ML18227B525

Turkey Point, Units 3 & 4 and St. Lucie Plant, Units 1 & 2 - Joint Petition of Florida Cities for Leave to Intervene Out of Time; Petition to Intervene; and Request for Hearing

ML18227B525
Person / Time
Site:	Saint Lucie, Turkey Point
Issue date:	08/06/1976
From:	Jablon R Florida Cities, Spiegel & McDiarmid
To:	NRC/OCM
References
Download: ML18227B525 (105)

Text

TABLE OF CONTENTS I THE COMMISS ION SHOULD GRANT CITIES 'ETITION FOR LATE INTERVENTION IN ST. LUCIE UNIT NO. 2 ... 14 A. Good Cause Exists for Granting the Peti-tion to Intervene 16 B. The Atomic Energy Act Requires that Late Intervention Be Granted under the Circum-stances of This Application 24 1; The.'Nuclear Regulatory Commission Has a Responsibility and Obligation, before Issuing a Construction Permit, to Determine Whether Florida Power

& Light Company's License Will Be Adverse to Antitrust Laws or Policy 24

2. "Significant changes in the licensee's activities . . . [that] have occurred subsequent to the previous review" Make Mandatory an Antitrust Review and Re-

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quire that Petitioners Be Granted Inter-vention and that Issues Raised Be Re-solved Now ~ 0 ~ 0 0 ~ 0 I ~ 0 0 I ~ ~ 31 C. Changed Circumstances Legally Warrant the Grant of Cities'etition for Leave to Intervene ~ ~ \ I ~ I ~ ~ ~ 0 ~ ~ ~ ~ ~ 31 D. Equitable Circumstances Favor Granting Cities'etition for Leave to Intervene and Request for Hearing . . . . . . . . . . . . 37

1. The Equities Involved in Their Totality Favor Grant of Cities'etition to Intervene 37 (a) The availability of other means whereby petitioners 'nterests will be protected 37 (b) The extent to which may reasonably be ex-petitioners'articipation pected to assist in developing a sound record ~ ~ 0 ~ 0 \ 0 0 ~ ~ ~ 0 0 0 41

(c) The extent to which will be represented petitioners'nterest by.

existing parties 41 (d) "The extent to which will broaden the, petitioners'articipation issues or delay the proceeding" . . . 42 "

IX. CITIES SHOULD BE GE&2ITED INTERVENTION AND A HEARING SHOULD BE HELD TO DETERMINE WHETHER FLORIDA POWER 6 LIGHT COMPANY'S LICENSES FOR ST. LUCIE UNIT NO. 1 AND TURKEY POINT UNITS NO. 3 AND NO. 4 SHOULD BE REVOKED OR MODIFIED TO REMEDY THE EFFECTS OF FLORIDA POWER G LIGHT COMPANY'S ANTICOMPETITIVE ACTIVITIES '3 III XN THE EVENT THAT THE COMMISSION DETERMINES FOR ANY REASON NOT TO GRANT CITIES'ETITION AS TO ANY OF THE UNITS HERE IiiVOLVED, IT SHOULD REQUEST XiNVESTIGATION OF FLORIDA POWER

& LIGHT COMPANY'S ACTIVITIES BY THE FEDERAL TRADE COMMISSION ~ ~ 0 ~ ~ ~ ~ ~ ~ I ~ I ~ 48 IV. FLORIDA POWER 6 LIGHT COMPANY HAS VIOLATED ANTITRUST LAW AND POLICY MANDATING AN ANTITRUST REVIEW FOR ST. LUCIE UNITS NO.

TURKEY POINT UNITS NO..3 AND NO. 4 l AND NO. 2 AND 49 A. Introductory Statement and Request for elle f R 1 ~ 0 0 ~ ~ 0 ~ t ~ 0 ~ 0 ~ 0 ~ ~ 49 B. The Situation Inconsistent 54

1. Nuclear Monopoly 55

2. Past Acquisition Attempts 62

3. Territorial Agreements 67

4. Refusals to Deal .. 70

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CITATIONS:

Alabama G Vicksburg Railway Co. v.

Mississippi Railroad Commission, 203 U. S- 496 (1906) 80 Albertson v. PCC, 182 F.2d 397 (D.C.Cir., 1950) 40 Arlington Coalition on Transportation

v. Volpe, 458 F.2d 1323 (4th Cir.,

1972), cert. denied, 409 U.S. 1000 (1972)

Associated Industries v. Ickes, 134 F.2d 694 (2d Cir., 1943) 37, 41 Associated Press v. United States, 326 U.S. 1 (1945) 81 Brougham v. Blanton Manufacturing Co.,

294 U.S. 495 (1919) 32 California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508 (1972) 82 Cascade Natural Gas Corp. v. El Paso Natural Gas Co., 386 U.S. 129 (1967) 35 Cities of Statesville v. AEC, 441 F.2d 962 (D.C.Cir., 1969) 32, 46 Citizens for Allegan County, Inc. v..

FPC, 414 F.2d 1125 (D.C.Cir., 1969) 78 City of Ft. Pierce, et al. v. Florida Gas Transmission Co., Case No. 71-1494-Civ; CA (S.D.Fla.)

'ity(D.C. Cir.,

of Pittsburgh v. FPC, 237 F.2d 741 1956) 37, 41 Eastern Railroad Conference v. Noerr Motor Fre'ight, Inc., 365 U.S. 127 (1961) 81-82 Environmental Defense Fund v. TVA, 468 P.2d, 1164 (6th Cir., 1972)

PPC v. Florida Power & Light Co., 404 U.S.

453 (1972) 66

FPC v. Idaho Power Corp., 344 U.S. 17 (1952) 24, 36, 79 FPC v. Sunray DX Oil Co., 391 U.S. 9 (1968)

Gainesville Utilities Dept. v. Florida Power Corp., 402 U.S. 515 (1971) 22 Gainesville Utilities Dept. and City of Gainesville, Florida v. Florida Power 6 Light Co., Case No. 68-305-Civ. J. T.

(N.D.Fla.) 64, 69 Gardner v. Panama Railroad Co., 342 U.S. 29 (1951) 35 George R. Nhitten, Jr., Inc. v. Paddock Pool Builders, Inc., 424 F.2d 25 (1st Cir., 1970), cert. denied, 400 U.S. 850 (1970) 82 Gulf States Utilities Co. v.

I FPC, 411 U.S. 747 (1973) 58, 78 Hecht v. Pro-Football, Inc., 444 F.2d 931 {D.C.Cir., 1971), cert. denied, 404 U.S. 1047 (1972)

Hodgson v. United Nine Norkers of America, 473 F.2d 118 (D.C.Cir., 1972) 32 Holmbezg v. Armbrecht, 327 U. S. 392 (1946)

Homebuilding and Loan Association v. Blaisdell, 290 U.S. 398 (1934)

International Business Machines v. United I States, 298 U.S. 131 (1936) 58 Iowa Student, Public Interest Research Group

{ISPIRG) v. Callaway, 379 F.Supp.

1974) 714'D.Iowa, Isbrandtsen Co., Inc. v. United States, 96 F.Supp 883 (S.D.N.Y., 1951), a'ff'd ~b an ~euall divided court, A/SJ Ludwig Mow>.nckels Rederi v. Isbrandtsen Co., Inc.,

342 U.S. 950 (1952) 30

'7 Lambros v. Young, 145 F.2d 341 (D.C.Cir.,

1945) 40 Life of Land v. Volpe, 363'.Supp. 1171 (D.H aw ,.1972), aff'd, 486 F 2d 460 (9th Cir., 1972), cert .denied, 416 U.S. 961 (1972) 36 Lorain Journal Co. v. United States, 342 U.S. 143 (1951) 81 Michigan Consolidated Gas Co. v. FPC, 283 F.2d 204 (D.C.Cir., 1960)

Missouri Pacific Railway Co. v. Larabee Flour Mills Co., 211 U.S. 612 {1909) 80 Munn v. illinois, 94 U.S. 113 (1876) 36, 79 NLRB v. Virginia Electric 6 Power Co.,

314 U.S. 469 (1941) 82 North Carolina Public Service Co. v.

Southern Power Co., 282 Fed. 837 (4th Cir., 1922), ~aeal dismissed, 263 U.S.

508 {1924) 80 Northern Natural Gas Co. v. FPC, 399 F.2d 953 (D.C.Cir., 1968)

Horthside Tenants'ights Coalition v.

Volpe, 346 F. Supp. 244 (D.Wise., 1972)

Office of Communication of the United Church of Christ v. 'FCC, 425 F.2d 543 (D.C.Cir.,

1969) .30

.Otter Tail Power Co. v. United States, 410 U;S. 366 (1973)

Postal Cable Telegraph Co. v. Cumberland Telephone G Telegraph Co., 177 Fed 726 (M.D.Tenn., 1910) 80 Public Service Commission of State of New York v; PPC, 329 F.2d 242 (D.C.Cir., 1964), cert;-

denied sub nom. Prado Oil Co. v. Public

~

Service Commission, 377 U. S. 963 {1964) 33

Sacramento Coca-Cola Bottling Co. v.

Chauffeurs Local 150, 440 F.2d 1096 (9th Cir ., 1971), cert .'deb'ied., 404 U.S. '826 (1971) 82 Salisbury & Spencer Railway Co. v.

Southern Power Co., 180 N.C. 422, 105 S.E. 28 (S.Ct., 1920) 80 Scenic Hudson Preservation Conference v.. FPC, 354 E. 2d 608 (2d Cir , .19'65), cert..denied sub nom. Consolidated Edison. Co of .New York v. Scenic Hudson. Preservation Con-ference, 384 U.S. 941 (1966) . 23-24, 26-28 Silver v. New York'tock Exchange, 373 U.S. 341 (1963) 81 Texas 6 Pacific Railway Co. v. ICC, 162 U. S. 197 (1896) 80 Udall v. FPC, 387 U.S. 428 (1967) 29-30 Union Carbide and Carbon Corp. v.

Nisley, .300 F.2d 561 (10th Cir , 1962),

cert di.smissed ~er stipulation sub'om.

'Piade v. Union Carbide and Carbon Corp., 371 U.S. 801 (1962) 58 Union Pacific Railway Co. v. Goodridge, 149 U.S. 680 (1893) 79 United Mine Norkers of America v. Pennington, 381 U.S. 657 (1965) 82 United States v. Crescent Amusement Co., 323 U. S. 173 (1944) 78 United States v. El Paso Natural Gas Co.,

376 U.S. 651 (1963) 78 United States v. Firestone Tire 6 Rubber Co.,

372 F.Supp. 431 (D.Ohio, 1974) 36 United States v. Griffith, 334 U.S. 100 (1948) '1 United States v. Pennsalt Chemicals Corp.,

262 F.Supp. 101 (D.Penn., 1967) 36

United States v. Terminal Railroad Association, 244 U.S. 383 (1912) 81 Nestern Union Telegraph Co. v. Call Publishing Co., 181 U.S. 92 (1901) 80 Woods Exploration & Production Co. v. Aluminum Co. of America, 438 F.2d 1286 (5th Cir.,

1971), cert. beni.ed, 404 U. S. 1'047 (1972) 82 ADMINISTRATIVE DECISIONS:

City of Clewiston, Fla. v. Florida Power

& Light Co., FPC Docket No. E-7243 "Order Terminating Proceeding" (6 July 1966) 66 Consumers Power Co. (Midland Units 1 and 2),

NRC Docket, Nos. 50-329A and 50-330A NRCI 75/7 52 Florida Power & Light Co., FPC Docket-No. ER76-211 53 Florida Power & Light Co., 37 FPC 544 (1967) 65-66, 73-74 Florida Power & Light Co., FPC Docket.

No. E-7210 72-73 Florida Power Corp. (Crystal River Unit No. 3), NRC Docket No. 50-302A 17, 69 Kansas Gas & Electric Co. & Kansas City Power & Light Co., NRC Docket No.

50-482A, NRCI 75/6 19, 24-25 STATUTES:

Atomic'nergy Act, Section 1 42 U.S.C. 52011 3, 13, 45, 82 Atomic Energy Act, Section 103, 42 U.S.C. 52133

Atomic Energy Act, Section 104, 42 U.S.C. 52134 2g 10I 45 46 Atomic Energy Act, Section 105 42 U.S.C. 52135 Atomic Energy Act, Section 105 {a) 42 'U. S.C. 52135 (a) 3, 21, 28, 32, 39, 40, 48, 49, 85 Atomic Energy Act, Section 105 (c),

42 U.S.C. 52135(c) 2, 14, 15, 18, 31, 37, 39, 85 Atomic Energy Act, Section 183, 42 U.S.C. 52233 39-40, 46 Atomic Energy Act, Section 185, 42 U.S.C. g2235 2, 39-40, 46 Atomic Energy Act, Section 186, 42 U.S.C. 52236 2r 32'9 40r 46, 83 Atomic Energy Act, Section 187 42 U.S.C. 52237 2, 32-33, 39-40 g 46 Atomic Energy Act, Section 188, 42 U.S.C. 52238 2, 39-40 Clayton Act, 15 U.S.C. 52.8 78 Federal Power Act, Section 7(b),

16 U. S.C. 5800 {b) 29 Federal Power Act, Section 201 16 U.S.C. 5824 73 Federal Power Act, Section 202, 16 U.S.C. 5824a 65 Pederal Trade Commission Act, 15 U.S.C. 51 et seie. 40 Federal Trade Commission Act, 15 U.S.C. 545 (1970) 48

Natural Gas Act, 15 U.S.C. 5717 33 Sherman Antitrust Act, 15 U.S.C. ggl, 2 78 Nuclear Regulatory Commission Regulations under the Atomic Energy Act, Section 2.714, 10 CFR 42 (1976) 15, 37 Nuclear Regulatory Commission Regulations under the Atomic Energy Act, 10 CFR 50.54 (e), (g), (h) 47 Nuclear Regulatory Commission Regulations under the Atomic Energy Act, 10 CFR 50.100 OTHER AUTHORXTIES:

~industr , Report to United States Atomic Energy Commission and Department of Justice Arthur D. Little, December 1968

UNITED STATES OF A~RICA BEFORE THE NUCLEAR REGULATORY COMMISSION Florida Power 6 Light Company ) Docket: Nos. 50-335A (St. Lucie Plant, Units No. 1 ) 50-389A and No. 2) )

)

Florida Power 6 Light Company ) Docket Nos. 50-250A (Turkey Point Plant,, Unit;s No. ) 50-251A 3 and No. 4) )

JOINT PETITION OF FLORIDA CITIES FOR LEAVE TO INTERVENE OUT OF TIME; PETITION TO INTERVENE; AND REQUEST FOR HEARING This petition is filed on behalf of the Fort Pierce-Utilities Authority of the City of Fort Pierce ("Fort Pierce" ),

the Gainesville-Alachua County Regional Electric Nater and Sewer Utilities ("Gainesville"), the Lake North Utilities Authority ("Lake North" ), the Utilities Commission of the City of New Smyrna Beach ("New Smyrna Beach" ), the Orlando Utilities Commission (" Orlando" ), the Sebring Utilities Commission ("Se-bring"), and the Cities of Alachua, Bartow, Bushnell, Chatta-hoochee, Daytona Beach, Fort Meade, ~ey Nest, Lake Helen, Lees-burg, Mount Dora, Newberry, Quincy, St. Cloud, Tallahassee and Williston, Florida, and the Florida Municipal Utilities Associa-tion ("FRUA").(hereinafter referred to collectively as "Cities" ).

Nith the exception of FMUA, they each generate and/or distribute electricity for the benefit of their citizens and ratepayers. 1/

1/ Daytona Beach is considering distributing electricity. Its citizens are now served at retail by Florida Power G Light Company.

(cont'd)

Pursuant to Section 2.714.of the Commission's regula-tions, Cities seek late intervention in'l'orida Power 6 Light Co.'St, Lucie Pl'ant, Unit'o'.'), NRC Docket No. 50-389A.

They seek'ntitrust, review and request a hearing to determine whether under the Atomic Energy Act an unconditioned. construc-tion permit can lawfully issue and, further, determination of such license conditions as should be imposed pursuant, to Sec-tion 105 (c) (6) .. o f the Act, 42. U. S.C. 52135 (c) (6), or as may be otherwise appropriate. The. specific relief requested is set forth infra.

Cities also seek Commission review of the operating licenses issued to Florida Power & Light Company for its Turkey Point Units No. 3 and No. 4 and St. Lucie Unit No. 1, to d'etermine whether the Commission has "impose[d] the mini-mum..amount of...

C regulations and terms of license as will permit the Commission to fulfillits obligations under [the Atomic Energy Act]," as is required by Section 104(b) of the Act, 42 U.S.C.. 52134(b). Cities seek a hearing under Sections 104, 185, 186, 187 and 188 of the Act, 42 U.S.C. 552134, 2235, 2236, 2237, 2238, to determine whether and under what terms and c'onditions the operating licenses for the above-mentioned (1/ cont'd) Daytona Beach seeks to preserve its right to undertake such distribution and its right to nondiscriminatory access to nuclear power, as well as the other relief requested herein.

