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Mr. MATSUNAGA: I would like to ask the bill
managers to clarify another point. The supply or
service contract transition rule requires that the
property be readily identifiable with and necessary to
carry out the contract. The committee report explains
that the specifications and the amount of the property
must be readily ascertainable from the terms of the
contracts or from related documents.
Is this Senator's understanding correct that the
requirement is met when a binding power purchase
contract specifies the type of generating equipment in
terms of primary energy source and specifies the amount
of generating equipment in terms of total generating
capacity of the turbines necessary to produce the
contracted power? In other words, the rule does not
require the technical details of the generating
property to be spelled out.
Mr. PACKWOOD: The Senator from Hawaii is correct.
132 Cong. Rec. 15028 (1986).
Wometco argues that the above discussions between Senators
bolsters its argument that (in order to qualify under the supply
or service transition rule) specific rebuilds and line extensions
need not be expressly identified in construction contracts
outstanding as of December 31, 1985, but rather that the general
language of its franchise agreements that were outstanding as of
December 31, 1985 (requiring that Wometco's systems be maintained
according to the “highest accepted standards of the industry”,
the “highest and most desirable form of service”, and the “state
of the art”), is sufficient to bring the six rebuilds and line
extensions that in fact were undertaken and built between
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