y Requesting riffs petroleum at Valdez and therefore there is little quality difference among the petroleum loads delivered to the shippers at that location. Consequently, Tesoro contends that little evidence has been adduced concerning the quality adjustments at Valdez. Tesoro indicates that it has recommended that its proposed revisions to the Quality Bank be adopted at Valdez to accommodate future changes in the petroleum streams at that determination point. Tesoro alleges that during the hearing, counsel for Tesoro specifically asked Petro Star witness Lewis whether Petro Star had any plans to expand its refinery operations. Tesoro indicates that the witness responded in the negative. In its motion Tesoro seeks to reopen the record to allow for the inclusion of two newspaper articles published in February of 1991 which are purported to show that Petro Star, in conjunction with a partner, plans to build a new refinery at Valdez to process the common stream from TAPS. Tesoro argues that the prospect of a new refinery at Valdez was precisely the type of change Tesoro contemplated in its recommendation with respect to quality bank adjustments at Valdez. Tesoro maintains that the injection of refinery products from a new refinery could result in greater differences in the quality of petroleum streams flowing into and through TAPS at Valdez. Tesoro argues that in order to ensure that the record accurately reflects all relevant facts and provides a complete picture of the current and potential future circumstances on TAPS the presiding judges take official notice of the newspaper articles. Tesoro maintains that no party would be prejudiced if its motion is granted. In its Answer, Petro Star states that it does not oppose the motion provided that it is given an opportunity to address any argument based on these articles which may appear in Reply Briefs. In its Answer, Mapco states it would be prejudiced and opposes granting the motion. Mapco asserts that the articles constitute rank speculation and are irrelevant to this proceeding because they do not state whether oil from the proposed refinery will be returned to TAPS. The record in any proceeding must close at some time. Acceptance into the record of newspapers articles published several months after the close of the hearing cannot be permitted in the face of opposition. The parties do not, at this time, have an opportunity to address the truth or accuracy of the information in the articles. The articles without cross examination, do not constitute reliable and probative evidence. In the absence of mutual agreement among the parties, the motion is denied. It is so ordered. Motion to Take Official Notice of FERC Tariffs Mapco filed a motion on February 27, 1991, requesting that Official Notice be taken of all tariffs filed with FERC and the Alaska Public Utilities Commission (APUC) establishing the Trans Alaska Pipeline System's (TAPS) Quality Bank adjustments since the commencement of blending of natural gas liquids (NGLS) in the common stream, i.e., from January 1, 1987 to the present. Mapco states that in light of the acceptance into the record of the most recent PACE report as exhibit CON-148, the adjustments shown in other PACE reports contained in these tariffs would establish a complete record. No opposition to this motion has been filed. The motion is granted in part. Official Notice will be taken by me of all such FERC tariffs upon condition that any party referring to a tariff provision not physically marked as an exhibit must attach a copy of the provision to its motion or brief. I deny the motion in the proceedings before FERC to take Official Notice of APUC tariffs. It is so ordered. [¶ 63,032] Central Power and Light Company, Docket No. ER90-289-003 Presiding Administrative Law Judge's Order Partially Certifying Contested Offer of Settlement to the Commission Only as to Noncontesting Participants and Severing as to Contesting Intervenor (Issued March 26, 1991) Walter J. Alprin, Presiding Administrative Law Judge. FERC Reports tomer, Rio Grande Electric Cooperative, Inc. (Rio Grande). The basis of Rio Grande's opposition relates to two provisions of the Offer. ¶ 63,032 The first basis of opposition deals with Notice of Termination applicable to nongenerating wholesale customers, increasing the requirement of notice from a three-year period to a five-year period. Rio Grande alleges that such provision is unjust and unreasonable because of: (1) Rio Grande's uncompetitive situation, (2) its higher costs due to lower customer density, (3) its inability, due to the lack of a blended Power Cost Recovery Factor in its contracts, to equalize additional costs among customers using its other three suppliers, and (4) its inability to consider alternative energy sources. The second basis of opposition deals with allegations that loss factors applied to fuel cost adjustment calculations are improper in that they are not based on any reliable study of losses actually incurred by CPL's service to Rio Grande, being based instead upon losses incurred by a total of CPL's service. Upon CPL's motion, a settlement judge was designated by the Chief Administrative Law Judge, and a settlement conference was held. Upon report by the settlement judge that the issues were irreconcilable, the matter was referred back to the undersigned presiding administrative law judge. The disputing participants have differing views of the procedure to be followed at this point. Rio Grande requests that the