ML17266A428

Petition to Intervene & Request for Hearing.Commission Should Hold Limited Antitrust Hearing.Certificate of Svc Encl

ML17266A428
Person / Time
Site:	Saint Lucie
Issue date:	04/07/1981
From:	Gary M, Kucik G, Sward E ARENT, FOX, KINTNER, PLOTKIN & KAHN, PARSONS & WHITTEMORE
To:	NRC COMMISSION (OCM)
Shared Package
ML17266A429	List: ML17266A428 ML17266A430 ML17266A431
References
NUDOCS 8104090669
Download: ML17266A428 (16)

Text

UNITED STATES OF AMERICA NUCLEAR REGULATORY COiP'ISSION In the iiatter of FLORIDA POWER & LIGHT COt&3QW Docket No. 50-389 (St. Lucie Plant, Unit No. 2)

PETITION FOR LEAVE TO INTERVENE AND REQU ST FOR HEARING Pursuant to 10 CFR 5 2.714 and the Commission's March 9, 1981, notice o receipt of an application from Florida Power & Light Company (FP&L) for a facility operating license, 46 Fed. Reg. 15831, Parsons & Whittemore, Inc. (P &W) and its subsidiary, Resources Recovery (Dade County), Inc. (RRD),

jointly petition for leave to intervene in this proceeding and recuest the Commission to hold a limited antitrust hearing, as described below, on FP&L's application. The grounds for this petition and reauest are set forth below and some of them are elaborated upon in the accompanying brief.

IDENTI Y OF PETITIONERS (1) P&W is a New York corporation engaged in a variety of indust 'al activities in the United States and throughout the world. One of we activities in which P&W and

its subsidiaries are engaged is the construction and operation.-:,

of facilities for processing solid waste.

(2) RRD is a Delaware corporation that is wholly owned by P&W. RRD has recently completed the 'coKstruction of a solid waste processing facility in Dade County, Florida.

It is anticipated that the facility will process up to 18,000 tons of solid waste per week, convert combustible materials into refuse-derived fuel, burn the fuel to raise steam, and generate electricity. The facility has an installed nameplate electric generation capacity of approximately 76 megawatts.

It is a aualifying small power production zacility within the meaning oz Section 201 of the Public Utility Regulatory Policies Act of 1978 (PURPA), 16 U.S.C. 5 796, and the implementing regulations, 18 CFR Part 292 (1980) .

INTEREST QF PETITIONERS IN THIS PROCEEDING (3) Petitioners seek to intervene in this proceeding to protect their rights and the r'ghts o similarly situated entities under PURPA, the federal antitrust laws and Section 105c of the Atomic Energy Act, as amended, 42 U.S;C. 5 2135(c) .

It is Petitioners'ontention that if FPaL is permitted to operate St. Lucie Plant, Unit No. 2, under the terms of the proposed Settlement Agreement pending in NRC Docket No. 50-389A,

particularly Section X relating to transmiss'on services, the effectuation of an important aspect of federal energy policy as reflected in PURPA may be frustrated and a "situation incon--

sistent with the antitrust laws" may be created or maintained.

42 U.S.C. 5 2135 {c) (5) .

{5) Petitioners will be directly impacted by the above-described conseauences of implementing Section Z of the proposed Settlement Agreement. RRD has complied with the requirements of PURPA and has taken the necessary steps to,secure the benefits to which it is entitled. On triarch 13, 1981 RRD notified the Federal Energy Regulatory Commission (FERC) that it is a Qualified Facili y under the Act. A copy of that notice was served the same day on FP&L with a covering letter in orming FP&L that RRD "will begin sales of electric energy to Florida Power & Light on or after ninety days from the date hereof."

(Letter to Robert Talion of FP&L from George E. Boyhan of RRD; Appendix A).

(6) RW has also sought "to explore competitive opportunities for sales to other electric utility entities." To that end, RRD wrote FP&L on April 3, 1981 and asked it to confirm that FP&L "vill transmit electricity in behalf of RRD to poten-tial customers other than FP&L." As authority for reauiring FP &L to provide RRD with transmission services, RRD cited the antitrust laws and the proposed Settlement Agreement. See Lette- from David Bardin, Counsel for P&W and RRD, to L.

Christian Hauck, FP&L's Vice President, Legal Affairs {Appendix B).

(7) As described more fully below=an<.'-n brief,Section X o the proposed. Settlement Petitioners'ccompanying Agreement affects Petit oners'bility to secure .rts full.-

rights under PURPA and to gain access to FPGL'.s.-.transmission grid so ' can compete with FPaL in the sale .of electric power.