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plants should be revoked or modified.

Specifically, as is cutlinecl i'nfra, Cities believe that, the operation of these plants, absent appropriate condi-tions, contravenes the Atomic Energy Act and the policies of the antitrust laws cited in Section 105(a), 42 U.S.C. 52135(a).

Cities seek the imposition of conditions to assure that future operations of these plants will be consistent with the policy of the Atomic Energy Act as set forth in Section 1, 42 U.S.C.

52011, and elsewhere.

The names and addresses of the persons to whom all communications concerning this petition should be addressed are 'as follows:

Robert. A. Jablon, Esquire Spiegel 6 NcDairmid 2600 Virginia Avenue, N.W.

Washington, D.C. 20037 Nr. Robert E. Bathen Nr. Fred Saf fer R. W. Beck 6 Associates P.O. Box 6817 Orlando, Florida 32803 Dr. John W. Wilson Wilson & Associates 2600 Virginia Avenue, N.W.

'Washington, D.C. 20037 Charles R. P. Brown, Esquire Attorney for the Fort Pierce Utilities Authority P.O. Box 1418 Fort Pierce, Florida 33450 Osee R. Pagan, Esquire Attorney 'ity P.O. Box 1307 Gainesville, Florida 32601

Mr. Clifford C. Blaisdell, Jr.

Utilities Director Lake Worth Utilities Authority 114 College Street Lake Worth, Florida 33460 Mr. John R. Kelly Director of Utilities New Smyrna Beach Utilities Commission P.O. Box 519 New Smyrna Beach, Florida 32069

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Thomas Gurney, Sr., Esquire 203 North Magnolia Avenue Orlando, Florida 32802 Mr. James H. Phillips General Manager Sebring Utilities Commission 213 South Commerce Avenue Sebring, Florida 33870 Mr. George Stevens Acting City Manager P.O. Box 8 Alachua, Florida 32616 Mr. A. W. Kelly Superintendent of Utilities P.O. Dra~er 1069 Bartow, Florida 33830 Joseph Minotti, Esquire City Attorney P.O. Box 395 Bushnell, Florida 33515 Mr. Clyde Hopkins City Superintendent P.O. Drawer 188 Chattahoochee, Florida '2324 John C. Chew, Esquixe City Attorney Legal Department P.O. Box 551 Daytona Beach, Florida

Mr. Everett B. Howe City Manager P.O. Box 856 Fort Neade, Florida 33841 Mr. John T. Daughtry Manager Key Nest Utility Board 535 Eaton Street Key Nest., Florida 33040 Honorable Erston Royal Mayor of Lake Helen P.O. Box 423.

Lake Helen, Florida 32744 Mr. Calvin E. Glidewell City Manager P.O. Box 630 Leesburg, Florida 32748 Mr. Cecil Barks Director of Utilities P.O. Box 176 Mount Dora, Florida 32757 Nr. F. N. Caldwell Director of Utilities P.O. Box 368 Newberry, Florida 32669 Mr. William F. Johnson City Manager P.O. Drawer 941 Quincy, Florida 32351 Nr. Rodney Newton Director of Utilities Electric 6 Water Department 824 New York St,. Cloud, Florida 32769 Mr. C. R. Beverly President City Council P.O. Dra~er 160 Williston, Florida 32696

C. H. Corn, Superintendent Electric Production Department Arvah B. Hopkins Generating Station Route 4, Box 450 Tallahassee, Florida 32301

,Mr. Mac H. Cunningham Executive Director Florida Municipal Utilities Association P.O. Box 2402 Lakeland, Florida 33803 Fort Pierce, Gainesville, Key West, Lake Worth,'ew Smyrna Beach, Orlando, Sebring, St. Cloud and Tallahassee own and operate their own generating facilities, and, except, for New Smyrna Beach and Sebring, meet their entire load from that generation. In 1975, these cities'ombined generation totaled approximately 1,616 megawatts. The remaining cities purchase their full requirements under wholesale for resale contracts with Florida Power Corporation (" Florida Power" ).

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Fort Pierce, which is interconnected with Florida P

Power 6 Light Company and the City of Vero Beach,. served 17,000 meters in 1975. Its sales during the year amounted to 283,000 mwh, with a net. system capacity of 66 mw; Gainesville served 35,000 meters in 1975. It's capacity was 220 mw and its,sales totaled 636,000 mwh. Gainesyille is interconnected with Florida Power Corporation.

Key West served 13,342 metered customers in 1975, with capacity equal to approximately 81.5 mw. Key West's,total 1975 sales were about 334,200 mwh.

Lake Worth had capacity equal to 81 mw in 1975. It served 20,000 meters with total sales equal to 219,000 mwh.

As are Fort .Pierce, New Smyrna Beach and Orlando, Lake Worth is interconnected with Florida Power 6 Light Company.

New Smyrna'each served 9,000 meters in 1975. The system has generating capacity of 25 mw. In 1975, it, had total sales of 110,000 mwh, 52,000 of .it self-generated, the remaining 58,000 purchased under a wholesale for resale con-tract with FPGL for a segregated part of, its system. New Smyrna Beach also has an interconnection and interchange arrangement with FPGL that will become effective over a parallel intertie with that Company when facilities now under construction are completed.

The largest of the cities is Orlando, with generating capacity in 1975 equal to 746 mw. Its total generation in that year equaled 1,866,270 mwh. Its service area includes Orange County and nearly 84,000 metered. customers. Located between Florida Power and FPGL service areas, Orlando is interconnected with both those utilities.

Sebring served 4,943 meters in 1975. The Utilities Com-mission's 1975 capacity was 24.5 nw; its total sales equalled 69,300 mwh, of which 30,000 mwh was purchased from Florida Power Corporation under one of several interchange schedules in effect under the City's interconnection and interchange agreement with that Company. I St. Cloud, with 7,273 metered customers and generating capacity of 18.76 mw in 1975, is the smallest of the generating

systems. Its total sales amounted to 60,200 mwh in 1975.

Tallahassee, another of the larger systems, had capacity I

in 1975 of 278 mw. It served 40,000 meters, and had total sales of about 919,668 mwh. It is interconnected with Florida Power and exchanges firm po~er and other interchange power and energy with that Company.

During the calendar year ending 31 December 1975, the cl.tz.es o f Alachua I Bartow, Bushnell, Chattahoochee, Fort Meade, Lake Helen, Leesburg, Mount Dora, Newberry, Quincy and Nillis-ton purchased a total of 504,800 mwh from Florida Power Corpora-tion.. The eleven catches'otal non coincident peak demand during the period 1 October 1974 through 30 Septenher. 1975 was nearly 119 mw.

Florida Municipal Utilities Association was established to assist in the solution of problems encountered by municipal and other electric systems, to work 'through cooperative effort for the general improvement of member systems, to encourage cooperation among such systems and to promote the exchange of ideas toward the efficient; operation and management of such systems. Its members include the cities of 'Alachua, Bartow, Blountstown, Bushnell, Chattahoochee, Clewiston, Fort Meade, Port Pierce, Gainesville, Green Cove Springs, Havana, Homestea s ead Jacksonville, Jacksonville Beach, Key Nest, Kissimmee, Lake Helen, Lakeland, Lake North, Leesburg, Moore Haven, Mount Dora, Newberry, New Smyrna Beach, Ocala, Quincy, St. Cloud, Sebring, Starke, Tallahassee and Nillist.on, Florida. On behalf of its members, FMUA requests intervention and hearing in these pro-ceedings, in order to establish the cit:ies'ights to access 8

to FP&L's nuclear generation and attendant relief. QUA's interest in the outcome of these proceedings is clear. Each of its member systems owns and operates a municipal electric utility distribution system within and around its boundaries.

Xts members have.a clear interest in establishing a competi-tive market for nuclear power supply and wholesale bulk power supply services.

Florida Power a Light Company was incorporated in 1925 and has, since that time, bein engaged in the electric utility business of generating, transmitting, distributing and selling electric energy. Xt operates in 35 counties in the State of Florida, serving an area, of about 27,650 square miles with an estimated population of 4,200,000. At, the end of 1975, the Company was serving approximately 1,772,000 meters.

Florida Power 6 Light Company's dominant position in Florida is set forth in the Department of Justice's "ad-vice letter" of 14 November 1973 {pp. 2-3) concerning FPGL's application for a construction permit for its St. Lucie Plant, Unit No. 2, NRC Docket No. 50-389A:

"Applicant is by far the largest electric utility in the State of Florida; it of the statewide electric load.

serves approximately half HeadcIuartered in Miami, its area of operation includes most of southern Florida and extends= up the east coast to the Georgia border; As of the end of 1972, it provided retail=

electric power to 574 communities with over 1,500,000

customers. Its total energy sales for 1972 were 28,927,808 megawatt hours. Applicant's summer 1972 peak load was 6,011 megawatts; its dependable generat-ing capacity at that time was 6,585 megawatts--over 70 percent of the generation in the area. Its system of generating stations is integrated by over 3,400 miles of high-voltage transmission lines, approxi-mately 90 percent of the high-voltage transmission in the area including the 230-kilowatt main trans-mission grid for southern Florida and the east coast.

"Applicant calls itself 'the nation's fastest grow-ing electric utility.'lorida's rapid growth has been concentrated in the area in which it serves; and for the past 'several years, the Applicant has added more 'new customers than any other electric utility i'n the'. United States.megawatts--over

'Applicant's projected peak load for 1980 is 14,475 twice its 1972 load and generating capacity is planned to increase more than 10,000 megawatts to meet that load.

"Applicant's system is directly interconnected and coordinated to some degree with most of the other elec-tric generating systems in Florida; Florida Power Corporation, Tampa Electric Company, and the municipal systems of Jacksonville, Orlando, Fort Pierce,'ero Beach and Lake North. Applicant coordinates opera-tions with still other systems through the activities of the Florida Operating Committee. Some of these co-ordinating arrangements have been entered into only recently.

In 1974, FPGL's net generation had increased to 35,622,866 mwh, with a peak load of 7,235 mw.

FPSL presently operates Turkey Point Units No. 3 and No.

4 pursuant to operating licenses issued 19 July 1972 and 10 April 1973, respectively. It is now commencing operations of St. Lucie Plant, Unit No. 1, pursuant to an operating li-cense issued 1 March 1976. All licenses were issued under Sect'ion 104(b), 42 U.S.C. 52134.

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FP GL has filed a construe ion permit application for St, Lucie Unit No. 2 under Section 103, 42 U.S.C. 52133, which was docketed 4 September 1973. The construction per-mit sought has not yet. issued.

The nameplate or proposed capacity for each of the above units is as follows: Turkey Point, Unit No. 3 728 mw; Turkey Point, Unit No. 4 728 mw; St. Lucie, Unit No. 1 810 mw; St. Lucie, Unit No. 2, 810 mw.'/

FPGL has also filed an application to construct two additional nuclear units, 'for convenience referred to herein as the South Dade units. A hearing has been ordered concexn-ing these units in Flox'id'a Powe'xi'ght Co., NRC Docket No.

P-636-A. These units, planned as an integrated part of FPGL's coordinated generation, are intended for commercial operation in 1983 and 1985, with a planned capacity of 1,140 mw each. 2/

Because of the marked cost. differences between nuclear generated powex and the alternatives that are available to Cities, FPGL is able to'se .the economic advantages-it gains 1/ Source:

Power

'lorida Plants," Ed. No. 8.

Power 6'i't'o., "Commercial Nuclear 2/ Cities have informal notice that FPGL is considering canceling or postponing the construction of the South Dade units. Were this to occur, FPGL would have the cost and other advantages of its four nuclear units in operation and planned, while Cities would be'holly excluded from those advantages. See note 1, on the following page.

I from a virtual nuclear monopoly Ql to attempt to force at least some independent systems from business and to adversely affect the economics of all cities'perations. FP&L has offered to buy at least one independent syst: em, Vero Beach. Xt is ap-parently considering offers to purchase other systems.

FPGL has refused to enter into an integrated power pool or to make generally available transmission services, thereby adversely affecting power supply alternatives and mar-kets available to Cities. Zn some instances, it has refused

'to sell wholesale power to Cities or has discouraged such transactions. lt has lobbied against state legislation that would facilitate the financing of joint ventures by Cities.

At.'the same time FPGL is attempting to acquire smaller systems, it is using its power and control over facilities to limit the ability of Cities .to compete in wholesale and retail power markets.

Absent corrective action, the operations of Turkey Point Units No. 3 and No. 4 and St Lucie Unit, No. 1, as well as the 1/ The only non-FPGL nuclear plant in Florida in existence, planned or under construction, is Florida Power Corporation's Crystal River Plant, Unit No. 3, which is. presently under con-struction. Alachua, Bushnell, Gainesville, Leesburg, with New Smyrna Beach, Orlando, Sebring and Tallahassee (along Ocala, Kissimmee and Seminole Electric Cooperative, Inc.) share a ten percent undivided interest in that unit.

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planned operations of St. Lucie Unit. No. 2 and the South Dade units, will provide a means by which FPaL can extend its existing monopoly position.

The purpose of. the Atomic Energy Act is to assure that the use of nuclear energy provides "the maximum contribution to the general welfare . . . , increase[s] the standard of living, and strengthen[s] free competition and private enter-prise." Atomic Energy Act, Section 1, 42 U.S.C. 52011. Here, the very existence of electric systems is threatened by FP&L's use of nuclear power. The Nuclear Regulatory Commission clearly is obligated to prevent use of its licenses to violate both

, the principles of its own authorizing statute and ho'se under-lying the antitrust laws. Therefore, Cities seek corrective relief. 'n view of the factual situation, prompt action is essential. By the terms of Florida Power 6 Light Company's offer to purchase the Vero Beach electric system, the Ca.ty zs required to hold an election no late" than 30 September 1976 to provide for a change in the 'city charter that would allow for a sale of the system.

In view of the importance of nuclear development and costs associated with delay, and in view of the fact that the plants at issue are already in operation, or under construc-tion, or planned to be under construction shortly-, Cities do not seek a delay in actual construction or operation of th Turkey Point No. 3 and No. 4 or St. Lucie .No. 1 and No. 2 nuc-lear units. However, interim relief is warranted (in the

, nature of a preliminary injunction), pending hearing and final order. Such interim relief would prevent. use of existing generation as part of an anticompetitive scheme, pending the outcome of proceedings. The request for such relief will I

be filed separately.

I. THE COMMISSION SHOULD GRANT CITIES'ETITION FOR LATE INTERVENTION IN ST e LUCIE UNIT NO e 2 St. Lucie Unit No. 2 has not yet received its initial construction permit. Since the permit was applied for subse-quent to the passage of the 1970 amendment.s to the Atomic Energy Act, antitrust review is required pursuant to Section 105{c) {1) and (2), 42 U.S.C. 552135(c) (1), 2135(c) (2).

On or about 14 November 1973, the Commission issued a notice of its receipt of the A'ttorney General's advice letter.

The Department of Justice concluded (p,. 7):

.'[C]onstruction and operation of St. Lucie No. 2, and the sale of power therefrom to meet Applicant's load growth and compete with the smaller systems in its area could.'reate or maintain a situa-tion inconsistent with the antitrust laws if access to,nuclear generation were denied those smaller sys-tems~

However, the Department of Justice concluded. further that, since Florida Power 6 Light Company was negotiating to provide other entities access to nuclear generation "and the probability [is] that part'ipation in St. Lucie Unit No. 2.

will be made available to certain of these. entities," the De-partment. need not. recommend a hearing. Zn so doing, the De-partment of Justice noted (ld., pp. 7-0):

that issuance of the construction permit for St. Lucie Unit. No. 2 is not contemplated until early in 1975,

..Pursuant to Section 2.714 of the Commission's regula-tions, 10 CFR 42 (1976), this petition +or late intervention should be granted for "good cause shown." Cities point out that an antitrust review would be mandated, in any event, before issuance of an operating license under Section 105(c)(2) of the Atomic Energy Act, 42 U.S.C. 52135(c)(2), since "significant changes in the 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

~ + S 15

permit for the facility-"

A. Good'ause'xists for Grant'in'g the'et'ition to Intervene Before issuing the advice letter, Department of Justice staff had met with FP&L and representatives of some of Cities, including Nes Smyrna Beach. As stated supra, the Department of Justice did not. recommend an antitrust hearing specifically in hopes that FP&L would agree to license conditions to protect systems requesting participation.

After the advice letter was issued, staff of the Nuc-lear Regulatory Commission met separately with FP&L and repre-sentatives of interveners. Following negotiations with staff,. \

FP&L agreed to license conditions that, among other things, bound FP&L to offer those systems that,had so requested "the opportunity to purchase, at licensee's costs, a reasonable ownership share . .' of the St. Lucie Plant, Unit No. 2," in-eluding transmission arrangements for that power. Letter of Mr.

John F. O'eary to Ben H. Fuqua, Esq., 25 February 1974.

