opportunity to brief the matter.
,0 g MR. McCLAREN: Ycur Honor, as I would read 39 l g ? that section of the statute,1 believe upon the filing of the g complaint the temporary rates continue until hearing and
$ decision is completed on the complaint and you are released
,,2 4 j 23 h fr a thas e bounds of the six-month trial period.
THE ADMINISTRATIVE LAW JUDGE: You may be g
, prighc.
l5 t E
??SNMt.4CM fa T.MMSME. INC. - 27 m L'OSKW11.t.OW AVE. - M ARfMSSUN. PA. 17181
121 -
U y
?'l MR. BARASCP.: That would be our understanding
- ?
5 of the law as well, Your Honur.
g 3sW THE ADMINISTRATIVE LAW JUDGE: You eny be s
4 1 right. At least we ucnt to give all parties an opportunity i
5ytorespond. We would like to dispose of this aspect of the P
6 hcase, get this out of the way.
7 MR. WOLASCH: Your Honor, if I could ask a a follow-up question along the lines of Mr. McClaren's question.i 9i y Is it Your Honor's understanding that not [
E lo [only does this petition represent a proposed resolution of the E
13 scomplaint or settlementof the complaint, but also describes a
12,4 the bounds of what the company's case is against the complaint,,
p 13 g i.e. , the $25 million is the amount which they believe they a
- s. .
W 24 !can justify?
I 15 j If Your Honor does not know the answer, I i
16 4 will put the question to the compeny.
I 17 i THE ADMINISTRATIVE LAW JUDGE: You can put l
' l t
iff [ the question to counsel, but as I see it, they filed the I? E complaint and it is up to the company to justify the complaint .
f Now how they do it, whether this is it, l
20 h' t
21 t whether Mr. Grinam's testimony is it, that is up to the N
, 27.i company to determine as far as ue are concerned.
l 9 23 f MR. RUSSELL: I think you are using an
?
v
- g; unduly restrictive view.
~
The complaint is there. It stands g
.",3 : on its c:m two feet and speaks for itself.
eexu w c m rw_. n _ - a n. i.cew ,u.ow ,a - mmaum. n. mu
122 e ( This le c petition by the co:pany to
-) i g implement the possible early determinstion of the complaint.
It sct forth certain suggestions. Beyond th::c, the natter i
- g. f g h goes from there es the proceedings go ahead.
'E.
- e
~
DIE ADNIHISTRATIVE IM JUDGE: If you view i g ! the petition itself, the petition deals with matters e::traneou's 1
0 rIto the complaint.
~
e MR. BARASCH: I understand that, E THE ADMINISTRATIVE I R JUDGE: Suggested !
gI gg f forms of a possible settlement, as I view it.
9 ll gg I MR. BURGRAFF: Just carrying through on the 12 complaint aspect, Your Honor, you are envisioning an initial '
O 13 l: decision recommending a level of, it is our understan j
,1,g. y permanent rates and that would go to the Commission, am I-li g correct? ,
16 L THE ADMINISTRATIVE IM JUDGE: As we f'
,,, t, envision it right now the complaint is the cornerstone of l,
f 18 l, this proceeding and we envision this as merely a suggested h
l : p3F form of resolving that complaint.
t i :
Our view of the matter is that it would be 20 ,
l o1.,
, ! our position to make a recommended decision to the Commission
.. ,, as in a ra te case.
l uy ;
l Anything further? !
)
t L2 g2. I-ER. McCLAREN: Bothing further of the staff,-
. f3, .,
.3[ ,
. ! Your Honor, i l
l
- ,; t i f . ennnen c rar.swas.. r <c. - :7 ::. tec,:m
- i.ew Av:. - uAvrsw:s r>r. im:
l-
Grahmn-Huff 123 .;.___.
7 _ _. _ _ ._ _ ._ _ ...-
e
- E.LY THE ADMIIIISTPJ.TIVE IR TJ0GE
- Q I think Mr. H
- fer gr.ve us ths figures cf y ' sin and four, ten c.illion, for the operation and mainten nce a
f 0
<,- lthat was not included in cle:n-up as far se TriI-2 is concerned)i i t g yis that correct? .
l' 6lt A (Huff) Thst is correct.
i 7f Q Do you have the scme figures for THI-l?
s '
Cd A (Huff) Your Honor, the TMI-1 numbers that i E :
1 g pare included in the September 30, 1980 12 months ended en i
in l Exhibit B-131 is $4 million 770 for payroll and $12 million l 9,
33 'i902 for other than payroll, which is Other O&M. !
h !
- 12. E Q Mr. Grsham, you indicated thzt you were N
is taking out the revenues associated with TMI-1 over the 12-montr 14 j period, is that correct? l I
A l 15 E F
(Graham) I took out the revenues that the ;
is, f Comheion took at:sy from us in the May 23rd order, yes, sir. j l
5 l 17 r Q And you based that over a 12-month period?
