ML19329C532
| ML19329C532 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, 05000398, 05000399  |
| Issue date: | 02/08/1972 |
| From: | Kauper T JUSTICE, DEPT. OF |
| To: | Rowden M US ATOMIC ENERGY COMMISSION (AEC) |
| Shared Package | |
| ML19329C517 | List: |
| References | |
| NUDOCS 8002140900 | |
| Download: ML19329C532 (29) | |
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Marcus A. Rouden, Esquire a O-Q_Q~}f jlj- u]lm 1
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Associate General Counsel ~~
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~~ --- ---Mendocino Pouer Plant Units 1 and 2 :k
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Dear Mr. Rowden:
You have reonested our advice oursu nt to the provisi.ons
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- 6f-Section 105 of the fromic Energy' Act of 1954, as amended i.
by,P.L.91-560, in regard to the above-cited application. }n;.) ..
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A.L -.The .Annlicant - . - . .
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The Mendocino Youer Plant, Units 1 and 2 i~n Mendocino [.
County, California, will. consist of two 1163 tc.u units.
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The plant ui.ll be awacd 'oy a single utility, Facific Gas E" ,
& Electric Scapany ("PG&E"). The esticated coct of con-struction at completion is appror.imately $742 million. [:
l Unit 1 is scheduled to go into operation in the spring of L I
1978, and Unit 2, one year later.. .
t PG&E is a privately-owned integrated electric utility *(-
L uhich serves 67 counties in northern and central California. The f In 1971, PGE.E had a system peak demand of 10965 mu. p.
' Company ouns cad operates over 16,000 miles of transmission facilitics ranging in ecpacity frc= 60 to 500 hv, including re.
9 over 1000 miles of 5C0 hv trcnsmissica circuita and over :..
4400 miles of 230 kv transmission located throu:;hout northern cand central California. PG&E contrcir, all or most of the t.
high voltege transmission located in thi; area. The Bureau [l;r of P,cclamation has trant. mission facili. tics adj ccent to those %
I of the Ccapany but their ere ir rectrictdd by a centract betueen the'Eureau and PG&C. PG E presently distributes ,
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!: d to incet the load grouth on its svatem which i:: con :itted l '
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previcichc di.ccucced chove (cce parts II.A.3, II.A.6 and F '.
. II.B.1) rc:.'ain in ef f ect . It ic, therefore, cl. car that r -b '
Applicant'c activitics under the licence would help to ..
racintain the c:cncpoly cituction. . .
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VI, Conclucion -
. .. Based upon cur -revic 7, the Dcpertrent of Juctice can only conclude that FG66 by the conduct.describcd above h.
l has crectcu, a situat:.on 2.nconci.c tent in.t.n une outa.truct . . . ..
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concludes th.c tha Cc:c.niccica chculd hcid an antitrust '
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hearing on this cpplicction. ,
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If the hearing rec.crd cupports the above view of Ry e.
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Mendocino uni.tc to the ~.naerc of .KPA: -
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(2) recuire. . PCI.3 -:,
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SIGD n;cy plan and conct uct. .
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6 %e4% a! POWER CONTRACTS Smaller systems have won important rights in rulings of commissions and courts By FRANK W. FRISK, JR. leghfarire director and speci.J coansel, American Public Pcwer Association -l Consumer-owned c!cctric utilities have gained 2 number of bowever, receives no bene 6ts but does incur real, substantial i valuable new legal tools for negotiating power supply and other responsibilities." (The court mistakenly assumed that Florid 2 contracts with the generally larger private power companies in Power had, in effect 2 5rm obligarica to provide emergency recent months and years. But to use these new tools, the back-up, despite Commission language to the contrarv.) consumer owned systems mu:t look beyond -he nctions seme. The question of the standby charge was appe2!ed to the U.S. times voiced by power company spokesmen to the facts abour Supreme Court, where the at:ctney for the Ecrida Power recent court and commission rulings. Corp. argued in February that his company was so much !stger he rights of municipal utilities and other consumer-owned than Gainesville 62c se City's reserve capacity wou:d be systems in their dealings with power companies have been meaningless to the comp 2ny. However, Gainesville's 2::ctnev, broadened and more sharply desned in a number of Federal George Spiegel, pointed out dat even sough Consolida:ed Power Commission actions and court cases. It's up to the Edison Co. of New Ycrk is !2r larger than the other u:ih:ies consumer-owned systems to assert these newly-won rights,2nd with which it is interconnec:ed :he ccenpany has been drawing old myths about the relationship of sms!1 consumer-owned power frem the smaller interconnec:ed companies, rather than systems to the large power companies do not die easily. vice versa. Fureermere, Ccmmissica s:2:i s:udies showed tha: Let's look at some of the ccmmon "Ec:fons" about whcles2!e G2inesville wculd pixe less reli2nce on 6e poci ne:wcrk than power supply and oder contractual arrangements and the fac:s Ecrida Power. . as they stand today, based on commission and cour: actions. Irrespec:ive of how the Supreme Court decides this case, it is cle2r that Gainesville already h2s wen hichir sieniscant c2 ins FICTION: A municipal elec:ric pili:y with genera:ing facili- ~ not only for itself, but ic: 111 loc 1i publiciy cwned elec:ric ~ ses has to accept terrsce are.s or ascer rnerrazont in oraer to utilities, rural elec:ric ccocer2:ives and c:her smaller ut!!! ties. cblain a desirable interconnec: ion with a priva:ely owned By t1 king its c1se to the F'FC, G1inesville h1s demonstra:ed tat, company. as a matter of right, a sm2Cer municip11 u:ili:y can in:er-FACT: A smaller utility can, as a matter of right, inter- e nnect with a large neigh . -ing priv2:e a:dity, withou: ccercus connect with 212rge ne'ighboring private utility without service are2 c cdmons or ocner res:r:c:: ens being impc;ed. accepts}ng burdensome service area or other restrictive conastrons. - FICTION: Rer:ric: ions o s he res.z!e of power by a r=nicipal utility or c:her purchaser may be included by .s power co :pany The Federal Power Commission set:!ed this issue when it I* ' *0#I"### E8 *" ##8"'"- handed down a decision more 62n two years ago in a cas* brought by the City of G2mesville, B.t against Ecrida Power FACL Any attempt by a utility selling power at wholesale Corp. to place 2 restriction on the sise ci customers the purchas-ing utility may serve, or to imecse surchart;es for such