To the extent that the operating license sought by FP&L in this proceeding incorporatesSection X, Petitioners will be directly and detrimentally affected.

POTENTIAL EFFECTS OF THIS PROCEEDING ON PZTITIONEPS'NTERESTS A. Effects on Petitioners'URPA rights.

(8)Section X of the Settlement Agreement, for the first time in an NRC licensing proceeding, pu"ports to confer benefits on Qualifying Facilities within the meaning of PURPA.

In reality, those benefits may be entirely illusory; indeed,Section X may even require RRD and other Qualifying Fac'1'ties to abandon valuable PUPZA rights to benefit from the transmission services afforded by Section X.

(9) Section 210 of PURPA seeks to encourage co-genera-tion and small power production. It does so by conferring upon Qualifying Facilities the right to sell their elect ical output to an electric utility, to interconnect with a util'y and to buy at retail from the utility electric power needed within the facility. The implementing regulations exempt Qualified

=acilities rom most utility-type regulations to encourage

competitive entry by industrial concerns into the generation business. Congress enacted these PKVA provisi.ons. to overcome the reluctance of electrical utilities to do business with .such Qualifying Facilities on an economically viab3.e basis. One. of the important effects of PURPA is the facilitation and .encourage-4/

ment of competition from new electrical power sources,.

(10)Section X appears to advance the pr'nciples summarized in paragraph (9) above by requiring FP&L to transmit power "(5) from any qualifying cogeneration facility or small power production facil'y (as defined by the Federal Energy Regulatory Commission in 1S CFR Part 292, Subpart B) with which Company is interconnected to a neighboring entity or neighboring distribution system, ..." That commitment to transmit power, however, is conditioned upon a Qualifying Facility's forfeiture of valuable rights under PURPA. Speci ically, under Section Z(a)(5) the Qualifying Facility must arrange to rece've any sales of backup power and maintenance power from the neighboring entity or neighboring distribution system to which transmission services are provided. That condition would force RRD and other Qualifying Facilities to abandon their right to sell all of their electric power at the buyer's avoided costs, under the

"/ Several provisions of PURPA have been recently held uncon-District stitutional by Judge Harold Cox of the United States Mississiaoi Court for the Southern District of Mississippi,

v. PERE, Civ. Action No. J79-02212(c), (Peb. 19, 991 Peti ioners'ounsel have been informed that &e Solicitor General intends to appeal that decision directly to the Supreme Court.

terms o f PURPA I and to buy at retail from FP&L ig: accoraance.

with the 3.atter's ob3.igations to provide all of;the energy-needed by the Qualifying Facilities.

{11) By placing rest ictions on the provision of transmission services to Qualifying Fa cilities which do not apply to "neighboring entities,"Section X unfairly and unrea-sonably discriminates against Qualifying Fac'lities. Although Petitioners believe that the RRD facility in Dade-County iq both a Qualifying Facility and a "neighboring entity-,'-'anguage of subsection X(a)(5) might be construed by FP&L as diminishing rights that had been conferred by the other subsections.

(12) Subsection {b) o Section X introduces a further restriction of the rights conferred on neighboring entities and Qualifying Facilities. That provision states that "Nothing in this license shall. be construed to require Company to whee power and energy to or from a retail customer. Althoug h the restriction shou3.d be interpreted only as a limit on retai'1 customers which are not in the generatio n business, a clar'i-cation or modification to this effect is essentia3. to assure that the proviso will not force a Qualifying Facility, exercising its right to purchase e3.ectxicity at retail, to cut atsel~ off from the needed transmission sexvices.

B. Antitrust Effects (13) FP&L possesses ol over monopolistic contxol ove the provision oz "ransmission ran services in southern and eastern Fior'a.

(14) Section X of the Settlement Agreement -is so written as to afford FP&L unreasonable opportunities- -to construe -.:

the provisions contained therein in a way. Mat would .defeat. their procompetitive objective, thereby maintaining FP &L' monopoly.

power over transmission services.

(15) The unreasonable and unfair discrimination between Qualifying Facilities and other generators of electricity described in paragraph (13.) above, would place Petitioners and other similarly situated entities at a competitive disadvantage.

(16) Subsect'on Z(a) of the Settlement Agreement, particularly conditions (3), (4), and (5), give FP &L excessive discretionary latitude in denying Petitioners and other similarly situated entities access to FP&L's transmission grid, thereby P

enabling FP&L to prevent Petitioners and others from selling their generated electricity to municipal utilities.

