ML17209B146
| ML17209B146 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 05/26/1981 |
| From: | Bouknight J FLORIDA POWER & LIGHT CO., LOWENSTEIN, NEWMAN, REIS, AXELRAD & TOLL |
| To: | Atomic Safety and Licensing Board Panel |
| Shared Package | |
| ML17209B147 | List: |
| References | |
| ISSUANCES-OL, NUDOCS 8106040369 | |
| Download: ML17209B146 (65) | |
Text
FPL: 5/26/81 M
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD MAfgy)gy~
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~%eofthogoo, L'nlrb'r,'n the Matter of FLORIDA POWER 6 LIGHT COMPANY (St. Lucie Plant, Unit No.
2)
)
)
Docket No.
50-389-OL
)
)
May 26, 1981 ANSWER OF FLORIDA POWER 6 LIGHT COMPANY TO THE FLORIDA CITIFS'ETITION TO INTERVENE AND REQUEST FOR CONSOLIDATION Florida Power a Light Company
("FPL") has filed with the Commission an application for a facility operating license for the St. Lucie Plant, Unit No.
2.
The Commission pub-lished in the Federal
~Re ister for March 9,
- 1981, a notice that FPL's application had b'een filed.
In that notice, the Commission invited all parties whose interest may be affected to intervene in Docket No. 50-389, a health and safety pro-ceeding.
4/
On April 7, 1981, certain Florida Cities
("Cities" )
~ ~,,gpJ/I iled a Petition to Intervene and Request for Consolidatio
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The Petition was filed by the Gainesville Regional g,s
~~>ps Utilities, the Lake Worth Utilities Authority, the utilities Commission of New Smyrna
- Beach, the Sehringg Utilities Commission, and the Cities of Alachua, Bartow,4 Fort Meade, Homestead, Kissimmee, Mount Dora, Newberry, St. Cloud, Starke and Tallahassee, Florida.
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ACCESSION NBR:8106040369 DOC.DaTE: 81/05/26 NOTARIZEO:
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[hereinafter cited as Petition].
The pleading was filed in Docket No. 50-389A. It is clear from the Cities'etition, however, that it was filed in response to the March 9,
- 1981, Federal R~e later notice in this docket.
(Petition at 1-3).
The Cities state that they seek to intervene here as a protective matter to assure that any conditions attached to the construction permit in Docket No.
50-389A remain in effect for the operating life of the unit.
(Id. at 1-3).
For this reason the Cities also seek to consolidate this operating license proceeding with the construc-tion permit antitrust review in Docket No. 50-389A.
(Id. at 2).
FPL maintains that the Cities'etition should be denied in its entirety.
First, the purported basis for the Cities'ntervention is to argue that antitrust license conditions attached to the construction permit remain in effect after the issuance of an operating license.
FPL does not contest this; in-deed under NRC law it will occur in any event.
Thus, the Cities'etition is moot by its own terms.
- Second, the only contentions which the Cities seek to litigate are antitrust contentions.
However, their Petition was
. submitted in response to the March 9, 1981, Federal Receister notice inviting petitions for leave to intervene on radiological health and safety and environmental matters.
The concerns ad-dressed in the Cities'etition are beyond the scope of this proceeding, and thus the Petition must be denied.
Third, Section 105c(2) of the Atomic Energy Act ("Act")
provides that an operating license antitrust, review may be convened only if "the Commission determines that such review is advisable on the ground that significant changes in the licensee's activit~ies or proposed activities have occurred subsequent to the previous fconstruction permit] review by the Attorney General and the Commission...."
(42 U.S.C.
5 2135(c) (2)).
A finding of significant changes has not been made for St. Lucie 2.
- Moreover, such a finding could not possibly be made since the construction permit antitrust review is still in progress.
- Fourth, an antitrust. review on the operating license applica-tion for St. Lucie Unit No.
2 cannot be initiated by the filing of the Petition.
The Commission's rules provide a specific procedure by which a party may intervene in an antitrust pro-ceeding if the Commission makes the finding prescribed in Section 105c(2) of the Act, and here the Commission has not made such a
finding nor have the Cities followed the prescribed procedure.
Accordingly, the Petition cannot be entertained.
Fifth, although the Board need not reach the merits of FPL's antitrust allegations, the operation of St. Lucie 2 in accordance with the antitrust license conditions already in effect would not create or maintain a situation inconsistent, with the antitrust laws.
For all these
- reasons, FPL submits that the Cities'etition should be denied.
We address these five points, each of which standing alone is decisive, below in Sections I - V.
One additional section of this pleading is made necessary by the Cities'nclusion in their Petition of allegations of a nature both defamatory and gratuitous.
I.
The Cities'etition is Moot.
The Cities state that they seek to intervene in this pro-ceeding "solely as a protective matter."
(Petition at 2).
They are already party to the construction permit antitrust review in Docket No. 50-389A.
As the Atomic Safety and Licensing Board in that proceeding
("Antitrust Board" ) recently. stated,
"[tjhe Cities will have ample opportunity in [that) proceeding through evidence and argument to persuade the Board that the license conditions
[already in effect]
do not go far enough in dealing with an asserted situation inconsistent with the antitrust laws."
Florida Power 6 Li ht Co.
(St. Lucie Plant, Unit No. 2),
No.
50-389A, slip op. at 6, (Atomic Safety and Licensing Board, April 27, 1981).
The purported justification for the Cities'etition is to assure that conditions attached to the construction permit remain in effect for the life of the unit.
It is an established principle of NRC practice that anti-trust conditions attached to a construction permit remain in effect after the issuance of an operating license.
In every case in which antitrust license conditions have been attached to a
construction permit, the NRC has extended those license condi-tions upon the issuance of an operating license for the time span of the license.
The Cities allege no basis for suspecting that the Commission would not do the same here.
Accordingly, the Cities'etition is moot by its own terms.
Their intervention is predicated upon the defense of an established tenet, of NRC practice which FPL does not contest.
On this basis
- alone, the Cities'etition should be denied.
II. Antitrust Contentions are Beyond the Scope of this Proceedin The Commission's March 9, 198l, Federal Receister Notice offered an opportunity for "any person whose interest may be affected by this proceeding" (45 Fed.
Rect.
15,831 (1981)) to in-tervene and request a hearing.
The issues to be considered in "this proceeding" are limited to radiological health and safety and environmental issues.
Cities do not seek to raise any contentions relating to such issues.
As they have ex--
plained, Cities request intervention in "proceedings with regard to the [St. Lucie Unit No.
2] operating license o~nl insofar as 4/
they may relate to antitrust concerns."
Cities seek by their Petition to initiate an antitrust review in connection with the operating license, and request consolidation of any such review with the construction permit antitrust review in Docket No.
50-389A.
"/
"Response, by Florida Cities to NRC Staff Answer,"
p.
2 (May 7, 1981)
(emphasis in original).
Antitrust matters are beyond the scope of this proceeding, and should an antitrust review in connection with the operating license be conducted, the Commission will order a separate pro-ceeding.
Section 2.104(d)(3) of the Commission's rules spe-cifically provides that unless the Commission determines other-
- wise, the antitrust aspects of an application will be con-sidered at a hearing other than the one convened to address radiological health and safety and environmental matters.
This policy is also reflected in 10 CFR Part 2, Appendix A, Section X
[hereinafter Section X].
Specifically,Section X(e) states that a hearing on the antitrust aspects of an application will generally be held separately from a hearing on radiological health and safety aspects.
This policy has been consistently followed.
See, e~,
Duke Power Co.
(Oconee Nuclear Station, Units 1, 2
and 3),
4 AEC 592 (1971);
Boston Edison Co.
(Pilgrim Nuclear Power Station),
4 AEC 666 (1971).
The Commission's policy reflects the intention expressed by Congress in 1970 when it amended the prelicensing antitrust review provisions of the Act to their present form.
The Joint Committee on Atomic Energy, evincing concern that the pre-licensing antitrust review not cause delay in the issuance of
- licenses, stated this intention plainly:
The committee expects and will urge the Commission to make every reasonable effort to deal with the potential antitrust feature under subsection 105c of the bill fully se grate board or boards should be utilized in the im lementation of ara ra hs (5) and (6) of subsection 105c.
(H. R.
REP.
NO.
91-1470, 91st Cong.,
2d Sess.
15 (1970)
(emphasis added)).
In determining whether the Petition raises issues within the scope of the proceeding, the Board is bound by the Com-mission' notice.
By means of that notice, the Commission sets the scope of this proceeding and establishes the authority of this Board.
Pacific Gas and Electric Co.
(Stanislaus Nuclear Project, Unit 1), ALAB-400, 5
NRC 1175 (1977); Carolina Power and Li ht, Co.
(Shearon Harris Nuclear Power Plant, Units 1,
2, 3 and 4), ALAB-577, 11 NRC 18 (1980).
Clearly the March 9 notice does not encompass antitrust issues, and where a Board is convened to hear environmental, health and safety issues, it lacks jurisdiction to grant.
a petition to inte'rvene which seeks to raise only antitrust issues.
Public Service Co. of Indiana (Marble Hill Nuclear Generating
- Station, Units 1 and 2), ALAB-316, 3
NRC 167 (1976).
Moreover, it is well settled that a Licensing Board appointed to rule on intervention petitions submitted in a proceeding cannot initiate a new or different proceeding in response to a petition.
Houston Li htin and Power Co.
(South Texas Project, Units 1 and 2), ALAB-381, 5
NRC 582 (1977).
These precedents are controlling here.
The Cities, similar to the municipalities in Marble Hill, have sought to introduce antitrust issues into this health and safety pro-ceeding.
The Cities seek to accomplish this objective either by intervening directly or by bringing about the consolidation of this proceeding with the construction permit antitrust review in Docket No.
50-389A.
By either course, antitrust issues would become part of this proceeding in contravention of the Commission '
regulations, the limited jurisdiction which the Commission has delegated to the Board and the express intent of Congress.
The Cities'ntitrust allegations are sim:ly beyond the scope of this proceeding.
If the Cities wish to litigate their alleged antitrust concerns, they may do so in Docket No.
50-389A in which an antitrust proceeding concerning the construction permit application for St. Lucie Unit No.
2 is now pending.
III.
No Antitrust Review has been Ordered in Connection with the St. Lucie Unit No.
2 0 eratin License Review.
