ML17266A240
| ML17266A240 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 07/18/1980 |
| From: | Youngblood B Office of Nuclear Reactor Regulation |
| To: | |
| Shared Package | |
| ML17266A239 | List: |
| References | |
| NUDOCS 8008010010 | |
| Download: ML17266A240 (35) | |
Text
U.'i TED STAT S
!UCLEI'3 REGULATORY CGX'~fSSaON OGCKET AQ. 50-389-A FLGR<GA ?OHER A"jD LrGHT CGi'!?i'i~(Y CITY GF ORLANQO, FLGRiOA AD THE GRLANOG UT<L."'TIES CG;.!~! SiGii ihOTiCE 0" RECE.PT OF AOOlTiGf'QL AihTiTRUST iPFG(X."
T".l".E FOR SU""y~!SSIG!I QF ViE'r'S 0% ANTITRUST NATTERS Fl or i da P O'I"er ano Li gi:.-. Company, pursuant to Sect ion 103 of the Atomi c Ene, gy ACT. Gf 19~".,
as a iiended, (the Act), fi.ed on June
- 19SO, informat on requested by tn. Attorney General for Antitrus" Ravi-"r( as recu red by 10 CFR Part
~0, appendix L.
The information con-cerns the addition of the City of Orlando, Florida and th Orlando Utilities Co=."is.ion, as an ovIner "
the S:. Lucie Plant, Unit 2, loc ted on Hutchinson Island in St. Luc;e County, Florida.
The Orlan"o Utilities Corm'ss.'on
~vas cre-ted by.he Florida Sta-.'e Legislature and is a part of the 'y of Orlando Flor ida.
.'he information was filed in connection with Florida Poier and Light Company's apolicaticn.or an am ncment to Construct:on Pe;mi".
Vc, CP. R-44 to the St. 'cie Pla i Unit 2.
Construction
?ermine Ho CPPR 1'/as issued on;~icy 2, 1977 and construction of the plant is undemay.
The original notice cf Receipt of application for cons. ruction permit and ooeratirg license included the antitrust aspe'cts of he application and was publishec in the Federal Reg ster on June io, 1971, (3o F.R.
11473).
~
t'
7590-01 A copy of the Florida Power and Light Company letter, dated June 13, 1980 and above stated documents are available for public examination and copying for a fee at the Coranission's Public Document Room located at 1717 H Street, N.W., Washington, D.C.
and at the Indian River Community College Library, 3209 Virginia Avenue; Ft. Pierce, Florida 33450 Any person who wishes,to have his views on the antitrust matters with respect to the City of Orlando, Florida and Orlanddo Utilities Commission presented to the Attorney General for consideration should submit such views to the U. S. Nuclear Regu.l'atory Commission, Washington, D-C.
20555, Attention:
Chief, Utility Finance
- Branch, Division of Engineering, Office of Nuclear Reactor Regulation on or before September 29, 19BO
~
~
Dated at Bethesda, Maryland this <p~ stat.- s-4~,
i I a 0
'OR THE NU LEAR REGULATOR COMMISSION PkyL ~
B. J.
Yo ngblood, Chief Licensing Branch 81 Division of Licensing, 0ffice of Nuclear Reactor Regulation
If
~
~
f il
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the J~
Atomic Safet and Licensin A
ea1 Board Florida Power 6 Light Company (St. Lucie Plant, Unit No.
1)
Florida Power a Light Company (Turkey Point Plant, Unit.Nos.
3 and 4)
Docket No. 50-335A
)
)
)
)
Docket, No. 50-'50A
)
=
50-25 lA BRIEF OF FLORIDA POWER 6 LIGHT COMPANY IN OPPOSITION TO APPEAL OF FLORIDA CITIES Florida Power 6 Light Company
("FPL," or the "Licensee" )
opposes the appeal taken by the Cities -< from the April 5, 1977, 1/
Memorandum and Order of the Atomic Safety and Licensing Board, which dismissed the Cities'etition and request for initiation of antitrust proceedings to modify or revoke operating licenses that FPL holds for Turkey Point Units No.
3 and 4 and St. Lucie Unit No.
1 (the "Operating Plants" ).
Statement of the Case On March 25,
- 1966, FPL applied for licenses to construct and operate Units 3 and 4 at the Turkey Point plant.
(I F'
4 2,/
The 'application
-~"Cities" consist of the Fort Pierce UtilityAuthority of the City of Fort Pierce, the Gainesville-Alachua County Regional Elec-tric Water and Sewer Utilities, the Lake Worth Utilities Authority, the Utilities Commission of the City of New Smyrna Beach, the Orlando Utilities Commission, the Sebring Utilities Commission, and the Cities of Alachua, Bartow, Daytona Beach, Fort Meade, Key
- West, Mount Dora, Newberry, Quincy, St.
Cloud and Tallahassee, Florida and the Florida Municipal Utilities Association.
-~ Docket Nos.
50-250 and 50-251.
3/
requested licenses pursuant to Section 104b of the Act.
On April 29, 1967, the Commission -/ issued construction permits for 5/
the Turkey Point facilities.
On July 19, 1972, the Commission 6/
issued an operating license for Turkey Point Unit No.
3
- and, thereafter, on April 10,
- 1973, an operating license wa's issued for 7/
Turkey Point Unit Mo.
4.
All such.licenses were. issued pursuant.
to Section 104b of the Act, and no'ntitrust review pursuant to Section 105c was requested by any person or conducted by the Com-mission in connection with any of the licenses described above.
The application for licenses for Unit No.
1 of the St. Lucie plant, submitted on January 29, 1969, also requested licenses 8/
pursuant to Section 104b.