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Gainesvil!e had been operating an isolated system,2nd wanted service, is probabiv illegal under the Federal Power Ac: to have an interconnection with Ecrida Power Corp., but se and the antitrust laws, coinpany refused to do so unless the city wculd drst agree to o restricted service area 2nd other conditions which the City One of the mose Snancially devastating restric:ive c!:uses found unacceptable. In its decision of Nov. 6,1968. FPC cedered found in wholesale power contrac:s be: ween publicly owned the company to interconnect with the City, but refused to con- efectric utilities and private pwer comp 2mes is (cund where dicion its order upon any agreement as to service 2res problems, the purchasing publicly owned system is precluded from sellin;; contending that this ques: ion was outside of its jurisdiction. power to customers whose loads exceed 2 certain sise. e The FPC also 6xed the rates for interchance service whenever A common situation is a restric:ica on service to lar::e power Bowed between the two utiliites, and each utility was industrial customers whose loads represent an opportuni y to required to provide emergenc7 services to the nther on an as- level!oad curves 2nd orier an irnpresnt source of revenue :o the available basis. The FPC found that both systems would gain public!y owned utility. Under such contractual provisiens, the substantis! 6nancial and engineering bene 6ts from the inter. . private utility h22 reserved to itse!f the "cre m* of poten:i;l connection, particularly if they coordinated generstion expansion. large customers and deals 2 sometimes cripplin ; blow :o tne The case was appealed by the company to the Fifth Circuit right of the purchasing utility to sc!! to customers in its nwn. Court of Appeals, which stdemed the order of the FPC in every service 2res and, at the ume time, impedes the 6nancui stability respect, except one: The Fifth Circuit contended that the City 2nd etEciency of the purchasin:: utility. - should pay the compai.y some type ni scantiby charge, because, Surprising!y, some wholesale contracts on n!c with the the Court contendul: "The small system rece:ved high bene 6ts Federal Power Commission contain restrictions on the sue of and,because of its size, no real obligations. The large system, lo2d the purch23ing urdity may serve. The resuhs of such
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customers are retained by the private power company, it is noe too long before r . attempt is made to take over the entire
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the company being able to acquire the publicly owned system. The issue of wholes 2le surcharges on re:sil sales to 12rge ff.y M g g 9 N customers was discussed by the FFC in a decision issued Feb. g,~4 , .4 18,1971, involving sales of power by Mississiooi Power Co. to y,
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M.. rural c!ectric cooperatives. The company had been charging the , -[ - W .',' i . # -d- 'IE cooperatives two diferent r1tu for wholesale power. It irst .
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charged a basic rate for 21152!es, but if the power wu to be . i.m resold by a cooperative to any censumer whose elec:rical "I ' 'I 3' ' ' f' requirements were in excess of 175 kw during any month, the s4:*;. ,, s /f
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~M not attempt to prohibit direct service to large custome:S by Attossrey Frank *%'. Fmk. Jr.. is legisia:n e dire:rce erl special ccunsel the purchasing utility; ins:end, it adopted an indirect ine: nod on the std of the Amniae Public Pner Anuwon. y to extract revenues item such luge customers by means of 2 contain no unlawful dual rate p:ovision of any kind."
surcharge in its rate schedule. This me:hed of rate de:ermination In i:s Mississippi Power Co. decision the Commission drew came about after the State of Mississippi adopted territorial an analogy with a case involving Georgia Power Co. which wu legis!stion in 1956 which granted ccoperatives the right to En211y decided by the U.S. Court of Appeals for the Fifth serve a!! custorners in their service area. Prict to adoptica of Circuit in 1967. Two restrictions on the sale of power by l that ser, the company served a number of large customers municipal purchasers had been imposed by Gecrgis Power I located in the co-op service areas. Thus, by me2ns of a ra:e which were (cund to be unduly discrimint.tcry 2nd unlawiui l sdjustment, the company sought to keep the revenues it ! cst under the Feder21 Power Act. One wu a c!ause under which when it was deprived of the ability to serve these loads direc:ly. whclesa!e customers paid a higher r2:e ict :he encev they Dut, as the FPC hearing examiner noted: "Ncching in the purchased for ress!e to customers using more than x000 kwh Federal Power Act sug;ests that a supplier who has sudered per month than for the electrici:v which they resold :o cus-a territori Iloss a a result of certidca:e grants by a state co'mers using less than 5,C00 kw h. The dual race wu discrim-commission should be 2' lowed to charge a discriminatory rare instory as to 12rge customers served by the municipsi:y owned i as compensation thereict." electric utilities purchasing from the company. The second Mississippi Power Co. at:empted to justify the surcharge on clause was a resale load provision which prchibited 42 of - the need for revenue, as a compensating fac:ce for 2 low basic ~ Georgia Power Company's 50 municipal customers frem reseil-rate to the cooperatives. 2nd on the ground that it had incurred ing power for industrial and commercial loads above certam increased capacity costs to deliver power to the cooperatives specified sizes. ' Oose large cu>tomers had loads which peaked at the same time Upc.: hearing a pies from Gecrgia Power that it would as the company's peak. However, the FPC did not accept these substitute a load ceiling which 26ected all 50 municipal arguments and pointed out that rates can always be adjusted customers, the Commission pointed cut that this may not ' il they are too low. , have represented discrimination be: ween wholesale custcmers, The Commission also found that "the surcharge has restrained but it did raise the question of the legality of any restrictions competition between Mississippi Power Co. 2nd the ca. ops. It at 211. Accordingly, the Commission did not adopt the pies of can restrict and has restricted the co ops in their ederts to the company, and stated: serve large loads. The decision neced that the surcharge had I Even if Georcia Power's resale lo2J limitations did not discrimin2re' th? c'6cci of permitting Mississippi Power to sell power in between various municip21 customers, : hey soulJ nct necesurnv be co-op territory to large users on terms substantially more just and reasonab'c. ThJe we do ner here hold that there can be nd favorable than those which coo!J be offered by the co. ops. circunntances under shich !nad hmir rinns are rustined ac do not
'Gur, the Cnmmission held that the surcharge was an unreason- aeree with the Company char it is normally consistent with the pubhc interest for a who;esak suppher of dectric puwer or restrict the manner ab!c restraint under the terms of the Federsi Power Act,2nd it in which its cuiromer m2r rese!! the power.