The NRC does not, as a matter of course, conduct an anti-trust review in connection with an application for an operating license.
Section 105c(2) of the Act provides that the NRC may consider antitrust issues at. the operating license stage only if the Commission first determines that "such review is ad-visable on the ground that significant changes in'he licensee's activities or proposed activities have occurred subsequent to
the previous review by the Attorney General and the Commission in connection with the construction permit for the facility."
The Commission has not made a finding that, sig-nificant changes have occurred here, nor could such a finding rationally be made since the construction permit antitrust review has not yet terminated.
Accordingly, the consideration of antitrust issues at this time in conjunction with FPL's application for a license to operate St. Lucie 2 is barred by Section 105c(2).
Congress intended that an operating license antitrust review be distinct from and sequential to the construction permit review.
This is evident from the language of Section 105c(2) which provides that a finding of significant changes in the licensee's activities or proposed activities that have view is a prerequisite to a second antitrust review at the operating license stage.
And, as the Commission has explained, in order for "significant changes" to occur as required by Section 105c(2),
the changes must, occur after the publication of the advice of the Attorney General and after any antitrust hearing conducted at the construction permit stage by the Commission or its delegates.
South Carolina Electric and Gas Co. CLI-80-21, 11 NRC 817, 823 (1980)
~
10 Here, the Commission has not made a finding under Sec-tion 105c(2) that significant changes have occurred in FPL's activities or proposed activities since the construction per-mit antitrust review.
Nor could such a finding logically be made since the construction permit antitrust proceeding--begun at, the Cities'equest in a petition filed thirty-one months late--is still pending.
Absent a finding of significant changes, Section 105c (2) precludes the consideration of antitrust issues at the operating license stage.
South Carolina, ll NRC at 823; Houston Li htin and Power Co.
(South Texas Project, Unit Nos.
1 and 2), CLI-77-13, A/
5 NRC 1303, 1312 (1977).
Whether the introduction of antitrust issues results from permitting the Cities to intervene in this proceeding or consolidating this proceeding with the construction permit anti-trust review is immaterial.
In either instance, the effect would be to review antitrust issues in conjunction with an application for an operating license without first making the significant changes determination required by Section 105c(2).
The Cities'etition simply ignores this clear statutory requirement.
Consolidation would also render meaningless the distinction in the statute between the scope of construction permit and operating 'license antitrust reviews.
Section 105c(2) provides that any antitrust review conducted at the operating license stage shall be limited in scope to significant changes that
"/
10 CFR 5 2.102(d) (2) also states that the Commission's finding of significant changes is a prerequisite to an operating license antitrust review.
have occurred in the licensee's activities or proposed activities since the completion of the construction permit antitrust review.
'South Carolina, ll NRC at 823; South Texas, 5
NRC at 1312 Consolidating the two proceedings would elimi-nate any distinction between the scope of the construction permit and operating license reviews contrary to the clear intent of the statute.
For these reasons, it would be contrary to law for any sort of antitrust review in connection with the operating
'license application to be convened in response to the Cities'etition.
IV.
An Operating License Antitrust Review Cannot be Initiated b the Filin of a Petition.
The Petition is not. sufficient, in and of itself, to initiate an operating license antitrust review.
The Commis-sion's regulations, 10 CFR 55 2.101-2.102, explain the procedures which the Commission follows in implementing Section 105c of the Act, including the procedure for initiating an operating license review pursuant to Section 105c(2).
Section 2.102(d) (2) provides that. the Commission, after consulting with the Attorney General, will make a determina-tion of whether an operating license review is advisable on the ground that significant changes have occurred subsequent to the construction permit, antitrust review.
The Commission has delegated to the Director of Nuclear Reactor Regulation
("Director" ) authority to make the significant changes deci-sion for the Commission.
lf the Director determines that
12 such a review is advisable, then Section 2.102(d)(1) states that the Director will refer and transmit a copy of the application for an operating license to the Attorney General as required by Section 105c of the Act.
The Attorney General, within the next 180 days, will then render his advice as to whether the activities under the license would create or maintain a situation inconsistent with the antitrust laws.
Section 2.102(d)(3) provides that.the Director will'ublish the Attorney General's advice in the Federal Re ister.
That section further provides as follows:
Any notice published in the Federal Re<eister pursuant to this subparagraph will also include a notice of hearing, if appropriate, or will state that any person whose interest may be affected by the proceeding may, pursuant to and in accordance with g 2.714, file a peti-tion for leave to intervene and request a hearing on the antitrust aspects of that application.
The notice will state the petitions for leave to intervene and requests for hearing shall be filed within 30 days after publication of the notice..
One who seeks to raise antitrust issues in conjunction wi h with an application to operate a facility must do so in accordance with these procedures, not by submitting in a procedural vacuum a petition requesting intervention and a hearing.
13 4/
Accordingly, the Cities'etition should be denied.
As is explained in the preceding section of the response, the Director has not yet had occasion to consider whether an operating license antitrust review is appropriate for St.
Lucie 2; the construction permit antitrust review has not yet run its course.
V.
The Operation of St. Lucie 2 Would Not Create or Main-tain a Situation Inconsistent with the Antitrust Laws.
FPL believes that the Board should deny the Cities'eti-tion without addressing the merits of the Cities'ntitrust al-legations.
Nonetheless, FPL believes that a brief response to the Cities'ccusations is warranted.
In Docket No. 50-389A, FPL, the NRC Staff ("Staff" )
and the Department of Justice
("Department" ) attained a settle-ment of their differences which called for the attachment of certain antitrust license conditions to the construction per-mit for St. Lucie 2.
The Staff and the Department, represented to the Antitrust Board in that docket that the licensing of St. Lucie 2 in accordance with the settlement license conditions would not create or maintain a situation inconsistent with the
"/
The Commission published in the Federal Re ister for March 26,
- 1981, (46 Fed.
Rect.
18,747 (1981)),
a pro-posed rule designed to implement the Commission's delegation to the Director of authority to make the "significant changes" determination.
The proposed rule does not alter the procedures dis-cussed above for filing a petition for leave to in-tervene and requesting a hearing on the antitrust aspects of a license application, however.
14
%/
antitrust laws.
The three parties filed a Joint Motion re-questing that the Antitrust Board approve the settlement and give immediate effect to the settlement license conditions.
On Ap:.il 27,
- 1981, the Antitrust Board granted the Joint Motion, and the settlement license conditions are therefore now in effect.
St. Lucie 2, Docket No.
S0-389A,
~au ra at 4.
The Cities apparently allege that the licensing of St.
Lucie 2 even with the present antitrust license conditions in effect would create or maintain a situation inconsistent with the antitrust laws.
The Cities thus raise the same argu-ments that they have raised in the construction permit antitrust proceeding.
PPL unequivocally denies that activities under the operating license for St. Lucie 2 would create or maintain I
a situation inconsistent with the antitrust laws..'onetheless, the Cities'ntitrust allegations need not be adjudicated here.
The Cities will have ample opportunity to litigate their al-legations and to attempt to persuade the Antitrust Board to attach new or different license conditions in Docket No.%*/
50-389A.
(St. Lucia 2, Docket No.
50-389A,
~au ra at 4).
"/
"Stipulation," p.
1 (September 12, 1980).
The Cities'etition concurs on this point, as of course it must, stating that "a separate proceeding
[at the operating license stage]
should be unnecessary."
(Peti-tion at, 2).
15 VI. Cities'llegations of Misrepresentation to Government A encies are Baseless, Gratuitous and Irresoonsible.
The final nine pages of the Petition is devoted to a recitation o
alleged instances in which FPL has "made claims before governmental agencies that have been knowingly without basis.
(Petition at 14).
These allegations are also the subject of copious appendices to the Petition.
The Petition does not explain why allegations of this nature are made in a Petition which states that it is filed "solely as a protective matter" and is based on "allegation[s]
and relief" which are "parallel" to issues now pending before the Licensing Board which is conducting the construction permit antitrust hearing.
(Petition at 2). If these allegations are relevant to anything pending before the Commission, and FPL believes they are not, they would relate to the merits of the antitrust proceeding now pending in connection with the con-
- /
struction permit application.
This is not the time or place for resolving the merits of the dispute between the Cities and FPL.
The Cities will have their opportunity in the pending construction permit proceeding to attempt to prove their case on the merits through competent
- evidence, and FPL will have an opportunity to present its defense.
In the context of that
- hearing, the issue will turn on the sworn testimony of witnesses who have direct knowledge of the facts, not the inferences
"/
The ostensible purpose for including these allegations in the Petition is that they relate to FPL's alleged anticompetitive intent.
(Petition at 14).
16 that any lawyer or hired expert chooses to draw from a few documents chosen out of the context of hundreds of thousands.
Nevertheless, FPL deems it important to respond to these allegations, at least to the extent of dispelling any impres-sion that FPL has knowingly misstated matters to the NRC.
What follows is not a complete response on the merits of all of these matters, but a refutation which should be more than sufficient to dispel in the mind of any objective person the impression that any of the Cities'laims should be taken at face value and to assure the Commission that FPL is acting in good faith to discharge its obligations of candor to the NRC.
Beyond that, FPL declines to be drawn into an adjudica-4/
tion of the merits of the antitrust dispute based on pleadings.
"/
The Cities appended to their pleading hundreds of pages of documents ostensibly as evidence that they wish the Board to consider.
The practice of dumping large numbers of unauthenticated documents upon the Board and the other parties as evidence prior to the commencement of any evidentiary hearing is a manifestly objectionable practice not sanctioned by the NRC's rules of practice.
FPL regrets that this a tactic which the Cities use often, as the Antitrust Board recently noted in denying "yet another in a series of improper attempts
[by the Cities) to make premature evidentiary showings."
Florida Power op. at 2-3 (Nay 19, 1981).
Xn most instances, FPL would not respond by attaching documents of its own.
- However, the circumstances here are unusual in that the Cities'llegations go beyond the merits of the antitrust issues.
The documents appended by the Cities constitute a wanton attack upon FPL's integrity in the face of which FPL can-not stand silent.
Accordingly, FPL has attached to this Answer three affidavits and documentary material on which it bases statements contained in this Answer.
FPL has attempted to limit this material to that absolutely neces-sary for the limited purpose of this response, and the attached material by no means constitutes the complete evidentiary presentation that FPL would submit at a hearing.