A construction permit was issued by 9/
the Commission on July 1,
- 1970, followed by issuance of an 3/ The Atomic Energy Act'f 1954, as
- amended, 42 U.S.C. 2011
~et se (the "Act").
The Nuclear Regulatory Commission succeeded to the licensing 4/
responsibilities of the Atomic Energy Commission pursuant to 42 U.S.C. 5841, enacted October ll, 1974.
Throughout this brief the term "Commission" refers without differentiation to the Nuclear Regulatory Commission and its predecessor, the Atomic Energy Commission.
3'EC.- 195.=
~
5/
6//
I-Operating License No. DPR-31, Docket No.
Operating License No. DPR-41, Docket No.
7/
Docket No. 50-335.
8/
4 AEC 373.
- K V
4 50-250.
50-251.
10'perating license on March 1, 1976.
Both such licenses were issued pursuant to Section
- 104b, and no antitrust review pursuant to Section 105c was requested by any person or conducted by the Commission in connection with either license.
At no stage of the licensing or operation of any of these three plants was -any request for a hearing on antitrust matters received from any member of the public until the Cities'etition was submitted on August 6, 1976.
The Cities'etition of August 6, 1976, requests "Commission review of the operating licenses issued to [FPL]," and requests that a hearing be held to determine "whether and under what terms and conditions the operating licenses for [the Operating Plants]
should ll) be revoked or modified." All of the contentions in the petition relate to the antitrust laws.
The petition cites Sections
- 104b, 183,
- 185, 186 and 187 of the Act as jurisdictional bases for
'2) granting of the requested relief.
The same petition also requests late intervention and an antitrust hearing with respect to FPL's St. Lucie Unit No.
2, NRC Docket No. 50-389A.
That matter is separately pending before the Appeal Board.
'10 Operating License No. DPR-67, Docket No. 50-335.
"Joint Petition of Florida Cities for Leave to intervene 11/
out of Time; Petition to Intervene; and Request for Hearing,"
dated August 6, 1976, pp.
2-3.
XQ., p.
2.
12,/
~
~
On August 13,
- 1976, an Atomic Safety and Licensing Board was established to "Rule on Petitions" in the present dockets and, in Docket No. 50-389A. 13/
FPL opposed the petition as it concerns the Operating Plants on two grounds.
FPL argued first that the Atomic Safety and Licensing Board lacked jurisdiction to grant the petition under the NRC's regulations,
- and, second, that, regardless of the dis-position of the procedural question, there is no statutory basis for the Commission to conduct the requested antitrust review of the Operating Plants'icenses or to revoke or modify them on the antitrust grounds alleged by the Cities. 14/
The NRC Staff opposed the petition as to the Operating Plants on the procedural ground of want of jurisdiction in the Licensing Board.
On the statutory issues, the Staff argued that the Cities'etition could not be considered under Section 104b of the Act, but did not take a position on whether the Commission has juris-diction under one or more of Sections
- 183, 185, 186 or 187 of the Act to grant the relief requested by the Cities. 15/
I Florida Power
& Light Company (Docket Nos.
50-335A, 50-389AI 13/
50-250A and 50-251A), Establishment of Atomic Safety and Licensing Board to Rule on Petitions, August 13, 1976.
.:"Response of Florida Power 6"'Light,'Company, in Opposition
~.
to: 'Joint'eti'tion"'of.,Fl'ori'da" Citi;es fo'r Leave to..Intervene Out of Time; Petition to Intervene; and Request for Hearing," filed on September 1,
- 1976, p.
10,
~et" ee "Answer of NRC Staff to the Petition to Intervene Out. of 15/
Time and Request for Hearing by Certain Cities," filed on September 17, 1976.
~
~
The Cities requested and were granted leave of the Licensing Board to file a reply to FPL's and the Staff's pleadings, and a
"Reply of Florida Cities to Responses of Florida Power and Light Company and Nuclear Regulatory Commission Staff
" was submitted on October 3,5, 1976.
On April 5, 1977, the Licensing Board issued a Memorandum and, Orde'r dismissing the Cities'etition as to the Operating Plants on the sole ground that it lacked jurisdiction to grant'.the petition under the Commission's regulations, citing Houston Li htin
& Power Com an (South Texas Project, Units 1 and 2), ALAB-381, 5
NRC 582 (1977). The Licensing Board did not reach the 16/
issue of the Commission's statutory authority to grant the requested relief.
Zt is this decision of the Licensing Board which is under review in the present proceedings.
While the present proceedings have progressed before the Licensing and Appeal Boards, the Cities have taken two related actions in other contexts within the NRC.
By letter dated October 29, 1976, the Cities "lodged" their petition of August 6, 1976 with the Director of Nuclear Reactor Regulation (the "Director"), referring in their letter to 10 CFR 52.206.
On April 18, 1977, following the Licensing Board's
- decision, the'itie's. wrote 'once. again"to"the Director;;this, time requesting, pursuant to 10 CFR 52.206, that an order be issued requiring FPL to show cause why the licenses for the Operating Plants should not "be revoked, amended or modified" on the anti-Memorandum and Order of April 5, p. 4.
16/
trust grounds stated in the Cities'ugust 6,
1976, petition.
The Director issued, on May 16,
- 1977, a notice of receipt of the Cities'equest, and the notice was published in the Federal 17'eceister on May 26, 1977.
No further action has been taken by 18'he Director on the Cities'equest as of this date.
- Second, on March 29, 1977, the Cities filed a "Motion for Commission Clarification of Procedures,"
which was addressed to
\\
the Commission.
Essentially, the Motion requested that the Com-mission designate, by a ruling in the nature of a declaratory
- order, the appropriate procedural context for consideration of the Cities'equest for initiation of antitrust proceedings with respect to the Operating Plants, and suggested that the Commission itself might rule directly on the Cities'ugust 6, 1976, petition.