Despite best efforts by New Smyrna Beach, agreement upon a reasonable ownership share has not yet been reached between New Smyrna Beach and FP&L. Furthermore, although the Company has committed itself in general terms to transmit power for New Smyrna Beach from its St. Lucie Unit No. 2 entitlement share to the Utilities Commission's facilities, FP&L has yet to agree either upon a basis whereby Hew Smyrna Beach can obtain an 16 .

ownership interest in transmission facilities, or upon a trans-mission rate or formula. Nor has the Company yet agreed upon a transmission arrangement for New Smyrna Beach's 0.5608 per-cent ownership interest in Florida Power Corporation's Crystal River nuclear generating Unit No, 3, licensed. in Florida Power Corporation (Cr stal River Unit No. 3), NRC Docket No. 50-302A.

Similarly, although the above-'referred to commitments for St. Lucie .Unit No. 2.provide that individual cooperatives "may determine to aggregate their entitlements... through a single representative," FP&L .has "refused even to discuss Seminole ' participation in the St. Lucie No. 2 unit and has insisted upon dealing individually with member coopera-

"ives, thereby making their participation unfeasible. Florida Power & Li ht.Co. (South Dade Plant), NRC Docket. No. P-636-A, "Petition to intervene and Bequest for Hearing" of Seminole Electric Cooperative, inc., and its member systems, pp. 17-18, and supporting affidavits filed therewith (14 Hay 1976),

The rationale underlying the Justice Department's ad-vice not to hold an antitrust review is vitiated by the cir-cumstances outlined above. Clearly New Smyrna Beach had good reason, based on negotiations being conducted with FPGL by the Department of Justice and Nuclear Regulatory Commission staff and on reliance upon the settlement agreement reached by the staff and resulting commitments from FP&L, to not involve it-self in litigation in 1973.

The St. Lucie Unit No, 2 construction permit has not yet issued. The Attorney General advised that absent approp-riate conditioning, granting such construction permit "could create or maintain a situation inconsistent with the antitrust laws . . ." Advice Letter, p. 7.

Under such circumstances, the Commission is lawfully obligated to "make a finding as to whether the 'activities un-der the license would create or maintain a situation inconsis-.

tent with the antitrust law'." Section 105(c)(5), 42 U.S.C, 52135(c)(5). Given PPGL's subseauent failure .to abide by its initial commitments, the Commission has no basis upon which to affirmatively find that the activities under the license would not create or maintain such situation inconsistent with the antitrust laws.

Clearly, granting New Smyrna Beach intervention and hear-ing,is justified and mandated. However, since the Department, of Justice's advice letter, PP&L has demonstrably failed to live up to its obligations under the Atomic Energy Act and the antitrust laws, and such failure equally supports granting in-tervention to the other petitioners herein, 1/

'lis warranted, To the extent. that intervention by any of petitioners herein intervention- should be granted all petitioners and

-complete antitrust review proceedings instituted, since the po-tential-delay and inconvenience factors militating against such review are made moot in granting intervention to New Smyrna Beach or. any other of petitioners. Xn any event, especially considering (cont'd) 18

The Orlando Utilities Commission was misled as to FP&L' intentions with regard to sharing nuclear generating capacity. During meetings in late 1972 and early 1973, Mr.

E. L. Bivens, Vice President of FP&L, told Orlando ". . . that capacity from the St. Lucie II nuclear project was needed by Florida Power and Light for their system and was not. available for sale to other utilities." Fl'orida Power' Light'o.'Nuclear Units), NRC Docket No. P-636-A, "Affidavit of Harry. C. Luff, Jr.,"

p. 4 (14 April 1976). These statements by FP&L representatives were made at Florida Coordinating Group meetings. Since the Florida Coordinating Group is composed of nearly all Florida generating entities, Mr. Bivens'tatements were public state-ments. Hhile unwilling to grant paiticipation in St. Lucie Unit No. 2, Mr. Bivens ". . . assured the other participants at the meetings of Florida Power and Light's willingness to share future generating capacity, both nuclear and non-nuclear."

Xbid.'. 1/

(1/ cont'd) the "fundamental national economic policy" repre-sented by the antitrust laws (Kan'sas'a's' Ele'ctri'c'o'. and Kansas Cit Powe'r& Li ht.'o., Docket. No. 50-482A, NRCI 75 6,

p. 559, 568), the large economic and public interests involved herein, and the fact tnat petitioners are not requesting a de-lay of construction of the plant, convenience factors should not justify. failure by the Commission to review consequential claims ..

1/ In an exchange of correspondence between Fort Pierce and FP&L, initiated by ort Pierce in a letter dated 24 October 1975, expressing the City's interest in particip'ating in FP&L's St; Lucie nuclear units, and culminating in a letter from Tracy Danese, Esq., Vice President, for Public Affairs for FP&L, on 19 December 1975, the Company made quite clear its position that it did not wish, nor did it intend, to share capacity in its St. Lucie nuclear units with other utilities.

While a settlement agreement, between FPGL and the smaller systems requesting participation in St. Lucie Unit No.

2 was never formalized, FPGL could have reasonably anticipated that smaller systems such as Orlando would forego litigation to'secure rights in a planned nuclear generating unit at the specific request of a dominant neighboring utility such as FPGL, in consideration of that company's promises of future cooperation. FPGL's subsequent failure to. meet its promises of future cooperation--which promises Orlando relied'pon in not intervening timely 1/ is itself good'ause for the Com-mission to- grant intervention, especially'where there is no basis for claiming FPGL's xights have vested,'/

1/ See Affidavit of Harry C. Luff, Jr.

2/ Implicit in FPRL's St. Lucie Unit No. 2 commitments is the implication that the Company would be receptive to sharing future nuclear capacity. The license commitments state:

"At a time when licensee plans for the next nuclear generating unit to be constructed after St. Lucie No.

2 has reached the stage of serious planning, but be-fore, firm decisions have been made as to the size and desired completion date of the proposed nuclear unit, licensee will notify all non-affiliated utility systems with peak loads smaller than licensee's, which serve either at. wholesale .ox at xetail .adjacent to areas served by Applicant that licensee plans to construct such nuc-

'ear unit."

FP&L has refused to grant participation in its proposed South Dade units to entities requesting such participation, stating, ". . . FPL has decided to proceed independently with development of the South Dade project and to utilize the pro-ject's electric generating .capability to meet our own system's (cont'd) 20

Two .events have .occurred. since the Department of Justice issued its 14 November 1973 advice letter. First, partially as a result of the OPEC oil boycott and subsequent OPEC-related oil price increases, prices for all fossil fuels have .skyrocketed and a severe sho'rtage or potentially severe shortage of some ossil fuels has developed.

Second, FP&L has engaged in acts contrary to the anti-trust laws specific'd in Section 105(a) of the Act,,42 U.S.C; 52135(a), including the attempted acquisition of competing utility systems; refusals to enter into an integrated state-wide power pool; active opposition to legislation which would allow joint ventures by smaller systems; and other practices which, taken together, limit the access of smaller systems to favorable power supply arrangements, or make potential or ac-tual power supply unduly expensive.

These allegations are discussed in more detail 'infra, and in supporting affidavits.'/ Xt must be stressed, however,

'(Ql cont'd) . energy needs." Letter addressed to Harry C. Luff, Jr., from Tracy Danese, Esq., Vice President for Public Affairs, dated 30 March 1976. As noted sup'ra, FPGL has recently indi-cated.that uncertainties in load growth may make construction of the South Dade units unnecessary at this time.

1/ Affidavits of Robert E. Bathen, Osee.R. Fagen, Esq., Robert A. Jablon, Esq., Harry C. Luff, Jr:, and John W. Wilson, sub-mitted in Docket No. P-636-A, are made part of .this petition to intervene, as well, and both support the statements made herein and supplement them, further explaining 'factual contentions.

The Supplemental Affidavits of Robert E. Bathen, Pobert A.

(cont'd) ~

21.

that FPaL is, at, .the very least, taking advantage of unanticipated dislocations in the fuels market and large price increases in alternative fuels to suppress .competition. Thus, FPGL's nuc-lear monopoly, in conjunction with the fuels situation, endan-gers wholesale and resale competition throughout Florida.

Not only is FPGL using its nuclear monopoly in an anticompetitive manner, but it has- used its more general monopoly control over base load generation and bulk transmission facili-ties and its economic control over power supply sources and markets to prevent or inhibit the most'efficient use of pe-titioners'ower supply and to impede -their access to alterna tives. Such actions, of course, are in themselves anticompe-titive. See Gainesvill'e't'ilities De'. v.'l'o'r'i'da'ow'e'r C'o 402 U,S. 515 (1971). Together with the present instability in the fuels market, they exacerbate the anticompetitive situa-tion.

In October, 1975, FPGL's representative to the Florida Coordinating Group Technical Advisory Group Pooling Task Force, Mr. E. L. Bivens, stated that his company was unwilling to partici-pate. in a statewide Florida integrated pooling arrangement, de-

=spite FPGL's previous indications that 1

it was willing to con-(1/ cont') Jablon, Esp., and 'Harry C. Luff, Jr., are referred to as such in order to distinguish these affidavits from those initially submitted in Docket No. P-636-A.

22

sider at. least limited cooperation with other utilities. ln addition, 'FPGL has taken the position that Cities:

should not have a legal ownership in the proposed 500 EV transmission system that would strengthen interconnections among Florida utilities and with the Southern Company, although they apparently are not adverse to other systems participating in the cost of construction on a limited basis." Af-fr davit of Harry C. Lufr, Jr , .~su rap. 5.

The result is to prevent the most efficient loading of genera-tion, thereby causing increased costs for smaller systems. A system such as Vero Beach, faced with a purchase offer for its system; is prevented from purchasing wholesale power when and where it. is most economic and selling excess capacity where it is most economic., Thus, FPGL limits Vero Beach's alternatives, making a sale of the entire system appear more necessary. See Supplemental Affidavit of Robert E. Bathen.

Not only do factors such as the changed fuel situa-tion and FPGL's intensified anticompetitive activites, as dis-cussed ~su racon,stitute "good cause" for granting Cities late intervention in Florida Power 6 Light'o. (St.'ucie'lant, Unit No. 2), NRC Docket No. 50-389A, but these factors demand corrective action by the Nuclear Regulatory Commission on its own motion.'nder these circumstances, the granting of an un-conditioned license for FPaL's St. Lucie Unit No, 2 would be directly contrary to the intent, purposes and language of the Atomic Energy Act. Comparece'n'i'c'uds'o'n. Pr'e'se'rvationC'o'nfe'r'e'nce

v. PPC, 354 F.2d 608 (2d Cir., 1965), 'ce'rt.'enied 'sub nom.

Cons'oli'd'at'ed'di'so'n'C'o'.'of New'ork v.'c'eni'c Hudson're'serva-tion Confer'ence, 384 U.S. 941 (1966).

B. The Atomic Ener' A'ct-'eu'i're'sthat L'a'te'nter'v'e'n't'i'on Be Granted under the Circumstance's o'f Th'i's'p'icatz.on

1. The Nuclear Regulatory Commission Has a Responsi-bility and Obligation, before Issuing a Construc-tion Permit, to Determine Nhether, Florida Power 6 Light Company's License Will Be Adverse to Antitrust Laws or Policy The Nuclear Regulatory Commission has a special re-sponsibility. Unlike most other administrative agencies, an antitrust review is specifically required in issuing permits and licenses for nuclear generating facilities. .g., Atomic Energy Act, Section 105, 42 U.S.C. 52135. This statutory ob-ligation is imposed in recognition of the fact that in permit-ting the commercial development of nuclear energy, the govern-ment is allowing private use of the fruits of a nuclear tech-nology developed largely by the federal government for the benefit of the entire public. It is. allowing grants of the "public domain." FPC v. Idaho Power Cor ., 344 U.S. 17, 23 (1952).

Granting the use of nuclear power to aid monopolization would be .totally. contrary to the intent of the Act, especially since the policies of the antitrust laws are important--indeed, central--to our economy'. It was in this context that the Appeal Board in'a'ns'a's'a'sa'l'e'c'tr'i'cC'o.'n'd'a'n's'a's Cti Powe'r '6

~Li ht'o., NRCZ 75/6, pp. 564-565, stated:

"Xn its Waterford decision, the Commission explained the reasons underlying its involvement in anti<rust

,matters. 'The requirement of Section 105 of the Atomic Energy Act for prelicensing antitrust review reflects a basic Congressional concern over access to power pro-duced by nuclear facilities. " Louisiana Power 6 Light Co. (Waterford Steam Electric Generating Station, Unit 3), CLX-73-7, 6 AEC 48-49 (1973)'(Watex'ford I), The antitrust responsibilities placed on the Commission are 'a Congressional recognition that the nuclear in-dustry originated as a government monopoly and is in great measure the product of public funds. Zt was the intent of Congress that the original public control should not be permitted to develop into a private monopoly Via the AEC licensing process, and that access to nuclear .facilities be as wide spread as possible.'ouisiana Power 6 Light Company (Waterford Steam Electric Generating'Station, Unit 3), CLX-73-25,' AEC 619, 620 (1973) (Raterfor'dlX) ."

C The Department of Justice's advice letter and. the facts enumerated herein make clear that licensing St. Lucie Unit'Vio. 2 without antitrust conditions would create a situation inconsis-tent. with the antitrust laws. Without ordering such conditions, the Commission cannot issue the construction pexmit requested by FPGL and make the requisite Section 105(c)(5) finding that the activities proposed under the license are not inconsistent with the antitrust, laws. Granting Cities intervention and hear-ing under the Act would aid the Commission in making an approp-x'iate finding.

Xn short, the Commission is statutorily obligated to make an antitrust finding prior to issuing a construction per-mit; this obligation is not waived because intervention, in the proceeding is sought out of time by parties with a clear interest

in the matter, especially where good cause is shown for such lateness. l/

ln'cen'i'c Hu'dscnr'e's'e'rv'a't'iono'n'fe'r'e'n'ce v.'PC, 354 F.2d 608 (2d Cir., 1965), 'Ce'rt.'de'n'i.'ed 's'ub'om. 'Con's'ol'ida'ted Edison .Co. oew'o'rk v.'ce'n'i'c'u'd's'on'reseivaiono'n'fe'r'e'n'ce, 384 U.S. 941 (1966), the Second. Circuit remanded'o the Federal Pover Commission its decision granting a construction license for a pumo'ed storage facility because the record vas insuffi-cient concerning gas turbine alternatives and potential ha~'o fish. The court held that the petitioner a'n'd 'nub'1'i'c at

~lar e have a righ0 to a complete record and that the Commission's obligation existed, independently of the actions of the parties.

Because it represents the public interest, the Federal Power Commission (and, in the instant case, the Nuclear Regulatory Commission) could not:

act, as an umpire blandly calling balls and strikes for adversaries appearing before it; <he right of the public must receive active and affirmative pro-Ql Cities recogni,ze that the lateness of their petition to intervene may possibly be taken into account in other vays that vill not adversely affect the Commission's statutory re-sponsibilities. For example, petitioners do not. seek delay of the construction of St. Lucie Unit No. 2, so FPSL vill not be placed in a worse position than it would have other-vise been had C9:ties (or any other party) filed a petition to intervene timely. Xndeed, that Cities do not seek a de-lay in construction of the nuclear generating unit effectively places Applicant in a position better than it would have been had Cities intervened within time.'6

tection at the hands of the Cormwssion." 354 P.2d at 620.

The Second Circuit quoted libera,lly and approvingly from Ni'chigan Con'sol'isa't'e'd 'Cas'o. v.'PC, 283 P.2d 204 (D.C.

Cir., 1960), where the court remanded the Commission's finding in a gas abandonment application, because the Federal Power Commission had not considered. an alternative and had failed to take the initiative in seeking information (354 P.2d at 621):

"'Xn viewing the public interest, the 'Commission's vision is not to be limited to the horizons-of pri-vate parties to the proceeding. . . =-. As sole re-presentative of the public, which is a third party in these proceedings, the agency owes the'uty to investigate all the pertinent facts, and to see that they are adduced when the parties have not put them in . . . The agency must always act upon the record made,'nd if"'that is not sufficient, that the record is supplemented before itit should see acts. Xt ~

must, always preserve the elements of fair play, but, it is not fair play for it to create an injustice, instead of remedying one, by omitting to inform it-self and by acting ignorantly when'ntelligent ac-tion is possible.'sbrandtsen Co. v. United States, 96 P. Supp. 883, 892 (S.D.N.Y., 1951), aff'd by an equally divided court, A/SJ Ludwig Mowinckles Rederi

v. Xsbrandtsen Co., 342 U.S. 950, 72 S.Ct.. 623 (19'52).