Broadbrush accusations are easy to make, particularly if the accuser is prepared to be irresponsible, yet difficult to answer decisively without painstaking inquiry into the sur-rounding facts, including the opportunity to be confronted with and to cross-examine the accuser's fact witnesses.
For this reason, these Cities constantly seek means of circum-venting the discovery and evidentiary processes.
Unfortunately for them, they now find themselves in two forums--the con-struction permit proceeding before the NRC and the U.S. Dis-trict Court, in Miami--where FPL expects to have access to reasonabl discovery and the Cities are faced with the prospect of having to produce live witnesses who can confirm their counsel's speculations.
Two general observations about the Cities'llegations are in order.
First, they reflect an excessive zeal which goes beyond vigorous advocacy and indicates the absence of any reasonable, professional perspective about the litigation between the Cities and FPL.
In the eyes of those who craft the Cities'leadings, there is no room for differences about how events should be characterized or the weight which should be given particular evidence.
Anyone who disagrees with their characterizations lacks integrity, or at best is beset, with extreme naivete.
This approach extends beyond
- FPL, and is evident in letters and statements by counsel for the Cities complaining of decisions by the NRC Staff and the United States
18 Department of Justice to enter into a settlement agreement 2k/
with FPL in the construction permit antitrust proceeding, a settlement which was subsequently approved by the Antitrust Board.
Bt. Lucie 2, No.
50-389A,
~su ra at 14.
- Likewise, the possibility that a reasonable explanation might exist for what the Cities perceive to be a discrepancy seldom occurs to them.
They are prepared to attack the integrity of a corporation and of individuals based on their perception alone, without any apparent regard for the effects of 'such attacks on others and ultimately on the civilityof the legal
+*/
proceedings io which they are party.
- Second, as noted above, there was no apparent reason for inclusion of any of this material in the Petition, and no reason at all for the gratuitous aspersions cast upon FPL's commitment to construct, and operate nuclear generating facilii,ies in compliance with the NRC's regulations and policies regarding protection of the environment and the
"/
P'ehearing Conference transcript at 324-26 (March 5, 1980); Letter from George Spiegel to Howard K.
Shapar (April 16, 1980); Letters from Robert A.
Jablon to Sanford M. Litvack (March 26, 1980),
(April 18, 1980); Letter from Robert A. Jablon to Howard K. Shapar and Tom Engelhardi.
(March 26, 1980).
The reference in Appendix V of the Petition to the allegedly untrue testimony of Marshall McDonald, FPL's Chairman and Chief Executive Officer, is illustrative.
(See, pp.
46-50, infra).
A/
public health and safety.
FPL has alleged in a counter-claim filed in the U.S. District, Court in Miami, Florida, that these same Cities "have engaged in an unlawful combination and conspiracy among themselves and with others for the purpose of causing injury to FPL's business and property."
(Counter-claim for Defendant at 14, City of Gainesville v. Florida Power 1979).
FPL alleges that, as part of this combination and conspiracy, at least some of the Cities have participated in NRC proceedings having "no inte:;est in obtaining the relief they ostensibly are seeking,"
but have intervened "in order to coerce FPL into agreeing to other demands they have made, in-eluding the payment to
+*/
sums."
The District tiffs for dismissal or plaintiff Cities of substantial monetary Court has denied motions by the plain- +**/
summary judgment of FPL '
counterclaim.
On May 7, 1981, the Cities filed a second pleading evi-dencing the absence of any desire to participate in the environmental, health and safety proceedings concerning St. Lucie Unit No.
2 and stating that the Cities intend their charges to relate solely to antitrust issues.
No explanation was provided as to why statements relating to health and safety issues were made to begin with.
("Response by Florida Cities to NRC Staff Answer," No.
50-389 (May 7, 1981)).
Amended Counterclaim for Defendant, Cit of Gainesville
- v. Florida Power
& Li ht Co.,
No. 79-5101-CXV-JLE (S.D.
Fla., filed May 20, 1980)
[hereinafter cited as Miami Suitj.
""~/ "Order Denying Motion to Dismiss or for Summary Judg-ment," Miami Suit (Feb.
1, 1981).
20 The Cities now find themselves in the posture of litigating their claims in an NRC proceeding in which the NRC Staff and the Department of Justice have advised the Anti-trust Board on the basis of a settlement between them and FPL that activities under the license for St. Lucie Unit No.
2 will not create or maintain a situation inconsistent with the antitrust laws.
In the Miami suit, as the action progresses, the Cities have good reason for perceiving that their potential exposure from FPL's counterclaim is'reater than any chance for recovery against FPL on their own claims.
In these circum-stances, it is not unreasonable to infer that the Cities have escalated the course of conduct described in FPL's counterclaim and have concluded that actions which threaten to jeopardize FPL's reputation for integrity with the federal agency which exercises critical regulatory authority over its nuclear activities constitute Cities'hief remaining weapon for coercing FPL into yielding to Cities'nreasonable demands.
This tactic to coerce FPL will not succeed.
As demon-strated below, the irresponsibility of the Cities'ttack com-bined with ample indications of FPL's good faith efforts to meet its obligations to the NRC negate the Cities'harges.
FPL is convinced that it has good defenses on the merits of the antitrust issues involved in the construction permit anti-trust proceeding and in the Miami suit, and it intends to pro-ceed to a resolution of these claims and of what it believes to be a meritorious counterclaim against the Cities.
21 A.
The Allegations that Antitrust Information Filed by FPL with this Commission has been Incom lete and Misleadin are Groundless.
Ne turn first, and give primary emphasis, to the allega-tions that antitrust information filed by FPL in connection with its applications for the St. Lucie and South Dade plants has been knowingly incomplete or misleading.
Even though this is not the place to try each of these allegations on its merits, FPL wishes to dispel promptly any impression that it has not provided candid responses to questions specified in the NRC's regulations, 10 C.F.R. Part 50, Appendix L.
It is important at the outset to place these allegations in their proper perspective.
The information required by Appendix L was submitted in the context of antitrust reviews conducted by the NRC, with the advice and participation of the Attorney General and with opportunities being provided in each instance for the Cities to participate as parties to the proceedings.,
In both cases, FPL had reason to believe that each City located near the area where FPL serves would be approached directly by the Department of Justice and asked for information in its pos-
<</
session which might pertain to the antitrust review.
The Cities
"/
FPL is aware that the Department of Justice follows this procedure as a matter of course.
In addition, FPL has located letters of inquiry from the Depart-ment in files of a number of the cities which have been inspected in the course of discovery for the construction permit antitrust proceeding and the Miami suit.
22 exercised their rights to intervene in both cases, although in 0/
the case of St. Lucie Unit No.
2 their petition was filed late.
All of the instances of alleged omissions from FPL's two ap-plications concern information which was at least equally available to one or more municipalities to which the Department's inquiries were directed, and most of them concern information which was in the hands of Cities which actually intervened in the proceedings.
Accordingly, it is untrue that any "inaccurately benign picture" of FPL's dealings with municipal utilities painted by FPL's filings could have materially affected the course or timing of either antitrust review.
(Petition at 17).
In almost every instance the allegations made by the Cities concern disputed factual matters, indeed many are matters wh'ich could be determined on their merits in the forthcoming antitrust hearing and the trial of the Miami suit.
The Cities'iew is that FPL's failure to include the Cities'ersion or characterization of these events in its filings with the NRC demonstrates FPL's lack of integrity or credibility.
That is absurd on its face.
Moreover, the charge has little significance in a context where the information in issue was equally available to both parties and the Cities have
- had, and availed themselves of, every opportunity to advance their
"/
The Cities-claimed that their lateness was justified be-cause of drastic changes in the environment in which they operate resulting from the fuel crisis which began in
- 1973, about which more will be said later, as well as an alleged misunderstanding between FPL and Orlando.
"Joint Petition of Florida Cities For Leave to Intervene Out of Time; Petition to intervene; and request for hearing," p.
21 (August 6, 1976)
~
23
<</
own characterizations of events.
- Secondly, the Cities have now had years to pour over the hundreds of thousands of documents produced by FPL in the con-struction permit antitrust review, the Miami antitrust litigation, and a number of proceedings at the FERC.
The Cities have, un-doubtedly, reviewed these documents with the intensity of parties engaged in litigation.
Yet they have come forward with nothing which even raises a question of knowingly false representations--
which is the charge made in the Petition.
Even "their allegations that FPL's filings with the NRC were technically deficient in some way are either groundless on their face or are based on arguments as to how Cities'ounsel believe certain events should be charac-terized.
Having reviewed Cities'leading, FPL submits that the filings are accurate and complete in every material respect.
Moreover, in light of the affidavits that are attached to this
- response, there can be no question that conscientious, good faith efforts were made by FPL's management to compile accurate and complete filings in each instance.
"/
The Cities claim (Petition at 17) that had their characterization of events been advanced in 1973 and 1975 "protracted antitrust proceedings.
might likely have been obviated" has no merit.
Presumably, it is Cities'ersistence despite the views of the Department of Justice and the Staff--
who long ago had access to all of the documents appended to Cities Petition--which has made neces-sary further'rotraction of the construction permit antitrust review.
1.
Cities'llegations Concerning FPL's South Dade Filin In the course of its application for a license to construct
+/
the South Dade project, on July 14,
- 1975, FPL filed in Docket No. P-636A a document prepared pursuant to 10 C.F.R. Part 50, Appendix L, entitled "Information Requested by the Attorney General for Antitrust Review Facility License, Application" [here-inafter cited as Information). It is this document, specifically its responses to Question Nos.
13 and 18, which the Cities characterize as embodying knowingly false claims made with respect to the South Dade project.
There is no basis for such an allegation.
FPL undertook a good faith effort to furnish complete and accurate responses to the questions in Appendix L, and after reviewing those responses in light of the Cities'etition and its voluminous appendices, FPL believes that the Information was complete and accurate in every material respect.
The preparation of the Information was the responsibility of Tracy Danese who is 4*/
now FPL's Vice President for Governmental Affairs.
Michael Mills, an engineer in the employ of FPL, worked under Mr. Danese's
"/
Plans for construction of the South Dade project have since been abandoned.
"*/ Affidavit of Tracy Danese at
)(
2 (May 13, 1981)
[here-inafter cited as Danese Affidavit].
(Danese Affidavit is Attachment A)-
25 e/
supervision.