On June 23, 1977, the Commission issued'a Memorandum and Order denying the Cities'otion as not properly before the Commission.
The Commission recognized that the Cities'otion raised the legal question of whether the Commission has statutory authority to modify the licenses for the Operating Plants; acknowledged that it could address these legal issues on its own motion; but, noting H'"
I, 17' 42 Fed.
Reg.
27071.
On July ~,
- 1977, FPL wrote to the Director suggesting 18/
that the Cities'equest for issuance of an order to show cause should be denied because of an absence of statutory authority for granting of the relief requested.
That letter was served on this panel and on all parties to the present proceedings.
~
~
~
the pendency of the present appeal and the availability of proce-dures provided in 10 CFR g2.206, concluded that the legal issues should "be first addressed by the Appeal Board or the I;Director],
19/
after an opportunity for briefing."
On April 29, 1977, the Cities filed a "Notice of Appeal and Appellate Brief" appealing. to the Appeal. Board the Licensing Board's Memorandum and. Order of April 5, 1977, i.n'sofar as it dis-missed the Cities'etition with respect to the Operating Plants.
On May 5, 1977, the Chairman of the Appeal Board Panel issued an Order deferring further proceedings on the Cities'ppeal pending the Commission's disposition of certain matters then pending before it in Houston Li htin 6 Power Com an (South Texas Project, Units 1 and 2),'Docket.Nos.
50-498A and 50-499A, on the ground that "Chere is a reasonable possibility that the Commission's disposition of the South Texas matter will also resolve the issues which 20/
Florida Cities'ending appeal would have us'ecide."
Florida Power G Li ht Com an (St. Lucie Plant, Unit 19/
Nos.
1 and 2; Turkey Point Plant, Unit Nos.
3 and 4), Docket Nos.
50-335A,'0-389A, 50-250A and 50-251A, Commission Memorandum and Order; CLI,
NRC-(June 23,. 1977).
P'erhaps'nother,-consideiation, which'eigh'ed.-against,"the, Commission's'dd'ressing the'eri.ts 'of the legal issues was the limited participation of Chairman Rowden.
Xd., footnote on p.
3.
Without the participation of Chairman
- Rowden, the Commission would have lacked a quorum of three members.
Appeal Board Order of May 5, 1977, p.
2.
20/
On June 16, 1977, this Appeal Board issued an Order noting that the Commission's decision in South Texas issued on June 15, 1977, affording Cities the opportunity to file a supplemental brief confined to consideration of the Commission's South Texas
- decision, and fixing a time for filing of briefs in support or o'pposition to the appeal.
These times were extended by Order of June 2'1,
- 1977, and Cities submitted their supplemental brief on June 29 I 1977.
FPL now submits this brief in opposition to the Cities'ppeal within the time specified in the June 21, 1977, Order.
ARGUMENT I
The Licensing Board Correctly Dismissed the Cities Petition for Lack of Jurisdiction The Licensing Board held that it lacked procedural jurisdiction under the Commission's regulations to grant the Cities'etition for initiation of antitrust proceedings concerning the Operating Plants-.
This result is,.as the Licensing Board properly found, reguired by ALM3-38l, ~su ra, and the 'Licensing Board's decision in this regard should be affi'rmed on the basis of ALAB-381.
The issue in ALAB-381 was characterized by the Appeal Board as follows:
"fT]he inquiry comes down to whether (1) licensing boards have been given by Commission regulation the power to reopen a concluded construction permit proceeding for the purpose of commencing a hearing to determine if antitrust conditions should be imposed upon the permit; and (2) if not, whether a board may order such a hearing in the absence of a pending construction permit or operating licensing proceeding."
5 NRC at 589-590.
The Appeal Board answered both questions in the negative and held that:
"As no one appears to dispute, the licensing boards have no independent authority to initiate any form of adjudicatory proceeding.
What is required is the prior issuance, by some other component of the Commission, of one of the five types of 'orders or noutice's specified'n 10 CFR '2.700...'." (Id'.,'t 5'93.'-"59'2).
In an order issued on March 31, 1977, the Commission expressly stated that it had determined not to review ALAB-381.
As the Commission subsequently noted, this, of course, does not mean that it agreed with everything stated in that opinion.
Houston Li htin a power Co. et al.
(South Texas project, Unit Nos. l~s2, CLI-77-NRC
, Slap Op. p.
8 (June 15, 1977). Nevertheless the determination not to review leaves ALAB-383. the most authoritative precedent within the Commission with respect to the issues it decided.
Ho construction permit or operating license proceeding is, or was at the time the petition was filed, pending with respect to FPL's Operating Plants; and no order specified in 10 CFR 2.700 has been issued by any component of the Commission.
Therefore, the Licensing Board was bound to dismiss the Cities'etition as.to the Operating-Plants.
II The'Question of the Commission's Statutory Authority to Grant the Relief Requested by Cities is Ripe for Decision Although the Licensing Board disposed of the petition as to the Operating Plants on the narrow procedural ground discussed in the preceding section, the basic question whether the Commission has statutory authority to grant the relief requested by the Cities is ripe for decision by this tribunal.
The statutory question has been thoroughly briefed by the Cities, both to the Licensing Board-and in their briefs, particularly of June 29, to this Appeal Board.
Moreover, the Commission, by directing that this legal issued first be addressed by the Appeal Board or the Director of Nuclear.. Reactor Regulation, clearly contemplated that the issue 22/
could, be resolved. in 'these. pending proceedings'.
The'alte'rnative to 'this tribunal's a'ddressing the issue in the present case is the conduct of further proceedings before the Director of Nuclear Reactor Regulation on the Cities'ending request Commission Memorandum and Order of June 22,
- 1977, pp. 3-4.
