ML17228A943

Submits Rept on Events Relevant to Petition of Florida Municipal Power Agency for Declaration & Enforcement of Antitrust Licensing Conditions & to Impose Requirements by Order Filed on 930702,in Response to B Lambe Request

ML17228A943
Person / Time
Site:	Saint Lucie
Issue date:	12/05/1994
From:	Blair B, Jablon R SPIEGEL & MCDIARMID
To:	Gody A Office of Nuclear Reactor Regulation
References
NUDOCS 9412080056
Download: ML17228A943 (8)

Text

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ACCESSION NBR: 9412080056 DOC. DATE: 94/12/05 NOTARIZED: NO DOCKET FACIL:50-389 St. Lucie Plant, Unit 2, Florida Power & Light Co. 05000389 AUTH. NAME AUTHOR AFFILIATION JABLON,R.A. Spiegel & McDiarmid BLAIR,B.S. Spiegel & McDiarmid RECIP.NAME RECIPIENT AFFILIATION GODY,A.T. Office of Nuclear Reactor Regulation, Director (Post 870411

SUBJECT:

Submits rept on events relevant to "Petition of Florida Municipal Power Agency for Declaration & Enforcement of Antitrust Licensing Conditions & to Impose Requirements by Order" filed on 930702,in response to B Lambe request.

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TITLE: Antitrust Info Re Reg Guide 9.3 NOTES:

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>-481 OEDROE SPICCEL. PC 5 P IE GE I Bf MC D I A R,'III I D RISC J PETERS ROBERT C. MCDIARMID PETER J, HOPKIIT6 SANDRA J. STRCBCL I38D NEW YORK AVENUE, N,W.

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Dear Mr. Gody:

In response to Bill Lambe's request, we are submitting this report on events relevant to the "Petition of Florida Municipal Power Agency for Declaration aad Enforcement of Antitrust Licensing Conditions and to Impose Requirements by Order"

("FMPA's Petition" ), Gled on July 2, 1993. Although much has occurred in the seventeen months since FMPA Bled its Petition, two critical conditions remain unchanged: (1) no regulatory or Judicial authority has acted to enforce the St. Lucie Plant, Unit No. 2 antitrust license conditions ("Antitrust Conditions" ), and (2) Florida Power 4 Qght Company ("FPL"), which agreed to the Antitrust Conditions, still is not se0ing network transmission service to FMPA.

There arc two proceedings currently pending before the Federal Energy Regulatory Commission which are relevant to FMPA's efforts to secure network transmission service, Ia FBRC Docket Nos. TX934000 and EL93-51-000, initiated by a FMPA complaint Bled on July 2, 1993, the FERC has ordered FPL to Qle a rate for network transmission service pursuant to the FERCs authoritjj under g 211 and 212 of I p q412080056 941205 0 Q PI 0 3 ( PDR ADOPK 05000589 PDR

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Mr. Anthony T. Gody December 5, 1994 Page 2 the Federal Power Act ('FPA"), 16 U.S.CA, H 824j and k; the FERC expressly deferred making any ruling on FMPA's complaint that FPL violated 5 206 of the FPA by Ming to comply with the Antitrust Conditions. In FERC Docket No. ER93465-000 and consolidated dockets, the FERC has set for hearing, among other issues, whether FPL's proposed rates, terms, and conditions far transmission and other wholesale services arc unduly discriminatory in failing to offer transmissian users comparable access to the FPL transmission network.

As reported at page f3 of FMPA's Petition, PMPA Bled a complaint with the FERC simultaneously with its Petition to thc NRC. On October 28, 1993, the FERC determined that, under the newly enacted Energy Policy Act of 1992 ("EPAct"), Section 211 of the Federal Power Act, 16 U,S.C.A. 5 824j, it would issue a "proposed order requiring [FPL] to provide network transmission service to support FMPA's IDO Project, without multiple point-ta-paint pricing and consistent with 212(a)" of the Federal Power Act, 16 U.S.C.A. 5 824k ('roposed Order" ). The Proposed Order is reported at 65 FERC $ 61,125 (1993), The Proposed Order directed the parties to negotiate for a period of sixty days to attempt to reach agreement on the proper terms and conditions for network transmission service. The FRRC expressly deferred the issue of FPL's obligations to sell network transmission pursuant ta the Antitrust Conditions, Proposed Order, 65 FERC at page 61,618.