As his attached affidavit indicates, Mr. Danese's intent at all times was to respond fully and candidly to the questions in Appendix L, and he so instructed Mr. Mills who 4*/
performed his responsibilities with that objective.
To compile the material needed to respond to Questions 13 and 18, Mr. Mills systematically reviewed FPL's central files at its corporate headquarters for correspondence and other documents pertaining to certain municipal and cooperative electric systems.
Mr. Mills also interviewed a number of in-dividuals in the employ of FPL who were believed to have had personal knowledge of the matters referred to in Questions 13 and 18.
This effort covered a spectrum of departments within
- FPL, and the interviewees were asked whether they were aware of any events that should be listed in response to either ques-'ion.
Mr. Mills and Mr. Danese conferred on many occasions
%**/
throughout this process.
Mr. Danese was aware of the pro-cedures that were followe'n assembling the material.
He also furnished information about events of which he had personal Danese Affidavit at 1l 4.
Danese Affidavit at
<J 8; Affidavit of Michael Mills at
',I 3
(May 7, 1981)
[hereinafter cited as Mills Affidavit].
(Mills Affidavit is Attachment B).
"**/Mills Affidavit at 1l 4.
26 4/
knowledge, and he thoroughly reviewed drafts of the Information.
Mr. Danese believes that all the resources within FPL that could have reasonably been expected to possess information A%/
responsive to Questions 13 and 18 were exhausted.
Both Mr. Danese and Mr. Mills sought to resolve doubts as to whether particular material was responsive to the questions by including such material in the Information.
This attitude is reflected by the fact that FPL included a number of matters
%*%/
in its response that were not strictly required.
As the discussion which follows demonstrates, the Cities'etition and appendices do not reveal that FPL's responses were inaccurate or incomplete in any material respect.
Certainly, there is no indication that FPL knowingly submitted inaccurate or incomplete information as the Cities have so irresponsibly alleged.
(a)
Question 18 Question 18 provides: "List applicant's offers or proposals to purchase,
- merge, or consolidate with electric utilities, subsequent to January 1, 1960."
(Information at 32).
In the time period covered by the Information, FPL made an offer or proposal to only one electric utility--to New Smyrna Beach in 1974--and that proposal was listed in FPL's response.
In Danese Affidavit at 1j 5.
Danese Affidavit at 1I 7.
See, e~,
FPL's response to Question 18 in which FPL was re-quired to list the electric utilities which FPL offered to purchase or with which FPL offered to merge or con-solidate.
See also p.
27, infra.
27 fact., FPL's response was over-inclusive.
It referred also to Edgewater, which was an isolated portion of the New Smyrna Beach system and was not by any fair reading an "electric utilit[yj"in its own right, and to Vero Beach, a system which had initiated discussions with FPL, but to which FPL had not tendered an acquisition offer or proposal.
Additionally, the response noted discussions with New Smyrna Beach in 1965 and 1970.
In those
- cases, FPL informally suggested terms for acquiring the New Smyrna Beach
- system, but in both instances it was clearly understood that FPL was not making an offer or proposal.
Question 18, by its terms, does not, require that these matters be mentioned.
FPL's response, if anything, was over-inclusive.
Cities allege that FPL's response should have listed alleged proposals to Homestead in 1967, Fort Pierce in 1965, Clewiston in 1965, and Vero Beach in 1967-68.
However, the documents cited by the Cities to support this allegation do not reflect any "offers or proposals" on the part of FPL.
Those documents at most reflect preliminary indications of interest by the Cities or discussions concerning the possibility of lease or purchase arrangements as possible alternative solutions to their problems.
None of these documents suggests that these pre-liminary discussions evolved into anything remotely resembling an offer or proposal by FPL.
Discussions which did not eventuate in an offer or proposal by FPL are not required to be listed under any reasonable reading of Question 18.
28 FPL has not had the opportunity to take meaningful anti-trust discovery on Cities'llegations concerning Fort Pierce and Clewiston in 1965, and Uero Beach in 1967-68 in order to deter-mine whether those cities'erception of events coincides with 4/
FPL's.
- However, FPL has been able to explore the circumstances surrounding Cities'llegations concerning Homestead in 1967 through discovery in the Miami litigation, and the sworn testimony of Homestead officials belies the allegations which Cities level in their Petition.
Mr. Pearson, City Manager of Homestead during the period, testified that in 1967 or in the years immediately thereafter there was no extensive consideration by Homestead of the possibility of selling or leasing the electric system to
+*/
FPL.
William Dickinson, who was Mayor of Homestead in 1967, stated during his deposition that he cannot recall the subject
- /
of such a sale ever arising.
Ft. Pierce settled with FPL in the Miami litigation be-fore discovery against it had progressed very far.
Clewiston and Uero Beach are not parties in any anti-trust litigation against FPL.
However, nothing in the documents cited by the Cities as to these systems sup-ports the Cities'llegations.
Deposition of Olaf Pearson pp.
269-71 {April 1981),
{hereinafter cited as Pearson Deposition]
(Attachment C).
"**/Deposition of William Dickinson p.
27 (March 1981),
{Attachment D).
29 In sum, the indisputable facts concerning Cities'llega-tions are (1) no offer or proposal was made to any electric utility by FPL other than the offer to New Smyrna Beach--
and this offer was listed in response to Question 18; and (2) in the one instance in which FPL has had an opportunity to con-duct a balanced factual inquiry into the Cities'llegations, the inferences drawn by Cities'ounsel differ sharply from the sworn testimony of their clients.
Not only are the allegations in the Petition baseless, but the nature of the discrepancy be-tween the allegations and the facts in the Homestead affair is indicative of the reckless manner in which these allegations have been hurled and the relative weight that should be accorded to counsel's characterization of the significance of one or two documents (excised from among thousands) in the other instances in which there has been no opportunity for a balanced inquiry in-to the underlying facts.
(b)
Question 13 Question 13 of the Information provides:
List and describe all requests for, indications of interest in, interconnection and/or coordina-tion and for purchases or sales of coordinating power and energy from adjacent utilities listed in Item 9 since 1960 and state applicant's re-sponse thereto.
List and describe all requests for, or indications of interest in, supply of full or partial requirements of bulk power for the same period and state applicant's response thereto.
(Information at 17).
30 Cities make a number of contentions that FPL's response to this quest,'on was incomplete or misleading.
Distilled to their essence, the gist of these contentions is that where a factual dispute exists, FPL should have characterized those facts the way Cities wish they could establish them.
FPL plainly had no obligation to present in the Information the tendentious characterizations made by counsel for Cities, and moreover, in each instance in which FPL has had full access to underlying facts, those characterizations have been shown to be untrue.
(1)
Wholesale Sales We turn first to the Cities'llegations con-cerning wholesale sales.
It is instructive, before turning to specifics, to place the incidents included in those allegations in the context of the changing economic circumstances at the time.
As the Cities admitted in their late petition to inter-
+/
vene in the construction permit antitrust review, the energy crisis of 1973 altered the entire environment in which they operated.
Prior to 1973 oil and gas.were in ample supply and inexpensive.
FPL's nuclear units, on the other hand, had not yet proven to be economically advantageous.
Thus, there was little incentive for the municipal systems to purchase power at
"/
"Joint Petition of Florida Cities for Leave to Intervene Out of Time; Petition to Intervene; and Request for Hearing," p.
21 (August 6, 1976).
31
- /
wholesale from FPL on any long-term basis.
FPL believes that it has sold power a
wholesale in each instance since 1960 where it was seriously asked to do so by municipals in the area where it served.
FPL believes that the instances in which this service was requested and provided are accurately listed in the response to Question 13.
The facts are that through the early 1970's each municipal system intended to generate all of its power requirements over the long term, and that documents discussing wholesale power prior to the early 1970's were generally written in a context in which both FPL and the municipality were struggling to keep pace with a load
'I that was growing at a phenomenal rate.
Any disagreements between FPL and municipal systems with regard to wholesale sales generally concerned such matters as priority in the event of a shortage or the comparative rate paid by municipalities and cooperatives.
It is for such reasons that FPL's answer notes the "emergency" nature
"/
The Cities'erspective of the relatively unattractive nature of purchasing bulk power from FPL as contrasted with continued self-.generation is illustrated by the 1970 power supply study prepared for the City of Ft.
Pierce by Mr. Robert E. Bathen of R.
W. Beck
& Associates, power supply consultants for many of the Cities.
That study concluded that reliance by the City upon wholesale purchases from FPL was its most expensive power supply alternative and recommended that, Ft. Pierce construct generating units of its own and rely upon a capacity credit from Vero Beach as a preferable means of meeting its load growth.
R.
W.
BECK
& ASSOCIATES, INITIAL POWER SUPPLY OF FT.
- PIERCE, FLORIDA, at I-4, I-ll (SePtember, 1970).
(Attachment E).
32 of the wholesale service requested and provided.
The Cities would prefer to ignore this historical context and -rely instead on counsel's cold inferences in 1981 from documents prepared ten to twenty 'years ago.
The Cities charge that FPL's answer to Question 13 wrong-fully omits reference to Clewiston, Ft. Pierce, Homestead,
- Starke, and Vero Beach, and allege that "all indicated an in-terest in firm power."
(Petition at 18. )
Also, the Cities claim that FPL failed to mention that New Smyrna Beach sought to pur-chase firm power prior to 1973.
With respect to Clewiston, the Cities provide no basis for their allegation.
Clewiston, in
- fact, has received a substantial portion of its bulk power and energy from the Glades Electric Cooperative, a wholesale customer of FPL.
In support of their contention that Ft. Pierce requested and was refused firm power, the Cities rely upon certain pages of their April 7, 1978', brief in Florida Power 6 Li ht Co.,
Federal Energy Regulatory Commission
("FERC") Nos.
ER78-19 and ER78-81 (Phase I).
The brief discusses alleged re-fusals to sell firm power by FPL commencing in 1976.
- However, the South Dade Information was filed in 1975.
- Thus, even if the allegations in the Cities'rief had any substance, and FPL believes they do not, the incidents referred to therein occurred after the Information had already been submitted and
33
+/
obviously could not have been included.
Cities clai::i that FPL should have indicated that Homestead had requested to purchase firm power and was refused.
FPL accurately stated in the Information that Homestead requested and received power and energy at distribution voltage.
- Indeed, FPL made arrangements to provide wholesale service tc Homestead as early as 1964 on a basis which involved FPL's supplying power to a portion of Homestead's distribution system.