ordered the company to 6ie new race schedules which "shall g, Georgia Power thus was forced to abandon both of these {; e s 11 plt 9LIC POT E R W A v.J uN E 1971 ' __3 I
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methods of contracting with municipal wholesale customers. In this case, Alabama Power Co. In its decision the FPC noted: There are other cases which also make it clear that any scrempt by a wholesale seller to restrict the full use of purchased The preccerion atTorded by the Federal Power Act minst undue s power will not stand up under the terms of the Federal Power discrimirucion among whciesale customers dees nor extend to the pre- ' Act, or the antitrust laws. vention of competicion chrough freezing wholes 2'e customers to the:r Present power supply sources. Yet, we still 6nd that many contracts contain restrictions, but go unchallenged by the FPC or wholesale customers. Some In that case, FPC also noted that the municip2lities had l cf these include: covenants not to interconnect with any other properly terminated their contract by giving notice. However, l urdity, territoral restrictions, restrictions on pochng, restrictions as the testimony given by the Department of Justice befcre ' en the building of generation, and prohibitions 2;2 ins: seiling the Senate Antitrust and Afonopoly Subcommittee last year power to other utilities. It is fair to say that,it they wre pinted out,"C!ayton Act Section 3 prevents requirements challenged, prcbab!y all of these limitations would (211 under contracts . . where it is reasonably probable that they will the terms of the Federal Power Act or the antitrust laws. .tubstancia!!y lessen competition." The question remains: How do we get rid of burdensome, When is a requirements contract so tareasonable as to restrictive wholesale contractual clauses? In the Afississippi contravene the antitrust laws? The answer to that cuestion Power and Georgia Power cases, the FPC itse!f challenged the would depend on many factors,inc!uding the :endh of the contracts, but the Commission is not challenging all the con. contract, whether or not a dominant monopciy position of l tracts which are 6!ed with it containing restrictions. The surest the wholesaling company has been used to force ene purchssing remedy is for the purchasing utility itself to insist at the time utility to take an all. requirements contract,2nd an examination the contract is negotiated that all restrictions are removed of the general purposes behind such stem;ements which ceuid l Where existing who:esale power contracts contain restt:ctive . free:e a utility to its source of wholes 2!c power. I provisions, they can be challenged before FPC, or, in sorne The important thing to remember is riat 2 purchasing i instances, in the courts under the antitrust laws. utility has a richt-under both the Federal Power Act 253 the antitrust lawsUo shop 2round in the markeep!2ce ict sources FICTION: Co nsumer owned elec:ric sys: ems purch.ning power of p wet. And there is increasing evidence that all. requirements as wholesale from one source cannot purchase powerfrom ' ** iin s 'h'_' 'h0 i in * *
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acother source. . can be challenged in the courts or beiere ??C. t ms :2ctsnou:d be kept in inind by ocEcials of consumer. owned ef ectric ututies FACT: Systems purchasing power ganerally may not be who are negotiating who:essle power contracts or !ceking ict precluded from seeking out 21:ernative sources of power new sources of power supply. when they are under contract with a wholesale seller of Along with the right of publicly owned electric systems to (nergy. The so called all. requirements contract may not be so restrictisc as to limit the choice of energy for the . shop for wholesale suppliers, there is a correspond!nc chiip purchasing utility when power is available that is less tion on private pour companies who are seiling at who;esale to other utilic:es x dl to those utilities looking for new expensise or more suitable to the purchasing utility's load. Sources of power. - ( A distinction should be made between those contracts where- e of the classic 2ntitrust erinciples is that a supplier by a wholesaler agrees to provide all of the purchaser's needs c2ncor refuse to sei! his comm'odity to scme buyers and not to and a contract where a certain amount of energy is agreed to others if the purpose of his refusal'is anti comectinve in pur-be provided. In the latter case, the purchasing utility may seek pose. This principle is being tested right now by the Depart power above the amcune contracted for without looking 6rst ment of Justice in its suit ac;2 inst Otter Tail Power Co., where ta his present supplier. In the $rst instance, an all. requirements the Department charges,2rnong other chines. that the company contract that contains a pmvision to the e:icct that the purchis- refused to sell pow er at wholesale to municipal ciectric utilities sng urdity may not purchase power from any other source- and consequently violsted the antitrust !sws. the problem commonly faced by local publicly owned utilities- I FICTION: Prit are power companier may refute to allow local is a restriction that, in most instances, will not stand un under publicly owned arditics to orin part of a nuclear power plans the Federal Power Act or the antitrust laws. , proposed by :he companies, or :o purchase power .v:.i enerzy for example, in 1% the Federal Paser Cnmmissian in the from .s p.srtic:dar atomic unir at appare.i:o buying electricity, case oi Alabam. E!caric Caoturarit e v. Alabama Power Co. as wholes.de at "syttem" costs. found that two municipal systems being served by *he cooper. t stive,2fter giving the notice required ut der their et neracts, FACT: Federallaw prohibits such refussis where they are were contractually free to seek other sources of powtr supply, inconsistent with the antitrust laws. t (J,e FACT AND FICTION, pre J2) 12 runue pown a wm>uur in t t.