22/
10
for issuance of an order to show cause.
In light of what FPL believes to be the clear guidance of the Commission's South Texas
- decision, nothing would appear to be gained by further prolonging NRC proceedings involving this same legal question.
Accordingly, t
FPL urges that the Appeal Board address and decide in these proceedings the question of whether the Commission has statutory authority to grant the relief requested by the Cities.
III The Commission Lacks Statutory Authority to Modify or Revoke the Operating Plants'icenses on Antitrust Grounds This case does not involve a request that the Commission act, pursuant to Section 105a of the Act, on the basis of a court finding of antitrust violation, nor does it concern the enforcement of any existing antitrust license conditions.
The claim that the Commission has authority to revoke or modify the Operating Plants'icensees rests upon two building blocks: (i) that the Commission has continuing authority to police the activities of its licensees with. regard. to the; antitrust;laws, and (ii). that 'such authority extends to licenses issued under Section 104b of the Act. If either proposition is rejected, the Cities argument must fail.
FPL submits that. both elements of the Cities'rgument must be rejected.
A.
Th ommission Lacks Continui Authorit to Police the Activities of its Licensees with re ard to the Antitrust Laws.
In Houston Li'tin a Power Com an, et al.
(South Texas Project, Unit Nos.
1
& 2) CLI,
NRC (June 15, 1977),
the Commission for the first time considered the reach of its antitrust jurisdiction and concluded that such jurisdiction is specifically defined and limited by the Act:.
"Some of the parties'rguments would assign us a broad and ongoing antitrust enforcement role; they envision that we would have a continuing policing responsibility over the activities of licensees throughout the lives of operating licenses.'s we shall
- show, we believe that the Congress envisioned a narrower role for this agency,'with the responsibility for initiating antitrust review focused at the two-stop licensing process."
(Slip Op., at 9)..
And.
"In summary then, we conclude that Congress had no intention of giving this Commission authority which could put. utilities under a continuing risk of antitrust review.
Had Congress agreed with the proposition that this Commission 'should have broad antitrust policing powers independent of licensing, the statute that emerged
[from the hearings and debate before and in Congress]
would have looked quite different."
(Id., p.
- 24).
23/
The South Texas case involved efforts to amend construction i
-- --,-,, --permits" on antitrust grounds"-in",the: interim; between'.."issuance'f';.
-:;..-=-:.'-'.
The Commission's decision contains and is grounded upon a
23/
thorough analysis of the Act as it developed through Congressional action in 1946, 1954 and 1970, including a review of the legislative history of each enactment.
Slip Op., pp. 9-24.
12
the construction permit and formal docketing of an application for operating licenses.
Xt was unchallenged there that Section 105c(2) of the Act, authorizes the Commission to conduct a further antitrust review at the operating license stage upon a proper finding that such further review is "advisable on the ground that significant changes in the,licensee's activities or proposed activities have occurred subsequent to the 24/
review... in connection with the construction permit...."
Accordingly, the Commission did not have before it and did not decide "whether antitrust review'may be initiated....where
'significant changes'ccur after an operating license is 25/
issued."
Nonetheless, the basic reasoning of the South Texas decision foretells the result of such a case, when and if it is presented.
The Commission reasoned that its antitrust responsibilities are defined by-Section 105 of the Act:
"Ne find the specificity and completeness of Section 105 striking.
The section is comprehensive; it addresses each occasion on which allegations of anticompetitive behavior in the commercial nuclear power industry may be raised, and provides a
procedure to be followed in each instance."
, (IQ.,
p;
- 14).
Section 105c(2) of the Act.
25/
South Texas,
~su ra, Slap Op., p.
26.
13
Moreover, it found that "the Commission's antitrust authority is defined not by the broad powers contained in Section 186, but by the more limited scheme set forth in Section 105. " (Id., p.
- 24).
Thus,. it is beyond doubt that any authority to conduct antitrust proceedings after an operating license is issued must be founded upon Section 105, not upon some general provision of the -Act.
Wi;thin Section
- 105, such authority appears to b' 26/
conveyed only by Section 105a, which permits the Commission to act only after an antitrust violation has been found by a court.
Section 105c provides for antitrust review at the time of receiving an application for a construction permit and for the possibility of a further, limited review at the operating license stage in the event of "significant changes" as specified in Section 105c(2).
Any review based upon changes in circumstances after the construction permit stage is thus grounded in Section 105c.
It is difficult to conceive of a theory other than one which. attacks the licensing antitrust review(s) on the ground of fraud, mistake, undiscovered evidence or something similar which allows Section 105c to be construed to authorize a post-operating 4
license antitrust review.
It,is impossible logically to devise a
rationale for conducting a post-operating license antitrust review f
C k
A
~
g p
-..-.-;=.. -'-'.. where.-the. licenses.. are.not even subject.to, Section.,-105c.';.~
The Commission's reasoning with respect to Section 186 applies with equal force to Sections
- 183, 185 and 187, on which Cities rely.
14
B.
Th is No Basis for Conduct a
Post-Operating License Antitrust Review with respect to Unconditioned Licenses Issued Under Section 104b As has.been shown, the first element of the Cities 'rgument depends upon the extremely dubious proposition that the Act permits some kind of post-operating license antitrust review in some circumstances.
The second element of the argument is that this. continuing policing authority is extendable to the Operating Plants'icenses, which were issued under Section 104b of the Act without antitrust review or conditions.
Xt is clear beyond any possible dispute that the antitrust review provisions of Section 105c do not apply to these licenses which were issued under Section 104b.
The Commission so held prior to the 1970 amendments to the Act and was sustained by the Courts.