The other arrangement discussed by Homestead and FPL in 1967 con-cerned the supply of wholesale power in connection with a trans-mission voltage inter'connection which would have permitted the two systems to operate synchronously.
Nhy serious negotiations about an interconnection did not commence until some years later is disputed between FPL and the Cities.
- However, Henry C. Peters, Homestead's Director of Utilities, testified at his deposition that the reason, at least after he assumed his duties in 1970, was dissension within the City government as to whether an inter-connection was desirable.
He gave additional testimony that suggests that Homestead's City Manager, who was directly involved in these matters in 1967, was a leading opponent of intercon-a*/
nection.
"/
Furthermore, although the Cities choose not, to mention the fact, FPL notes that it currently serves Ft. Pierce with firm power.
"*/ Deposition of Henry C. Peters, pp.
29-35 {April 19Sl)
[hereinafter cited as Peters Deposition].
(Attachment F).
The documents concerning Starke fail to point out any inadequacy in FPL's Information.
In one document, FPL agreed to furnish emergency power in response to a request.
The only possible area of contention revealed by the document is FPL's insistence that it treat the service as "emergency" and thus re-tain the right to curtail service to Starke before interrupting other firm loads on the system.
The other two documents refer to a time period prior to 1960 and therefore are beyond the cutoff date utilized in preparing the Information.
With reference to Vero Beach the Cities rely solely on their interpretation of a document mentioning an apparently general discussion in an informal meeting in 1967.
And lastly, for New Smyrna Beach the Cities cite to minutes of the New Smyrna Beach Utilities Commission in 1958-59 and the deposition testimony of Alan Wright of FPL pertaining to an alleged request for firm power in 1955.
Both these documents refer to matters that antedate the time period covered in the Information.
(2)
Interconnections Cities do not dispute the fact that every inter-connection request or indication of interest of which FPL was aware was listed in FPL's response and that this listing gave the Department of Justice and the NRC due notice of the instances in which negotiations have taken place.
The basis for the Cities'laim that the Information was "knowingly inaccurate" as regards
35 interconnection requests is that FPL failed to anticipate that the Cities might claim that some of these negotiations took too long, a claim that FPL denies.
Interconnection of two electric systems is a complex tech-nical matter involving engineering and economic considerations which must, be evaluated with care.
The evidentiary facts rebut the Cities'ounsel's implication that FPL intentionally prolonged the negotiations.
For example, the negotiations be-tween FPL and New Smyrna Beach are fully described in the In-formation.
The dispute in that instance was not whether the parties should interconnect, but whether the interconnection should be at transmission or distribution voltage.
The question was considered before an administrative law judge at the
- FERC, and it was held that the interconnection proposal advanced by the Cities was "of unconventional design and not widely accepted by the industry," while FPL's proposal was described as "ap-propriate."
(Florida Power
& Li ht Co.,
FERC No. E-8808, slip.
op. at 60-61 (November 26, 1974)).
(Attachment G).
- Further, as noted above, the testimony of Homestead's Director of Utilities evidences that any delay in Homestead's obtaining 4/
an interconnection was not attributable to FPL.
"/
Peters Deposition at 54-75.
(Attachment F).
- Indeed, the documents cited by the Cities if anything con-firm that Homestead had not seriously explored the possibility of an interconnection with FPL prior to the months preceding execution of the interconnection agreement that is now in effect.
36 In these instances, as in others, the Cities'harges are in essence nothing more than a recapitulation of the Cities'iews on the merits of certain allegations, the rele-vance of which is doubtful in any event.
FPL will not, be drawn into an extensive argument of the merits here.
The Cities'ntitrust allegations, to the extent that they are pertinent, should be tried on the basis of evidentiary proof before the Antitrust, Board or before the District Court and not on the basis of counsel's shrill characterizations.
(3) i~theelin Cities also attack FPL's response to Question 13 on the ground that it does not provide reference to "earlier" requests for "transmission service," i.e., wheeling, and alleges that.
FPL refused wheeling requests from Homestead, Jacksonville, Lake Worth, and New Smyrna Beach.
The document which Cities cite as a refusal to wheel power for the Jacksonville Electric Authority, a letter from H.
W.
Page of FPL to J.
K. Wiley of Jacksonville, dated February 26,
- 1971, has been explained in the testimony of Robert J.
- Gardner, FPL's Vice President-Strategic
- Planning, in Florida Power
& Li ht Co.,
FERC No.
ER 78-19 (Phase II).
l (Attachment H).
As Mr. Gardner's testimony explains, FPL had at times sold power to Jacksonville while simultaneously purchasing the same quantity of power from a third party.
In those instances, the price charged Jacksonville consisted of the price paid the third party by FPL, plus an "adder"
37 a/
paid FPL for the use of its facilities.
The document referenced by the Cities concerns an effort by Jacksonville to have some of these transactions made with no "adder" to compensate FPL on the theory that Jacksonville accommodated some flows of energy through its system resulting from the configuration of its interconnections with FPL.
This proposal on the part of Jacksonville is reflected in the terms of a draft agreement which Jacksonville sent to FPL on January 21, 1971.
(Attach-ment I).
The agreement states in part,
"[p]ayments for the service of transmitting power will, under normal conditions, be at no cost, on the basis that, both parties will be transmitting power through the other party '
system on an equitable basis
- (Draft Agreement at 2).
Mr. Page's letter of February 26,
- 1971, expresses FPL's dis-agreement with such an arrangement.
This disagreement con-cerned only price,
- however, and it did not involve any question of a refusal on the part of FPL to wheel power from a third party to Jacksonville.
Jacksonville is not one of the Cities petitioning to intervene in this proceeding.
Moreover, the Cities'etition povides no basis for any inference that they possess any
"/
These transactions took place for the most part before FPL became subject to Federal Power Commission juris-diction and counsel is informed that no readily acces-sible records of these transactions are available
- now, nor were they available at the time that the Information was prepared.
38 direct knowledge about FPL's buy-sell transactions with Jack-sonville and a third party.
Outside the context of under-standing the precise nature of the disagreement that arose between FPL and Jacksonville, the letter referenced by the Cities is incomprehensible.
The Cities'ssertion that this letter evidenced a refusal on the part of FPL to wheel is simply another example of a lawyer drawing his own inferences from a document read out of context.
The Cit,ies'laim that FPL's response to Question 13 should have listed communications pertaining to such simult'aneous buy-sell arrangements as requests for wheeling is questionable at best.
FPL doubts that Question 13 could reasonably be read to require the listing of such transactions which the Cities inaccurately characterize as "wheeling," and certainly, that the FPL employees compiling the Information did not so regard them provides no basis for believing that FPL intentionally omitted any reference for the purpose of misleading the Commission.
The irresponsible nature of Cities'llegations is also evident in their charge that FPL refused to wheel for New Smyrna Beach.
To support their allegation, the Cities annexed to their Petition New Smyrna Beach's April 28, 1975, inquiry about the availability of transmission service.
Omitted entirely from the Cities'leading is any mention that FPL in fact agreed to wheel power in response to this request by letter of June 30, 1975.
As in many other instances described
- above, the utter
39 disregard for objectivity inherent in these allegations reveals much-about the degree to which the Cities are willing to subjugate
%/
responsible treatment of the facts to adversarial ends.
What is beyond dispute is that the Cities'llegations reveal not a
shred of evidence of any knowing misstatements or any misconduct by FPL or any failure by FPL to fulfillits obligations to this Cities'llegations as to Homestead and Lake Worth again go to the merits of their antitrust claims, and are equally without basis.
Nith respect to the allegation involving transmission service between Homestead and Key West, it suffices to note that Henry C. Peters, Homestead's Director of Utilities, testified that the matter was not regarded by any participant as a serious proposal but instead as a "pig in a poke."
(Peters Deposition, Vol. II, at 112-13).
As to Lake Worth, the November 27, 1970, letter from C.
C. Blaisdell of Lake Worth to J. L. Breedlove of FPL discloses only that Lake North sought to include wheeling in the abstract as a subject in the negotiations leading up to an interchange contract.
FPL believes that it is wholly appropriate in responding to Question 13 to distinguish between an actual request for transmission service and a discussion of the proposition of wheeling in the abstract.
The memorandum concerning the February 17,
- 1971, meeting between FPL and Lake Worth indicates FPL's willingness to engage in simultaneous buy-sell transactions for the benefit of Lake North.
- However, as previously stated, it is not at all clear that such transactions should have been reported in response to Question 13.
The only other Lake North document referenced by the Cities pertains to an alleged wheeling request in
- 1977, several years after the Information was prepared.
40
+/
Commission.
"/
The same is true with regard to Cities'ther contentions of a miscellaneous nature relating to FPL's answer to Question 13.
The first of these contentions is that FPL should have mentioned Gainesville's alleged desire to participate through interconnected operations in a power pool.
The Information describes Gainesville's inquiry about consideration of an interconnection in 1966 and clearly identifies the developments and the correspondence which ensued.
Under any reasonable reading of Question 13, that was amply sufficient, for as a U.S. District Court jury found and the Fifth Circuit affirmed in Gainesville Utilities v. Florida Power
& Li ht Co.,
573 F.2d 292, 303 (5th Cir.), cert.den.ied, 439 U.S.
966 (1978), in connection with Garnesville's Section 2 claim against FPL, Gainesville did not seek an interconnection from FPL.
Equally without merit is the allegation that FPL failed to mention municipal interest in FPL's nuclear units.
In fact, FPL lists in the. Information those utilities to which FPL offered participation in St. Lucie 2 and those utilities that expressed an interest in participating in the South Dade units.
The two documents cited by the Cities vis-a-vis Ft. Pierce indicate that the subject of participation was mentioned in passing in a meeting in 1970.
Cities omit. to advise that one of the attendees representing Ft. Pierce did not deem the discussion serious enough to merit mention in a memorandum which he prepared summarizing that meeting, (Attachment J) and that there is no evidence that Ft. Pierce was serious enough about its interest to follow-up with any written request for par-ticipation in the units.
Jacksonville's and Orlando's alleged expression of interest in joint generation with FPL never progressed beyond the stage of embryonic discussion.
In 1972-73, representatives of FPL, Orlando, Jacksonville and Florida Power Corporation discussed the possibility of developing joint generation in north central Florida.