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(Conn.ued from pto 12) his concept of p2rticipation-and the protections which it accords the public-has been put into practice by the 2cnon of commissions, courts, and the Congress. In Vermont, under
" Die concept of joint participation in generating facilities pressure from the state's public Service Board, the private is not novel. Over the years,2 number of utilities have found power company sponsors of the 520,000.kw Vermont Y2nkee l thir by joining their load growth 2nd 6nancial resources with pmject agreed in 1967 to allow consumer owned systems in the state to share in the project on 2 b2 sis similar to compa N others, spey were able to build rnere economic power production projects to their mutual benedt. Likewise, electric systems have in the New England region. Two municip.sl electric systems a
['. frequently found it pro 6 cable to buy power from speci6c stations three rural electric cooperstaves asked for-and were granted-the right to purchase stock in Vermonc Yankee sad receive a
! owned and operated by others for the purpose of suoplementing existing sources of supply. These practices have achieved greater bicck of power. The town of Lyndonvi!!e. for proportionate
{ importance in recent years, because of increasing unit size, instance, obtained an allocation of $293,375 in stock, which 1 l rises in the cost of building and operating plants, exosnsion of capacity entitled it to 3,222 kw of capacity-or less than 1G of the total of the plant. environmental controls, and ditEculties in siting faciiities. l Opprtunity to take part in joint generation has assumed A group of Massachusetts municips! electric systems sou I even more signi6cance with the advent of commercial nuclear similar participation in Vermone Yankee and the 790.000.k v power, Because the economics of nuc! ear p2wer plants dictate Maine Yankee project, but private power comparq sponsors large units, atomic stations can be constructed by only 2 denied the opportunity in this case. An appeal to the Searities relatively few major utilities without recourse to joint arrange. and Exchange Commission, followed by court acnon, resu!ted ments. Furthermore, special siting restrictions mean that nuclear not only in the opening up of these two plancs to members of power plants cannot be constructed eve ywhere, and a limited the Massachusetts group, but in agreement that the compan: would make available tesnsmission service over the inte supply of trained manpower is readily 2vailable to operate those ' placed in accepr2ble locations. nected New England regional grid and provide backup cf the 1 capacity at established fees. Nuclear generation-development of which has been fostered _The erincie!es involved in these decisions were ratised by b sa investment of $2.5. billion in Federal funds-is exveted tb constitute 2 rapidly rising proportion of new generation. C0""55 b5t ve't in N5'e of le "br:o' ic' mUts m21-Direct access to nuclear power generation is essentis! for the d2m annerm rev ew of Mcanm kr aH cme c: 21 preservation of the pattern of pluralism which has characterized nue! ear cower M2nts The new bw re nres 2: the Anmi the electric utiliry industry in the U1 throughout its history.Enerev Commiss:nn fcrwsri such r&canors o rhe f*ce But local public power systems have found access blocked in aDerarrment fnr eummat:en ni cemeennve issues The cumber of instances. _ Attnrney Generars advice is turnished AEC. wh::h r.ust mb'!sh Js M _trin the rurchief of the fustice De~ rt nent's An irru<t Divitica in In63:
-2nd *eich the c'~~'en% mc?'r?r we ?P*e at5- 2nv The Commission is the, caned uren ta mke 2 deter- enatic,
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, Dert have been a number of recent instances in which utilities if**to or 'vh?O er th? 20!ivitie' under the HC?nse Tctld _
maintain 2 sintation ir ennsstrent w r$ *he actitms !a vs t groups of utibrics particularly en'tnicipal companies, have beene rebun d in theit edores to obtam some form of partic:psren in icint venture the answer is "ves". AEC has the reseensibdirv to conem } tuclett projects bein:t organized in their reeion. The companies the !! cense ro correct the snntrust ereblem or retuse to rss i dInied an opportunav to participate in nuc est ventures are chststrer. thelicense. { I istically smallet than the companies shich orc 2nber these prn ee:s. but it is by no means clear that the firms which are eco sm211 to Just constructas the commissions and courts have written new their own nuclear plant. and even rno small to neautiare their way to refute the Scrions cited above, so new g2 ins may come to the nato a regional joinc venture, should simply be dismissed as obsolete and uneconom,ical umts, destmed to disappear as the rechnology smaller of electric the systems in cases yet to be decided. For exam i;duury advances. 2 challenge is now being brought by the Department of Justice De economics of sea!c in electric Jistnbution are c;uire dirTerent agstr.st one of the most serious restrictions being imposed by ferm the economics of scale in generarson and tranirnission. While some2private companies-their refusal to wheel power for i utihry enay be (2r enn small to construct and operare a modcra certain generar.l utilities. sin plant ce high. volt 2ce transmission line. it rnse be well above the sole of she necoury to rerform emcient Jmnbuonn service. (' In 2 case brought by the Department of Justice sc2 inst Otr$r U II only those Jntribution sompamn wkh have access on their own Tail Power Co., which operates in Minnesota 2nd North and
- to the economics .4 sole in a nct2rion are m survive the stru ctu rr- South Dakota, the Government is challengine the richt of the - .: l of theworse.