And Dean Landis said: 'For [the to be .successful, in a particular field, administrative'rocess is imperative that controversies be decided as 'rightly's it possible, independently of the formal record the parties themselves produce. The ultimate test. of the administrative process is the policy that not the fairness as between the parties of the disposi-it formulates; tion of a controversy on a record of their own The Administrative Process,=39 (1938)."'s making.'andis, compelling and to the point as these principles of law are, the actual facts of Sce'n'i'c'u'd'son make this case

even more apvli,cable, Testimony concerning the aas turbine al-ternative was submitted by a non-party to the Federal Power Com-mission proceedings after or'al arguments had been heax'd; thus the Commission haQ denied the petition to intervene as "untime-ly." Th'e Second Circuit noted that. the Commission should have thoroughly'nvestigated the gas turbine alternative, observing that. the testimony had been submitted "more than two months" before the license was issued. 354 F.2d at 618. The court stated further:

"Especially in a case of this type, where the public inte'rest and concern is so great, the Commission's re-fusal to receive the Lurkis testimony, as well as prof-fered information on fish protection devices and under-ground transmission facilities, exhibits a disregard of the statute and of judicial mandates instructing the Commission to probe all feasible alternatives. michigan Consolidated Gas Co. v. Federal Power Comm., 108 U.S.

App. D.C. 409, 283 F.2Q 204, 224, 226, cert, denied, 364 U.S. 913, 81 S.Ct. 276, 5 L.EQ.2d 227 (1960); City of Pittsburgh v. Federal Power Corran., 99 U.S. App. D.C.

113, 237 F.2Q 741 (1956)." 354 F.2d at 620; footnote omitted.

'n including the statutory requirement for concise and specific antitrust findings in Section 105(a) of the Act, Con-gress has imposed on the Nuclear Regulatory Commission an yah equal burden and obligation to fully explore the facts of a case and to initiate appropriate. corrective action, where matters in possible conflict with its statutory purpose are brought to its attention.

There is abundant case 'law confirming that, commissions

are obligated to make affirmative -findings (and to assure that records are developed whereby they can make such findings) in accordance with their statutory purpose. Where compliance with internal procedural rules conflicts with the fulfillment of that purpose, the public interest demands attention to the II overriding statutory purpose.

Zu Udall v. FPC, 387 U.S. 428 (1967), the court vaa

'asked to determine whether the Federal Power Commission had made the finding rec{uired in Section 7(b) of the Federal Po~ver Act, l6 U.S.C. 5800(b), which provides:

"Whenemr, in the judgment of the Commission, the development of any water resources for public pur-poses should be undertaken by the United States it-self, the Commission shall not approve any applica-tion for any project affecting such development; but shall cause to be made such examinations, and shall submit its findings to Congress with such recommendations as it, may find appropriate concern-s ing such development." Emphasis added.

The hearing examiner had admitted into the record a letter from -the Secretary of the Xnterior, suggesting that the hydro-electric project in question (" High Mountain Sheep" ) would

.best be developed by the federal government, and had allowed a

the Secretary to participate in oral argument, but would not reopen the record for the Secretary's evidence since his appli-cation was out. of time. The Supreme Court'reversed the Com-mission in its grant of a license for the proposed project:

[T]he Commission by its rulings on the ap-29

plications of the Secretary to. intervene and to reopen precluded it from having. the informed judg-ment that 57(b) commands." 387 U.S, at, 434,'l 1/ Compare Chief Justice Burger's language inff'ic'eof Communicationof thnite'd Chur'chof'h'ri'st v.'CC, 425 F.2d 543 (D.C.Cir., 1969), writing for the United States Court of Appeals for the District of Columbia Circuit:

The Examiner seems to have regarded Appellants

[interveners opposing renewal of an FCC broadcaster's license] as 'plaintiffs'nd the licensee as 'defen-dant,'ith burdens of proof allocated accordingly.

Tnis tack, though possibly fostered by the Commission's own action, was a grave misreading of our holding on this question. Ne do not intend that intervenors re-presenting a public interest be treated as interlopers, Rather, if analogues can be useful, a 'Public is seeking no license or private right is, in this Intervenor'ho context, more nearly like a complaining witness who presents evidence to police or a prosecutor whose duty it is to conduct an affirmative and objective investi-gation of all the facts and to pursue his prosecutorial or regulatory function if there is probable cause to believe a violation has occurred." 425 F.2d at 546; footnotes omitted.=

Equally apt is the language of Judge Frank in Isbrandtsen Co.,

Inc. v. United Sta'tes, 96 F.Supp. 883, 892 (S.D.N.Y., 1951),

aff'd b~ an ~euall divi'ded court, A/SJ Ludwiq ."Kowinckels Rederi v.'sbrandtsen'o.,'nc., 342 U. S. 950 1952), quoted by the court in'Scenic Hudson, ~su ra

2. "Significant changes in the licensee's activities

[that] have occurred subsequent to the pre-vious review" Make Mandatory an Antitrust Review and Require that, Petitioners Be Granted. Interven-tion and that Xssues Raised Be Resolved Now Under Section 105(c)(2) of the Atomic Energy Act, 42 U.S.C. 52135(c) (2), an application for a license to operate a commercial'facility must be reviewed if the Commission de-termines that:,

significant changes in the licensee'.s activi-ties or proposed activities have occurred subsequent to previous review by the Attorney General and the Commission under this subsection in connection with the construction permit for the facility."

Significant changes in PPGL's activities and proposed .

activities with regard to St. Lucie Unit No. 2 have already occurred, although PP&L has not yet received permission to con-struct the facility.

To the extent that granting petitioners intervention is made discretionary rather than mandatory by the lateness of Cities'etition, it should be kept in mind that it is in the interest of all concerned including being in the public interest that possible anticompetitive impacts under the li-cense be reviewed now, rather than at a later stage in the licensing pro'cess. Such review will be mandatory later, in any event.

C. Chan ed Circumstances Le all Warrant the Grant of Cities'etition for Leave to intervene Changed circumstances constitute clear legal grounds

for granting a late petition to intervene. Xn ~Bod son v.

United Nine Workers of America, 473 F.2d 118 (D.C.Cir., 1972),

union members were allowed to intervene in a civil suit after trial was. completed, and seven years after the action had been filed.

Considerations of equity aside, changed factual cir-cumstances can suhstantively alter results. B.g., Broucrham

v. Blanton Nanufacturin Co., 249 U.S. 495 (1919). The "step-by-step" review procedure established for licensing nuclear generating facilities recognizes this fact. Cities of Statesville v. AEC, 441 F.2d 962, 974 (D.C.Cir., 1969).

That rights granted under the Atomic Energy Act. are not vested rights supports granting late intervention when cause comporting with the o'verall purposes of the statute has been shown. Under Section 105(a) of the Act, the Commission may "suspend, revoke, or take such other action as it may deem necessary with respect to any license issued by the Commission,"

42 U.S.C. 52135(a), in the event a licensee is found by a court or any government agency having jurisdiction to have violated the antitrust laws. Similarly, Section 186 specifically pro-vides for revocation of licenses for "failure to observe any of the terms and provisions of this chapter or of any regula-tion of the Commission." 42 U.S.C. 52236. Section 187 provides for license modification "by reason of amendments of this 32

chapter or by reason of rules and regulations issued in accor-dance witn the terms of this chapter." 42 U.S.C. 52237. And

~

standard ."boiler plate" language in construction permits and operating licenses, including those of Applicant, condition their issuance:

to the conditions specified in Sections 50.54 and 50.55 of [the Commission's] regulations; to all applicable provisions of the Act, and rules, regulations and orders of the Commission now or here-after in effect . . ." Florida Power 6 Li ht Co.,

NRC Prod. & Util. Fac. 335, Construction Permit, No.

CPPR-74 (July 2, 1970).

Congress certainly did not intend that intervention to raise anticompetitive issues should be foreclosed, regard-less of the extent to which use of a licensed facility may sup-port anticompetitive conduct--particularly before a construc-tion permit, has been issued--merely by passage of time beyond the date initially set. for the filing of petitions to intervene.

The courts have held, for example, that the Federal Power Commission is obligated under the Natural Gas Act, 15 U.S.C. 5717, to order refunds of rates implemented pursuant to temporary, unconditioned, authorizations to serve, but with the caveat that certification was subject to subsequent orders in the proceeding, where such rates are subsequently found. to be excessive. Public Service Commission of State of New York

v. FPC, 329 F.2d 242 (D.C.Cir., 1964), cert. denied sub n'om.

Prado Oil Co. v. Public Service'ommission, 377 U.S. 963 (1964);

33

FPC v. Sunra DX Oil Co., 391 U.S. 9, 40-47 (1968). The same principles would apply ~here governmentally developed nuclear power was used in a manner c'ontrary to the antitrust. laws.

's 'in the instant. case, the Federal Power Commission proceedings involved a bifurcated application process requir-ing federal agency review of certificated actions subject to conditions. Moreover, in this case the initial authorization has not even been granted.

While it may be true that petitioners can bring an independent. civil antitrust suit against, Florida Power 6 Light Company in federal district court and then subsequently seek to have FPGL's license condi ioned according to the district court's findings, nothing compels such a course. Xndeed, it runs counter to the statutory purpose of the Atomic Energy Act, as well as common sense. 1/

Moreover, assuming that Cities might succeed in pur-suing alternative remedies--resulting in license revocation or modification, or conditioning of the operating license--

it would be preferable to now consider the serious antitrust 1/ Compare Diaz v. Southern Drillina Cor~., 427 P.2d 1118 (5th Cir.j 1970), 'cert. denied, 400 U.S. 878 (1970), where the probability that the United States government, intervener in this case, would be unable to obtain'n ~ersonan. jurisdiction over the defendant at a later date was held to be sufficient reason to allow intervention under Rule 24(a) more than a. year after com-mencement of the suit. ln addition to its concern that the Government's interests would not be represented adequately by existing parties, the court's decision was based upon practical and common sense considerations.

34

questions raised to avoid uncertainty and to allow all involved to take into account .the rulings of the Commission. Compare Eiorthside Tenants'(i hts Coalition v. V~ol e, 346 P.Supp. 244 (D.His., 1972), wnere construction of an urban freeway was en-joined due to failure of the government to file an environmental impact statement, the court stating, ". . . it is better to de-lay now than later when corrective action might be so costly Coalition on Trans ortation v. V~ol e, 458 F. 2cl 1323 (4th Cir.,

1972), cert. Senie6, 409 U.S. 1000 (1972).

At worst, the lateness of Cities'etition to intervene creates an equitable consideration. It certainly does not ab-solutely bar consideration of issues addressed by the Atomic Energy Act. Indeed, judicial bodies considered traditionally to have less flexibility in procedural matters have granted petitions to intervene even after judgment, when such late in-tervention was deemed necessary to preserve some right which could not otherwise be protected. E.g., Ca'scade Natural Gas

~cor v. .El paso Natural Gas co., 386 U.S. 129 (1967).

Here lapse of time does not create a defense of laches.

Laches will be allowed only if there has been an inexcusable delay and if the defendant would be prejudiced because'f evidence or a change in the nature of the claim. -Gardner v.

Panama E(ailroaS Co., 342 U.S. 29 (1951); ~E(olmher v. hrmhrecht, 327 U.S. 392 (1946).

A defense of laches is especially vulnerable in cases involving the public interest. Thus, delay could, not bar a suit brought by the government to vindicate a public right such as the right to effective enforcement of the antitrust laws. United States v.'irestone Tire & Pubbe'r 'Co., 372 F.

Supp. 43l (D.Ohio, 1974); United'tates v.'en'n's'alt'hemi'cals

~Cor ., 262 F.Supp. 101 (D.Penn., 1967) . ((hile Cities are en-gaged in commercial activities, these activities are of a type uniformly recognized as having public utility ". . . and by their nature affected with the public interest.". See Nunn

v. Xllinois, 94 U.S. ll3 (l876). Moreover, Cities seek on behalf of their citizens and ratepayers to vindicate rights which involve both grants of the public domain l/ and claims arising out of the antitrust, laws, the nation's charter of economic liberty. Xn this context, refusal by the Commission to-hear Cities'laim cannot be justified under classic egui-table tests. 2/

l/ FPC v. Idaho Power Corp., supra, 344 U.S. at 23.

2/ An analogy to environmental law is apposite. Courts have refused to invoke laches where such bar would be contrary to the public interest status afforded ecology preservation.

of Land v. V~ol e, 363 F.Supp. 1171 (D.Haw., 1972), "af 'd, 485

'ife F.2d 460 (9th Cir., 1972), 'cert deni.'ed, 416 U.S. 961 (1972);

Environmental Defense'und v. TVA, 468 F.2d ll64 (6th Cir.,

l972). Laches has been allowed only where the proposed activity is so near completion that to delay or abandon't would itself seriously harm the public interest. I'owaStude'nt'ubl'i'c'n-terest Research'roup (ISPXRG) v. '~Cal'1'a+a, 379 F.Supp. 714 (D.Xowa, l974). However, here, Cities do not seek construction delay or enjoining building of the plant.

D. E uitable Circumstances Favor Grantin Cities'etition for Leave to intervene 'and Reauest for Hearin

1. The Equities Involved in Their Totality Favor Grant of Cities'etition 'to Intervene Mainly for reasons stated ~su ra, Cities should be granted intervention and a hearing instituted as to Florida Power a Light Company's St. Lucie Unit No. 2. Before issuing

\

a construction permit, the Commission is required by statute to 'determine whether the activities. under the proposed license "vill create or maintain a situation inconsistent with the an-titrust laws." Section 105(c) (5), 42 U.S.C. 52135(c) (5). As parties whose interests would be directly affected, and as is supported by the accompanying petition and affidavits, Cities can assist the Commission in making such finding. Absent a hearing, a record to support such finding simply will not be developed. See Cit of Pittsbur h v. FPC, 237 F.2d 74l, 745-750 (D.C.Cir., 1956); Associated Xndustries v. aches, 134 F.2d 694 {2d Cir., 1943).

Section 2.714 of the Commission's regulations, 10 CFR 42 (1976), lists four additional factors to be considered.

While these factors are generally addressed ~su ra, for conveni-ence, Cities list and briefly discuss them here:

(a) The avail'abilit of other means'hereb petitioners'nterests will be protected: Other means to vindicate Cities'nterests may exist, but these point to the equities of 37

granting late intervention here.

Cities 1/ have applied for intervention in Florida Power a Light Co. (South Dade Plant), NBC Docket No. P-636-A.

Xn view of FPGL's integrated use of its existing, under con-struction and planned nuclear generating capacity, and for reasons stated in Cities'etition for Leave to Intervene, Cities have requested that the construction permit for the South Dade units be conditioned to.provide for relief requested herein, including "a fair share entitlement in St. Lucie Unit No. 2 through direct participation alone or in combination with others or through unit power purchasing."

Should the full relief requested in Docket No. P-636-A be granted and made effective in timely fashion, rights sought in this petition would be effectively granted. However, by its "Prehearing. Conference Order No. 1," issued in Florida Power & Li ht Co. (South Dade Plant), Docket No. P-636-A, on 29 July 1976 the -Atomic Safety and Licensing Board held that it was without jurisdiction to condition directly the St. Lucie Unit No. 2 construction permit. But the Board states further (p- 3) -.

"We do not. now reach the issue of whether we have 1/ With a few exceptions, petitioners in Docket No. P-636-A are identical to the Cities group herein.

authority to require participation in St. Lucie Unit No. 2 as a condition to a South Dade permit."

Since Cities do not seek delay of construction, and since the factual considerations involved in Docket Nos.

P-636-A and 50-389A may largely overlap, it would be approp-riate if the issues and requested relief associated with these dockets were dealt with in a consolidated proceeding.

Xn consolidating these dockets, none of FPaL's rights could be prejudiced (except insofar as relief may be granted on the merits) anQ the matters involved in both proceedings could be resolved without duplicative effort.

As stated in Section X.B., ~su ra, if: the construction permit, does issue, the Commission will be required under Sec-tion 105(c) (2) of the Act to make antitrust findings before issuing an operating license. 42 U.S.C. 52135(c) (2) . However, this in itself is sufficient reason to hold the required hear-ing now. l/

Of course, pursuant to Section 105(a), 42 U.S.C. 52135(a.),

in conjunction with Sections 183 and 185 through 188, 42 U.S.C.

1/ Nithout waiving their r'ights to a hearing on the construc-tion permit, should such relief be denied, Cities request that a hearing to determine appropriate antitrust conditions to the operating license commence at this time. For reasons stated suora, such hearina should be consolidated with the hearing or dered on the South Dade units in Duel:et No. P-636-A. However, Cities perceive no compelling reason for pursuing such an indi-rect proceQure rather than granting FPGL a temporary permit to commence construction, and at the same time instituting a hear-ing concerning the construction permit.

