ML18227B527

Notice of Appeal and Appellate Brief of Florida Cities

ML18227B527
Person / Time
Site:	Turkey Point
Issue date:	04/29/1977
From:	Giacalone D, Jablon R Florida Cities, Spiegel & McDiarmid
To:	Atomic Safety and Licensing Board Panel
References
Download: ML18227B527 (40)

Text

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING APPEAL BOARD NOTICE OF APPEAL AND APPELLATE BRIEF OF FLORIDA CITIES Robert A. Jablon David A. Giacalone Attorneys for the Fort Pierce Utilities Authority of the City of Fort Pierce, the Gainesville-Alachua County Regional Electric Water and Sewer Utilities, the Lake Worth Utilities Authority, the Utilities Commission of the City of New Smyrna Beach, the Orlando Utilities Commission, the Sebring Utilities Commission, and the Cities of Alachua, Bartow, Daytona Beach, Fort Meade, Key West, Mount Dora, Newberry, Quincy, St. Cloud and Tallahassee, Florida and the Florida Municipal Utilities Association April 29, 1977 Law Offices of:

Spiegel & McDiarmid 2600 Virginia Avenue, N.W.

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

TABLE OF CONTENTS PAGE INTRODUCTION ....................................... 1 Statement of the Case .............................. 4 I Argument ....................................... 14 II. The Licensing Board has the Authority to Order an Antitrust Hearing on the II Old Plants ll . ................................. 16 III. In the Event it is Deemed Applicable the Board Should Reconsider the South Texas Decision

~ ~

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 22 IV. Once an Antitrust Hearing Was Ordered in Construction Permit Proceeding for the St. Lucie 52 Plant, Ancillary Jurisdiction Existed to Order A Combined Hearing Which Includes the Operating P lants ........................................ 27 C oncluszon ......................................... 31

TABLE OF AUTHORITIES COURT CASES PAGE Cities of Statesville v. AEC, 441 F.2d 962 (D C CilsI 1969)

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 11, 19, 20 FTC v. Raladam Co., 316 U.S. 149 (1942) 19 Gulf States Utilities Co. v. FPC, 411 U.S. 747

( 1967 o ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 18, 23, 30 Nia ra Mohawk Power Co. v. FPC, 379 F.2d 153 (D ~ C ~ Cir ~ f 1 967) ~ ~ ~ ~ s ~ ~ ~ ~ ~ o ~ e o ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 18 Revere Co er and Brass, Inc. v. Aetna Casualt and 27 United Gas Im rovement Compan v. Continental 21 United Mineworkers of America v. Gibbs, 383 U.S. 715

( 1966 s ~ ~ ~ ~ ~ ~ ~ ~ s ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ I ~ 27 U.S. v. New Orleans Chapter Associated General Contractors of America, 382 U.S. 17 (1965)

P (E.D. La. 1965) 19 NRC CASES Consolidated Edison Compan of New York, (Indian Point Units 1, 2 and 3). CLI-75-8, 2 NRC 173 (1975)... 23, 24, 28, 29 30, 31 Duke Power Com an (Catawba Nuclear Station, Units 1 and 2), ALAB-355, NRCI 76/10 397 ............. 25, 31 Houston Li htin 6 Power Co., (South Texas Project, Units 1 and 2 , ALAB-381 (March 18, 1977) passim Kansas Gas 6 Electric Co.(Wolf Creek Generation Station, Unit 1 , 1 NRC 559 (ALAB-279, 1975) 20 Kansas Gas 6 Electric Co. (Wolf Creek Nuclear Generating Station, Unit 1), ALAB-321, NRCI 76/5f 293 (1976) ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 21 Duguesne Li ht Co. (Beaver Valley Power Station, Unit 2), ALAB-208, 7 AEC 959 (1974) 29

PAGE Public Service Company of Indiana (Marble Hill Nuclear Generating Station, Units 1 and 2),