A '
le ; (Graham) Yes, sir.
if [ Q But you have not eliminstec any of the -
2 I so Iexpenses that were associated for that same period of time? [
r 2 y. A (Graham) No, sir, the expenses were not The expenses are still there. We have to pcy lj 25e$eli*inOted. ,
n ; Ithat money. They were not allowed to us in rate making. i
- g. , Ett the expensen are still there. g 1
25 - in the esme way I ceme up with c rete of :
2 P
ra:m e m: - l
-w.t. m - e . :.c mm.tove e :. - w.nscen. ". mic
_ _ _ . - - -- ___.Grahan-Huff
. - .. - _ __. _ 1. 2 _4 _ _-
- s return thct is significantly Icss than the elloecd rate of j
- t e ; return.
{
Os "! But didn't the Commission indicate, I e$ .,
Q ;
l! !
g, pI believe in the May 23rd order, that in view of the fact that I
y f they were allowing the company to recover its purchased energy e
g costs, did not the Commission in that order say that they did 7 ) not thinit that they should still have the customers assume f E
Ojother costs at TMI?
pj A (Graham) Agreed, but I am not asking the ,
gn j customers to pay those costs in this filing. What I am sayind, p :
Judge, is -- l
^q I(! '
~
Q Well, you are not asking directly but you 13 b 3 jj are showing those costs in your expenses here, in your income V L 34 ?
l statement. f 15 $ A (Graham) No, sir, I don't think that is l ?
16 k a fcir characterization. I agree that those costs are in . ;
h 7 f this income statement. This is a total income statement for {
i
.q. f the company. But the rate of return that I produce, which is 3
Ig only 10 percent, is significantly less than the 13.38 that 20 was allowed to the company.
t l g! Q The 13.38 was not a guaranteed sum. That 22 ) was a sum that the cingny was given an opportur.ity to earn, 4
23 y is that right?
r 7- y,, A (Graham) I don't agree at that we were j
' Q) 7g given an opportunity to earn 13.38. f l t s, wen e t msw.s sua. - v n. ue:nnnu o:i a: - nmissern. rz su s: 1
Greham-Huff 125 g ,_ __ _ . ~ . - - _ -- .
I. ,
i E ;! Q I mean, a rate of return alloued by the .
4 i
~
- 2. fCommission pretumes that the co:Lpany has an opportunity to Ig i
y :9t carn that. 1r does nct guarantee that rete of return in any 3
6 trate case, j A Agreed that that is the presumption l .
5f ,
(Graham)
S $1 also suggest that the rates were set in such a uay thct it
=
1 7 (wculd not be pcs sible to accomplish th:t. l.
D.k What I am trying to suggest, Judge, -- and ,
l 9 we could come up with a full non-TMI income statement and non-10 f TMI rate base -- that is not what we did here -- I might say e
3,1 $ that such evidence was produced in the spring in evidence !
13 f produced by witnesses before the Commission -- what we tried .
15 to do here is take a look at the company as it actually exists g
- w. a l
14,S.and the costs associated with TMI are real costs that are j 3
n t is]beingspent. {
k ;
1s [ We are not asking that rates be set tha t l 4
k .,
17 { either directly or indirectly include any of the costs j
. 4
- c i associated with TMI.
II 19 l These are the total expenses of Metropolitan F
20 ( Edison Company for 12 months ended September 30,1980, all of j
n j the costs that are. charged to the income statement, TMI and E
yjnon-TMI.
I 23 {c On line 25 we came up with only 10 percent
- .g.
a even after we get the $25 million, jg 25i I might suggest that if it would be useful '-
E
. ,,m m,ee..,m,m_,m - oc. m m m, m.-, m ,.. m m,
9:2.h!L:?ef. f -.
110 ~~
i y
,and I think there cre several of them in the case for
- p. 3 j different periods, for historical periods, for forecast
, t c $ periods -- we can come up with a completely non-THI inco=e
! statement and rate base that excludes all of the expenses and !
4 t
g jallcftherevenuesassociatedwithTMI.
a I suggest to you 'that we would produce a e 6hv g
7 [l revenue requirement --
Q That is what I would like to see, an income gg 1
g j statement excluding all expenses as well as revenues from TMI-f gc,j2 and TMI-1, g, A (Graham) Could I just have one minute?
12 We will present that as an exhibit tomorrow, Judge.
- n. Q Very well, y l A (Graham) I am concerned, Judge, because 15 I have the feeling by your question,'about whether we did v
that directly or indirectly, that it implies we were trying 16 g
77 j to sneak something through and I am very concerned that that i
gg ; impression not be left.