for the mJuury wdl be grestir changcJ. 2nd, I suggest, almost company certainly arbitrarily to refuse to wheel power because the ) o (See FACT AND FICTION, pre 3D E G 32 PueLac pows 8 H A v.JUN E ( d) 71
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i , Fcet end Fiction mission lines, or unnecessuy estrictions on utilities in being (co nn.,e from p.g,32; . able to buy bulk power frort. sources removed frcm their service areas. company contends that such wheeling may aid a competitor Here are other issues at stake in the Otter Tail case. Fcr cf the company. It is alleged in this case that Otter Tail Power example, the Department of Justice has alleged that the com. , C). refused to wheel power frem the Bureau of Reclamation pany made reproper use of litigation by chal!cnging, often to municipalities which had been served se retail by Otter Tail, through dummy plaintitis, bond e!ections and other proceed-but which established their own municipal electric systems. ings in the formation of municipal electric systems. Tnis is The company h.u been wheeling pwer from the Bureau to 2nother practice which is quite common in some parts of the municipalities which 2! ready had distribution systems. nation, where private pwer companies eng23e in endle:s court There are many parts of the nation where publicly owned cha!!enges to impede the growth of publicly owned electric ' utilities are faced with private pwer companies being in the utilities and their plans for icint action. P haps the Otter Tail position of contrc!1ing transmission sources, and where they case will help bring an end to such practices. hava been told that these transmission lines may not be used What the Federal Power Commissica 2nd the courts have for wheeling by the publicly owned utility, even though the been saying, in effect, is ths consumer. owned electric sy:tems lines may alre2dy be in use for wheeling ict other utilities. have equal rights under the law with the giants of an increas. n: Otter Tail case raises the possibility that a decision will in;.y. concentrated private power industry, be rendered that, once and for all, w:ll end the practice by some Perhaps the bigges- dction of all those promoted by the companies of arbitrarily refusing to wheel power for certain investor. owned utilities is that small consumer.cwned systems pubitc!y owned electric utilities. Such refus2ls are clearly de. are somehow second. class citi: ens. Recent actions of the ??C signed to hamper competition. The princip!e at stake in this and the courts make it clear that the consumer. owned utilities
. case is essencial to the centinued and orderly growth of the are second.c!sss citizens only for as lcng as they f2il to stand -
Industry, and to the most etiicient and reliable means of service. up and 6;ht fcr their rights. M+ , The alternative to wheeling is the building of duplicate trans. i es i. , y , i . , CI*aCite-1 <ta,, ae. 1
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. COOPER-DEssEstER . NCRDOERC . ENTERPRISE ifI a 50 per cent savings in re:lacement cost and with 4
800 W. Wt Box 92 . g gg - McPM s a so H, XANsAs A list of cities with whom we do business will be sent upon request
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of the Co'tri hist in b-r's prep t reil e v t.; f. *:. r et l'ee t au.4 ra r the cuntru.en. ,..t the reisder. .%e.L nafed .iN.f e r. usfreet Luamber ca., 00u U.S. 3 t, aar. { a , SUPREME COURT OF THE C_:ITED STATES ,
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OTTER TAIL POWER CO. v. GITED STATES l APPEAL FROM TIIS UNITED STATES ?'.4TRICP COURT FOR TIIE DISTIt!CT OF MIh .' J.JOrA . . No.'71-091. Argued December 5,1972-De Ad February 22,1973 In thi3 Sherman Act suit, brought by the C- enment, the District Court enjoined as viviative ci } 0 the ic". :n; practices in which appellant, Otter Tad Power Co. (Otter 7 sh enga:cd to prevent -. towns from estab;iehin;; their own power ew ns when Otter TailN retail franchises expired: rein 2als to who!e, 2 power to the munic;- , pal systems or transfer ( whee!") it ovi. : Otter Tail's far ities ' from other sources, liti;ation intended to de'ay cetabli2hment of municipal system.s and invocation of trae :ciesion contract pro-
'visioru to forestall supplsing by other pe-r companies. lle/dr i,
- 1. Otter Tail is not in.uiated from anti . : ' re;u ation by reason I of the Federal Power Act, who3e tecidathe hi> tory maniicsts no .
, purpose to make the antitrust law < inar-!ia.ble to power com-panies. The essenti.d thrust of the authcc: of the Federal Power Commi:sion (FPC) is to encoura::e ve,F mry interconnections. . .
Though the FPC nuy order iaterconneco if "necessary or ap-propriate in the public interest ant:tru r co -iderations, though - relevant under that standard. are not decrminative. Pp. 5-7
- 2. The Dietrict Court's deerce does not ~. . dict with the re;uia-
, . , tory respotuibilities of the FPC. Pp. 7-9.
(a) The court's order for wheelin: u correer Otter Tail's anticompetitive and monopolietic practice: is not counter to the-
, authority of the FPC, which lacks th. puer to impose such a requirement. Pp. S-9.
(b) Appellant's ar::ument that the decree overrides FPC's power over interconnections is premature. ti.cre bein:: no present cotiflict between the court's decree and any contrary ndm; by the FPC. P. 9.
- 3. Tlu record .<upport. the Dietrict Cm:r i 'indin: 4 that Otter e . Tail >utely to prevent the municipal e Ac.u frmn credin; its 2nonopoli, tic po.-irion-refuted to sell at whu!crale or to wheel, t -
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P e n OTTER TAIL l'OWElt CO. v. U.N*ITED STATES . [
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. and that Otter Tail to the same end intnked retrictise provi ions ;e ;
, , injits contracts with the thircan of I:cclamation and other sup.
. p phers, the court correctly concludin;t that sm b provi. ions, per se, [
violated the Sherman Act. I'p. 0-11. p:
- 4. The District Court shouhl determine on remand whether the Ol
,',l litigation that Otter Tail was found to have in,tituted for the .
purpose of maintainin; its monopoli. tic po ition was a mere jj sham" within the meanin:t of IL: stern Radroad Conference v. '.l l Notre 3fotor Freight. ::65 U. S.127, so that the liti::ation would .
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love its constitutional protection in line with the Court's deci= ion in Ca!ilornia 3fotor Transport Co. v. Trucking Unlimited, ~iO4 jl l
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U. S. 50s, which was decided after the District Court had entered [t. its decree. Pp.11-12. .
- 5. The DLtrict Court's retention of juri= diction to afford the [j parties "necessary and appropriate relief" provides an aderpiatt .
safeguard against the possibdity that compulsory interconnection , t or wheelin;; mi;ht threaten Otter Tail's ability adequatel3 to serve .
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. the public. Pp.12-14.
331 F. Supp. 54, afdrmed in part and vacated and reinanded in part. ,
' Doccras, J., delivered the opinion of the Court,in which EnENNAN,
,j Wnrre, and Ensu st.r., JJ., joined. SrEwant, J., f.!cd an opinion l'
- > concurrin:; in part nr.d dissentin; in part, in which BencEa, C. J., p .
and REHNQUIST, J., joined. UtaCMIUN and PoWE1.1., JJ., took no ;- part in the consideration or decision of the case.
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t c s SUPREME COURT OF THE UNITED STATF3 - l .