ALAB 316'RCI 76/3g 167 (1976) 22 Toledo Edison Com an (Davis-Besse Nuclear Power Station, Unit 1), ALAB-323, NRCI 76/4 (April 14( 1976) o ~ ~ ~ ~ ~ ~ ~ e ~ ~ ~ ~ ~ ~ e ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 21, 30 STATUTES Atomic Energy Act of 1954 Section 1, 42 USC 2011 2, 6 Section 104 (b), 42 USC 2134 7, 8, 9, 17 Section 105, 42 USC 2135 8, 10 Section 181, 42 USC 2231 12 Section 183, 42 USC 2233 2, 7, 8, 12 Section 185, 42 USC 2235 2, 7, 8, 10, 12 Section 186, 42 USC 2236 2, 7, 8, 10, ll, 12 Section 187, 42 USC 2237 2g 7g 8~ 10'2 Section 188, 42 USC 2238 2g 10'2 REGULATIONS UNDER THE ATOMIC ENERGY ACT Regulations Under the Atomic Energy Act S ection 50.54 ~ ~ ~ ~ ~ 0 ~ ~ ~ ~ ~ ~ ~ ~ 0 ~ ~ ~ t ~ ~ ~ 1 ~ 0 ~ ~ ~ ~ ~ 0 12 Sects.on 50.100 12 NRC RULES OF PRACTICE NRC Rules of Practice Rule 2.105, 10 CFR 52.105 ................... 21 Rule 2.202, 10 CFR 52.202 ................... 12

PAGE Rule 2.206, 10 CFR 52.206 9g llew 29'1 Rule 2.714, 10 CFR 52.714 17, 18, 21, 26 Rule 2. 717 (a), 10 CFR 52. 717 (a) 17 Rule 2.718, 10 CFR 52.718 26 Rule 2.721, 10 CFR 52.721 26 Rule 2.785, 10 CFR 52.785 30 Rule 2.786, 10 CFR 52.786 30 MISCELLANEOUS Florida Power 8 Light Co. Power System Statement to the Federal Power Commission for 1975 (Form 1 2) ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ o ~ ~ ~ ~ ~ ~ ~ ~ ~ o ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Florida Power & Light Co. Annual Report to Federal Power Commission for 197S (Form 1)

Florida Power 6 Light Co. Annual Report to Share-holders for 1975 Report by the Joint Committee on Atomic Energy to Accompany H.R. 18679, 24 September 1970, 91st Cong., 2d Sess., H.R. No. 91-1470 10

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE .THE ATOMIC SAFETY AND LICENSING APPEAL BOARD Florida Power & Light Company }

(St. Lucie Plant, Unit No. 1) } Docket No. 50-335A

)

Florida Power a Light Company )

(Turkey Point Plant, Unit Nos. }

3 and 4) } Docket Nos. 50-250A 50-251A NOTICE OF APPEAL AND APPELLATE BRIEF OF FLORIDA CITIES Introduction On August 6, 1976, Florida Cities 1/ filed with the Nuclear Regulatory Commission a "Joint Petition of Florida Cities for Leave to Intervene Out of Time; Petition to Intervene; and Request for Hearing."

They requested intervention out of time in the proceeding relating to the St. Lucie Unit No. 2. Florida Power 6 Li nt Com an , Docket No. 50-389A. They also requested:

Commission review of the operating licenses issued to Florida Power 6 Light Company for its Turkey Point Units No. 3 and 4 1/ l'lorida Cities" consist of the Fort Pierce Utilities Authority of the City of Fort Pierce, the Gainesville-Alachua County Regional Electric Water and Sewer Utilities, the Lake Worth Utilities Authority, the Utilities Commission oi the City o~ New Smyrna Beach, the Orlando Utilities Commission, the Sebring Utilities Commission, and the Cities of Alachua, Bartow, Daytona Beach, Fort Meade, Key West, Mount Dora, Newberry, Quincy, St. Cloud and Tallahassee, Florida and the Florida Municipal Utilities Association.

and St. Lucie Unit No. 1, to determine whether the Commission has 'impose [dj the minimum of regulations and terms of license as will permit the Commission to fulfill obligations under [the Atomic Energy Act],

its 's is reauired 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 ActI 42 U S C /f2134

~ g 2235 2236 I 2237 I 2238 I to g

determine whetner and under what terms and conditions the operating licenses for the above-mentioned plants should be revoked or modified... 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."

"Joint Petition," suora pa,ges 2-3.

The Trial Board granted the joint petition of Florida Cities with regard to St. Lucie Unit No. 2 in Docket No.

50-389A, and:

ordered that an antitrust hearing be held to determine whether the activities under the license applied for would create 'or maintain a situation inconsistent with the antitrust laws pursuant to the provisions of Section 105 (c) (5) of the Atomic Energy Act." iMemora'ndum and Order Grantin Joint Petition to intervene Out of Time and Request for Antitrust Hearing, Florida Power Li ht Cpm@an (St. Lucie Plant, F*

Units 1 and 2; Turkey Point Units 3 and 4),

Docket Nos. 50-335A, et al., (April 5, 1977, pages 29 of slip opinion).