uncontested issues settled by the Offer be severed and certified to the Commission, and that the contested issues be set for evidentiary hearing. CPL suggests that severance be extended to parties, rather than to issues, and the Offer be Icertified to the Commission as binding on the noncontesting participants, with the issues disputed by Rio Grande severed for a hearing binding only as to CPL and Rio Grande.1 As noted by CPL, the Offer contains a "zipper clause," that the agreement stands only to the entire scope of the offer, and that if less than the entire scope is considered between the agreeing or noncontesting parties the offer is withdrawn. If selected issues are severed for hearing between all parties, then none of the issues are agreed to. The Commission has, however, recognized the logic and propriety of severing parties for the determination of disparate issues relating to the disputing parties, stating most recently in United Gas Pipe Line Company, 46 FERC ¶61,314, at p. 61,957 (1989), that "The Commission's procedure for approving a settlement for consenting parties and severing contesting parties is intended to bene 'CPL also suggested the alternatives, if applicable, of certifying the contested Offer to the Commission in toto on the grounds that Rio Grande's disputation does not present genuine issues of mate fit all parties by permitting consenting parties to have the benefit of their bargain while contesting parties are afforded an opportunity to litigate contested issues." In Northern Natural Gas Company, Division of InterNorth, Inc., 33 FERC 61,261, at p. 61,523 (1985), the Commission had ruled that "As to (the participants who support or do not oppose the settlement), the settlement is uncontested and is approved. . . . As to the (Iowa State Commerce Commission), the Commission will not impose the settlement on it; it may proceed to hearing." To the same effect, see Trans Alaska Pipeline System, 33 FERC ¶ 61,064, at p. 61,139 (1985), and Northwest Pipeline Corporation, 31 FERC ¶ 61,263, at p. 61,515 (1985). In addition to the procedural issue, the additional factors to be considered are whether material issues of fact remain outstanding, and if so whether the record is sufficient to determine those issues without an evidentiary proceeding. One such issue is as to the justness and reasonableness of a five-year, as opposed to a three-year cancellation notice period. The same matter was considered as part of the United States Court of Appeals' affirmation of Commissions orders, Kentucky Utilities Co. v. United States Federal Energy Regulatory Commission, 766 F.2d 239 (5th Cir. 1985). In that decision, the court looked with favor on the Commission's finding that "What constitutes adequate notice varies, of course, with the circumstances," and found that the evidence in that particular case demonstrated the relevant period to be at least five years, roughly the period between making commitments of construction capital and the time that the generating unit is completed. Findings of "variable circumstances" are by definition findings of fact, they are material, and there is insufficient matter in the record from which to make such findings. The second issue to be considered involves loss factors applied to fuel costs. CPL alleges that the record contains sufficient evidence to make a determination, but cites only limited direct testimony submitted in its application. This testimony has been filed, but has not as yet been accepted into the record, countered by testimony from respondents, or subjected to cross examination. Under these circumstances, it alone is an insufficient basis for drawing a conclusion. The presiding administrative law judge finds that the Offer taken as a whole will settle all issues outstanding between CPL and the agreeing or noncontesting participants, that Rio Grande's objections are based upon material rial fact or, if it does present genuine issues of fact, that the proceedings to date contain substantial evidence upon which to base a reasoned decision. issues of fact, and that the current record of the proceeding is insufficient to determine those factual issues. If the Commission accepts the Offer as to the participants who support or do not oppose the settlement, and agrees that material issues of fact require evidentiary hearing, it can remand the remaining issues to the presiding administrative law judge. Pursuant to Rule 602(g)(1) of the Commission's Rules of Practice and Procedure, 18 C.F.R. § 358.602, the following items are certified to the Commission: 1. The offer of settlement referred to above, 2. The comments in support and opposition cited herein. 3. The proceedings in this matter, consisting of all documents heretofore filed, and the transcript of the prehearing conference held herein on July 10, 1990, volume 1, pages 1 through 23. 