Cities of States-ville v. AEC, 44l P.2d 962 (D.C.. Cir. $ 969).
- Moreover, Congress, acting in 1970 with the Statesville decision before it, deliberately decided not to apply the antitrust review provisions of Section 105c to operating license proceedings where the construction permit had been issued under 27/
Section 104b.
Nor is there any other basis in'ection 105 for conducting any kind of antitrust review with respect to the Operating Plants.
Section 105a authorizes Commission action only wheie an antitrust violation has been f
- ..." "-,,;found,.by a=-court, 'and",Section,105b..involvesreport'ing of,information,-.
~ ~ r regarding antitrust violation to the Attorney General.
See Section 102b of the Act. Also see H.R. Rep.
No.
91-1470 27/
(identical to S.
Rep.
No. 92-1247),
91st Cong.
2nd Sess.
26-28.
Congress elected to apply the antitrust review provisions of Section 105c to certain operating license proceedings where the construction permit had been issued under Section 104b, but the present facilities were not included in this group.
See Section 105c(8) of the Act.
15
To look beyond Section 105 for such authority would conflict with the Commission's holding in South Texas.
However, the Cities nonetheless argue that the provision of Section 104b that "'the Commission shall impose the minimum amount of such regulations and terms of license as will permit the Commission to fulfillits obligations under this chapter'"
somehow. authorizes a post-operating license antitrust review for plants licensed under Section 104b.
Aside from begging 28/
the question of where, other than in Section
- 105c, the obligation to conduct an antitrust review can be found "under this chapter,"
this argument fails for two reasons.
First, if Section 104b had been read by the court to require some kind of antitrust review, the Statesville case would have been decided differently.
Second, it is clear that Congress deliberately decided, in 1970 after the Statesville decision, not to subject 104b plants to antitrust review.
The only argument left in favor of the Cities'osition is the argument that the Commission has a general responsibility to enforce the antitrust laws with respect to its licensees and that such responsibility transcends the specific provisions of Section 105.
Although this matter will be touched on briefly in the following section, it is clear that such an argument cannot be maintained
. i;n.,the, wake. of.. South Texas....';,',,
What then is the NRC's antitrust responsibility with respect to licenses previously issued under Section 104b?
28/
Supplemental Brief of Florida Cities, dated June 29, 1977, p.8.
16
The South Texas decision is eminently clear:
"With respect to 104(b) licenses, the Commission could only suspend, revoke, or take other action with respect to a license as it deemed necessary after a court finding of monopoly." (Slip Op.', p.
17, footnote 10).
The quoted language speaks to the holding in the Statesville case.
However, the point is underscored by the deliberate action of Congress in deciding, after the Statesville decision was issued, not to apply Section 105c to Section 104b licenses.
C.
The Cities Effort to Distin uish South Texas In their supplemental brief the Cities candidly state that in significant respects they simply disagree with the Commission's South Texas decision.
However, they make an 29/
effort to distinguish it from the present case by arguing that the "equitable principles" which underlie the South Texas decision do not apply here, since there has been no antitrust review of the 30/
Operating Plants under Section 105c.
The essence of the Cities'istinction is that, since an antitrust review under Section 105c is so clearly unobtainable here at'ny'ime,'here is-n'o 'c'onflict'between,Section's 105 and 29/
Supplemental Brief of Florida Cities, dated June 29,
- 1977, p.
1.
30/Id g p 7 ~
17
186 in. this case and, therefore, Section 186 should be applied here and an antitrust review initiated.
This is not a distinction of, but an attack upon, the South Texas decision.
At the outset it should be clear that the Cities intend to invoke the portion of Section 186 which permits revocation of a license for violation of the Act..
The Cities cannot argue, 31/
as did the NRC Staff in South Texas, that Section 186 should be invoked to condition, a license on grounds--inconsistency with the antitrust laws determined pursuant to the standards of Section 105c--
which would have justified its revocation or conditioning initially.
The Operating Plants'icenses could not have been conditioned initially by virtue of Section
- 105c, because, as has been
- shown, Congress chose not to apply Section 105c to them.
Thus the Cities'distinction" stands on the same ground which underlies their pre-South Texas arguments, that the Act vests the Commission with a broad, general responsibility to enforce the antitrust laws as regards its licensees.
This argument was made by the Cities to the Commission in an amicus curiae brief filed in the South Texas proceeding and was explicitly rejected by the C
\\
t F
31/
Xd., p.
6, footnote 2 (text of which appears on p. 7).
18
Commission. Moreover, it conflicts with the entire thrust 32/
of the South Texas holding that Section 105 comprehensively defines the NRC's antitrust responsibility and authority.
Zt is of the ilk of the arguments previously made by Florida dities to the Commission which "avoid or strain the language of Section 105.".
South Texas,
~su ra, p.
14.
Finally, the Cities view that where Section 105c does not apply it is perfectly acceptable to seek out some other basis for conducting an antitrust review demonstrates an unwillingness to accept the central teaching of South Texas, which is that the NRC s antitrust function is a limited one.
South Texas,
~su ra, pp. 15-15, footnote S.
Although 32/
the Commission found the cases cited by the Cities not very persuasive in the context of the Atomic Energy Act, it is significant to note that not even one of the cases cited by the Cities there supports the proposition that an agency with general public interest responsibilities is empowered to commence antitrust proceedings against the holder of a previously issued license.
That proposition is different in quality from the concept that certain agencies have a general responsibility to consider antitrust policies in performing other, e.g., licensing, functions.
See Cit of Lafa ette Louisiana v.
- SEC, 454 F.
2d 941 (D.C. Cir. 1971
, affirmed sub;nom; Gulf States Utilities Com an :v, Federal Power;..