<f2233, 2235-2238, upon a finding by a court or government agency having antitrust jurisdiction, a license may be modi-fied or revoked. However, considering the jurisdiction given the Nuclear, Regulatory Commission and. the desirability of the Commission's conducting its own antitrust review, Cities be-lieve, absent a statutory bar, that it would be inappropriate and circuitous to force a Federal Trade Commission or court hearing concerning matters over which the Nuclear Regulatory Commission has direct jurisdiction". 1/

As is stated infra, should the Commission be in doubt as to the appropriateness of Cities'ntervention, Cities re-quest that. it forward this petition, tog ther with supporting papers, to the Federal Trade Commi'ssion and request a determina-tion by that Commission whether Florida Power 6 Light Company has violated the Federal Trade Commission Act, 15 U.S.C. 551, et sece., as specified in Section 105(a) of the Atomic Energy Act, 42 U.S.C. 52135 (a) .

1/ Cities do not waive the right to seek outside review under Section 105 (a), 42 U.S .C. 52135(a) . However, this could lead

-to duplicative litigation. Administrative procedure is to be simpler and less technical than judicial procedure.

in-'ended Albertson v. FCC, 182 F.2d 397 (D.C.Cir., 1950); Lambros v.

~Foun, 145 F.2d 341 (D.C.Cir., 1945) . Cities see no purpose in commencing a Federal Trade Commission or court proceeding to determine whether FPGL has violated antitrust laws requir-ing enforcement, at least in part, by this Commission.

40

(b) The extent to which 'titioners'artici ation ma reason'ably be e. ected tossist in developing a sound record: Each of Cities is a municipally owned utility in p1orida; FMUA, as dascr'bed ~sn ra ,is an associan'on comprisad of such utili ies. They have retained the undersigned counsel (in addition to local counsel) and have authorized retention of technical experts who can assist, this Commission. The cities are uniquely able to provide factual-evidence with .

regard to the impact of PPGL's proposed activities under the license on the competitive market structure in Florida and the history of Pp&L's conduct, and to make informed recommenda-

.tions conc ming the form of relief and its effect, as well as the impact of failure to grant relief.

Because they are operating utilities, they have avail-able technical expertise with regard to the administrative and engineering aspects of generation and distribution of electric

'ower.

Purther, because of their status as public entities, they are in a unique position to represent the interests of the public at large, including their citizens and ratepayers,

'I PPC, 237 P.2d 741 (D.C.Cir., 1956); A'ssoc'iated Xndustries v.

Xckes, 134 P.2d 494 (2d Cir., 1943) .

(c) The extent to which petitioner's 'nter'est: vill be re resented b existing parties: Since no proceeding has 41

been ordered, only by granting intervention and hearing can petitioners'nterests, be represented in this docket. 1/

Cities cannot, in any event, see that other parties could in fact represent their interests.

(d) "The extent to which petitioners'rtici 'ati'on will broaden the issues or dela the procee'din ": Since a proceeding has not yet been initiated to consider St. Lucie Unit No. 2, granting intervention cannot delay such'proceeding, Moreover, while Cities seek consolidation with Docket No, P-636-A, granting of this request cannot delay that proceeding since there is, for practical purposes, an identity of parties and interests with petitioners herein, and because that proceeding is just commencing. Since Cities'ontentions and the relief reauested in both dockets broadly overlap, consolidation would not cause delay in any event.

Although instituting a hearing 'at this time might have delayed construction of St. Lucie Unit No. 2, Cities do not seek such delay in construction. Therefore, to the extent that PPGL is shown to be legitimately entitled to power 1/ For reasons stateu snore, Cities'.interests may not FpaL be ade-quately protected in the South Dade proceeding. '.g., may delay or withdraw its application for a construction permit, in or the license may be refused; or failure to order a hearing may rest in part upon other legal considerations. 'his'docket 42

from the St. Lucie plant, granting a hearing at this time cannot delay availability of that power to the Company.

Cities'perations are presently being adversely af-fected by Florida Power 6 Light Company's monopolization of nuclear power and refusals to grant participation in nuclear power, as well as its refusals to agree to transmission rights, its refusals to agree to an integrated Florida power pool and its other actions contrary to the letter and intent of the antitrust laws. The result of FPsL's conduct is such as to force some cities to consider the sale of municipal systems heretofore independent. Thus, Cities have an immediate and direct interest in speedy proceedings which are concluded ez-peditiously to allow for relief needed now. On the other hand, once Cities concede that construction of St. Lucie Unit No. 2 should begin, FPGL obtains little, if any, advantage from expedited proceedings and considerable advantage in delay.

XX. CITIES SHOULD BE GRANTED INTERVENTION AND A HEARXNG SHOULD BE HELD TO DETERMINE WHETHER FLORIDA PONER 6 LIGHT COMPANY'S. LICENSES FOR ST. LUCIE UNIT NO. l AND TURKEY POINT UNITS NO. 3 and NO. 4 SHOULD BE REVOKED OR MODIFIED TO REMEDY,THE EFFECTS OF FLORIDA PONER 6 LIGHT COMPANY'S ANTICONPETXTIVE ACTIVITIES There is additional legal support for granting a hearing and antitrust review applicable to the St. Lucie Unit No. l and Turkey Point Units No. 3 'and. No. 4. For convenience, arguments concerning legal entitlement to antitrust review of these units are set, forth separately, largely in summary form.

43

To a large extent, the Commission's obligation to, prov'de for appropriate antitrust reivew for these units is analogous to its obligation as to St. Lucie Unit. No. 2, discussed ~su ta Xn the interest of brevity, those arguments are incorporated herein.

The Commission issued so-called "research and. develop-ment" licenses for PPGL's St. Lucie Unit Ho. l and Turkey Point Units No. 3 and No. 4. The Company has received an operating permit. for eacn of these units. However, since the units are being utilized in an integrated fashion'to injure Cities, contrary to the antitrust laws and policies, Cities invoke the aid of this Commission to obtain appropriate re-lief. Cities again stress that the take over of one or more existing independent utilities by PPGL, through use of nuclear power generated from these units in conjunction with its re-fusals to deal and other activities contrary to the antitrust laws, is threatened and may well become a reality absent ac-tion by this Commission.

The units in question have never been subject to anti-trust, review. lt is appropriate that such review be ordered now.

Cities note that their petition is here not late in any technical sense. Thus, so long as Cities demonstrate a tech-nical basis for relief, there are no grounds for failing to 44

order a hearing and, should grounds be shown for prevailing on the merits, appropriate license conditioning.

Section 104 (b), 42 U. S.C. 52134 (b), provides:

"In issuing licenses under this subsection, the Commission shall impose the minimum amount of such regulation and terms of license as will permit the Commission to fulfill its obligations under this chapter."

Prior to the 1970 amendments to the Act, Section 10'4 (68 Stat..937, amended. -.9 Dec. 1970, Pub. L.91-560, Section 5, 84 Stat. 1472) read:

"In issuing licenses under this subsection, the Com-mission shall impose the minimum amount of such regu-lation and terms of license as will permit the Cora-mission to fulfillits obligations under this chapter to promote the common defense and. security and to pro-tect the health and safety of the public and will be compatible with the regulations and terms of license which would apply in the event that a commercial li-cense were later to be issued pursuant to Section 2133 of this Title for that type of facility.

The 1970 amendments to Section 104 thus eliminated the modifying clause "to promote the common defense and security, etc.," but left intact the requirement. that the Commission "fulfillits obligations under this chapter."

The overall purposes of the chapter (including strengthen-ing free competition in private enterprise and improving the general welfare) are contained in Section 1, 42 U.S.C. 52011.

Monopolization of nuclear energy or its use to further monopolize the electric power industry clearly are not within the purpose 45

of this chapter. 1/ Xn this context, Cities note that, the Atomic Energy Act, regulations issued pursuant to that Act, and licenses themselves, are carefully written to avoid a vesting of rights. Cf., Homebuilding and Loan Association

v. Blaisdell, 290 U.S. 398 (1934).'/

Section 183 of the Act specifically makes all licenses subject to "all'f the other provisions of this chapter, 'now.

or hereafter in effect and to all valid rules and regulations

. of this Commission." 42 U.S.C. 52233; emphasis added. Sections 185, 186 and 187, 42 U.S.C. 552235, 2236, 2237, each condition rights granted or allow for revocation or modification, so that 1/ Cities of Statesville v. AEC, 441 F.2d 962 (D.C.Cir.,

1969), which lead to the 1970 amendments, accepted the proposi-tion that the construction of nuclear-fueled generation units was experimental in nature and that therefore antitrust review could wait until issuance of the operating license. For plants constructed before the 1970 amendments,- provision for. antitrust review would be encompassed in Section 104 and therefore the substantive requirement for review cannot be deemed to be more narrow than the purposes of the Act.

2/ See Section X.C., supra. Tne Ninth Circuit has held re-cently in Arizona Power Poplin Associ'ation v. bIorton, 527 F.2d 721 (1975), that the rights of a nonpro it Arizona corporation to purchase thermal power could not. be negated by the fact that the government. had previously entered into a long-term contract, effectively disposing of the power or that the plan had previ-ously been submitted to Congress and approved by it pursuant to statute. The matters at issue were very similar to those here. Ultimately,- they involved a claimed vesting of rights to unrestricted use of a project by private power interests because of an earlier government decision that .purportedly over-rode enforcement of statutory obligations.

licensees are under continuing obligations to act in accordance with the rules and regulations of the Commissi'on. These re-quirements are tracked'by the Commission's regulations and by authorizations issued to PPSL. E.g., 10 CPR 550.100. 1/

Nithout repeating previous arguments, since licensees are'equired to comply with antitrust laws and since the li-t censes specifically allow modification, the legal requirements for modification are met. 2/

1/ 10 CPB 550.54 states: "The license shall be subject to re-vocation, suspension, modification, or amendment for cause as provided in tne act and regulations, in accordance with the procedures provided by the act and regulations." Subpart (e).

The regulations state further: "The issuance or exis-tence of the license shall not be -deemed to waive, or relieve the licensee from compliance with the antitrust laws, as spe-cified in Subsection 105a of the act. In the event that the licensee should be found by a court of competent jurisdiction to have violated any provision of such antitrust laws in the conduct of the licensed activity, the Commission may suspend or revoke the license or take such other action with respect to it added.

as shall be deemed necessary." Subpart (g); emphasis "The license shall be subject to the provisions of the act now or hexea ter in effect . . . the terms and conditions of the license shall be subject to amendment, revision, or modi-fication, by reason of amendments to the act or by reason of rules, regulations and orders issued in accordance with the terms of the act." Subpart (h); emphasis added.

2/ E.g., construction permit No. CPPR-27 for Turkey Point nuc-lear generating unit No. 3 was specifically issued "pursuant to Section 104 (b) of the Atomic Energy Act of 1954, as amended and Title 10, Chapter 1, Code of Pederal regulations, Part 50 and was made 'subject to all applicable provisions of the Act and rules, regulations and orders of the Commission nor or hereafter in effect . . .'" Emphasis added. This pro-vision is'typical.

XXI. XN THE EVENT THAT THE CO'94XSSXON DETERMINES POR AilY REASON NOT TO GRANT CITIES'PETITION AS TO ANY OP THE UNITS HERE INVOLVED, IT SHOULD REQUEST INVESTIGATION OF PLORXDA PO3'3ER LIGHT COliPANY'S ACTIVITIES BY THE FEDERAL TRADE CO~1iMISSXON For reasons stated herein, Cities believe that the Nuclear Regulatory Commission should, and, indeed must, grant their petition. However, they recognize'hat their interven-tion may be challenged by Florida Power s Light Company on substantive or procedural grounds. Xn the event the Commis-sion determines either that it does not have jurisdic'tion or that it should not consider the issues raised concerning any of the units involved, it should refer the matter to the Federal Trade Commission.

Section 105(a), 42 U.S.C. 52135(a), refers to the Federal Trade Commission Act, 15 U.S.C. 545 (1970), and other antitrust laws. It states that in the event a government agency (i.e., the Pederal Trade Commission) "having jurisdic-tion under the sections cited above" determines that in the conduct of licensed activities, one of the provisions of such section has been violated, "the Commission may suspend, revoke, or take such other action as it may deem necessary As Cities have sta ed earlier, they deem it neither necessary or desirable for the Commission to refer the matter to the Federal Trade Commission. Clear reason exists for -ac-tion by the Nuclear Regulatory Commission. However, should

the Commission find contrary, it should'hen refer the matter to the Federal Trade Commission under Section 105(a) of the Act.

XV. FLORIDA POWER 6 LIGHT COP>ANY HAS VIOLATED ANTITRUST LAN AND POLICY Y&NDATING AN ANTITRUST REVIEW FOR ST. LUCXE UNITS NO, 1 AND NO. 2 AND TURKEY POINT UNITS NO. 3 AND NO. 4 A. Xntroductor Statement and'e u'estfor Eel'ief Having stated the jurisdictional basis upon which they seek an antitrust hearing and relief, Cities state herein the basis for their substantive claims that Florida Power Light Company has violated antitrust law and policy and the grounds for relief sought. This statement closely follows Cities'oint petition to intervene in Florida Power 6 Li ht Co. (South Dade Plant), NRC Docket No. P-636-A. Cities'eti-tion to intervene and. request for hearing has been granted--

indeed, without opposition from FPGL. Atomic Safety and Li-censing Board, Docket No. P-636-A, "Memorandum and Order" (9 June 1976); "Applicant's Response to Joint, Petition of Florida Cities" (26 May 1976), Docket No. P-636-A. Xf the in-stant petition is procedurally allowed, considering that essen-tially the same substantive claims are raised herein as are raised in Docket No. P-636-A, the grant of intervention and hearing there, based upon a finding that, ". . . the Florida Cities has shown an interest sufficient to sustain interven-tion under Section 2.714 and has identified a contention that

meets the requirements of Section 2.714" (" Order," p. 4; foot-note deleted,) is determinative that substantive grounds re-quiring a hearing also exist here.

Since the substantive contentions raised in this pe-tition and in Docket No. P-636-A are virtually identical, Cities submit. herewith copies of the affidavits offered in Docket No. P-636-A. In addition, supplementary affidavits of Robert E.- Bathen, Robert A. Jablon, Esq., and Harry C. Luff, Jr.,

addressed to additional and/or supplementary contentions raised here are filed in support of the instant, petition.

As discussed ~su ra, because of its dominant position in Florida, including control over nuclear power and bulk

.transmission facilities, FPGL can severely limit power supply alternatives available to petitioners.

With limited qualifications, Cities are restricted to using fuel oil (largely imported). Cities'ccess to coal is limited by transportation and other factors, and, except for Lake Worth, New Smyrna Beach and St. Cloud, the generating Cities'atural gas supply has been nearly totally curtailed.

In contrast, FPGL's gas supply, accounting for approximately 26% of its generation, remains uncurtailed. Nuclear power accounts for about 22% of its generation, so that nearly 50%

of its generation is achieved with fuel substantially lower in cost than fuel oil. With the addition of the proposed 50

St. Lucie Unit No. 1 l/; FP &L ' generation is anticipated to be more than 35% nuclear. FP &L,plans St. Lucie Unit No.

2 for commercial operation in 1980 and, until the Company's recentlv announced plans to postpone their construction, dis-cussed ~su ra, the South Dade units for 1983 and i985. Absent corrective action by this Commission, by 1985 the disparity in generation costs resulting from increased nuclear capacity on FP&L's system but not on Cities'ystems will. have increased substantially.

As a direct result of their inability (except by order of this Commission) to obtain nuclear access and of FP&L's failure to offer Cities nuclear access, the continued exis-tence of at least some municipal systems is in question and the economic operation of all are affected. For example, FP&L has offered to purchase the Vero Beach electric system, an independent municipal system since 1922, for about $ 42.5 million, two other systems are presently considering a sale to FP&L and a spokesman for FP&L has produced a "hasty .estimate" that "there are about half a dozer. community or co-operative 1/ According to press reports, FP&L's St. Lucie No. 1 nuclear generating unit went on line on 28 June 1976, operating, at about 50% capacity. On 10 July 1976, the Company took St. Lucie No. 1 off line in order, according to an FP&L spokesman, to

'investigate "an inbalance in the power pattern" (a problem, was stressed, not involving the .safety of the plant). "St.

it Lucie Nuclear Plant Shut Dolmen," Orig'n'do Sentinel, 18 July 1976.

electric-abilities in our area which might benefit by selling their plants to us." ~Tam a Tribune, 25 February l976.

FP&L's use of its Turkey Point and St. Lucie nuclear units in operation or planned may affect the 'very existence of other systems. The Company's use of its nuclear power-the "activities under the license" becomes the means of ac-quiring other systems, providing a direct, "nexus" between the acti.vities under the license and the xelief sought.: non-dis-criminatory access to that. nuclear power. This satisfies even the rigid test. of the trial board. in Midi'and. 1/ The situation is exacerbated by FPSL's use of its dominant posi-tion to prevent. or to limit the value to Cities of alternative power supply sources available to them apart from nuclear power.

Cities'lternatives are affected by the lack of a statewide power pool, lack of access to FPGL transmission facilities, lack of a joint transmission rate between FPaL and Florida Power and lack of state legislation--opposed by FPaL to enable Cities to form authorities for the purpose of jointly constructing units and facilitating the participation of others in such units, among other things. Exclusion from nuclear. plant par-ticipation.and economic alternatives to nuclear generation 1/ Consumers Power Co. (Midland Units 1 and 2), ÃRC Docket.