Florida Cities do not appeal this ruling.

However, citing the Atomic Safety and Licensing Appeal Board decision in Houston, Li htincr and Power Com anv (South TeXaS PrOjeCt, UnitS. 1 end 2} P. ALAB 381"". (NarCh.'18'977)', ( SOl'ith TeXaS!', aS standing for the proposition "that a petition's Board does,not have the authority to reopen a terminated construction permit

proceeding by ordering a hearing on supervening antitrust questions," the Licensing Board dismissed Cities'oint petition insofar's it r'elates to the oPerating licenses of Turkey Point Units 3 and 4 and St. Lucie Unit No. l.

Florida Cities respectfully appeal from the'icensing Board's ruling insofar as (l) it failed to order an antitrust, hearing relating to whether the operating licenses for Turkey Point Units 3 and 4 and St. Lucie Unit No. l, should be revoked, modified or conditioned; and (2) it failed to find the South Texas decision inapplicable to this proceeding. As they must, in order to preserve their rights, l/ Florida Cities also appeal on the basis that South Texas is in error.

Florida Cities stress that what they seek ultimately is a determination of the appropriate procedures whereby their substantive claim"may be heard. They believe that they have stated ample grounds for determining that Florida Power and Light Company is utilizing electrical energy generated pursuant to licenses granted by this Commission directly contrary to the purposes for which they were or could have been granted. They therefore seek modification of the operating licenses or other relief to prevent such licenses being used contrary to law. So long as the procedures ultimately ordered for determining these questions comport with equity, fairness and due process of law, l/ Florida Cities respectfully request that to the extent this Appeal Board may find South Texas controlling, it reconsider that decision in this case.

Florida Cities do not seek a particular mode of procedure for determining their rights. However, the'y res'pectfully submit that common sense would appear to suggest that a threshold resolution of their rights by an Atomic Safety and Licensing Board versed in antitrust law would be most appropriate.

Statement of the Case Florida Power & Light Company ("FPGL") is the dominant electric utility in Florida. As has been stated in the Department. of Justice "advice letter" of November 14, 1973, concerning FPGL's application for a construction permit for its St. Lucie Unit No. 2 (NRC Docket No. 50-389A):

"Applicant is far the largest electric utility in the byState of Florida; serves it approximately half of the statewide electric load. Headquartered 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, provided retail electric 'power to 574 it communities with over 1,500,000 customers.

Its total energy sales for 1972 were 38,927,808 megawatt hours. Applicant's summer 1972 peak load was 6, 011 megawatts; its dependable generating 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, approximately 90 percent of the high-voltage transmission in the area--including the 230-kilowatt main transmission grid for southern Florida and the I /

east coast." 1/

The Tu=key Poin" Nuclear Un. ts, No. 3 anc. No. 4, are ooerating 'u"suant to 1'ceases issued Julv la, la72 Apr~ 1 10, 1973, resoec. ive v, &L n s .

ecen ly commenced operat'ons o= St. ucie Unit No. 1, also a zssue I oursuant to an ooera ing 1'ce..se 'sued 3 74 a976 o hl 1 above 1'censes were 'ssued under Section '04(b), !7 U.S.C.

$ 2134.

Th. comb:ned n~~eolat ge..er i'on capaci "y Q7 8\Q ahovn un's ' 2 g 266 megawatts. 2/

n the'r Augus" 6 Jo't Pet'tion,:lor'da C't'es se-orth as follows (pages 11-13, foo ~ot s cm -');

Because 0: the market" cost dz erences between nuclear genera"ed oower and the alternatives that are available to Cities, FP&L

's abl to use the econom'c advantages gains frcm a virtua>>uclear mono oly to attecot to forc at eas t some '.dependent systems f=om business and to adversely affect the econcm'cs of all cities'perations. :P&L has ofzered to buy a leas one irdeoendent systom, Vero 1/ According to its 1975 Ann~t Report to the Federal Pcwer Caanissicn (Fozm 1), FP&L had 1,738,000 custmiers at. the end of 1975 and had 34,100,898 mwh sales of energy in dwt year. Form 1, p. 409. It also had 3819.12 miles oz high-voltage tranm'ssion. lines at the end oz 1975 (Id., at 442) and experienced an arcual peak danand of 7,076 rtw in August, 1975 (Id., at 431) .