4. All pleadings, documents and orders of record in this proceeding including this partial certification of contested settlement. [¶ 63,033] Carolina Power & Light Company, Project No. 432-004; North Carolina Electric Membership Corporation, Project No. 2748-000 Order of Chief Judge Ruling on Motion of North Carolina Electric Membership Corporation for a Finding of Willful Violation of Protective Order by Carolina Power & Light Company and for Sanctions (Issued March 28, 1991) Curtis L. Wagner, Jr., Chief Administrative Law Judge. On March 19, 1991, North Carolina Electric Membership Corporation (NCEMC) filed a motion alleging that the rebuttal testimony of Carolina Power & Light Company's (CP&L) Vice President, Bobby L. Montague, be stricken because it relies on the wrongful use of protective materials, and that CP&L's counsel be disqualified from the proceeding for the willful disclosure to Mr. Montague. NCEMC points out that in Mr. Montague's rebuttal testimony he states at one point: . . . "My review of ... the minutes of NCEMC's Board of Directors and Power Supply Committee's meetings.. confirms this fact."; and at another point Mr. Montague states: ". . . my review of various documents that were produced by NCEMC and their engineering consultants, Southern Engineering . . . . In a document produced by Southern Engineering, entitled Strategic Planning Meeting: October 31, 1988. ... Another document dated December 2, 1988 and entitled Planning Meeting List... Exhibit BLM-206." NCEMC alleges that all of these documents were produced by NCEMC and were provided under the Chief Judge's Protective Order. NCEMC also alleges that CP&L and Mr. Montague signed a Protective Order Certificate on March 6, 1991, but they did not furnish that certificate to NCEMC's counsel until March 18, 1991, after Mr. Montague's rebuttal testimony referring to the protected documents was filed. NCEMC charges that the disclosure of the protected material was deliberate and wanton and not an accidental disclosure. On March 25, 1991, CP&L filed an opposition to the NCEMC motion involved herein alleging that there had not yet been any disclosure of NCEMC's protected documents to Mr. Montague, attaching an Affidavit by Mr. Montague which states that Mr. Montague had never inspected, read, or knowingly seen, any document produced by NCEMC under the Protected Order, including BLM-5 and 6 attached to his rebuttal testimony, that he, Mr. Montague, is aware of the existence of only a handful of such material which he had discussed with authorized reviewing officials, but knows nothing of any confidential information that they may contain. Counsel for CP&L alleges that Mr. Montague was told only of nonconfidential matters that were in some of the protected material. On March 25, 1991, counsel for Saluda River Electric Corp., Inc., filed a response stating its fear that in view of the allegations in the NCEMC motion, the materials provided under the Protective Order by Saluda may also be compromised. In view of the request for expeditious action on the involved motion and responses thereto, the Chief Judge held a telephone conference with Messrs. Madden and Pierce representing CP&L; Mr. Leckie, representing NCEMC; Mr. Miller, representing Saluda; and Mr. Bartus, representing the Commission staff on March 27, 1991, to advise the parties of his ruling on the said motion and responses. This order is a confirmation of that ruling. First, the Chief Judge found that there was no violation of the Protective Order since the signed response of counsel for CP&L and the affidavit of Mr. Montague make it clear that Mr. Montague has not seen any of the material whatsoever provided under the Protective Order. Second, the Chief Judge ruled that under section 7F of the Protective Order issued by him on November 1, 1990, Mr. Montague cannot be a reviewing representative under the Protective Order; that Mr. Montague must not be shown any of the material furnished under the Protective Order; and that any material furnished under the Protective Order must not be discussed with Mr. Montague in any way. Third, the Chief Judge ruled that exhibits BLM 5 and 6 will be stricken from Mr. Montague's testimony; that any reference to them in his testimony will also be stricken. In this connection, counsel for CP&L, and Mr. Montague, are directed to file with the Chief Judge and serve the parties in this proceeding on or before noon April 4, 1991, affidavits setting forth in detail discussions of counsel for CP&L and reviewing officials with Mr. Montague concerning any protected material, in order that the Chief Judge can make a determination as to any confidential information which may have been divulged and for use in striking those portions of Mr. Montague's testimony referring to any such protected information. Counsel for NCEMC also objects to the execution of Protective Order certificates by Mr. Starling and Mr. Calvert, house counsel for CP&L, since they are part of and regularly advise CP&L's negotiating team. While the Chief Judge strongly believes that any person or entity has a right to be represented by counsel of their choice, in this instance the two involved attorneys, who are full-time employees of CP&L, and who are not representing CP&L in this proceeding, are barred from being reviewing representatives under the Protective Order by paragraph 7F of the said order. The parties are admonished that no protective material provided by Saluda under the Protective Order will under any circumstance be provided to any nonreviewing representative and any such material will not be discussed with any nonreviewing representative for any reason under any circumstances. [¶ 63,034] Texas Eastern Transmission Corporation, Docket Nos. RP88-67-000, Report to the Commission (Issued March 28, 1991) Herbert Grossman, Presiding Administrative Law Judge. In its October 26, 1990 Order on Remand, the Commission directed me to inform it "by April 1, 1991 of the status of this case so that the Commission can ensure that this case proceeds expeditiously." 