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I - . - i - l GAINESVILLE UTILITIES DEPART.TIENT ET AI l' _
- v. FLORIDA POWER CORP.*
.. . A CERTIO!!ARI TO THE l'.N~ITED STATES cot *RT OF APPEALS FOR ,
THE FIFTH CIRCt~IT
.Yo. 4G4. Argued February 24.1971-Decided May 24, 1971 l Pu suant to j02 (b) of the Federal Power Act, the Federal Power Commissica (FPC' ;s empowered to direct one c!cetric utility to j ; m
- tercocnect its electric eyetem with another uti?ity and it " mar
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, prescribe the ter:ns and eendition< of the arran;ement to be l made . . . includin; the apperticament of the cost between them l I. '
and the cocipen-atinn or reimbor-ement reasonably due to any of f t hem." After hearin:s and -td nudies the FPC found that an -
, interennna f bn he, xcen r +se::e n ., , , : t m . . 4, . . .tv. m - ~f ,
ut Fit v. av.1 rn e--+o r . *~rr- .n- -r-c?nw .--ir von!d ba h '! a ~ W i- n -~ r . xvi8i mt .b im r@ . - . .
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r t'C ordered Ine l interecanection, recnir.::; Gamen a:e to pay the entire 53 ::i.: loc l
. cost thereof and to maintain cert.dn generatin; eatucity. In the
. light of there cinumstances the FPC impo-ed no tandb.s char;e l s
on CainesvP'c. The Court of Appeak denied enforcement of the order, agreein; with re-pendent's claim that the v . ion of an , ancu.d $1*0.000 payment to it by petitioner for the backup service ! provided by the interconnectio:i re:u! red in a faihtte to satisfy the statutory mam! ate of " reimbursement rea outb:y due respondent beeme respondent woubt obtain no benent frum the interconnee- ' tiou. Section 313 (b) of the Act provides that "Sndin;< of the
, Conuuiraion as to the facts..if supported by sub rantial evidet:ee.
shall be cene!u,ive." Ildd Since there was aubstantial evidence
,
- Together with No. 4GO. Federal Potter Commission v. Florida Potter Corp., abo on certior.ari to the same court.
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. s a C.UNESVILE L'I'ILITIES r. FLORIDA POWER CORP. I
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.i to support the FPC's fmdin::s tlut beneSts wi!! scente to respondent from the interconnecti<>n, the Court of .\ppeak erred in not defer.
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. ring to the FPC's expert jud; ment. Pp. 6-14. l3
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. 425 T. 2d 1100, reversed and remanded.
BnENNAx, J., delivered the ordnion of the Court, in which a!! . l'
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. members joined except Bucett x, J., who took no part in the de- !
eision of the c:ue. ;
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r THE CLEVELANU ELECTRIC
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? MAIL ADDRESS: POST CFFICE 80X 5000 e CLEVrLAND. CHIO 44101 Serving The Best Location in the Nation 2.> Lee C. Howleye vict pass:ctNT January 2, 1C174 AND GENERAL COUNSEL r
Wayne R. Milburn, Esq. C/0 Milburn, Cannon and Stern Lake County IIational Banh 31dg. - Painesville, Ohio '4077 .
Dear Wayne:
Following cur recent conversatio' I an enclosing hercuith a proposed draft of a letter cuth-5; a Cc= pare / preposci to construct a.n interconnection teeveen the 2 syst rs, alcng with a sug;2sted pu:cha::: ':y the C =;e.-ef of territer/ new served by Paine::ville. This proposal is identicci to the one now e:c!. sting between the Co=pany and the City of Cleveland.
- As I indicated to you, 7. believe the nest practical thing to do is for us to get together c.fter the first of the year and dis-cuss these sugsestions alcng with art / others you night have.
My office vill en'1 you later for a suGCested tir.e. With best wishes, I es, Sine-ely, M I - LCH:IJW Encls. O
Hon. Wayne R. Milburn
- Director of Law City of Painesville .
City Hall Painesville, Ohio t
Dear Director Milburn:
1 For consideration as a basis for farther discussion, I offer the follc#.ng proposition in behalf of The Cleveland Electric T'1"-inating Co=pany. The T11m4 Eating Cc=pany vill provide at the City's cost of $7253CCO, a pernc=ent 138 kilovolt synchronous intereennection, connecting the City's Plant and the Oc=pany's 136 kV trans=ission system. . The illusinating Cc=pany #11 enter into an interconnecticn agree =ent proviii.s for such an intercennectica cnd. supply vnricus services to the City. A draft of such a preposed agreenent 17 enclosed for your consideration. This is essentially the sc=c tyce of agreement c=d services cnd the rates therefer to be provided the City of Cleveland and those current in the Industry. The Illuninating Cc=pany W 11 also enter into an apree=ent to pu-chase al' of the tran=11ssion and distribution facilities used by the City of Painesville l to serve the City's custc=ers in Perry Tcusship incl"d'r incorporated areas , 1 therein. The ni m4 . ting Cc=ps=y #11 also agree to provide electric service i 1 I to the custc=ers of the City presently served by the City frc= such facilities and to purchase the accounts of those custc=ers. The Illu=inating Cc=peny vill
. further agree to provide electric service to any custc=ers who in the fature 1ccate
- in Perry Township including incorporated areas therein. For such facitics and the accounts of the existing cus c=crs The Illu=inating Cc=peny would pay , ,
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. .I Hon. tlayna R. Milburn ,
Director of Law - l City of Painesville Page 2 Details of these agreements vould, of ecurce, be negoticted but the forecoing provides a basic for discussion to deter =ine if this pr:pocition f4. fills the requirements of the City.
. Sincerely,
. Lee C. Ecwley, Vice President and General Counsel s .