This was not an instance of someone requesting that FPL do something and receiving a refusal from FPL.
Rather, this was a pro-posed joint undertaking that never progressed beyond the preliminary stage for several reasons.
First, the Florida Constitution prohibited municipal systems from participating in joint ownership with a privately owned business.
- Second,
41 2.
Cities'llegations Concerning FPL's St.
Lucie 2 Filin FPL filed the Information for St. Lucie Unit No.
2 with the Commission on May 14, 1973.
FPL believes that the filing was prepared conscientiously and in good faith.
The Cities have waited eight years to make the criticisms which they now raise.
As a result, practically everyone who had any responsibility for the substance of the Information has retired, otherwise left FPL's employ or is deceased.
It is therefore not possible to obtain as thorough documentation of procedures used in pre-paring the St. Lucie 2 Information as was possible in the case of the South Dade Information.
(footnote continued from previous page) in 1973 Jacksonville announced plans to construct two off-shore floating nuclear units, and thus indicated a
lack of interest in proceeding with discussions in-volving any other project.
Third, Florida Power Corpora-tion announced plans to build a two-unit nuclear plant to be located in Orange County, Florida.
And fourth, Curtis Stanton, the Chief Executive Office of Orlando, informed FPL in 1973 that Orlando was no longer interested in pursuing the discussions.
(See Affidavit of Ernest L.
Bivans, Florida Power
& Li ht Co.
(St. Lucie Plant, Unit.
No. 2), No.50-389A (August 9, 1977); Affidavit, of Marshall McDonald, Florida Power 6 Light Co.
(St. Lucie Plant, Unit No. 2),
No.
50-389A August 9, 1977)).
The joint genera-tion project never matured into a serious
- proposal, and FPL does not believe that such early discussions were a proper subject for inclusion in the Information.
Finally, the Cities claim that FPL failed to refer to municipal interest in pooling.
At the time that the Information was prepared, FPL was participating in general discussions with other members of the Florida Electric Power Coordinating Group, Inc.
("FCG") with regard to pooling.
Dis-cussions of this nature take place regularly at meetings of the FCG committees.
FPL does not construe Question 13 as requiring that it list as a "request" or "indication of interest" its routine participation in discussions and other pro-ceedings and activities of a regional group such as the FCG.
42 James G. Spencer, Jr.,
a retired Senior Uice President of FPL, was principally responsible for review and approval of
- /
FpL's responses to Questions 13 and
- 18.
Mr. Spencer states in his attached affidavit that because of the position that he held with FPL, he would have been aware of any serious indication of interest by a neighboring utility in purchasing full or partial requirements of bulk power for resale during
- /
the time period from March 1965 through March 1973.
He states in his affidavit that he was not then aware and is not now aware of any indications of interest other than those requests that resulted in the supply of the service described in part C
- /
of FPL's response to Question 13 '
Also, because of his position Mr. Spencer would have been aware of any offer or proposal made by FPL to purchase, acquire or merge with any utility system during the same period.
Mr. Spencer states in his affidavit that he believed in 1973 and believes now that FPL's Mr. Spencer was not principally responsible for reviewing and approving those sections of the responses that pertained to Homestead.
However, the Cities 'lleged omissions from the St. Lucie 2 Information with regard to Homestead are the same as those raised in connection with the South Dade Information, and FPL has already disposed of those criticisms at pages 28-29, 33-34, 36 and 40, s~u ra.
Affidavit of James G.
Spencer at 1l 4
(Attachment K).
"**/Spencer Affidavit at fl 4.
43 response to Question 18 is true and accurate.
FPL maintains that the response to Question 18 was true and correct in every material respect.
The Cities'riticisms of FPL's response are largely the same as those made of FPL's response in the South Dade Information.
FPL will not repeat the reasons that it believes those criticisms to be unjustified, but merely adds two comments occasioned by the Cities'leading.
First, Cities complain that FPL did not list in its St.
Lucie 2 Information the negotiations with New Smyrna Beach and the acquisition of facilities in the City of Edgewater mentioned in its answer to Question 18 of the South Dade Informa-tion two years later.
As noted earlier, the only proposal FPL made to acquire New Smyrna Beach occurred after 1973 and therefore could not have been included in the St. Lucie 2 Informa-tion.
Also, the acquisition of the Edgewater facilities, mentioned in the South Dade Information, involved the acquisition of electrical distribution facilities that prior to Hay 1, 1966, had been operated as part of the utility system of New Smyrna Beach.
The City of Edgewater acquired title to these facilities and terminated the rendition of service by the City of New Smyrna Beach on April 30, 1966.
These facilities were never operated by the City of Edgewater but were transferred almost simultaneously to FPL's ownership.
FPL reasonably decided in 1973 that the acquisition
"/
Spencer Affidavit at 1!5.
44 of some distribution facilities formerly utilized by another utility that remained in existence after the acquisition was consummated was not responsive to Question 18, which re-4/
quires a list of offers or proposals to purchase other utilities.
Far from supporting Cities'rresponsible claims, the listing of the Edgewater matter and earlier negotiations concerning New Smyrna Beach which did not lead to proposals in the South Dade Information two years later merely reflects judgments on the part of those who prepared the 1975 Information to err on the side of over-inclusion.
- Second, the Cities raise basically the same criticism of FPL's response to Question 13 of the St. Lucie 2 Information as they raised in connection with the South Dade Information.
Nothing in the documents attached to the Cities'etition "refutes" FPL's statements in the Information.
As demonstrated in the instances cited above, where FPL has had some opportunity to conduct discovery, FPL's perception of the events in question has been substantiated.
B.
The Additional Charges which the Cities Relegate to an Appendix are Irrelevant, Groundless and Distorted In their Appendix V, the Cities hurl a number of miscel-laneous charges the substantive vacuity of which is so apparent.
that the Cities did not deem them worthy of inclusion in the body Spencer Affidavit at ))5.
4S of their pleading.
These charges have nothing to do with the issues in this operating license proceeding, do not concern any allegedly improper conduct before the NRC and, in any
- event, are groundless.
To dispose of the Cities'etition, which is the question before the Board, nothing more need be said.
Nonetheless, FPL feels compelled here to address specifically two of these allegations, one of which involves a personal attack on the integrity of FPL's Chairman and.Chief Executive Officer and the other a shockingly distorted account of certain proceedings before the FERC.
With respect to Mr. Marshall McDonald, FPL's Chief Execu-tive Officer and Chairman, Cities'ounsel alleges that Mr. McDonald "misled" the FERC in testimony in the Vero Beach pro-ceeding concerning the proposed sale of that system to FPL.
Specifically, Cities contend that Mr. McDonald's testimony as to FPL's Turkey Point steam generator tubing problems was not correct.
The charge is untrue.
Xn the Spring of 1977, FPL, like other utilities in the United States with operating Westinghouse reactors of similar
- vintage, was experiencing leakage in the steam generator tubing of the Turkey Point reactors.
There was uncertainty as to whether the problem would continue to deteriorate and to what remedial requirement.
would be imposed by the NRC; accordingly, in its consolidated financial statement FPL advised its shareholders that due to the lead time for possible procurement and installation
46 of equipment necessary to repair the problem, the Turkey Point units might be out of service for approximately two years.
(Florida Power
& Light Co.,
SEC Form lO-K, p.
2 (1976)).
Vhen Hr. McDonald was questioned on the Turkey Point repair by counsel for the Cities, his responses were forthright.
- Indeed, Cities characteristically omitted to apprise the Board that Mr. McEonald candidly admitted that the steam generator problem could cause the Turkey Point units to be out of service for two years
- and, Mr. McDonald explained further in an answer omitted by the Cities, that, such a two year period could come at any time over the four year span 1978-81:
Q.
Do you have any knowledge of when this two year [period] might be
.?
A.
I have a general knowledge that it would occur sometime in the time frame of 1978-79-80, possibly '1.
I don '
know exactly.
(Florida Power
& Li ht Co.,
FERC No. E-9574, Transcript at 786 (1977)).
In short, Mr. McDonald forthrightly apprised FERC of potential outcomes of the steam generator problems and the possible timing.
The Cities ignore these answers.
Instead they allege that Mr. McDonald somehow misled FERC by testifying that he did not, know
<what the impact of the Turkey Point steam generator problems would be on FPL's rates.
Mr. McDonald testified as follows:
47 Xf you needed to know what the impact would be on the interest of the stock-holders or bills to the ratepayers, is there somebody in the Company you could ask about that'?
A.
Mr. Spiegel, there are a lot of people I could ask, but until the engineers have completed their studies and determined what measures would actually be employed, there could not be a complete answer given until then.
(ld. at 789).
Cities, citing two FPL board minutes in the Spring of 1977 and the testimony given by Mr. Orin Pearson, an FPL witness in a different FERC case over a year later (Florida Power
& Li ht Co.,
FERC No.
ER 78-19), note that FPL authorized the purchase of steam generator replacement equipment in 1977, and from this would seek to have the Board conclude that Mr. McDonald testified untruthfully when he testified that the impacts of the repair measures on rates could not be completely determined in 1977.
This contention is groundless.
The fact of the matter is that in 1977 FPL was uncertain whether the steam generator problem could be solved in due course with continued regular maintenance or whether the problem might require a reduction in power or even a lengthy shutdown.
Meanwhile, Westinghouse advised FPL that it would require 1 1/2 to 2 years to fabricate new steam generators and have them on site if FPL placed its order immediately, and advised that a delay in ordering could result in a much longer lead time, due to backlogs.
Faced with these contingencies FPL, in April 1977, did indeed authorize the ordering of new
48 steam generators from Westinghouse and also authorized funds for the repair work, on the possibility that repair might be required in that year.
Nothing in Mr. McDonald's testimony is inconsistent with these facts.
- Indeed, he testified that the repair work might be necessary in any of four years.
What is truly "misleading" here
{to use the Cities term) is their inexplicable failure to apprise the Board of testimony of which counsel for Cities were aware and which explains the situation set forth above and is dispositive of the Cities allegation.
In testimony given in FERC No
~
ER 78-19 on March 28,
- 1978, the very case cited by the Cities, Mr. Robert J.
- Gardner, Vice President of Strategic Planning for FPL, ex-plained that FPL had purchased the replacement equipment, in 1977 as an insurance policy so that spare equipment.
would be on'and in the event the situation in the steam generator con-tinues to deteriorate.