FMPA and FPL were unable to agree on the terms and conditions for network transmission service, and during thc Brst quarter of 1994, both parties Bled briefs and supporting materials setting forth their respective positions, On May 11, 1994, the PERC issued a "Final Order" in Docket Na. TX934-000, 67 FERC $ 61,167 (May 11, 1994),

, In the Final Order, the FERC approved PPL's proposed load ratio approach to the pricing of network transmission with the crucial additional requirement, proposed by FMPA, that FMPA receive credit for transmission facilitics owned by FMPA or its members that will be used, along with FPL transmission facilities, to integrate FMPA's loads and resources. 67 FERC at pages 61,48&2. Both FPL and FMPA sought rehearing of certain aspects of the Final Order, and those requests for rehearing remain pending.

On July 11, 1994,'PL fQcd a document styled a Network Integration Service Agreement ("NISA"), with which FMPA did the requirements of the Final Order. In fact,

~ agree, which purported to comply with FPL's July 11, 1994 Sling did nat comply with the Final Order in a number of critical respects. Most notably, FPL's proposed NISA contained no provision for crediting FMPA or member-awned transmission facilitics, contrary to the directive in the Bnal Order. On August 12, 1994 PMPA Bled a

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l I Mr. Anthony T. Gody December 5, 1994 Page 3 Protest to FPL's NISA, demonstrating that it does not comply with the FERCs Hnal Order. The FHRC has not yet acted on FPL's proposed NISA or on FMPA's Protest.

B. N On March 19, 1993, prior to the Sing of FMPA's Petition in this proceeding, FPL Bled proposals to revise its rates, terms and coaditions for virtually all of its wholesale services, including wholesale power sales, transmission, arid interchange services. The FERC initially rejected that filing through a de6ciency letter dated May 18, 1993. On July 26, 1993, FPL re-submitted its Bling. FPL did not include proposed terms and conditions for network transmission service, despite FMPA's long-standing requests for such service, The FERC initiated hearing procedures in Docket No. ER93465-000 and consolidated dockets to consider whether FPL's proposais, which took effect subject to refund on February 26, 1994, are just and reasonable.

On June 16, 1994, the FBRC expanded the scope of the proceedings in Docket No. ER93465-000 to consider whether FPL's proposals wiH afford FPL's competitors, inciudirig FMPA, access to FPL's transmission network on terms comparable to FPL's own uses of the transmission network. 6'7 PERC 5 61,326. 'the PERC expressly included as an issue the significance of network trarismission service in evaluating comparability of access, FPL filed testimony on the comparability issues on August 5, 1994, Although FPL stated that it generally is willing to offer network transmission services on terms similar to those proposed in its NtSA in Docket No. TX934-000, described above, FPL did not Qle any proposal for a generally applicable network transmission service tariff in Docket No. ER93-465-000.

On October 21, 1994, the FERC Staff Bled a proposed network service tariff in Docket No. ER93465-000. FMPA generally supports the FERC Staff's proposals, although FMPA believes that some modiQcations are appropriate, FPL has not accepted the FBRC Staff network transmission proposal.

Evidentiary hearings in Dockc,t No. BR93465-000 are scheduled to begin in January, 1995.

D At the time FMPA Gled its Petition in this proceeding, the parties were preparing for trial on FMPA's claims in the United States District Court for the Mddie District of Florida, Docket No. 92-35-CIV-ORI 3A22. On December 16, 1993, the District Court

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Mr. Anthony T. Gody December 5, 1994 Page 4 L

dismissed FMPA's claims on grounds that the "Bled rate" doctrine prectudes FMPA"s=

claims for damages, and that FMPA's claims for injunctive relief are moot in light of the proceedings pending before the FBRC in Docket No. TX934-000.