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ClTY'UF PAINE'5VILLE CITY MAf1AGER'S REPORT 10/08/T3 KWHR DILLED RESIDEf4T I AL , , 3 7 2,061 f </,7yy : J74, p'Of KWilR BILLED COMf1ERL i AL 51,5 1,000 4 9 f /,2 77. gg/p,,q 7 KWilR BILLED INDUSTRIAL TOTAL KWilR BILLEO 4 2 4,610 -/ ' d, o 2.R = //J/1, (,3,1 .._ . . _ . . A MOUtl T BILLED RE510EfJTIAL 9,173.97 & / M'3 A
- h'7C'Re U A f>0U rl T BILLED COMMERCIAL 1,777. l fl /- MX 76 % /f.22,7f-. _
8 9. fl4 AMOUNT BILLEn Ir100S T R I AL 11,040.99/'/7f'088 /h8/M[ TOTAL AT100f 3 T BILLED-ELECTRIC
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NUMBER RESIDEfJT I AL ACCOUMTS 614 N'IMBER COMMERCI AL ACCOU.II S 75 , tJUMBER ltJDUST RI A1. ACCOUt1TS 2 TOTAL ACCOUtJT S BILL ED-ELECTRIC 691
- TOTAL NUMBER MVLT ACCoutJTS 52 _ , , , _ ,_ , _ , , _ _ _
_ 410.65 TOTAL AMOUf1T BILLED-HVLT I ' r .. W AT ER - CU.FT AT CIIV RATE O
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. , 'CU.FT AT TOWN 5111P RATE
' TOTAL CU.FT BILLED 0 AMOUNT Bil. LED AT CIIY RATE .00
, AMOUf4T HILLE0 AT IUWrJSIII P RATE .00 ,
. .' .! TOTAL AMOUNT B i l.L E D-W-A T ER . 00 , , e { NUMBER. CITY R A T E A C C O u ti T'S 0 NUHbER TOWNSHIP RATE ACCOUNTS , , 0_ , , TOTAL ACCOUf4T S IIILLED-W AIER O TOTAL tlOMBER llYORANI ACCOUNTS 0 _ TOTAL AMOUNT BILLED-HYDRAt4T .00
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THIS COPY. FOR PERSON ADDRESSED
, ._ e er Gity of painesuille TO Lea l'cro . C. M. FROM: Joo Fendy E. P. G. RE: # 4 Doller ove6cul / I.D. fcn failure April 23, 1975 On Friday April 11th et cyrreni ately 3:15 p.m. the induced d:c?t fan of cur 64 boiler fciled in certico, recultinc in a force'. cutcro of the unit. As boilero 04 cnd 93 ucro en lino nt the tino, thin inte rceted certico to 10 cf cur 12 dictributien circuita for vericus intericla until c3 etinctcly 7:20 p.c. at which tino boilera d2 cad ei vero on lino for cespleto certico rectoration. ihe attached chcot choun the circuits effected c .d c.evninsto tinco. . Failure of the fen una crcrently due to weer over its if yenro of cpc=tions tho fen ctor una totelly doctroyed, whilo the cheft, drivo unito, bearintp, cnd cccing rencined cccentV11v intcet. Lfforts to accuro n replecceent (hter f=n the fen sc: cfecturer Duffalo For-o Ccuper;t, yicided a bent tino cctincto of 3 necks cnd octi=ted coct of J10,CCO.- to -
$12 CCO.- ihia una not concicered to bo a viablo citernctivo.
Dy (ICO p.m., D.L. a C. Iciler tomo Co. Inc. of A-htstula une on cito tchint- l neccurtnento and cocudtr- Cinencio:r_1 dctc fer chop feb-ic .tica of a fen roter. ihe,- ucm chio to dolive-- tho ::oter en -un?ny evenint , April 13th, end by nl:Cir':t I'ceday ; nicht the unit reo hetalled, bel =ced, cnd nynilablo fer certico. Accictenco f=n perconnel of iic ccd J.cn:cc:c uns obte_ined for tc1=cinc. Totc1 char: es f=n D.L. *.: C encunted to ^9,0'm.73 ( heludien inctcilctien.) a concide=blo ccvino over the nenufacture- 'c ectincto. Fu--ther, the tinelin:cc of their effcds enchied us to hevo tho toiler bec!: en lino withcut further cc:vtec int.. uptienc, thich neuld havo reculted if tho fcn repair had been dolcyed for eny I I loccer period. Since the Miler una de:m, to p=cceded to do cur % in everhaul, which ? sd been echcCuled for /.pril 22 - 77th. She bener van =ta=cd to certico on er.rc6cy co=inc.1 :1117th, 0 ct creenicately 9: 15 c.c. totrl /c=tino was cypreninctoly 5} dcyo. A loc of the evc=cui vem eni eccta is attached. Cocts of repc.iro accociated with cur I.D. fcn wil.1 be cuk.itted no a chia on our incu=r.co.
. F1 caco cdvice if cdditicncl info: cation is decired.
co. R. !!coten - F.D. Jocc7h Fendy, Jr. J. icivo - P.G. y Electric Feucr superintendent - T. E111 - D.S. C. Icntezdy = P.C. J. rodio . 3.0 .
Outa688 April 11,17/5
#4 Boiler I.D. fan failure f
.ci m it # out In ,
L2,L3,H4 3: 15 . 4, 8, 15, 16 3:17 15 3:25 . , _ 4 3:28 8 3:29 , 4 3:31 15 3:40 , 16 3:41 ! 5 3:59 4 4:00 i, 2, 4 4:05 L2, HA 4:06 4 4:15 16 4:27 2 - 4:28 1, 8, L2 5:07 Partial E-3 , 5:08 Total H-3 ' 6:00 16, 8 7:00 1, L2 - 7:15 5, 15 7:30 Circuits not Affected 3, 6 Note: # $ turbo generator back on line 3:45 p.m.
# 1 Boiler en line 7:00 p.m.
~
# 2 Boiler on line 7:30 p.m.
O e
/
#4 BoilerOverhaul/I.D.FanRepair -
/
Avril i1 - 17. 1095
,, Maintennnee I' ens Total Enhnure i
1 1.. Air heater: Clean, plu6 had tubes 16 ,
- 2. Ash pit: Clean - M I 3 Cinder retu:=s systen: Clean, repair 104 4 Induced draft fan: Repair, coupling grease 16 5 Drums, stean & mud: Wash & inspect 16
- 6. Stoker fee <ters: seals, chafts, change oil, replace paddles, eccentrics, bearings 120
- 7. Deslas unit 72
. 8. Valves: repachin6 10
- 9. Doors renoval & replacement 8
- 10. Front walls repairs, brickwork 16
- 11. Handholes & nanholes: Clean, inspect, close 15
- 12. Steca coil air heaters modify 9
- 13. General super /ision & assistance on above tasks 180 Total @6 Hours Hours Ocaritionn ( ?ciler St. 2. 1 ) Rer Ti-a Ovar Ti e Engineers 190 91 Firemen 136 151 Coal =en/Achsen(Helpers) ,
118 28< Total 664 Total 527 Total Hours: - 1191 Maintenance ( 4 ovarba.ul )
' 24 214
. Mechanics, Yard:an, App. Electrician Supt., Supervisor, Sen. En6. Electrician 160 180 Total 400 Total 403 '
1 Total Hour >: - 803 1 1 4 e e
-- - . ~ . . . _ - _ _ _ .