According to its 1975 Pcwer Sys~i statavent to the F.P.C. (Form 12),

at page 29, FP&L had 8,927 nw of dependable capacity at y~-end 1975. In'ts 1975 Annual Roport to Shareholders, at page 11, the Ccmpany also report~4 that FP&L ranked 5th in the nation in num"er of custcmers served.

st-~ that the Canpany had em~ienceR a winter peak of 7,287 rrtw in January, It also 1976 (Ibid.) and tmt appraxQvately 650 ccrrrrmu.ties were b FP&L. Su~lenent to 1975 P~ual Report to Shareho3.Gers, page 5.

'~ sezved bv 2/ In an Initial Deciaion dated April 19, 1977, Dccket No. 50-389A, Licensing Board authorized issuance of a construction permit for St. the Lucie No. 2. The unit has a capacity of 810 rm. FP&L also has pending applications for two additional nuclear units of plant capacity of 1,140 megawatts each, Florida Power & Light Ccrrtpany, NRC Docket No. P-636-A.

Hcwever, at the request of the applicant, proceedings in this docket have been suspended.

Beach. It is apparently considering offers to purchase other systems.

FPSL has refused to enter into an integrated power pool or to make generally available transmission services, thereby adversely affecting power supply alternatives and markets available to Cities. In some instances, it has refused to sell wholesale power to Cities or has discouraged such transactions. It has lobbied against state legislation that would facilitate the financing of joint venture 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 4 and St. Lucie Unit No. 1, as well as the planned operations of St. Lucie Unit No. 2 and the South Dade units, [1/] will provide a means by which FPGL 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 welf are..., increase [s] the standard of living, and strengthen[s] free competition and private Energy Act, Secticn 1, 42 U.S.C. $ 2.011. Here, the very enterprise.'tomic existence of electric systems is threatened by FP6L'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 those underlying the antitrust laws. Therefore, Cities seek corrective relief."

1/ South Dade refers to a proposed location for possible future FPGL nuclear units, at issue in Flora.'da Power 6 Li ht Com an , Docket No. P-636-A.

Florida Cities'actual contentions are furthe'r summarized at pages 50-53 of the Joint Petition and in the'ir Summary of Argument to "Reply of Florida Cities to Responses'f Florida Power & Light Company and Nuclear Regulatory Commission Staff" (October 19, 1976). These contentions are set forth at greaterlength beginning at page 54 of their Joint Petition. Their requested relief on the merits is at pages 53-54 of the Joint Petition.

In their Joint Petition, beginning at page 43, Cities set forth a number of legal bases for their entitlement to intervention.

First, they contended that the Commission has a general responsibility to act where units licensed by it "are being utilized in an integrated fashion to injure Cities, contrary to the antitrust laws and policies." Cities "invoke[d] the the aid of this Commission to obtain appropriate relief."

Joint Petition, page 44.

Second, Cities set forth that Section 104(b), 42 U.S.C. $2134(b), itself provides for a "minimum amount of such regulation and terms of licenses will permit the Commission to fulfillits obligations under this chapter" and consistent with the purposes of the Act. Joint, Petition, pages 44-46.

Third, they demonstrated that Sections 183, 185, 186 and 187, 42 U.S.C. 552233, 2235, 2236 and 2237 specifically avoid a vesting of rights to licensees and provide for revocation

and modification of exi,sting licenses, so that li.censee's are under continuing obligations to comport with 'the Atomic Energy Act, the regulations 'of the Commission, the'authorizations issued, and the antitrust laws. Joint Petition, pages 46-47.

Florida Cities attached affidavits and documen'ts to their Petition in support of their factual contentions.

Zn their answering pleadings, neither the Nuclea'r Regulatory Commission Staff nor Florida Power S Light Company made any serious attempt to establish that Florida Cities had not made a suf ficient factual showing en'titling them to intervention and a hearing. However, they each 'claimed that Florida Cities had provided no proced'ural basis for relief.

"Answer of the NRC Staff to Petition to Zntervene 'Out of Time and Request for Hearing by Certain Florida Cities" (September 17, 1976); "Response 'of Florida Power 6 Light Company in Opposition to: Joint Petition of Florida Cities for Leave to Zntervene Out of Time; Petition to Zntervene; and Request for Hearing" (September 1, 1976).