(17) The effects described in paragraphs (13) through (16) above are more fully analyzed in the accompanying brief.

They support Petitioners'ontention that implementation of the Settlement Agreement as written would significantly change FP&L's activities and proposed activities within the meaning of Section 105c of the Atomic Energy Act, as amended, 42 U.S.C. 5 2135 (c) (2), requiring the Commission to hold an antitrust hearing at this time. These new anticompetitive activities are particularly invidious since, once approved,, they will appear to have the sanction of NRC and the Justice Department. That fact coupled

with the superficial impetus to competition afforded by the': --.

Section X transmission provisions make it critical that-the-.;

position of Qualifying Facilities under PKUA.-be taken into account before the operating license issues.

NATURE OF PETITIONERS'IGHTS UNDER TM ATONIC ENERGY ACT TO INTERVENE (18) Petitioners are entitled to intervene in th's proceeding pursuant to Sections 105c and 189 of the Atomic Energy Act, as amended, 42 U.S.C. 55 2135(c), 2239. Section .189 states that "the Comm'ssion shall grant a hearing upon the request of any person whose interest may be affected by the proceeding, and shall admit any such person as a party to such proceeding." As described in paragraphs (8) to (17) above, Petitioners'UR?A rights and their competitive interests w'l be directly impacted by the issuance of an operating facil'y license containing, or subject to, the conditions of the Sett'e-ment Agreement. Therefore, they should be permitted to inter-vene and be heard to protect those rights and interests and the

• /

rights and interests of other similarly situated entities.

(19) Section 105c of the Atomic Energy Act provides an additional statutory basis for intervening and seeking a

~/ The staff of the Florida Public Service Commission has estimated that the Florida capacity for Qualifying Facility projects approaches 2700 megawatts.

l hearing on the anti trus t issues issues. . That section requires that an antitrust review be .4 e ld aat the operat'ng license stage if i

"s'gnificant changes in 'n thee licensee's ice activities or proposed activatzes have occurred subsequen t too the previous revaew y ~ ~

th e Attorney General and the the construction permit for thee faci

~

t: he Commission ... in conn connection wit.

facil'ty." The signifacan

~ ~

changes t brought about b y FPSL's intended amplemmentation of the Settlement Agreement andd thear their eeffects e upon Petitioners, as described in paragzap hs (13) to (177) a b ove ve and in the accompany-ing bbrae , giive Petitioners the rig ri ht- to int:ervene for the purpose of es i ta blishing the need for, and an participating in, an a second antitrus t: rreview under Section 105c.

S OF PROCEEDING AS TO RFICH PETITIONERS NISH TO INTERVENE (20) Petitioners seek ek to anintervene erv in the instant i

p roceeding for thee limited purpose of assas tingi the Licensing Board and th e Commission to evaluate uate fully fu y the consequences of implementing Secti'on X of the propose se Settlement sed e Agreement.nt. In p articu 1 ar, Petitioners wish to Je heard ear as to Section Z '

tiall detrimental impactt on the PUP>A rights and comp-e-titive interests o f Petitioners e ther sima ar y and othe Qualifying Facilities.

{21) Petitioners do not believe e iev that a trial-type antitrust" hearing h ~ing is necessari 1 y req re uired here. They are

10 prepared to accept the record as developed to date, and would not ask that it be reopened. Petitioners seek. only to supple-ment that. record, in any manner the Commission deems appropriate, to present their evidence to the Commission and -to argue their.

position based upon the supplemented record.. Petitioners'.

evidence will include PP&L's answer to,,the letter marked as B, which they have requested by April 17. 'ppendix (22) As the accompanying brief 'points out, Petitioners'URPA rights are interrelated with their'ntitrust concerns.

The PURPA r'hts, however, can be. separately considered and protected without an antitrust hearing, if the Commission is so inclined. One of Petitioners'ontributions as intervenors will be to demonstrate the inconsistencies between the Settlement Agreement and the rights afforded by PURPA.

(23) Since Petitioners'nterest in the proceeding is limited to Section X of the Agreement, their rignts could be easily and efficiently protected without undue delay in the

'ssuance of ZP&L's operating license.

11-CONCLUSXON This petition to intervene should be granted, and an order allowing intervention should be entered. A limited anti-N

• trust hearing, as described above, also should be ordered.

Respectfully submitted, George R. Kuci Narc Gary E3.len . Sward Arent, Pox, Kintner, Plotkin 6 Kahn 1815 H Street, N.N.

washington, D. C. 20006 (202) 857-6000 April 7, 3.983. Counsel for Petitioners