Nos. 50-329A'and 50-330A. The trial board's test reguired that the proposed activities under the license (i.e., the generation of power) be a source of monopolization or other anticompetitive conduct. NRCl 75/7, pp- 29, 56-71 'he Board's decision is sujbect to appeal as providing too circum-scribed a test.

restricts options reasonably avai1able to Cities, leading to the possible sale of some systems. Moreover, to 0he extent.

that FP&L denies Cities ancillary and attendant rignts to nuclear participation, in comparison with its economic value to FPGL, the economic value to Cities of such participation in nuclear capacity that the Commission. may allow is decreased.

Cities are further hurt by the price squeeze resulting from increases in certain of FPaL's wholesale power rat es made effective as of 1 April 1976 by 'the Federal Power Commission.

Florida Power 6 Light Co., FPC Docket; No. ER76-211. These whole-sale rates are so high relative to FPGL's xetail rates, particu-laxly to large power customers, that municipal and cooperative systems are unable to competitively retail power purchased at, wholesale from FPGL without incurring large losses. See Supple-mental Affidavit of Robert E. Bathen.

As is set forth more fully herein, Cities request that this Commission use its authority to condition the li-censing of the nuclear generating units here involved to correct the "situation inconsistent"--i.e., FPGL's use of its contxol over nuclear generation in particular and power supply in general to limit Cities'ower supply opportunities--

I by assuring that municipal electric systems have the oppor-tunity for:

(1) a fair l

share entitlement in the St. Lucie Unit No. 2 through direct participation alone or in combination with others or through unit power purchasing; (2) a fair shaxe entitlement in FP&L's other nuclear 53

units, including Turkey Point Units Ho. 3 and No. 4 and St.

Lucie Unit No. 1, presently in operation, under construction or planned, through direct participation, alone or in combi-nation with others, or througn unit power purchasing;

{3) coordina ed plar.ning, development and opera-tion of power supply sources, including equalized reserves;

~

(4) availability of nondiscrim'natory back-up power supply arrangements with FPSL and others; (5) wholesale purchased power entitlements, under fair and reasonable terms which will not create a price sameze; (6) rights to participation together with FPGL in a statewide integrated power pool; (7) access to FPGL's transmission system on reason-able terms and conditions and agreement. by FPSL to facilitate a joint transmission rate with Florida Power Corporation and others; (8) support by FPGL for state legislation that will implement and facilitate the above proposed conditions and that will authorize joint ventures among municipal and other electric systems;

{9) elimination of any situation inconsistent with the antitrust laws as may be found; and (10) other relief that may be appropriate, including establishing terms and. conditions that vill acconpmr'sh the above.

B. The Situation Inconsistent On information and belief, the following factual situa-tion inconsistent with the antitrust laws exists concerning

PP&L's application: 1/

1. Nuclear Monopoly PP &L presently has in service two nuclear units, Turkey I

Point Units Ho. 3 and No. 4, in Dade County, with a combined capacity of 1,380 mw. As stated su@ra, the Company's 802 mw St. Lucie Unit No. 1 was brought on line in June, operating initially at 50% of its capacity. Xn addition, PP&L's St. Lucie Unit No. 2 (802 mw) is planned to commence operation in 1980, South Dade Unit No. 1 (1140 mw) in 1983 and South Dade Unit No. 2 (1140 mw) in 1985.

The only other nuclear unit presently or soon to be in operation in Florida is Florida Power Corporation's Crystal River Unit No. 3, a 825 mw unit presently anticipated to come on line in 1977. One cooperative and ten municipal systems share a ten percent undivided interest in Crystal River Unit No. 3, amounting to 82.5 mw.

The named intervening cities had total nameplate capa-city in 1975 of 1616 mw. Zn addition, they own 62.5 mw of capacity in Crystal River Unit No. 3. Thus, when Crystal

'/ Xn addition to t: he factual statements contained herein and in affidavits submitted upon their behalf, Cities rely upon the Department of Justice "Advice Letter" in,Plori'd'aowe'r' Light Co.(St:, Lu'cie'n'i't No'.'), NBC Docket No. 50-389A. Cities further rely upon FP&L's dominance in transmission facilities, bulk power generation and supply and its ability to affect vi-tal legal relationships affecting the purchase, sale and co-ordination of bulk power supply to establish the Company's basic obligations of fair dealing.

River is in full commercial operation, about 4% of generation will be nuclear. Xn contrast, FP&L's Cities'ombined present generation is 22% nuclear. By the time Cities'e-neration is actually 4"- nuclear, FPGL's nuclear capacity will have increased to 27'-o.

Prior to recent gas curtailments, most of the peti-tioners with self-generation relied upon natural gas as their main generating fuel. During 1973, about 625 of Cities'om-bined generation was with natural gas. Since then, they have all been heavily curtailed and have, as a result, been forced to depend almost entirely upon fuel oil.'/

Utilities in peninsular Florida 2/, especially smaller ~

inland cities, have only limited access to coal and hydroelec-tric power. Difficulties in obt'aining coal are pronounced for

'/ville, Nith qualifications not here relevant, Fort Pierce, Gaines-Orlando, Sebring and Tallahassee have direct preferred interruptible contracts for natural gas service with Florida Gas Transmission Company of long standing. Hew Smyrna Beach, Lake North and St. Cloud purchase gas from distribution com-panies which are customers of FGT. Some of Cities have sought damages and other relief based upon FGT's failure to deliver gas, Sti ulation and'onsent D'e'cree, Cit, o'f Ft'.'ie'rce,'t: al.

V. Florida Gas Transmission Co., Case ~~to. 71-1494-Civ-Ca {S.D.

Fla., Aug. 31, 1972 , and have been actively attempting to safe-guard their gas entitlements both in enforcement, proceedings in Case No. 71-1494-. Civ-CA apd at the Federal Power Commission.

Xn the meantime, the generating cities, except for New Smyrna Beach, Lake North and St. Cloud, are forced to rely almost en-tirely upon fuel oil to fire their generators, and these two cities are threatened with mounting curtailments.

'/ Peninsular Florida includes all utilities in the state ex-cept Gulf Power Company, which serves that portion of Florida west of the Apalachicola River. See documents attached to Af-fidavit of Robert E. Bathen.

petitioners who are small and removed from water transporta-tion. Coal use in Florida for electric generation is now li-mited to Tampa Electric Company and Gulf Power Company, both with ready access to water transportation.'/ In 1974, net coal-fired generation amounted to only 18.4-o of total genera-tion, all of which belonged to these 'two utilities. Hydro-electric power has historically provided only a miniscule part of Florida's net generation; nor does it provide a practical alternative for the future. In 1974, 00.33% of Florida's net generation was hydroelectric.

Not only do Florida Power' Light, Company and Florida Power Corporation, the state's second largest utility, have the size and resources to build nuclear generation units and greater capability than Cities to convert to coal, but they each have long-standing contxacts with Florida Gas Transmission Company for the transportation of natural gas purchased by them directly from natural gas producers, amounting to approximatetel y 125,000,000 NNBtu annually. This annot constitutes approximately one third'to one half the tota3. gas being transported by FGT.

1/ Tampa Electric Company, far large than any of the Cities, has obtained a long term supply of coal through an arrangement whex'eby barges bring coal down the Hississiopi River to Tampa, and then back haul phosphate fertilizer, lime rock or other bulk materials.

Approximately 26% of FPGL's generation output is gas-fired at costs considerably beneath the cost of oil-fired generation.

To date, neither Florida Power 6 Light Company nor Florida Power Corporation's "transportation" gas has been curtailed.

Cities'nability to obtain direct access to nuclear fueled generation--together with the limited number of economic alternatives available to them 'substantially limits their power supply options. The cost,'vailability and environmental characteristics of nuclear fuel generation are different from and in many respects considered superior to those of fossil-fueled generation. Xt would be inconsistent with the policies of the antitrust laws to create and maintain a situation that limits or denies Cities access to nuclear capacity because of their size, especially where the major utilities in Floxida do have such access. The opportunity for managerial choice as among power supply alternatives is encouraged by the spirit, of competition embedded in the antitrust laws. 1/ These principles 1/ The antitrust laws protect against monopolization of factors or components of production as well as monopolization of the

~b end products, ',q.,n't'ernatio'nal 3'usine'ss'Iachines v.United States, 298 U.S. 131 {1936); Union Carb"d e an'd 'Carbon Carp. v.

N~sl'e , 300 9.2d 561, 585 {10tn Cir., 1962), cert; dram seed p

371 U. S, 801 (19 62) .

i~lonopolization o nuclear generation z.s to be equally condemned as monopolization of wholesale power, Cf., Gulf States Utilities Co. v. FPC, 411 U.S - 747 (1973),

are especia3,ly applicable since nuclear power is substantially the result: of governmental development, ~ See,,g.,'omp'eti'tion Atomic Energy Commission and Department of Justice, Arthur D.

Little, December, 1968, Moreover, Cities are prepared to demonstrate not only the uniqueness of nuclear power, but. that its cost character-istics have a. significant impact on competition in Florida.

The Justice Department, in its advice letter concerning Florida Power 6 Light'o. '{S't'. Lu'cie1'an't,'n'it'o'. 2}, NRC Docket No.

50-389A, dated 14 November 1973 stated (pp. 2-3):

"There is substantia3. and vigorous actua3. arid poten'-

tial competition among electric utilities in Florida in both bulk power supply and retail distribution markets. Florida, law'oes not reauire electric utili-ties to restrict their service areas. The Florida Public Service Commissior. has approved certain volun-.

tary territor'ial agreements between Applicant and neighboring systems. 2/

"Even where these territorial agreements exist, neigh-boring smaller systems do compete with Applicant at retail. They still compete to attract new loads who can choose to locate either in their service areas or in Applicant's. They still compete to extend service in developing areas on the fringes of their systems.

Finally, they compete to stay in business; costs and retail rates become too high, their custo-if their mers may force them to sell out to the Applicant.

.lf 2/ Some territorial agreements involving the Appli-cant, apparently have taken form of oral under-standings and have never been submitted to the Commi s s ion.

"There is also competition in bulk power supply, where territorial agreements cannot lawfully operate.

The smaller systems have two basic competitive alter-natives; either they pxoduce their own bulk power supply, or they buy their bulk power requirements from the Applicant. "

Cities are prepared to demonstrate that nuclear capacity gives FPGL substantial cost advantage and, further, that denying Cities access to such capacity is causing and will cause them substantial disability in competing fox service axea and cus-tomers.

The future independence of smallex municipal generating systems is affected by their inability to obtain access to com-petitive power supply sources. Floxida Public Service Commis-sion Chairman Plilliam &Iayo has been reported as stating that availability of nuclear. power to the laiger systems makes

'he the sale of the smaller ones necessary. According to a news-cast transcript, Radio Station PlXRA in Fort Pierce, Florida, reported on 19 March 1976:

"The sale of municipal power plants is probably going to be necessary. The sales like the one proposed for Fort Pierce where Fort Pierce will sell its municipal plant to Florida Powex 6 Light and like the one in Vero Beach which is near an end where Vero Beach is selling its municipal plant to Florida Power a Light.

Nilliam Mayo, a Public Service Commissioner, talked about proposed sales as he was in Fort Pierce yester-day to tour the nuclear power plant. Here's what he said'1 think this is a joint problem of which the municipalities and the privately owned. power companies are concerned because the municipals are faced with the problem of continuing to 60

enpand with. an obsolete type of plant, let'.s fa'c'e'.i, bec'au's'e f'ossilis -ob s'ol e'te 'to d'aj,so their~roblem is to continue to e. and with an of 'their current 'needs o'r sell to a privately owns'd'ompany who. wall then, as I ~ncner~stan it, t'e wou'ld own reuenues, their dist'ribu'ti'onsystem, and the people won t be paying much difference for their electricity, 'utover th'e'n'g'tho'f'ime 'th'a't'e"ret.'a'"k'ina about th'e lifeof 'any aeneratina lant:,'he p ant i'nto'he ower ool o'f Florida Power & Light wh'ich'X course is'ontinuing to increase its

'n'uclear eneration. So I would say, looking down the road a long'way, that the people rea-son the municipalities will benefit because of theix being able to participate in lower cost nuclear eneray.'" Emphasis added.

Quoting the City Manager of Vero Beach, Florida, the Daytona Beach News reported on 1 March 1976:

/

"'Ne are solely dependent. on imported fuel oil, which is killing us,'uccinctly replied Little. 'Xf it were possible to sell our generating plant, I wouldn' even consider going out of'the T&D (transmission and distribution) business,Ne have the best small plant, in the state, bar none, and the best reliability regardless of size,'eclared Little.

"He explained that without access to nuclear power or natural gas fuel and being dependent. on high priced imported oil, more than half of the system's $ 13 mil-lion in revenue goes for fuel. EP&L can do the same job for about $ 4 million less a year. Aside from the advan ages of diversified fuel supplies, FP&L enjoys an inherent advantage that large generating units have over smaller ones, emphasized Little."

An evaluation of the proposed sale of the Uero Beach electric system prepared for the City by'rnst. & Ernst listed as "additional considerations" (to the terms of the

sale offer) that Vero Beach "would enjoy benefits or disadvan-tages of high technological changes" and would "enjoy bene-fits or disadvantages of var'ied fuel sources jof] FP&L," then cited the facts outlined above that 22'- of FPSL's generation is nuclear and 26% is gas power'ed.

2. Past Acquisition Attempts Xn addition to its current efforts to acquire smaller neighboring systems, FPGL has attempted in the past to expand through acquisition. Xn 1958, FPGL offered to sell emergency power needed by New Smyrna Beach on the conditions that that city (1) agree to postpone the purchase of additional genera-4 ing equipment; (2) negotiate a possible lease or sale of the system's electric facilities; and (3) initiate the necessary legislation for a charter change to reduce the legal majority necessary to sell the system.

Xn February, 1965, FPGL wrote to New Smyrna Beach "in connection with [its] power problems and the manner in which these problems might be solved." Xt again suggested a sale or lease of the system. On 19 April 1965, the City of Edge-water (which was the fastest growing part of the New Smyrna Beach service area) passed a resolution giving notice of ter-mination of its franchise agreement with New Smyrna Beach.

On 1 Nay 1966, Florida Power 6 Light Company concluded a franchise agreement with the City of Edgewater.

Xn 1970, while New Smyrna Beach was attempting to

-'2

obtain from FP&L a parallel interconnection to improve the efficiency of its operations FP&L again proposed a purcnase or lease of the city's system, The Company stated that it was "still of the opinion that it would not be practical to operate both systems in parallel." A satisfactory parallel interconnection agreement was finally concluded in 1976, but only after the electorate defeated a renewed attempt by FP&L to acquire the system.'/

1/ To a very large extent, continued independent operation of the New Smyrna Beach system depended upon the existence of a parallel interconnection and interchangeBeach's agreement, which Company was withholding. New Smyrna beach 'he was electrically isolated from the mainland system, was area,'hich dependent upon purchased power from FP&L. The result of this arrangement was that, New Smyrna Beach could not efficiently use its own generation and integrate i" with purchased power, and therefore had to'ay excessive demand charges for capacity purchased from FP&L where the city could not. make full use of related energy.

Xn short, FP &L was seeking to purchase the system and, at the same time, was withholding an appropriate inter-connection and interchange contract, which controlled the economics of operating the system.

The situation was especially marked, since FP&L an-nounced that, in payment for the system, of facilities it would be willing to the inter-to allow for the building necessary connection--which it was not willing to do if it could not pur-chase the syst: em.

Finally, before the sale of the system could take place, the New Smyrna Beach City Charter required that. the system be appraised by at least two qualified appraisers.

Ordinance 868, amending Sec. 193, Ch. 22408, Special Acts, Laws of Florida, 1943. Based upon information filed. with the Federal Power Commission, used had been retained by it appears that both of the appraisers FP&L. Payments by FP&L to one of the (cont'd) 63

Xn 1965, the Company similarly attempted to acquire the Fort Pierce municipal system. And in 1967;. in response to inquiries by Vero Beach concer'ning the 'availability of wholesale power, the Company responded:

jNje are reluctant to go further into this at this time as we believe there are other alternatives which should first be fully studied. These will include:

"(a) Similar arrangements for interchange of power between us such as we now nave 'with the City of Jacksonville and Orlando Utilities Commission, r

"(b) The outx'ight purchase of your present system by our company.

"(c) A 30-yeax lease of your present system by our company for our operation." Letter dated 28 November 1967, from FP&L to the City Commission of Vero Beach.

Xn 1967, FPaL wrote the City of Homestead as follows:

"You will recall when we met last that the Council, in addition to requesting proposals for an intercon-nection or a wholesale power contract, agreed (without too much enthusiasm T. admit.) to consider a proposal at the same time to purchase or lease your system.

h'e have been working on such a proposal in addition to the arx'angements covering interchange ox wholesale contract." Letter dated 3 October 1967 from FPaL to Nr. O. R. Pearson, City &tanager, City of Homestead.