19 Q I m not inferring anything. What I am i
20 , referring to is the Coc::nission's tiay 23 order in which they 21 allowed the company to recover its purchased energy costs and 22 ; in that same order I believe they said they didn't feel that A
23 by the same tchen they should allow the company to recover --
,j well, in that case I don't know whether they said return or
~
23[ rec ver enything, on the properties that were considered not 1
McWSr4H t: ?. TAP!SHA% MC. - :? t'e COC:r.*1;f ?.OV/
. A'.*:. - MAVIS31.l AG, PA. 17117.
I
Graham-Buff-127 if i
- jused cad useful in the operation of the company. !
e i
)
- A (Graham) All of the operating and capital g
. Ecosts c associated with TMI-2 have been removed from our rates 4 and the Commission has ordered us not to spend any custecer h
3 } revenues to clean up Three Mile Island. l 8 i 3l a We are trying very, very hard to comply with !
l 7 jthose orders. We are trying to do that here and we are trying!
s ;
i g :sto produce a level of revenues that does not try to put sny l I
h l g r]TMI-l or TMI-2 or clean-up into the customer revenues, whether i
gg jdirectly or indirectly, but allows us enough revenues that we l 3
u.
ican hook up customers and keep the transmission and maintenancei gg gp eople and distribution people on the line.
I c
13 That is exactly what we are trying to do g
3 jhere and if there is a better way to show that I am perfectly j gg happy to do that.
What we were trying to do with Exhibit B-13d -
l q3 i E
l was look at the company the way thatit is seen by the invest I 79 ;4 73 $ ment com= unity, which would show the company earning nothing 6
l 19 on its equity, having about 1.3 or 1.4 times coverage, and 3e earning 10 percent on its rate base equity.
21 Q In your Item 18 on page 2 of B-131 you have e
interest charges and preferred dividends of sixty-six million l
4 l and some odd dollars.
,.!ep A (Graham) All of the company's capital lg
'" ,, ; charges are in there, yes, sir.
-~ a l
_ - s ?ms.tm c, tsu smL.1:@ - 27 f f. CCOT/.hCW AYZ. - GP.R;0eURG. PA. m 10 l
_- Grah_am_._H.u.- f._f ' .
128 - -
y, Q There would be some indirect impact on the ,
- 3 customers with the interest charges on your investment in the b=; ~#
,g lTMI-- l gf A (Graham) No, sir, I really don't think that!
)
- is a fair characterization because if I come up with a return y$
6 5 on rate base equity thct exceeded what the Coczniscion had i
r; i allowed, then I could agree with you that maybe we are sneaking e y a little something in there.
9l But uhen I am 325 basis points below the ii go allowed return on equity, I suggest to you that I am not in IE , any way doing anything with any TMI costs that lay any of them b,
ggi on the customer.
13 j THE ADMINISTRATIVE LAW JUDGE: Anything y ,further by counsel?
33 MR. PANKIW: I have just one more question
.;6fIwouldliketoputtoMr.Huffwhileheishere.
37 BY MR. PANKIW:
1 18 j Q On normalizing Adjustment E there is ,
tg ) indicated a federal tax effect at 48 percent. Isn't the I
20 current federal tax rate 46 percent? Will you explain why Sl it y u e 48?
22 l A (Huff) It is if you have taxable income 73 currently, but we are in a carry-back position and it carries 1
3., back to the tius period in which it was 48 parcent.
v 23 l MR. PANKIW: Thank you .
? j.
? rame. =n o ansaw r- c. - n tr.- coccur.t.m w_. - wAnnicsue.o. PA. ??tta
Graham-Huff 120 -
r '
)
.g THE ADMIUISTRATIVE LAW JUDGE: Any other
) j l E testimony to offer, Mr. Russell?
I "r j MR. RUSSELL: Not at this time.
4 THE ADMINISTRATIVE LAW JUDGE: Then we will f fadjourn until tomorrow morning at 10:00 o' clock.
6( MR. BARASGH: Your Honor, would it be N
7 Rpossible to convene tomorrow afternoon instead of tomorrow :
C morning so we would have an opportunity to go over the
? l testimony ue have heard this afternoon?
10 l THE ADMINISTRATIVE LAW JUDGE: Would you ,
l 17.jbe ready tomorrow morning, Mr. Kelly? !
u I l 13 -
MR. KELLY: I suppose if we had to. Either!
U jone is all right with us. The afternoon is fine. M Mj MR. McCLAREN: I would anticipate, Your
( 5 i 15 jHonor,it is going to be a short day no c:atter what, and 16 g.1 wculd probably give additional time for preparation if we t
17 ! convene at 1:00 o' clock. We would have no objection to that. ;
IC f THE ADMINISTRATIVE LAW JUDGE: Is the 1 4 l 19 f company going to have any other testimony to offer tomorrow?
20 MR. RUSSELL: Mr. Graham will be putting in
[
211 the additional data that Your Honor has requested.