'" ommission",'11
'U S." 747 1973)'(also='cited't':.'0ofthe'""',.'ities'pril 29 brief); Cit of Pittsbur h v.
- FPC, 237 F.2d 741 1975), affirmed, 426 U.S.
271 (197~6; Federal Maritime Commission v. Svenska Amerika Linien, 390 U.S.
238 1968);
Mansfield Journal Co. v.
- FCC, 180 F.
2d 28 (D.C. Cir. 1950);
Denver and Rio Grande Nestern Railroad Co., v. United States, 387 U.S.
485 (1967).
19
- See, especially, South Texas,
~su ra, pp.
21-23.
There is H
no reason to expect to find'n the Act a remedy for antitrust problems which arise after issuance of an operating license.
As the Commission said:
"But in the post-licensing posture, this Commission's capacity to act is not unique.
There is no longer any question of 'lock[ing] the barn door before the
,horse is stolen....'tatement of Senator Pastore, III Legislative "History of'he
-Atomic Energy. Act of.1954,'at 3107 (1955).
When nuclear power plants have been constructed and are operating, anticompetitive behavior can be remedied only by modifying or
.conditioning existing behavior.
Whatever form of remedy the agency can offer is not appreciably different from that which may be fashioned by the traditional antitrust forums.
In this posture, we recognize, as did the Congress, that there are more suitable forums for antitrust enforcement."
Id., at 22-23,.
Conclusion Wherefore, FPL respectfully requests that the Appeal Board affirm the Licensing. Boaid's dismissal of the Cities'etition on both of the grounds stated above.
Respectfully Submitted, r~ ~... i)wn J B Boukuigl3ti J1 /j Lowenstexn,
- Newman, Reis 6 Axelrad 1025 Connecticut
- Avenue, N.W.
D.C.
20036 John E. Mathews, Jr.
- Mathews, Osborne, Ehrlich, McNatt Gobelman 6 Cobb 1500 American Heritage Life Bldg.
ll East Forsyth Street Jacksonville, Florida 32202 Counsel for Florida Power a Light Company 20
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of Florida Power 6 Light Company (St. Lucie Plant, Unit No.
1)
Florida Power G Light Company (Turkey Point Plant, Unit Nos.
3 and 4)
)
).)
)
)
)
)
Docket. No. 50-335A Docket No. 50-250A 50-251A CERTIFICATE OF SERVICE I HEREBY CERTIFY that copies of the following:
BRIEF OF FLORIDA POWER 6 LIGHT COMPANY IN OPPOSITION TO APPEAL OF FLORIDA CITIES have been served on the persons shown on the attached list by hand delivery or deposit in the United States Mail, properly stamped and addressed on July ll, 1977.
4 By
-'~f~~
~
~
4/
K
.A. Bouknight, Jr.
owenstein,-Newman, Reis G Axelrad 1025 Connecticut
- Avenue, N.W.
Washington, D.C.
20036
'Counsel for"Flor'ida Powei G.Light '-:-
Company
Cg Alan S. Rosenthal, Esp ire Atomic Safety and Licensing Appeal Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Jerome E. Shar fman, Esquire Atomic Safety and Licensing Appeal Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Richard S.. Salzman, Esquire Atomic Safety and Licensing Appeal Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Robert M. Lazo, Esquire Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washingt on, D. C.
20555 John M. Frysiak, Esquire Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Ivan W. Smith, Esquire Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commis sion Washington, D.C.
20555
'Lee Scott De ey, Esquire Counsel for the Staff U.S. Nuclear Regulatory Commis s ion Washington, D.C.
20555 C.R., Stephens, Supervisor (20)
Docketing and Service Station Office of the Secretary of the Commission U.S. Nuclear Regulatory
~ Commis s ion
~ Washington, D.C.
,20555 Secretary U.S. Nuclear Regulatory Commission
. Washington, D.C.
20555 William C. Wise, Esquire Suite 200 1019 19th Street, N.W.
Washington, D.C.
20036 William H. Chandler, Esquire
- Chandler, O'Neal, Avera,
- Gray, Lang 6 Stripling P.O.
Drawer 0
Gainesville, Florida 32602 Jerome Saltzman Chief, Antitrust and Xndemnity Group U.S. Nuclear Regulatory Commission Nuclear Reactor Regulation Washington, D.C.
20555 Robert, A..-Jablon, Esquire
.'2600 Virginia Avenue, N.W.
""-"Washi,'ngt'on', '.C".
'"20037,'avid A. Leckie,.Esquire Antitrust Division Department. of Justice P.O.
Box 7513
~
'.'y Washington, D.C.
20530
LAW OFFICES LOWENSTEIN, NEWMAN, REIS ac AXELRAD I025 CONNECTICUT AVENVE, N. W.
WASHINGTON> D.C. 20036 202 833-837I ROOCRT LOWCNSTCIN JACK R, NCWHAN HAROLD Y, RCIS HAVRICC AKCLRAO KATHLCCN H 5HCA J
A OOVKNIGHTqJR HORC H, GAGCOCK HICHACL A. SAVSCR ROOCRT H ~ CVLR FRCDCRIC S. GRAY LINDA L. HODGC JOCL 5. WIGHT (*Os<. CAL\\Y.lt July !~~SZL
)
)I 2/I Mr. Edson G.
Case Acting Director Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, D.C.
20555 RE:
Florida Power
& Light Company (Turkey Point Plant, Units Nos.
3 and 4), Operating License Nos.
DPR-31 and DPR-41 (St. Lucie Plant, Unit No.
1)
Operating License No.
Dear Mr. Case:
On May 16,
- 1977, you issued a notice of receipt of a request for order to show cause, submitted by the Florida Municipal Utilities Association and a group of Florida municipalities (collectively, "Cities" ) on April 18, 1977.