(lf contend) appraisers wexe contemplated the other was a consultant to the Company at over $ 200 million; in an antitrust case brought against FPaL by the City of Gainesville fox having con-spired with Florida Power Corporation to effectuate a texri-toxial division, among other things.-'a'ine'sv'i'1'1'e'ti'li'ties Dept;. and'ity ofGainesvi'1'le','l'ori'da v. Flo'rida 'Power 6 L~lht Co., Case No. 68-305-Clv.-J-T (N.D.5'la.); Whale there was a jury verdict in favor of 'FP&L in that case, the evidence produced therein clearly demonstrates conduct by FPGL "incon-sistent with the antitxust laws."

64

The interrelationship between FP6L's acquisitions policy and its refusals to deal was aptly illustrated in a case concerning that Company's dealings with the City of Clewiston, Florida, Zn'lor'i'd'aower' L'it'o., 37 FPC 544, 560, 572-573 (1967), the Presiding Examiner stated:

"Clewiston is three miles from Florida's Banch-Foxt, ayers txansmission line.'lewiston owns and, operates ita own distribution plant. It.

presently pux'chases its electxic supply rom U.S. Sugar Corporation, which -in turn purchases Clewiston's requizements from Glades Electric Cooperative, Inc., Glades purchases its power from Florida three miles from Clewiston. Clewis-ton seeks to purchase dixectly from Florida. Di-rect service to Clewiston by Florida would save the City $ 100,000 pez year.

"In 1952 Clewiston and U.S. Sugar sought jointly to obtain power for the summer months. Florida stated its willingness to sell power +o U.S. Sugar, but, was not willing to permit, the power to be re-sold to Clewiston.

"In 1954 Clewiston requested direct sexvice from Florida at wholesale. This was refused on the grounds that. this was contrary to company policy, that it would not sell to a municipal at wholesale except in the case oX furnishing an emergency supply.

As an alternative, Florida proposed to lease Clewis-ton's distribution system and sell directly at re-tail within the City. This counterproposal was ze-jected by the City Commission.

"In 1957 Clewiston again requested that Florida sell directly to it. Florida stated in essence that Clewis-ton's request was rejected, but that it would be will-ing to buy out the system and sell at retail within the City. The City turned down this counter-offer, and, as a result, was unable to purchase power from Florida. At this conference, Ploxida restated the same company policy as was stated in the 1954 nego-tiations.

"Xn 1962 Clewiston again "eguested a d'rect power supply from Florida. Florida stated, in essence, that. its policy had not changed and it would there-fore not sell to Clewiston at wholesale.

"Xn July l965 Clewiston requested a d'ect wholesale supply from Florida at the same rates as Florida was using for its sales to Glades, the rural electric co-operative which was res'elling Florida power to U,S.

Sugar which in turn was selling to Clewiston. Florida stated in essence that the company policy had not changed, and that it would not sell to Clewiston.

"in a September 1965 conference Florida's president stated in essence that the company policy regarding selling power to municipalities had not changed, but could change. He would propose to Florida's- Board of Directors that if .

the City of Clewiston would agree to have a referendum to see if the City would. sell its distribution system to Florida or should continue to operate it, and the City Commission would be bound by this referendum, Florida would, sell directly to the City if the referendum vote were in favor of City own-ership. Florida also stated, in essence, that the rates would not necessarily be as low as the rates to Glades, and that this would have to be worked out.

Clewiston informed,. Florida that mit a written proposal it if Florida .~ould sub-would be presented to the City Commission for appropriate action,"'/

Florida Power 6 Light Co., 37 FPC 544 (1967), was ultimately affirmed by the United States Supreme Court in l"PC v. Florida Power a Li ht Co., 404 U.S. 453 (1972).

1/ Thus, FPaL denied Clewiston access to economical power 'supply during the same time it was attempting to acquire the system.

Through a settlement agreement entered into in 1966, Clewiston fina,lly obtained the right to purchase wholesale power, but through an arrangement whereby it purchased power at wholesale from Glades Electric Cooperative, inc., which power had first, been puxchased by Glades from FPaL. 'ity Clewiston, Flo'rida v.'lo'r'i'da Powe'r 'G L'igh't'o., FPC Docket of No. E-7243, "Order Terminating Proceeding" (July 6, 1966)

3. Territo ial Agreements'irect evidence exists that Florida Power 6 Light Company ac ed to condition an interconnection agreement with the City of Gainesville upon the execution of a territorial agreement. When 0'h e City of Gainesville requested, Federal Power Commission assistance in obtaining an interconnection agreement, Florida Power 6 Light Company responded to the Federal-Power Commission's request through Ben A. Fuqua, Zsq.,

recently retired Senior Vice President for management and Planning:

"The facilities of the Florida Power Corporation are, of course, much closer to "hose of the City of Gainesville than are any facilities of our Company.

Obviously, we feel it would be an economic waste for us to undertake to build lines when Florida Power Corporation is already in immediate proximity.

"We have received a copy of the letter addressed to the Commission by Hr. N. J. Clapp, President of the Florida Power Corporation, and we have observed that Nr. Clapp expresses a willingness to sit down and try to work out this situation with the City of Gaines-ville officials. Ne are quite hopeful that this can be done." Letter dated 17 February l965, addressea to Hr. J. H. Gu ride, Secretary, Federal Power Com-mission. l/

l/ Florida Power Corporation had responded Power Commission:

to the Federal "Nith reference to Pr. Kelly's alternative request for assistance from the Commission in reaching an interchange agreement with Florida Power 6 Light Company, he has apparently overlooked the limita-tions in the City's Charter. Furthermore, Florida Power Corporation and Florida Power 6 Light Company (cont'd) 67

Throughout these interconnection negotiations, Florida Power & Light. Company informed Florida Power Corporation and kept, itself informed concerning Florida Powex's actions. FP&L took the position that. Gainesville was in Floxida Power's "terri-tory," and, further, that an agreement on division of retail territories was a. prerequisite for interconnection. 1/ FP&L (1/ cont'd) several years ago entered into territorial agreements to preserve territorial integrity, thus avoiding dup-lication and economic waste.* These agreemen s are on file with the Florida Public Utilities Commission, pur-suant to that Comm'sion.'s jurisdiction of these two companies.= Accordingly,'e would have to resist any

~

effort to'iolate the letter or spirit of these terri-torial agreements." Letter dated 10 February 1965, addressed to Nr. J. H. Gutride, Secretary, Federal Power Commission,-by Nr. N. J. Clapp, President, Florida Power Corporation.

At the same time, FP&L was arguing against its having power pool responsibility; 1/ For example, on 12 August 1965, Nr. Robert H. Fite oz FP&L wrote to Nr. John R. Kelly, then Director of Utilities in Gainesville:

"Xn discussing a possible interconnection with Gaines-ville among ourselves, the question of responsibility for service areas always arises. Xn this case, three parties are involved--the City of Gainesville, Florida Power Corporation, and Florida Power & Light Company.

Xt would seem that in order to avoid duplication of distribution facilities, any plan should include an agreement that. would define the service areas of all three suppliers and would clearly indicate the respon-sibility of each one; Have you given any thought to this subject--.and what are your commen"s as to how this matter could be xesolved'?"

Cities do not allege that Florida Power Corporation is involved (cont'd) 68

and,Florida Power are interconnected with each other; however, FPGL would not deal with customers or other systems located within Florida Power's service area.

Xn testimony in Gainesville Utilities Dept. v. Florida Power 6 Light'o., Case No. 68-305-Civ. J.T. (M.D.Fla.), FPGL acknowledged that it would have objected had Florida Power attempted to obtain a franchise without clearing it with FPGL.

Xn December, 1954, Starke attempted. to purchase whole-sale power from FPGL. FPGL refused. ln a letter dated 23 De-cember 1954 addressed to Nr. N. J. Clapp, Florida Power Corpora-tion, Nr. E. E.

Dearmin of FPaL described his Company's refusal:

"As you suggested, I informed these gentlemen at the beginning that we were very sorry, but in no position whatsoever to make- them a proposition as to supplying them with wholesale power service. I went into con-siderable detail as to why we could not make them a proposition, stressing particulaxly the point of ser-vice area Xn 1958-1959, FPGL refused to sell power at. retail in Chiefland, since, according to a memox'andum concerning the Company's proposed response, ". . '. this is in the Florida Power Corporation territory and they have been serving Chief-.

land under a franchise which has expired."

'(l/ cont'd), in antitrust violations. Florida Power Corporation settled any cases involving such allegations and has affir-has matively agreed to actions that would avoid anticompetitive si-tuations. E.g., see license conditions agreed. to in Florida Power Corp. (Crystal Ri'ver'n'it No.'), NRC Docke" No. 50-302A; Flor'da E.

Xn 1963, Hinter Garden was considering beginning a municipal system. FPGL refused to sell power to tl e proposed system, sending a blind copy of the refusal to Florida Power.'/

Evidence of dealings between Florida Power 6 Lignt Company and other systems clearly shows FPGL acting to maintain territorial divisions.

Concerning its dealing with Fort Pierce, a 25 February 1969 internal FPGL,memorandum stated that, the Company had. no objection to Fort Pierce's request that territorial agreements be separate from a proposed interchange territorial agreement is executed first.."

agreement'providing the Memo-randum from Nr. R. D. Hill to Hr. Coomes.

4. Refusals to Deal Florida Power a Light Company is unwilling to enter into a fully integrated pool arrangement, such as exists, for 1/ During this time, Florida Power & Light Company, Florida Power Corporation and Gulf Power Company (which is part of the Southern System) were jointly cooperating to attempt to have a bill passed that,:

"No electric supplier shall construct or extend dis-tribution or transmission facilities within one thousand (1,000) feet of an area supplied by or line owned by another electric supplier without the express written agreement of the supplier of the area involved."

70

examole, in New England 1/, whereby generation wou3.d be sched-uled as is most economic, regardless of system ownership. A

- I study prepared for the Florida Coord'nating Group 2/ confirms that such single system approacn would impxove the economics of generation in Florida:

"Joint planning for the development of generation and transmission facilities of'fees many advantages to the members of a power pool. Eliminate.on of dup-lication of effort in tne many steps'necessary to obtain plant site certification along with transmis-sion facilities expansion efforts which show that planning is based on common system needs without re-gard to service area should be viewed with favor by regulatory authorities. . . ." "A Florida Electric Power Pool" prepared by Power Pooling Task'"orce for Florida Operating Committee, December 1974, p. 1-2. 'he Xn Section 6-1 of its study, the Task Force stated somewhat more specifically:

The economies to be realized by pool operations 1/ The New England Power Pool (NEPOOL) was ormally established in 1972, with the objectives of maximizing reliability and eco-nomy, with an equitable sharing of benefits and costs among the participants. Membership is open to all utilities in the region, regardless of type of ownership. Zn 1972, NEPOOL in-cluded 42 utilities and represented over 95% of the New England power load.

2/ The Florida Electric Power Coordinating Group ("FCG") is a corporation comprised of nearly all Florida generating en-tities. According to the agreement on which the FCG was founded, its purposes are, among other things, to ". . . en-gage in active coordination of planning, construction and uti-lization of generation and transmission facilities in Florida" and to "serve as electric industry liaison with appropriate governmental bodies."

are difficult to quantify but, they do include positive aspects such as:

Fuel savings.

Lowering of resexve requirements and attendant lower investments in production facilities.

Investment economies of scale for production and transmission plant.

Reduced expenditures in the site approval processes."

For example, even with access to interchange power, without a fully integrated pool 1/, a smaller system p esently must with the waste of fuel and manpower--operate its generation continuously'n order to serve its own load plus generate suf-ficient spinning reserves to carry that load. On a pool basis, such generation might not be loaded except during statewide peak load periods and in the event of major outages. At the same time, since existing capacity costs tend to be less for municipal systems than for others, such pool would allow smaller systems credit for such capacity, while enabling FPaL to avoid adding more expensive capacity to its own system. 2/

1/ As described in the Florida Operating Committee's Power Pooling Task Force xeport entitled A F'1'or'da Electric Power Pool, an integrated pool is comlposed of corporately non-affi-liated systems. Planning and operations are carried out, how-ever, as though the individual systems wexe one syst: em. Sec-tion 1-1.

2/ FPGL's history concerning pooling and coordinating arrange-inents is shown in the record in Flori'da'owe'r '6ight'o,, FpC Docket No. E-7210. Xn that Proceeds.ng, the Federal Power Com-mission sough to determine whethex FPaL was an electric utility (cont'd) 72

(2/ cont'd) subject to its jurisdiction under Section 201 of the Federal Power Act, 16 U.S.C. 5824. The central issue in the case was whether FP&L engaged in tne transmission of ener-gy in interstate commerce, and the Commission heard testimony concerning, 'in'ter 'a'iia, the Floricla Operating Committee.

Xn the mid-1960's, the Florida Operating Committee con-sisted of FPGL, Florida Power and Tampa Electric Company as full members, and Jacksonv'lie Electric Association and Orlando as associate members. Nhile FPsL acknowledged that the term "pool" had been applied to the arrangements, there was a it denied that true Florida power pool, contending that the Com-mittee's activities were primarily directed toward securing emergency service and were +ar less formal and comprehensive tnan the term "pool" implied.

Xn its reply brief, filed inlo'ridao<ier' Light Co.,

FgC Docket No. E-7210, on 9 February 1966, FPGL stated (at pp. 2-3):

[T]he committee was set up as an in ormal group are no 'pooling 'r to consider mutual operating problems relating to the interconnected operations of these systems. There ments among these systems.

multiparty contracts or commit-Xt is an informal arrange-ment for the purpose of helping each other in cases of emergency."

The record, the Commission determined, demonstrated that the "pool" produced substantial benefits for FPGL:

"Consideration has been given to FPL's assertion that because of the unique peninsular nature of its service area that it it planned its system to be sel+-suf+icient, and.

possesses sufficient generating capacity of its own to meet its loads without any dependence upon the spinning reserves or emergency power of other Florida or out-of-state systems. Ne do not find this assertion persuasive. The fact that FPL could opera e as a self-sufficient utility is not controlling in that manner. The record in this proceeding makes plain that FPL receives substantial benefits from its it participation in the Florida Pool in the coordination of spinning reserves, the arran'gement of plant maintenance schedules, and the assurance of reliability of frequency control and from both the Florida Pool and XSG in the form of automatic assistance in the case of emergencies."

'lo'r'ida'ower '6i't'o., 37 FPC 544, 551-552 (1967).

By avoiding FPC jurisdiction, FPGL could avoid that (cont'd) 73

FPGL has stated that it will transmit zor the Utilities Commission of the City of New Smyrna Beach that Utilities Com-mission's Crystal River Unit No. 3 and St, Lucie Unit No. 2 entitlements (under tex'ms and, conditions still to be negotiated,) .

However, FPGL is unwilling to grant general transmission rights to New Smyrna Beach, even in principle, because the Company does (2/ cont'd) Commission's consideration of its obligations to interconnect with other utilities pursuant to'Section 202 oz the Federal Power Act, 16 U.S.C. 5824a. The FPC found, however/

as stated above, that FPGL was obtaining substantial benezits from its cooxdination arrangements and that FPC jurisdiction. 37 FPC at 551-552.

it could not avoid.

The contrast between the benefits of coordination en-joyed by FPGL and the effects of the Company's actions on the smaller systems is demonstrated by tne previously detailed ac-tions with regard to Clewiston, Florida, a party in Florida Power 6 Light Co., FPC Docket No. E-7210.

The Commission staff contended (Florida Power 6 Light Co., FPC Docket No. E-7210, "Reply Brief of Commzssion Staff,"

19 February 1966, at pp. 19-20):

.[T]he Commission should consider also benefits ezoected to accrue to the City of Clewiston, Florida, from an interconnection and direct wholesale service that, could be ordered pursuant to Section 202(b) of the Act . . . if in this proceeding."

FP&L's is found to be a public utility Staff continued (Id.):

"On a number of occasions FPL has refused to provide direct service to the City because of Company policy and direct service by FPL would result in an estimated

$ 100,000 annual saving in t¹ City's power supply costs (Brief of the Commission Staff, p. 36) . FPL has not contradicted the evidence in this regard presented by Clewiston at the hearing." Transcr'pt references omitted.

not wish to be a "common carrier," as it stated in a letter dated 9 January 1976 from Nr. R. G. Mulholland to George Spiegel, Zsq. l/

Not only has FPGL refused to deal with the smaller utili ies in providing access to alternative power supply ar-rangements, but, on informat'n and belief, FPGL has opposed state legislation intended to allow the smaller systems to form joint ventures, including legislation that would have al'lowed Cities to jointly finance participation in nuclear and other generating units. Thus, FPGL has opposed legisla-tion that would allow the smaller systems within Florida to take advantage of economies of scale on a basis that FPGL it-self enjoys because of its size. A fidavits of Osee R. Fagan, Esp., and Harry C. Luff, Jr.