As Mrs Gardner explained:
"But the decisions have not yet been made concerning the exact date of the shut down of the unit, nor have any final decisions been made concerning the duration of the shut down', nor have contracts been let for the implementation or installation of the equipment which has been ordered.
It is correct to say that costly equipment has been ordered but it is also correct to say that it was impossible in 1977 to determine the impact on rates and is probably equally impossible today inasmuch as we have not yet determined when the unit will be shut down or for how long or what the ultimate cost of repairs will be."
{Florida Power
& Li ht, Co.,
FERC No.
ER 78-19 (Phase I), Transcript at 1865-3866 (1978))
~
- Thus, even a year after Mr. McDonald's testimony, FPL had not made all the decisions necessary to determine the ul-timate rate consequences of Turkey Point steam generator re-
- pairs, and Cities'ounsel was aware that this was so.
Cities'harges with respect to Mr. McDonald's testimony are not only baseless; the failure of the Cities'ounsel to bring to the Board's attention the facts they knew which belied those charges is inexcusable.
Cities'harge that FPL misrepresented its position in FERC No. E-9574 (the "Vero Beach" proceeding) is equally objectionable.
In August 1977, during a prehearing conference, FPL's counsel objected to the unfair manner in which the proceeding
" had been permitted to evolve.
The clear import of counsel's objection was that FPL perceived that Cities'ounsel--together with FERC staff personnel who apparently worked in close co-ordination with Cities'ounsel--vere seeking to raise and have determined in that proceeding antitrust issues which FPL considered irrelevant and which, as the proceedings in the construction permit antitrust case and the Miami litigation make clear, would have taken years to explore properly through discovery and hearings.
Cities allege that this objection was "false."
This alle-gation is drawn from a March 16, 1977, letter to FPL management from a different law firm than that handling the Vero Beach proceeding, which noted the presence of the antitrust allegations
50
- /
some of the parties had raised.
This allegation cannot stand in the face of even a cursory'xamination of the Vero Beach proceeding.
First, counsel for Cities here appeared in the Vero Beach procee"ing with allegations of anticompetitive conduct against FPL which, while initially more limited, ring of the allegations they have made before the Antitrust Board, but in that proceeding their "clients" were three citizens of Vero Beach instead of these Cities.
Two of these "clients" were deposed by FPL, and during examination they were directed by the same counsel not to answer questions concerning the source
- /
of financial support, for their intervention.
- Thus, Cities'/
The letter was written by John E.
Mathews of the Jackson-ville, Floiida, law firm of Mathews,
- Osborne, Ehrlich, McNatt, Gobelman
& Cobb, which was one of FPL's outside'egal counsel.
Deposition oi Eugene
- Lyon, FERC No.
E 9574f at, 166-168 (June 20, 1977), Attachment L); Deposition of John B. Dawson,
."ERC No. E-95-74, at 278-282 (Attachment M).
'In addition, both witnesses admitted that they had no personal knowledge of many of the allega-tions in the Petition to Intervene filed on their behalf by Cities'ounsel.
They were likewise forbidden to answer questions as to the source of such allegations.
Lyon Deposition at 35-36, 73-74, 77-78, 92, 111-112, 141 and 162; Dawson Deposition at 37-38, 58-59, 130-131, 234-240 and 297-298.
A Motion to Compel answers to these questions was denied because of the ALJ's concern with expediting the proceeding.
See, infra note *, at 58.
51 counsel forbade their "clients" to reveal the identity of the true parties in interest, and thereby effectively rendered the Cities non-parties to the litigation and thus not susceptible to discovery, except by subpoena.
Following this, the FERC Staff filed the prepared direct testimony of economist Gordon Taylor.
Staff allowed Cities ample opportunity for input into Mr. Taylor's presentation, and the result was a collection of conclusory speculation and innuendo as to FPL's allegedly antitcompetitive actions and intent with respect to Cities, covering twenty years and most of the state 4/
of Florida.
Naturally, in the wake of this filing, FPL sought discovery of Cities, but the presiding administrative law judge made it clear that he would not authorize such "third-party" discovery, nor would he countenance the sort (footnote continued from previous page)
The third citizen intervenor, Fred C. Gossett, was Manager of the Vero Beach Power Plant,
- and, as such, was the only one of the three with direct knowledge of inter-utility relations in Florida.
He withdrew from the proceeding on the eve of his deposition.
"/
Et is extremely doubtful that the bulk of Taylor's testimony would have been admitted in any forum where ordinary rules of evidence apply.
Not only did Taylor offer conclusions of fact based on smat-terings of documents as to which he had no first-hand knowledge, but he improperly drew conclusions as to FPL's "intent" based on these unauthenticated, out-of-context papers.
of delay necessary for FPL to prepare a complete defense against
+/
antitrust charges.
- Thus, by their tactics in the Vero Beach proceeding, the counsel who represent the Cities here and the FERC Staff effec-tively precluded FPL from defending itself against their un-warranted accusations.
By participating in the proceedings through "citizens," and by advocating procedures which would deny FPL the chance to explore the bases for Taylor's con-elusory allegations, the Cities created for themselves an
+*/
opportunity for an "expert" (with no direct knowledge of the facts) to supply free-wheeling interpretations of cold documents against a party deprived of the chance to
"/
Order Denying Motions to Take Depositions, to Compel Discovery, etc.,
FERC No.
E-9574 (Sept.
12, 1977).
Denied opportunity to explore Taylor's charges through discovery, FPL undertook to review Cities'iles under Florida's "Sunshine Act," F.S.
ch.
119.
Not only did Cities resist FPL's statutory right to inspect City
- files, (See, Nait v. Florida Power a Li ht Co.,
353 So.
372 So.
2d 420 (Fla.
Sup.
Ct. 1979)) but it. became clear that access to raw files from uncooperative City officials was no substitute 'for responses to particular-ized document requests under FERC's procedural sanctions.
The Cities suggested (Appendix V, p.
- 5) that FPL's actions were influenced by "an abundant analysis and documentation" provided in the testimony of FERC Staff Economist Gordon Taylor.
The Cities effort to shroud this witness'estimony in the cloth of objectivity is not pertinent here, where Taylor is not appearing as a witness, nor is it credible.
Viewed benignly, Taylor's record indicates at, least an ideological af-finity for the Cities and an apparent bias against FPL.
Taylor's tendency to overlook facts contrary to his preconception is well documented in the record of the FERC proc=edings involving FPL (Direct Testimony of Gordon T.
C. Taylor, Florida Power
& Li ht Co.,
FERC No.
ER 78-19 (Phase II, 1978), at 10-12, 21-22; Rebuttal Testimony of Robert J.
Gardner (Florida Power Light Co.,
FERC No.
ER 78-19 (Phase II, 1978), at
53 mount a comprehensive defense.
list That these same lawyers can now unabashedly add to a of "alleged misrepresentations" by FPL its having com-plained of the procedural fairness of the Uero Beach proceeding 4/
is quite extraordinary.
Moreover, there is nothing even remotely inconsistent between FPL having noticed that antitrust
( footnote continued from previous page)
Taylor left the Government and held himself out as an economic consultant.
His office was for a substantial period located physically within the law offices of Spiegel
& McDiarmid, counsel for Cities (and may still be located there).
Apparently, most of Taylor's busi-ness at the beginning of his consulting practice was derived from his retention by Spiegel S McDiarmid on behalf of various municipal clients.
(Deposition of Gordon Taylor, Houston Li htin and Power Co.
{South Texas Project),
NRC No. 50-498A. p.
28
{Oct. 25, 1979).
The other allegations in Appendix V are of similar ilk.
For example, Cities claim (Appendix V, p.
9) that in 1972-73 FPL intentionally misled Orlando into believing in the possibility of a future joint venture to construct a nuclear unit in order to persuade Orlando to forego intervention in the St. Lucie II construction permit antitrust review.
Cities omit to apprise the Board that they pressed this point before the Antitrust Board and the Atomic Safety and Licensing Appeal Board as a basis for permitting their intervention out of time.
Although the Appeal Board allowed the Cities to inter-vene, it expressly stated, in a decision affirmed by the Commission, that the evidence did not demonstrate that FPL intended to mislead Orlando.
{Florida Power 2), ALAB-420, 6
NRC 8, 20 (1977) ).
This sort of omission is typical of the irresponsible approach employed in Appendix V and throughout the Cities'leading.
54 issues had been raised, and the later protests that it had not expected to litigate sweeping accusations of past antitrust violations unrelated to the application in issue.
C.
Court and Agency Decisions Cited by the Cities Lend No Su ort to their Char es Cities charge, in support of their claim that FPL has "continually made claims before government agencies that have been knowingly without basis," that "the credibility of FPL's top officials (as witnesses) has been
. questioned" by a court or agency in three instances cited in a footnote on page 15 of the Petition.
(Petition at 14-15).
FPL is not aware of any instance in which a court or agency has found it or any of its officials to be responsible for misrepresenting any matter much less for doing so "knowingly."
None of the decisions cited by the Cities contains any such findings; and, accordingly, this agency, as a stranger to those proceedings should accord no weight to the passages quoted in the Petition.
Moreover, Cities'ounsel, as is their wont, seek to advantage their cause by separating the quoted pas-sages from their context.
Gainesville Utilities v. Florida Power
& Li ht Co.,
573 F.2d 292 (5th Cir.) cert.
- denied, 439 U.S.
966 (1978), involved a suit brought against FPL and Florida Power Corporation by the City of Gainesville and which included claims under Sections 1 and 2 of the Sherman Act.
After settling with Florida Power Corporation, Gainesville
55 went to trial with FPL before a jury.
Extensive testimony was taken, and the jury was presented with a number of special interrogatories.
It returned a verdict favorable to FPL on every issue, and Judge Gerald Tjoflat, an experienced trial judge who now sits on the bench of the Fifth Circuit, denied Gainesville '
motions for judgment notwithstanding the verdict
%/
and for a new trial.
The Fifth Circuit affirmed on every special interrogatory question save
- one, the question whether any territorial understanding had existed between FPL and
- /
Florida Power Corporation.
(573 F.2d at, 293-94)
That a
contested factual issue has been determined adverse to a party does not amount to a finding that its witnesses knowingly mis-represented facts to the Court; if that were the case, the instances in that same case where the jury and Court declined
~/
Gainesville Utilities v. Florida Power
& Li ht Co.,
Order No.68-305 (M.D. Fla.