Staff argued that Section 104(b) licenses (42 U.S.C.

g2134(b) are not subject to the antitrust review provided for in Section 105'(c) of the Act (42 U.S.C. 52135(c); Answer, pp. 9-11) and that the Licensing Board could not order a Section 183 and 185-187 hearing (42 U.S.C. gg2233, 2235-2237)

Zd., pp. 11-12. With regard to the merits, Staff states (p. 3, n. 4):

since Staff believes that intervention is not warranted [with Cities'ate to St. Lucie Unit 2]'e have not addressed the merits of Cities'etition

'egard with respec't to those 'contentions raised at pages 49 through '82. It should be 'noted, however, that these same contentions were considered sufficient to allow and request for he'aring in Cities'ntervention the South Dade procee'ding."

FPGL took the broad position that Section 104(b) licenses were not subject to being reopened on antitrust grounds with certain exceptions not here 'rel'evant, on grounds, inter alia, that the requests "do not comply with 'any procedure under the Act or regulations." Res'ponse,'age '10. 'vailable FPGL argued that if a procedure does exist, it is '"by filing an appropriate request with 'the Director of Nuclear Reactor Regulation under Section 2.206(a)." Response., p. 11. FPGL declined to address the merits of the Joint Pet'ition, stating (page 61):

"As is stated on page 50 of the Petition

'the substantive contentions raised in

[the Petition] and in Docket No. P-636-A are virtually iden'tical.'I]n that proceeding, wher'e petitions were submitted in a timely fashion FPL has readily agreed to meet the charges on their merits, and inten'ds to demonstrate on that record their complete lack of factual substance.'o go thr'ough 'the exercise of identifying technical faults in these same contentions in this context

[of a late petition] would be an artificial exercise, wasteful of the time of the Board and the parties. The compelling [procedural]

reasons for denying this petition in its entirety have been stated in the foregoing sections of thi's response."

ln their reply brief 1/ Florida Cities pointed out that they were not seeking relief relating to the Section 104. licenses under P

Section 105'. and that Section 105'"was not the exclusive means of -affording relief. Pages 11-16:

[T]he 1970 amendments only cut off the Section 105 hearing for 'research. and development licenses.'esearch and devel'opment licensees.

could construct and operate their plants without antit ust review.'owever, Congress hardly freed such licensees from any ex'.sting obligations they might have under Section 104 or elsewhere.

But Sections 185 through 188 of the Act, 42 U.S.C. 552235-2238, specifically provide for modification of the licenses. For 187, 42 U.S.C. 52237, states:

example,'ection

'The terms and conditions of all licenses shall be 'subject to amend-ment, revision, or modif ication, by reason of amendments of thi:s cnapter or by reason of rules and regulations issued in accordance with the terms of this chapter.'anguage more explicitly avoiding a vesting of rights to licensees can hardly be imagined."

Florida Cities argued further (pages 13-14);

"Thus, as is clear from reading the'ct, as well as the 1970 Joint Committee Report 1/, the 1970 amendments have two principal purposes: to assure fair antitrust review'nd to allow for timely construction and operation of nuclear power plants. By el'iminating Section 105 review for

'research and development'icenses, Congress assured that construction and operation of plants could go forward on a timely basis.

1 Report by The Joint Comma.ttee on Atomic Energy

[To accompany H.R. 18679], 24 September 1970, 91st Cong., 2d Sess., H.R. No. 91-1470 (hereinafter referred to as 'Joint Committee Report.').

1/ "Reply of Florida Cities to Response of Florida Power and L'ght Company and Nuclear Regulatory Commission Staff" (October 15, 1976) .

"Congress provided that nucl'ear units authorized under existing licen'ses 'could be 'constructed and operated witho'ut further antitrust delay.

This would'.be 'equitabl'e 'in light of alrea'dy committed res'ources. However, ther'e 'is nothing in the'970 amendments or in the legislative history of the amendments to surges't that because it would be 'des'irable 'for already licensed plants to be built and operated',

licensees should therefore enjoy a to utilize federally granted licenses greater'ight to the antitrust laws tha'n they 'ontrary would have had before In substance, Florida Cities argued that to avoid delay and cost there is a Congressional and public policy to allow continued construction and/or operation of existing units, but that there is no language or policy of the Act, justifying a complete insulation of licensed companies from antitrust scrutiny after construction.

"After pointing out the Commission has a

'most serious duty'o evaluate 'the 'anticipatory antitrust impact of a plant whi'ch has practicability, the'ourt [in 'Citi'es demonstrated'ommercial

'of. Statesvil'le v. AEC, 441 F.2d 962 (D.C. Ci r.,

1969] concludes:

"Finally, under Section 186(a}, 42 U.S.C.