53 FERC ¶ 61,105, at p. 61,333. While it appears that the Court of Appeals has not yet taken either of the actions prescribed by the Commission as a prerequisite to making the Commission's October 26th order effective (see, id. at p. 61,340), I am, nonetheless, filing this report to keep the Commission apprised of the status of the case. The Commission's Order on Remand consolidated new issues with the pending rate case and encouraged the parties to settle these issues. Because of the nature of this proceeding, including the multiplicity of parties with highly adversarial positions and the interrelationship of numerous of those issues, it was impractical to expect that the parties would reach settlement or fulfill the Commission's requirement (id. at p. 61,337) that any settlement filed in this proceeding "have adequate record support," without the impetus of a hearing schedule and the filing of opening rounds of testimony to define and clarify the parties' respective positions. Accordingly, I incorporated the newly consolidated issues into a revised procedural schedule leading to a hearing of all issues, encouraged the parties to negotiate settlement of all issues, and, subsequently, extended the schedule on a few occasions to facilitate the settlement discussions. The current schedule will culminate in a hearing beginning on September 5, 1991. As a result of the pressure of the hearing schedule, the parties have met on a number of occasions to negotiate settlement. But, as might be expected, they have been unable to resolve all of the issues, as the attached March 27, 1991 status report of Texas Eastern indicates. I would doubt that any further progress on settlement would be made until additional rounds of testimony are filed. It is my intention, if the Commission permits, to continue with the present procedural schedule for the purpose of encouraging further attempts at settlement and moving expeditiously to hearing if settlement fails. I will allow the parties further pause along the way if the moments appear propitious for additional attempts at settlement, even after hearing. Absent the hearing schedule requiring further rounds of testimony, it is unlikely that the issues would be settled in any reasonable time, and even more unlikely that the parties could enter into a stipulation that would supply record support for a settlement that would permit the Commission to evaluate or modify the settlement to its satisfaction. Moreover, while agreement of the parties is desirable, some cases are just easier to try and decide, than to settle. This may be just such a case. Report of Texas Eastern Transmission Corporation on Status of Settlement Nego tiations To: The Honorable Herbert Grossman, By this order dated February 27, 1991, the presiding administrative law judge directed Texas Eastern Transmission Corporation (Texas Eastern) to report to the presiding administrative law judge concerning the status of settlement negotiations. This document is submitted in compliance with that directive. The parties to this case, including the Commission staff, have met repeatedly over the last several months in an effort to resolve the many complex issues in this proceeding. These meetings have included general meetings of all parties at the Commission, as well as meetings of ad hoc committees that were set up in an effort to resolve particular aspects of the case. All active parties have spent a great deal of time and energy in an effort to settle the case. There has been progress made on the resolution of some issues. These issues upon which progress has been made, however, are interrelated with other issues which have not yet been solved. Unfortunately, despite these efforts there remain certain issues yet to be resolved. The parties have not foreclosed the possibility of settling the case, but it appears unlikely that such a settlement can be reached before the commencement of the procedural dates now set in this proceeding. Prior to the last request for an extension of the procedural schedule, there was general agreement that there would be no further requests for extensions. Texas Eastern is willing to make further efforts at settlement during the course of the existing procedural schedule and during and after the hearing scheduled in this case. In that regard, the time that has already been spent by the parties will facilitate and advance the prospects of settlement. It is still Texas Eastern's hope that this case can be settled. Texas Eastern will, however, proceed promptly and diligently to submit evidence and otherwise prepare for hearing in accordance with the existing procedural schedule. It is Texas Eastern's desire that this case be resolved promptly in order to eliminate the considerable uncertainty that now exists concerning the status of Texas Eastern's services. Respectfully submitted, Henry S. May, Jr. VINSON & ELKINS 3300 First City Tower 1001 Fannin Houston, Texas 77002-6760 (713) 758-2554 Richard J. Kruse Deputy General Counsel Texas Eastern Transmission Corporation 5400 Westheimer Court Houston, Texas 77056 Attorneys for Texas Eastern Transmission Corporation Dated: March 27, 1991 Certificate of Service I hereby certify that on this 27th day of March, 1991, the foregoing "Report of Texas Eastern Transmission Corporation on Status of Settlement Negotiations" was served by firstclass mail, postage prepaid, upon all parties listed on the restricted service list compiled by the Commission for these proceedings. Henry S. May, Jr. VINSON & ELKINS 3300 First City Tower 1001 Fannin Houston, Texas 77002-6760 (713) 758-2554 3 |