- [, . .
( Summarf - Armual Overhauls e' 1974 1975 Time 14 days Sidays Reg. Fours 553 400 0.T. Hours 664 4o3 , i o Total Hours 1,217 Total 803 , O excludes operations hours e 4 e
- g. .
4 Om
't e
9 m
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CITY OF PAINESVILLE Interoffice Memo i
-Janua ry ' 6, 1974 -- - - - - -
. - . . .= -- - - - .-
TO: Bob Wooten, Acting City Manage r ,_ .__, __ __ _ _ _ , 2 FROM:--Joe Pandy, Electric Powe r Supe rintendent - - - - - - -- -- - - Re: Outage - January 14, 1974 - i Failure of an economizer tube on our #4 boiler resulted in a forced outage at- 2:15 P. M. on Monday, Janua ry- 14, 1974. -- - - - - As a result, se rvice was inte rrupted to over 7,000 of our custome rs, as all circuits we re dropped with the exception of our plant powe r (for auxilia ries). In orde r to restore service as rapidly as possible, the follohing actions were taken.
- (1)._ #2 boil.e r, which was already on the line in conjunction wit? #4, was loaded as high as possible to restore additional custome rs on an interim, rotated (at 20 minute intervals) basis.
. (2) #3 boiler was lit off_and brought._en line to augment our_ steaming capacity. -
(3) #4 boiler economizer was isolated from the unit by means of by-pass valves, and the unit was refired and returned to service on a
-reduced capacity basis. - -- -- - -
~ '
~ ~
~O5r~p;an is tolicsp-'uhits 2$ 3 and'47n~1ine thioug'h $riday, January 13, l 1974,--as old units 1, 2 and 3 would not be capable of meeting our total weekday loads. By shutting #4 down on Friday night, we should be able to accomplish
~~
econo'mizer repairs in time to have the unit back in service for the Monday morning peak of January 21, 1974. Allied Bcile r Co. , unde r annual contract for emergency repairs, will assist in the work.
- Since the olde r units burn more coal, as an inte rim measure, I have orde red an additional 100 tons / day of truck delive red coal f rom the Alexande r mine via Downing Coal Company. Cost of this coal will be 516.10 / ton. ,
l l It is of inte rest to note that boile r 44 economize r has shown a history l l of failure s. Our new 45 boile r will not have an economize r. l
.The attached log shows outage and restoration times for our circuits, and the approximate areas served are shovm on the attached sheets which may l be useful for future reference.
CIRCUIT 4 bkik 5N 15, H-2 2:13 P. M. H-2 2:16 P. M. H-3 - 2:16 P. M. 1, 2, 3, 4 5. 6, 8. 15, 16. H-4. H-3 2:21 P. M. i 6 2:42 P. M. 3 2:45 P. M. 2 2:4 5 P. M. 4 2:55 P. M. 4 b:59 P. M. 2 4:25 P. M. 1 4:25 P. M. 1 4 ISO P. M. 15 4:50 P. M. 15 5:10 P. M. 16 5:10 P. M. 16 5:30 P. M.
#3 boile r on line
- 4. 5 5:30 P. M.
#4 boile r 'oack on line H-4 6:20 P.M.
1 6:30 P. M. 8 6:3 5 P. M. 15 6:45 P.M. 16 6:50 P. M. H-2 6:54 P. M. H-3 7:02 P. M. (system frequency & voltage 1, 2 7:04 P.M. del ayed wnen H-3 added loac, of 6 mezawatts)
' 1, 2 7:15 P. M.
Approximately 75 custome rs in Pe rry we re not re stored to se rvice until 9:30 P.M.. due to failure of an oil recloser on H-Z circuit at Route 20 and Cente-Road. 9Y Joseph Pandy, J r. Electric Powe r Superintendent 8 ypf,, I i
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*,.* Notes of Error In: .
* ~
, Deposition of Jocarh Pandv. Jr.
2 July 9,1975 6 3ethesda, Ma:fland
; t.
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.. In the Matter of: Docket Moc.
To,ledo Edisgn Company and 50-}46A Cleveland Electric Illuminating Ccapany 2 (Davis Besse Nuclear Power 3tation) i and Cleveland Electric Illuminating Ccaper.y. 50-440A et al. 50-441A (Ferry 1;uelen Cenerating Station)
, Units 1 and 2
!:otee of Trrari F2 ;; - Ling Delete Add ir clace
! 6 -
S Obrrently Concurrently 9 - 5 in 9 - f there 18 - 2 .engotiationc negotis.tio:m 24 -
!? irvect'.fste theirown invector ovn'd 25 -
20 leeting letting 30 - 9 to;ive te give 31 - 22 servides services 44 - 4 - beinginctalle? bein.; inctclied 60 - 14 refsual refucal
*O 21 quality qualify 65 -
9 35,000 38,000 87 - 12 lefel level 90 - 1 Roeporation Corpora tion 98 - 11 proparing preparing 107 - 11 loo look
. 108 - 3 75,000 $750,000.
i
;6 108 -
10 Dolores dollars
, 4 110 -
19 ------- fuel (clauce) 113 - 17 syseten systen 1 119 - 4 accrus accrue i i
- h. (cont.)
b.
. (cont.)
I g- l.. . t',' PAE2_ - h Delete Add in rince 120 - 14 appropriate appropriately
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130 - 1 -------- (would) not (have) ,
; 135 - 6 spec - ric specific !
i 143 - 20
- one on 146 - 4 shoared shared i
I
. Joseph Panc'y, Jr.
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