The Cities request that you issue an order requiring Florida Power 6 Light Company (FPL), the holder of the licenses referenced in the caption above, to show cause why those licenses "should not be revoked,
- amended, or modified, due to alleged anticompetitive conduct and conditions under those licenses."
1/
The published notice stated that:
"Zn accordance with the procedures specified in 10 CFR 52.206 appropriate action will be taken on this request within a reasonable time." 2/
42 Fed.
Rece.
27071 (May 26, 1977).
1/
LowzNSTEIN, NzwM<N, RExs & AxlD Mr. Edson G.
Case July 5, 1977 Page 2
Although no provision is made in the Commission's regulations for responding to a request for issuance of an order to show cause, FPL wishes to inform you of its position on certain fundamental legal issues presented by the request, and respectfully asks that you consider this letter before acting on the Cities'equest.
3/
The Cities request that three licenses previously issued under Section 104b of the Atomic Energy Act of 1954, as amended (the Act) be revoked or modified "due to alleged anticompetitive conduct and conditions under those licenses."
4/
Of course, none of these licenses contains antitrust conditions, and no issue of enforcing the terms of a license is presented.
Consequently, the Cities'equest presumes that the Commission has continuing authority under the Act to police the activities of its 3icensees with regard to the antitrust laws, and presumes, moreover, that such authority extends to licenses issued under Section 104b of the Act.
Both of these premises are wrong.
They are wholly. at odds with the regulatory system deliberately enacted in 1970 in light of Cities of Statesville v.
- AEC, 441 F.2d 962 (D.C. Cir.
1969 Therefore, there is no statutory basis for the Commission's revoking or modifying FPL's licenses on the antitrust grounds stated by the Cities.
In accordance with the procedures specified in 10 CFR 3/
Part 2, Subpart B, the Director shall either institute the requested proceeding or advise the Cities that no proceeding will be instituted.
However, prior to instituting a proceeding, the Director is required to serve upon the licensee a notice of violation which "concisely states the alleged violation",
and the licensee is entitled to respond to the notice of violation and to have its response considered before any proceeding is instituted.
For the reasons stated hereafter, FPL believes that there is no legal basis for instituting any proceeding and, there-fore, that, the request should be denied forthwith.
However, in the event that the Director concludes that he can and should act affirmatively upon the request, FPL requests that the procedures specified in 10 CFR 52.201 be followed in every respect.
In particular, FPL would be entitled to notice of the acts which are alleged by the Director to have violated "any provision of of the Actor [the NRC's regulations]
or the conditions of the license,"
along with an opportunity to respond thereto prior to issuance of any order to show cause.
Notice of May 16,
- 1977, 42 Fed.
~Re 27071 (May 26, 1977).
4/
itOWENSTEIN NEWHANp REIS 8C AX D
Mr. Edson G.
Case July 5, 1977 Page 3
In Houston Li htin 6 Power Com an
, et al.
(South Texas
- Project, Unzt Nos.
1 6
2
, CLI-77 NRC (June 15, 1977),
the Commission found that the Act does not vest the NRC with continuing authority to police the activities of its licensees with regard to the antitrust laws:
"Some of the parties'rguments would assign us a broad and ongoing antitrust enforcement role; they envision that we would have a continuing policing responsibility over the activities of licensees throughout the lives of operating licenses.
As we shall show, we believe that the'ongress envisioned a narrower role for this agency, with the responsibility for initiating antitrust review focused at the two-stop licensing process."
(Slip Opinion at 9).
However, the present situation does not involve merely the question of continuing antitrust enforcement jurisdiction over licenses which were subject to prelicensing antitrust review under Section 105c of the Act, it involves application of the continuing antitrust enforcement jurisdiction theory to licenses which were issued under Section 104b and therefore were not subject to the review provisions of Section 105c.
Even if there may be (as FPL does not concede) circumstances in which antitrust, review may be initiated where "'ignificant changes'"
occur after an operating license is issued, a question not before and therefore not decided by the Commission in South Texas, 5/ it is not logically possible to apply such a
theory to a lrcense issued under Section 104b.
It is clear from the South Texas decision that whatever antitrust authority the NRC has rs grounded upon Section 105.
The Commission said:
"We find the specificity and completeness of Section 105 striking.
The section is comprehensive; it addresses each occasion on which allegations of anticompetitive behavior in the commercial nuclear power industry may be raised, and provides a procedure to be followed in each instance."
(Id., p. 14).
-~Id., p.
26.
'LOWENSTEIN, NEW%AN, REIS Bc AX D
Mr. Edson G.
Case July 5, 1977 Page 4
Section 105c creates a licensing antitrust review regime.
- However,
"[I]t [cannot] reasonably be argued that Congress did not foresee that antitrust allegations might be raised outside the license review context.
Subsequent allegations that licenses are being used in such a way as to violate the antitrust laws are to be referred to the Department of Justice for investigation and possible enforce-ment action, and if violations are found by a court, the Commission is given express statutory authority to take such license-related remedial action as is necessary."
(Id., p.
- 15).
It is plain that the licensing antitrust review regime of Section 105c does not apply to licenses issued under Section 104b.
The Commission so held prior to the 1970 amendments to the Act and was sustained by the courts.
Statesville,
~su ra.
- Congress, acting in 1970 with the Statesville decision before it, deliberately decided not to apply the antitrust review provisions of Section 105c to operating license proceedings where the construction permit had been issued under Section 104b. 6/
Accordingly, none of the provisions of Section
- 105c, including the "change in circumstances" provision of Section 105c(2), is applicable to these Section 104b licenses.