839 Fe Supp. 15Q (M.D. Fla. 1993), gypped

~kg. The District Court's appHcation of the Bled rate doctrine was based upon FPL's point-to-point transmission service rates on Ec at the FSRC. g, at 1571, The District Court did not rulc on FMPA's claim that the Antitrust Conditions obligate H?L to sell network transmission service to FMPA.

FMPA has appealed the District Court's dismissal of FMPA's claims to the United States Court of Appeals for the Eleventh Circuit, Case No, 94-2320. FMPA maintains that the District Court erred in disregarding the crucial distinction, highlighted 718 (1974), ~

by this Commission in 1 NRC 45 (1975), between network transmission and point-to-point 8 ABC transmission. The flled rate doctrine appHes only to rates for service which are actually Bled with a regulatory agency and which therefore can be corrected by the agency.

Because FPL rewed to Qlc a rate for network transmission service with the FHRC, there was no Bled rate for network transmission, and FMPA is entitled to seek damages for FPL's unlawful refusals to sell network transmission. On August 10, 1994, the United States Department of Justice Ecd a brief gmjggs ger~ agreeing with PMPA that the Bled rate doctrine does not apply where there was no rate on 61c for the service at issue, although it did not take any position on the underlying merits of matters in controversy.

BricQng before the Eleventh Circuit has been completed, but oral argument has not yet been scheduled.

In response to a June 7, 1994 Request for Proposals regarding power supply alternatives by the Qty of Lake Worth, Florida, FPL on September 1, 1994 submitted a proposal to acquire the Lake Worth electric system. Lake Worth is a prospective member of FMPA's IDO Project, which FMPA has been blocked from implementing duc to FPL's refusals to seH network transmission service to FMPA. Thus, while continuing to interfere with FMPA's ability to maximize eSciencics and'o offer lower cost power to its IDO members, FPL has sought to acquire one of those members. It is FMPA's understanding that Lake Worth has rejected FPL's acquisition proposal.

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Mr. Anthony T. Gody December 5, 1994 Page 5 The foregoing sets forth the current status of FMPA's ongoing efforts to obtain network transmission service from FPL Despite all of FMPA's efforts, FPL stiD is not

'elling network transmission service to FMPA, and no court or regulatory agency has adjudicated FMPA's rights to enforce the Antitrust Conditions and to buy network transmission service under the Antitrust Conditions. Ihe Antitrust Conditions had the purpose of curing an aQcgcd situation inconsistent with the antitrust laws" by providing assurance that certain services, including transmission, would be available on reasonable terms to requesting neighboring entities.Section X(b) of the Antitrust Conditions requires that in the event of a dispute over the services which are required to be provided, FPL is obligated to "immediately file" a service agreement with the FERC.

FPL's compliance with this provision would have given the PERC immediate and unquestioned jurisdiction over'he terms for network transmission, thereby preventing a denial of services and substantial harm to FMPA and to the competitive process.

Although the FERC's Final Order in Docket No. TX934-000 defers ruHng on FMPA's rights under the Antitrust Conditions, it does determine that network transmission service is in the pubHc interest, and that there are no reliability or technical impediments to FPL providing network transmission. These conclusions, of which FPL has not sought rehearing, eliminate any legitimate factual basis for FPL's rehsal to Qle a network transmission rate pursuant to thc Antitrust Conditions. The issues remaining concern FMPA's legal rights under the Antitrust Conditions. Action by this Commission still is necessary and appropriate to assure proper enforcement of FMPA's rights and FPL's obHgations under the Antitrust Conditions, and FMPA therefore requests that the NRC take appropriate action to that effect, Ifwe can be of further assistance, please do not hesitate to contact us, Sincerely, Robert A. Sablon IP~~ s. Ra Bonnie S. Blair Attorneys for Florida Municipal Power Agency cc: J.A. Bouluight, Jr.