2% THE ADMINISTRATIVE IAW JUDGE: Do you have 23 f any other witnesses for tomorrow?
24 MR. RUSSELL: No, Your Honor. Ih 25 !! THE ADMINISTRATIVE IAW JUDGE: Do the parties
' i venueu n r now_. me. - :: n. eeew..u.ow ,.v . - unum. n.. n. mu
130 I
have any additional data requ sts in regard to the presentatio[.1
, [ mcdo today, so the coupany will be preparod? If you can O -a
- r. identify any data requests or cny cisrification thct you i i
34 f want the company to mske on the presentation to made today, f
a ( this might be a good time to let your wishes be known so they
' >k 6 [: can come prepared.
s y[ MR. McCLAREN: The staff does not at this ;
+>
g f time, Your Honor, but we will not hestitate to contact the I
company i.f it appears we need any data and rec,uest it from j
,9 -
J them in a timely fashion.
IO I !
! THE ADMINISTRATIVE 1AW JUDGE: We would 11 -
12 ,; suggest if any of the parties have any inquirios they would m ) like to make, in order to facilitate the proceeding tomrrow, 0" "l hatd t you contact the company so that they can come prepared
\
.M E
! to respond to any question, rather than hold the thing off 15 ;
}
eagain.
16 i 1
i Does the company have any objection to 17 g convening tomorrow at 1:00 o' clock?
~
! MR RUSSELL: No.
6b ,
t 20 :>,'
THE ADMINISTRAiIVE UM JUDGE: Do any
! other parties have any objection to convening tomorrow at 21 3 I 1:00 o' clock? i 22 /
} MR. FRATER: No, Your Honor.
THE ADMINISTRATIVE UM JUDGE: Then we
^A I C _ . ,
w will cdjourn until tomorrow at 1:00 o' clock. T
" i!
b ??CHMU ACH & TMRS"At mc. ~ 07 (!. LOOCVi?. LOW AVI. - HA:tTdSBUMG PA. t*7 t ta
131 -
g_-- . - - _ -
n .
Ib (The hearing was adjourned at 2:45 o' clock i l p.m.) !
Ih Ib ? I 2l .--..
I:
4[
6 EL -
C I hereby certify that the foregoing is e i i
s; E true and correct transcript of my stenotype notes taken by ,I 2 e!me during the hearing on the above cause, at the herein '
9 findicated time and place, before the Pennsylvania Public y
EG jUtility Commission.
it II j
.. a u MORRBACH & MARSPAL, INC,
~
.n 5 By_$ % f M 2 e 84 ;,,! [/ JAMES P 6'HAPA I
s: (
10 l; f By fhi b pETTYB.' MARSHAL Ys A/
z., //-Af-56 s
M[REPORTEDBY:
- t. I
&! MOHRBACH & MARSHAL, INC. I 5
27 North Lockwillow Avenue l' W f. Harrisburg, Pennsylvania 17112 R
~41 f I l
?.2 i, (The foregoing certificaticn of this transcript f does not apply to any reproduction of the same by any means .
2.2
- unless under the direct control and/or supervision of the I certifying reporter.)
I 25' ,
i "C 1?. MC'4 C. !.%*f 0Mf.*., IMO. - 27 ti. LM"fLLM*/ AC - H A.R f. f 8 ? *JF;3. P A. T'#112 -- !
~ . o .
L4. oe ric e s RYAfd. RusscLL 5 McCotJ AGHY 530 PE NN 5 % A R E C C *. ? C 3 saws t, s ass srLL "' ' ' ' ' '
P C DOA 099 sat:tmca L.ac'oct RE ADiN1 PA #9603
- w. somn 03:r% _
2 i s . 3 72 4 7 eu JO"4 8 " C C C ' G '
ca.;L.o.s?na g C ou % 5 t. s osa% wiCMatt stLtzte October 27, 1980 Mr. William P. Thierfelder, Secretary Pennsylvania Public Utility Commission P. O. Box 3265 Harrisburg, Pennsylvania Re: Metropolitan Edison Company -
Docket No. C-80072105 et al
Dear Mr. Thierfelder:
In response to the suggestion of Administra-tive Law Judge Matuschak 2.n his decision dated October 16, 1980, there is enclosed for filing an original and three copies of a petition of Metropolitan Edison Company to implement possible early determination of (a) the complaint against temporary rates filed on July 29, 1980 in the above docket and (b) certain related matters.
This petition dces not seek to amend Peti-i tioner's complaint against its existing temporary rates and is submitted without prejudice to Petitioner's posi-tion and rights as asserted in such complaint. However, as set forth in the petition, Petitioner will withdraw its complaint against the existing temporary rates if a determination is made in the manner suggested in the peti-tion.
Very truly yours, RYAN, RUSSELL S McCONAGHY 1 f .f.?
Samuel B. Russell SBR /mp Enclosure s A
-