The
- result, as the Commission found in South Texas, is:
"With respect to 104(b) licenses, the Commission could only suspend,
- revoke, or take other action with respect to a license as it deemed necessary after a
court finding of monopoly." (Slip Opinion, p.
17, footnote 10).
6/
See Section 102b of the Act.
Also see H.R.
Rep.
No.
91-1470 (identical to S.
Rep.
No. 92-1247),
91st Cong.
2nd Sess.
26-28.
Congress elected to apply the antitrust review provisions of Section 105c to certain operating license proceedings where the construction permit had been issued under Section 104b, but the present facilities were not included in this group.
See Section 105c(8) of the Act.
LOWENSTEIN, NEWMAN, REIS 8f AXE D
Mr. Edson G.
Case July 5, 1977 Page 5
The quoted language speaks to the holding in the Statesville case.
However, the point is underscored by the deliberate action of Congress in deciding, after the Statesville decision was issued, not to apply Section 105c to the instant operating licenses.
The Cities, in the papers which are before you, do not really advance contrary legal arguments of substance.
- Indeed, the principal legal arguments which they have advanced are negated by the South Texas decision.
The consistent theme which the Cities emphaszze is that it would be inconsistent with the public interest for the Commission to ignore their claims of antitrust injury.
As is clear from the pleadings which FPL has filed with the Licensing and Appeal Boards, FPL vigorously denies that its actions are in any respect inconsistent with the antitrust laws, and submits that the Cities'ontentions are without merit.
However, the legal answer to the Cities'public interest" argument is also found in the South Texas decision.
There, explaining that the NRC's role in enforcing the antitrust laws is a limited one, the Commission said:
"But in the post-licensing posture, this Commission's capacity to act is not unique.
There is no longer any question of lock[ing]
the barn door before the horse is stolen.
Statement of Senator Pastore, III Legislative History of the Atomic Energy Act of 1954, at 3197 (1955).
When nuclear power plants have been constructed and are operating, anticompetitive behavior can be remedied only by modifying or conditioning existing behavior.
Whatever form of remedy the agency can offer is not appreciably different from that which may be fashioned by the traditional antitrust forums.
In this
- posture, we recognize, as did the Congress, that there are more suitable forums for antitrust enforcement."
(Slip Opinion, pp. 22-23).
The South Texas decision should dispel finally any view that the NRC has a responsibility to bend its enabling statute to entertain all antitrust complaints against users of nuclear energy.
Rejection of this request will not deprive the Cities of a remedy for any meritorious antitrust complaint they may have; it will simply require them to assert their claim in a traditional antitrust forum.
That the Cities have so assidiously avoided doing so says a great deal about the merits of their allegations as measured by the standards of the antitrust laws.
"LOWENSTEI¹ NEW%A.¹ REIS 8c AX D
Mr. Edson G.
Case July 5, 1977 Page 6
For the legal reasons set forth above the Director should decline to initiate any proceedings on the Cities
- request, and FPL respectfully requests that he do so.
Sincerely,
/
g.
g r
Boukna.ght, Jr.
owenstein, Ne an, eis
& Axelrad 025 Connecticut Ave ue, N.W.
Washington, D.C.
20036 jjn', fi" /@lip~~, Pi,
<<p, John E. Mathews, Jr,
- Mathews, Osborne, Ehrlich, McNatt Gobelman
& Cobb 1500 American Heritage Life Building ll East Forsyth Street Jacksonville, Florida 32202 Attorneys for Florida Power
& Light Company cc attached service list
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of
)
)
Florida Power
& Light Company
)
{St..Lucie Plant, Unit No.
1)
)
)
Florida Power
& Light Company
)
{Turkey Point Plant, Unit Nos.
)
3 and 4)
)
Docket No. 50-335A Docket No. 50-250A 50-251A CERTIFICATE OF SERVICE I HEREBY CERTIFY that copies of the following:
Letter to the Director, Nuclear Reactor Regulation dated 7/5/77.
have been served on the persons shown on the attached list by hand delivery or deposit in the United States Mail, prbperly stamped and addressed on July 5, 1977.
By:
A. Bouknigh
, Jr.
L wenstein,
- Newman, Reis
& Axelrad 1025 Connecticut
- Avenue, N.W.
Washington, D.C.
20036 Counsel for Florida Power
& Light Company
Alan S. Rosenthal, Esquire Atomic Safety and Licensing Appeal Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Jerome E. Sharfman, Esquire Atomic Safety and Licensing Appeal Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Richard S.
- Salzman, Esquire Atomic Safety and Licensing Appeal Board Panel U.S. Nuclear Regulatory Coaupission Washington, D.C.
20555 Robert M. Lazo, Esquire Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555 John M. Frysiak, Esquire Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555 Ivan W. Smith, Esquire Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washington, D.C.
20555 C.R. Stephens...upervisor (20)
Docketing and Service Station Office of the Secretary of the Commission Washington, D.C.
20555 Secretary U.S. Nuclear Regulatory Commission Washington, D.C.
20555 William C. Wise, Esquire Suite 200 1019 19th Street, N.W.
Washington, D.C.
20036 William H. Chandler, Esquire
- Chandler, O'Neal, Avera,
- Gray, Lang
& Stripling P.O.
Drawer 0
Gainesville, Florida 32602 Jerome Saltzman Chief, Antitrust and Indemnity Group U.S. Nuclear Regulatory Commission Nuclear Reactor Regulation Washington, D.C.
20555 Robert A. Jablon, Esquire 2600 Virginia Avenue, N.W.
Washington, D.C.
20037 David A. Leckie, Esquire
. Antitrust Division Department of Justice P.O.
Box 7513 Washington, D.C.
20530 Lee Scott Dewey, Esquire Counsel for the Staff U.S. Nuclear Regulatory Commission Washington, D.C.
20555