Jan.
23, l976).
"*/
The Fifth Circuit noted that the trial court's use of special verdicts permitted it to dispose of Gainesville's other claims; We commend the District Court for using special verdicts in this complex antitrust case.
They allow us to zero in on exactly where we think the trial court erred without disturbing acceptable factual findings.
In-
- deed, they enable us to put an end to the 5
1 allegation that
[FPL) refused to interconnect unless there was a retail territorial agreement, as well as to the g
2 attempt to monopolize claim, although the 5
1 issue on dividing the wholesale market goes back for retrial.
(573 F. 2d at 294 n.
3 (citations omitted) ).
56 to credit Gainesville's testimony on other issues would evidence at least equal culpability on Gainesville's part.
0*/
The second case referenced by the Cities, FERC No.
ER 78-19, offers an example of the unfairness which can result when the record of a proceeding contains allegations of an antitrust nature and no opportunity has been provided for the accused party to defend properly against the allegations.
Proceedings before the administrative law judge proceeded on an extraordinarily expedited basis, in accordance with the FERC's directions, leaving no time for FPL to conduct the sort of discovery or prepare the kind of
- /
testimony necessary to defend against charges of this nature.
In fact, Judge Tjoflat, who observed all testimony, ex-pressed concern about the veracity of the testimony of John R. Kelly, Gainesville's Director of Utilities and the plaintiff's principal witness.
Transcript, Vol. II at 192-93, Vol. IV at 114-19, 126-27, 149-50, Vol. V at 27-8, Gainesville Utilities v. Florida Power
& Li ht Co.,
No.68-305 (M.D. Fla. 1975)).
Florida Power
& Li ht Co.,
FERC No.
ER 78-19, 18 F.P.S.
5-783, Ops.nxon No.
57 (1979), reversin in part, Initial Decision (April 21, 1978).
Order, Florida Power
& Li ht Co.,
FERC No.
ER 78-19 (Dec.
30, 1977)
Under the expedited
- schedule, Staff and Cities filed their direct cases, including the testimony containing accusations of an antitrust nature, on February 24, 1978.
FPL filed its rebuttal case on March 10.
The hearing commenced on March 15 and concluded March 28, 1978.
The Presiding Judge issued his Initial Decision on April 21, 1978.
(Initial Decision supra, slip op. at 2-3; FERC Opinion No.
57, supra, 18 F.P.S.
at 5-784).
57 The presiding judge considered the antitrust allegations largely irrelevant and not susceptible of determination in 4/
such an expedited procedural context.
However, applying standards even more lenient than the relatively lax standards for the admissability of evidence that generally prevail at the
- FERC, he admitted the voluminous testimony and exhibits offered by the Cities and the Staff with respect to their antitrust contentions with, as the foregoing indicates, the
"/
The Judge's Initial Decision states:
In the short time available for consideration of this case, it was not possible to adequately ex-plore these incidents to determine whether anti-trust violations have occurred as alleged.
Estab-lishing an antitrust violation involves massive documentation, which requires far more time to prepare than the few weeks which counsel had for trial preparation in this case.
An overall inves-tigative effort by this Commission or by the Department of Justice, focusing more specifically upon past alleged anti-competitive conduct by [FPL],
can more adequately delve into the circumstances surrounding these charges to determine whether
[FPL]
has in fact violated the antitrust laws of the United States.
Given the time constraints under which this case must
- proceed, this decision will deal only with the justness and reasonableness of the limitation on the availability of total and partial requirements service and cancellation of service to the City of Homestead proposals, and will not explore whether the company has engaged in anti-competitive prac-tices in the past.
Initial Decision, slip op. at 5-6.
58
%/
intention of giving them little or no weight.
The FERC, after receiving the Judge's expedited decision, scrutinized this unbalanced record for some seventeen months before handing down Opinion No.
57.
Even so, the FERC itself recognized that the procedures followed were not suitable for the entry of any findings on antitrust issues, and Opinion No.
57 explicitly states that it should not be construed as con-
"/
The following rulings of the Presiding Judge are illustrative of the standards which governed the admissibility of testimony put forward by the Cities and the FERC staff:
PRESIDING JUDGE:
. Quite frankly, if we did not have the time restraints on us I would be reluctant to admit this at all without having further identification and further description as to what 'it is.
(Transcript, Vol.
6 at
- 780, ER78-19 (March 20, 1978))
PRESIDING JUDGE:
I think, gentlemen, that with regard to my ruling, we must bear in mind that with the time restraints with which we are faced in a case like this, we have to be somewhat more lenient in the admission of documents and other material into evidence than we would normally be, and where a document in the normal course would require a witness to authenticate it or to tell us what it is, in this type of expedited pro-ceeding we just don't have the luxury of being able to do that.
(Tr. at 785)
As is clear from these rulings, the record in this proceed-ing contains documents and other material which normally would not constitute evidence in a proceeding before the
- FERC, and certainly would not be admissible before the NRC or in a court of law.
taining any such findings.
- Indeed, there is a contrast be-
- /
tween the testimony of Cities'nd the FERC staff's witnesses characterizing carefully chosen documents and the testimony of FPL's witnesses possessing 'first hand knowledge of the facts (no fact witnesses were called by either the Cities or the FERC Staff).
The FERC explicitly, and properly de-clined to resolve these issues on the basis of the unbalanced and incomplete record.
Finally, the Cities quote a portion of the initial decision of a FERC administrative law judge in FERC No. E-9574, the Vero Beach proceeding, in which the judge remarks that FPL's testimony was "presented at times with reluctance and marked by less than candid testimony."
(Petition at 15, n.
1)
The opinion does not elaborate
- further, and FPL does not know to what the judge was referring.
In any event, the initial
"/
For example:
[W]e recognize that these anticompetitive effects may not have been demonstrated with the rigor as would be demanded in proceedings where specific findings of violations of the antitrust laws are at issue (18 FPS at 5-784-785).
- And,
[N]e do not make findings that violations of the anti-trust laws have occurred.
(Id. at 5-784)
(emphasis in original).
60 decision from which this quote was extracted finds for FPL on all issues and relies heavily on the direct testimony sub-mitted by FPL.
In summary, the three decisions cited by the Cities lend no support to their allegation that "FPL has continually made claims before governmental agencies that have been knowingly without basis."
(Cities Petition at 14).
That charge remains unsupported and can only be characterized as extremely, ir-responsible.
VII.
Conclusion For all of these
- reasons, the Cities'etition should be denied.
Respectfully submitted, By:
A. Bouknight, Jr.
owenstein,
- Newman, Reis a Axelrad 1025 Connecticut
- Avenue, N.W.
Washington, D-C.
20036 Herbert Dym, Esquire Covington 6 Burling 888 16th Street, N.W.
Washington, D.C.
20006 Attorneys for Florida Power Light Company DATED:
May 26, 1981
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of FLORIDA POWER
& LIGHT COh1PANY Docket No. 50-389-OL (St. Lucie Nuclear Power Plant, Unit No. 2.)
CERTIFICATE OF SERVICE I hereby certify that copies of "Answer of Florida Power
& Light Company to the Florida Cities'etition to Intervene and Request for Consolidation" were served by hand delivery* or by deposit in the U.S. Mail, first class, postage prepaid, this 26th day of May, 1981.
Ivan W. Smith, Esquire Chairman Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Robert M. Lazo, Esquire Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Michael A. Duggan, Esquire College of Business Administration University of Texas
- Austin, Texas 78712 William D. Paton, Esquire Counsel for NRC Staff U. S. Nuclear Regulatory Commission Washington, D. C.
205S5 Elizabeth S.
- Bowers, Chairman Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C.
2055S Dr. Peter A. Morris Atomic Safety and Licensing Board Panel U. S. Nuclear Regulatory Commission Washington, D.C.
20555 Dr. Oscar H. Paris Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C.
205S5 Docketing and Service Station Office of the Secretary U.S. Nuclear Regulatory Commi s sion Washington, D.C.
205S5 Jerome
- Saltzman, Chief Antitrust
& Indemnity Group U.S. Nuclear Regulatory Commi s sion Washington, D.C.
20555 Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commi s s ion Washington, D.C.
20555 Richard S.
- Salzman, Esquire Atomic Safety and Licensing Appeal Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555
Joseph
- Rutberg, Esquire Lee Scott Dewey, Esquire Fredric D. Chanania, Esquire Counsel for NRC Staff U.S. Nuclear Regulatory Commi ss ion Washington, D.C.
20555 Ann P.
- Hodgdon, Esquire Office of the Executive Legal Director U.S. Nuclear Regulatory Commi ss ion Washington, D.C.
20555 Thomas Gurney, Sr., Esquire 203 North Magnolia Avenue Orlando, Florida 32802 Robert E. Bathen Fred Saffer R.W. Beck
& Associates P.O.
Box 6817 Orlando, Florida 32803 George Spiegel, Esquire Robert Jablon, Esquire Daniel Guttman, Esquire Spiegel
& McDiarmid 2600 Virginia Avenue, N.W.
Washington, D.C.
20037 William C. Wise, Esquire Suite 500 1200 18th Street, N.W.
Washington, D.C.
20036 William H. Chandler, Esquire
- Chandler, O'Neal,
- Avera, Gray
& Stripling Post Office Drawer 0
Gainesville, Florida 32602 Janet Urban, Esquire U.S. Department of Justice P.O.
Box 14141 Washington, D.C.
20044 DATED:
May 26, 1981 Donald A. Kaplan, Esquire Robert Fabrikant, Esquire Antitrust Division U.S. Department of Justice Washington, D.C.
20530 Charles R.P.
Brown, Esquire Brown, Paxton and Williams 301 South 6th Street P.O.
Box 1418 Fort Pierce, Florida 33450 Helen Shea Wells 93 El Mar Drive Jensen Beach, Florida 33457 George R. Kucik, Esquire Mare Gary, Esquire Ellen E.
Sward, Esquire Arent, Fox, Kintner, Plotkin
& Kahn 1815 H Street, N.W.
Washington, D.C.
20006 Benjamin H. Vogler, Esquire U.S. Nuclear Regulatory Commission Washington, D.C.
20555
.A. Bouknzght, Jr.
owenstein,
- Newman, Reis Axelrad 1025 Connecticut Avenue, N.W.
Washington, D.C.
20036 (202) 862-8400