FP&L had in the past pursued a policy of refusing to sell wholesale power to municipalities, even though it was selling such power to rural electric cooperatives (on terms prohibiting resale of power to municipalities). Clewiston had to resort to litigation before the Federal Power Commission Jl An example of FPGL's ability to use its control over trans mission to prevent potential cost savings to other systems is its refusal to allow for the sale of Orlando's surplus capacity Affidavit of Harry C, to the Jacksonville Electric Authority.

Luff., Jr. Such refusals to deal can adversely affecttheresource

=

environ-utilization, and are likely to adversely impact upon ment, as well.

to obtain Wholesale powe- supply. The Chairman of ZP&L's Board of Directors, i~sr. Richard C. Fullerton, provided one reason for the Company's policy prohibiting the cooperatives from selling power to municipal systems:

"And we were not ourselves wholesaling to municipali-ties, so why should we sell to somebody else and let him wholesale it. I mean that is as good as a reason as i can think of it you want me to think one up."

Deposition of Richard C. Fullerton, Gainesville Uti-lities Dept. v. Fl'ori'cia power a Li'ght co., ~su rap,.

83.

While it appears clear that. under its FPC tariff, FP&L is obligated to sell wholesale power 1/, the Company has at d'or least implied that it is presently unwilling to do so. See

~Da tong Beach Evening News, 1 Narch 1976,'upra in response to a question of whether FP&L was willing to sell firm power to Fort Pierce, FP&L's representatives responded:

Z.ctually, FP&L doesn't really have any firm power with anybody. He wouldn't want to have firm power somebody unless the generating company could, also, guarantee him firm power. They don' have any firm power to guarantee. If they did, it' awfully expensive."'l Florida Power & Li.'gh't 'Co., ZPC El'ectric Tariff, Original Volume No, l, First Revised Sheet No, 5, "APPLXCM'ZOH "To electric service supplied to a municipal electric utility or to a cooperative non-profit membership cor-poration organized under the provisions of the Rural Electric Cooperative Law for their own use or for re-sale."

76

FPGL responded. further that wholesale power would be uneconomic.

"Then you get into a demand charge and a ratchet be-cause if the demand vent up to 50 megawatts and then three of four or ive months, you really only needed 20, FPFL couldn't be expected to I;sic] standing by with that much generation. That the whole ball game. The ratchet that's a nice word because every-body doesn', understand it--means that for the next 11 months you have to pay that same demand. That' vhat's a horror story for somebody that's trying to operate like this. To answer your question, he doesn' think that's the ansve . . . ." l/

Zn addition to absolute refusals to deal, FPSL has often taken lesser steps of agreeing to deal on clearly anticompetitive terms and conditions, such as the sale of wholesale power a discriminatory rates or at rate levels which create a price squeeze against smaller systems. Supplemental Affidavit of Robert E. Bathen. Florida Pover 6 Light Company presently sells wholesale power with a filed 75~ ratcnet on billing demand. Hovever, it imposes a 100~ ratchet for systems pur-chasing pover, vho also have their ovn generation. The rat-chet, subject to review by the Federal Power Commission, establishes that a customer must. pay capacity charges asso-ciated with purchased power equal to that. percentage of the highest amount or electricity use in a preu'ious billing peri-od, even though less power is purchased during the billing in question. Florida Power 6 Li ht Co., FPC Ele'ctric

"'eriod 1/ The relevant excerpts are in the Supplemental Affidavit of Robert A. Jablon, Esq.

77

Tariff, Original Vol. No. 1, First Revised Sheet No. 5. The statements of the FP&L representatives to Fort Pierce consti-tute an almost explicit recognition that their purchased power charges are structured in such a way as to oreclose Fort Pierce's purchasing of supplemental electricity, partially nuclear gene-rated, as an alternative to sale of their system to FP&L.

Xn view of FP&L's actions denying Cities access to power supply alterant'es, as delineated suora, its past and present acquisition attempts are inconsistent witn the policies of the Sherman Antitrust and Clay"on Acts,. 15 U.S.C. 551, 2, 18, as well as those of the Atomic Energy Act.

Xt may be assumed that it is not illegal ocr se for for one utility to acquire another'/, although in some sz.tua-J tions the mere act. of acquisition by a utility already possess-ing substantial monoooly power may be unlawful, The most ob-vious way to avoid competition is acquisition of tne competi-tor. Un'i.'te'O't'a'tes v. Cr'e'sc'e'n't 'Amusemen'tCo., 323 U.S. 173, 186 (1944). Especially in a highly monooolized industry, further restriction of the already limited competition must be treated as suspect. Gulf Sta't'es'til'itic's'o. v. FPC, 411 U.S. 747 (1973); Uni'ted States v." El Pa'so Natural Gas Co., 376 U.S. 651 (1963). See'orther'n" Natur'al Gas'o. v.'PC, 399 F.2d 953 (D.C.Cir., 1968). 2/

1/ Cf., Citizens for'llegan County','nc. v.'PC, 414 F.2d 1125 (D.C.Cir., 1969).

2/ At this stage,. Cities take no position whether further at-tempts at acquisition by ZP&L would be unlawful; nor do they preclude that the citizens or duly constituted governing bodies of one or more of their members might choose to sell their electric system based upon an informed assessment of their individual needs and alternatives available to them.

78

However, assuming the legality of FPc L' acquisition attempts, the Company cannot lawfully restrict other while at the same time seeking to acquire those systems'lternatives systems. Horeover, the citizens of a municipally owned system subject to a pu chase offer would, need to be fully informed concerning such power supply op"ions as might be reasonably available to them, in order to assess the offer, FP&L's present size and dominant position stem from public rights granted by the state and from secure retail markets achieved through long-term franchises.

These markets can support the construction of high voltage transmission and large scale generation, in particular the construction of nuclear generating units, and enable FPGL to achieve a generation mix on its own system providing both economies of scale and back-up generation resources. Pith these grants "of the public domain" go obligations to deal.

PPC v. 18eho Power Co., 344 U.S. 17, 23 (1951); Norm v. I111no1e 94 U.S. 113 (1876). 1/

1/ As the'upreme Court stated in'n'io'n'a'cific'a'ilw'ay 'Co. v.

Goodridqe, 149 U.S. 680, 690-691 (1893):

deriving its franchi.'se from the legislature, and depending upon the will of the people for its very existence, it [a common carrierj is bound to deal fairly with the public, to extend them reasonable facilities for the transportation of their persons and property, absolute equality."

and to put all of it's patrons upon an

=

One of the basic principles that has remained inviolate throughout the h'storv o the common law is that w'hen one holds a franchise, from the crown or the state, or otherwise has es-tablished a substan"ial monopoly control of a resource neces-sary for the functioning of a substantial part of society, he is bound to make that resource or the services assoc'ted with that resource available to all without discrimination, except as cost differences may justify.

'I Common carriers, whether engaged in interstate commerce or in that, wholly within the state, are per-forming a public service. They are endowed by the state with some of its sovereign power, such as the right of eminent domain, and so endowed by reason of the public service that they may render. As a conse-quence of this, all individuals have equal rights both in respec to service and charges. . . . To af-firm that a condition of things exists under which com-mon carriers anywhere are relieved from the burdens of these obligations, is a proposition which, to say the least, is startling." Western Union Telegra h Co. v.

Call Publishin Co., 181 U.S. 92,99-100 (1901).

Accord, Alabama 8 Vicksburg Bailee Co..v. Mississippi Rail-road Commission, 203 U.S. 496 (1906); North Carolina Public.

Service Co. v. Southern Power Co., 282 Fed. 837 (4th Cir.,

1922), ~seal dismissed,, 283 U.S. 508 (1924); Postal Cable Fed. 726 (N.D.Tenn , 1910); Salisbur Southern Power Co., 180 N.C. 422, 105 S.E. 28, 28-29 (S.Ct.,

1920). 1/

1/ "Nhenever one engages in that business, the obligation of:

equal service to all arises; and that obligation, irrespective of legislative action or special mandate, can be enforced by the courts." Missouri Pacific Railwa Co. v. Larabee l"lour Nills Co., 211 U.S. 612, 619 (1909). See also, Texas & Paci-fic. Railwa Co. v. ICC, 162 U.S. 197, 211 (1896).

80

Thus, Florida Powez' Light Company cannot lawfully use its control over power supply facili ies be they nuclear or large fossil fueled generating units, or transmission faci-lities--or its ability to affect. the legal erms and. conditions under which Cities must operate, to restrict Cities'lterna-tives and the'r ability to compete. Otter Tail Power Co. v.

United States, 410 U. S. 366 (1973), and the "bottleneck monopoly cases 1/, stand for the proposition that a utilitv controlling vital .acilities is obligated, to provide access to those facilities on nondiscriminatory terms and, further, that it may not use the strategic economic dominance result-ing from control of those facilities to advantage itself in other markets. "if monopoly power cari be used to beget mono-poly, the [Shermanj Act becomes a feeble instrument indeed."

United States v. Griffith, 334 U.S.'00, 108 (1948). Lorain Journal Co. v. United States, 342 U.S. 143 (1951).

EIere, becau e of FPGL's f'ailure to grant nuclear ac-cess, its failure to enter into an integrated statewide power pool, its failure to make transmission services generally avail-able and provide a. joint transmission rate, and, indeed, i s attempt to prevent legislation that would enable municipal systems to develop partial alternatives 2/, acquisitions by 1/ E.g., Silver v. New York Stock Exchancae, 373. U.S. 341 (1963); Lorain Journal Co. v. United States, 342 U.S. 143 (1951); United States v. Griffith, 334 U.S. 100 (1948); As-sociated Pxess v. United States, 326 U.S. 1 (1945); United States v. Terminal Railroad Association, 244 U.S. 383 (1912).

2/ Even assuming the legality of .PGL's legislative activi-ties under the Noerr-Pennington doctrine, and assuming that such activities were not a "mere sham," Eastern Railroad Con-ference v. Noerr Motor Freight,'Xnc., 365 U,S. 127, 144 81 (cont'd)

the Company must be deemed unlawful, until FP&L has been purged of such conduct. 1/

Since FP&L's acquisition efforts are supported by its nuclear monopoly, the nuclear Regulatory Comi aiiission is clearly obligated to take action, lest FPGL's use of nuclear energy weaken free competition in Florida and lest. the be..efits of governmentally developed nuclear energy be limited to a few, directly .contrary to the purposes of the Atomic Energy Act, stated in Section 1, 42 U.S.C. 52011.

(1/ cont'd) (1961); United Nine Workers of America v. Penning-ton, 381 U.S. 657 (1965), they are relevant as illustrating the "purpose and character" of FPGL's other conduct. United Nine Workers of America v. Penninaton, supra, 381 U.S. at 670,

n. 3, ana cases cited dxerein. Accorc, BLRB v. Vi Sinia Zlac-tric 8 Poser Co., 31-". U.S..469 (~1941 . But see Cali.fora>a Hecht v. Pro-Football, Inc., 444 F.2d 931 (D.C.Cir., 1971),

cert. denied, 404 U. S. 1047 (1972); Sacramento Coca-Cola Bott-

~lin Co. v. Chauffeurs Local 150, 440 F.2d 1096 (9th Cir.,

8 Produc"ion Co. v. Aluminum Co. of Am rica, 438 P.2d 1286 (St!s C r , 1971), 'ce.rt. denied, 404 U.S. 1047 (1972); Geo Se R. Whitten, Jr., inc. v. Paddock Pool Builders, inc., 424 F.2d 25 (1st Cir., 1970), cert. denied, 400 U.S. 850 (1970}.

1/ Attempts to preserve its monopoly by preventing new entrants to the market would be equally illegal under the same circum-stances. Beyond the economic effects of FPGL's refusals to deal and its other anticompetitive activitiesI which wou" d have a similar effect, discovery would be reauired in order to determine the extent of Florida Power a Light Company's activities to prevent the entry of potential competition into the wholesale and/or retail power supply market.

82

Florida Power 6 Light Company's conduct is directly contrary to the "terms and provis'ons" of Section 186 of the A omic Energy Act, 42 U.S.C. 52236, and, its regulations. Cities are faced with a situation in which Florida Power & Light Com-pany's eris ing nuclear generation (and that planned and. under construction) comprises the direct means by whicn it obtains competitive advantage, whicn advantage leads to the potential elimination of some systems. Certainly, the frame s of the Atomic Energy Act never intended that. nuclear 'power be used'n support of anticompetitive conduct. The unconditioned li-censing of PPGL's St. Lucie Unit No. 2 would maintain that situation (as well as create additional disabilities for Cities).

Zf PP&L's St. Lucie Unit No. 1 and Turkey Point Units No. 3 and No. 4 cannot otherwise be reached, the only corrective would be to condition the St. Lucie Unit No. 2 license (and, South Dade Unit licenses) so as to provide access to these earlier units. Such access would prevent Florida Power G Light Company from reinforcing, through the construction and opera-tion of St. Lucie. Unit No. 2, its monopoly position obtained through its fa'lure to offer access to its existing nuclear generating units. Since St. Lucie Unit No. l and the Turkey Point nuclear units were licensed for "research and development,"

they were never subject to antitrust scrutiny. However, the power generated'by these. units now comprises a large part of

the factual "situation inconsistent." l/

Use of nuclear powex to support antitrust; violations and at the same time to put independent systems out. of busi-ness is intolerable. While because PP6L's unit:s under considex'a-tion are now in operation or, in the case of St. Lucie Unit Ho.

2, planned for construct'on, Cities do no+ seek a stay of the construction or operation oz sucn units, even though they are being used t:o support anticompetitive activity directly to Cities 'etriment. However, clearly if act.iona by PPGL, themselves illegal, erode he ability of other systems to com-pete, pending determination of this litigation, the entire status auo of the market s-'ructure in Plorida will have been permanently changed to eliminate competition. Thexefoxe, pend-ing the resolution of the matters raised by Cities, interim l/ Cities seek censes) for St.

license conditions (or modifications to Lucie Unit; No, l and Turkey Point Units No.

li-3 and 5'o. 4 that will afford them the opportunity to purchase directly into these units on a reasonable basis. However, at this stage, Cities do not preclude t.hat lesser relief may be deemed adequate. While such ma ters are appropriate for hear-ing and determination on the merits, relief could include sale of power at costs direct;ly assignable to particular units--

sucn sales would not differ maxkedly from the manner in which power is presently being wholesaled; sucn condition might im- .

pose certain offsetting obligations upon other participants (i.e., interveners), such as a sell-back of capacity to PPaL, consistent with financing reauirements and internal revenue laws, coordination reauirements, or the like. Xn any event, in light of Plorida Powex & Light Company's obvious abuse of its control over nuclear power in Plorida, that no relief is appropriate.

it cannot be assumed 84

relief would be appropriate to prevent the alteration of the status auo by FPsL through misuse o nuclear power or through other anticompetitive actions supported by such misuse.

Rather than lengthen this pleading, since the granting of sucn preliminary relief {in the nature of a preliminary injunc-tion) would necessarily entail review by a hearing board, Cities will file a motion for such preliminary relief separately.

WHEREFORE, Ci"ies respectfully request. (l) that a hearing be ordered to determine whether the issuanc of the construction permit in St. Lucie Unit No. 2 will create or maintain a situation inconsistent with the antitrust laws; and whether the proposed permit should be denied or conditioned to comport with the public interest as required bv the Atomic Energy Act, Section l05(c); (2) that a proceeding be established to determine whether Florida Power s Light Company's licenses-for Turkey Point: Units No. 3 and. No. 4 and St. Lucie Unit No.

l should be revoked or modified in accordance with tne Act; (3) that Cities be granted intervention in both proceedings; and (4) without waiving any of the foregoing, should the Commission determine that any of the above relief should not be granted the Commission should forward this petition, together with all supporting affidavits to .the Federal Trade Commiss'n pursuant to Section 105(a) of the Atomic Energy Act to determine whether Florida Power 6 Light Company has "violated any' the provi-sions of such sections jtherein cited) in the conduct of the licensed activity."

Respect ully submitted, Robert A. Jablon Attorney for the For" P'erce Utilities Authority of the City of Fort Pierce, the Gainesville-Alachua County Regional Electric Pater and Sewer Utilities, the Lake Forth Utilities Authority, the Utilities Commission of th City of New Smyrna Beach, the Orlando Utilit'es COIQHliss3.on I the Sebr3.ng Ut" l3.t2.es Cocci V<2,s-sion, and the Cities of Alachua, Bartow, Bushnell, Chat+ahoochee, Daytona Beach, Fort "!cade Lake >!elen, Leesburg, Fioun t Dor'a Newber =y, Quincy, St . Cloud, 4' lis-z g

ton and Tallahassee, Florida, and the Florida '!unicipal Utilities Association Dated: 6 August 1976 Law Offices of:

Spiegel & i~!cDiarmid 2600 Virginia Avenue, N.71.

Washington, D.C. 20037 202-333-4500 86

Ih