Sec. 2236 (a} (1964), the Commission has "

the power to revoke any type of license it has issued whe'n there is a 'violation of, or failure to obser've any of the terms and provisions'f the Act. Thi's section invests the Commission with a continuing 'police'ower over the activity of its licen'sees and provides it if with the ability to take remedial action a license is being used to restrain trade.'" (441 F.2d at 974.)

Concerning the claim that Section 2.206 provides the mechanism to request a proceeding be instituted, Florida Cities stated (pages 23-25}:

If it is neces'sary that the Section 2..206 mechanism be separatel'y and specifically invoked',

and assuming they have 'not done so by'iling thei;r 6 August 1976 Joint Pet'ition, Florida Cities seek relief under that Sec'tion. They shall serve 'a copy of their original Petition and thi's Reply upon the Director of Nuclea'r Regulation, but to avoid confusion shall ask that action be held in abeyance until thi:s Board acts." (Footnote omitted).

"Florida Cities seek an agency determination whether' proceeding should be instituted pursuant to Section 2.202 to modify, suspend, or revoke FPGZ's operating licenses for the St. Lucie Plant, Unit No. 1 and the Turkey Point Plant, Units No. 3 and 4. Cities'ill cooperate fully with the Board in fulfilling the procedural prereq'uisites receiving a decision on the'erits of its

'o request that proceedings be instituted to determine whether FPGL's activities under said licenses are consistent with 'its statutory antitrust duties. To the extent FPSL'mplies (Response, p. 11, n. 25) that, the NRC's regulations are not explicit, this Board's delegated authority is sufficient to in such gaps. There is a clear statutory fill basis providing a continuing obligation on the part of licensees to comport with the Act and the regulations under it. Section 183,'2 U.S.C. 52233; Sections 185-188, 42 U.S.C.

gg2235-2238. The Commission recognizes such in 550.54 and 550.100 of the 'bligations regulations, 'i;n'ter 'a'1'ia.

"Pursuant to the Commission Rule of Practice 2.206(b), 10 C.F.R. Section 2.206(b), the appropriate Commission official must either institute the requested proceeding or advise person who made the'equest, of the reasons 'he for not instituting the proceeding. Since Section 181 of the Act, 42 U.S.C. 52231, provides that the 'provisions of the Administrative Procedure Act shall apply to all agency action taken under this such refusal would be subject to judicial chapter,'ny review for abuse of discretion.

Contemporaneously, by letter of October'9, 1976, Florida Cities lodged their pleading with 'the Director og Nuclear Reactor Regulation, stating:

"Because Florida Cities'ubstantive claims antitrust matters, the'y'iled these 'nvolve pleadings with 'the Se'cr'etary, as is

'for pleadings involving such

'ppropriate claims. By order issued 13 August 1976, the Nuclear Regulatory Commission establ'ished an Atomic Safety and Licensing Board to Rule Petitions.

'n Since Florida Cities believe they have already properly invoked .thi:s Commission's jurisdiction, the'y do not request that you now initiate a proceeding separate and apart from considerations presently before the Atomic Safety and Licensing Board established to rule on pet'itions, pending action by that Board.

Florida Cities are, of course, prepared to cooperate procedurally in any way, necessary to facilitate consideration of thi's matter."

As was stated above, the Atomic Safety and Licen'sing Board ruled that it was bound by Houst'on Li htin 'an'd: Power

~Com an (South Texas Project, Units 1 and 2) to dismiss this application. Florida Cities therefore take thi;s appeal.'l 1/ By letter of April 18, 1977, "[i]n view of the Trial Board's decision and claims by other parties that it, is appropriate for [him] to rule on this matter," Florida Cities requested that the Director of Nuclear Reactor Regulation "now rule on their Joint Petition." Recognizing that Houston Li htin and Power Com 'a'n (South 'Texas Project, Units 1 and 2),

Docket Nos. 50-498A, 50-499A, may be deemed applicable 'to them, on March 29, 1977, Florida Cities'iled a "Motion for Commission Clarification of Procedures" (March 29, 1977).

X. Argument Florida Cities have set forth.'a factual basis for their contention that' hearing should'e ordered 'that would allow 'them'access to FPGL's operating nuclear units and attendant relief. As has been set fo th above, at page 8,.'eo party has seriously:contested that Florida Cities'actual allegations have been sufficient to warrant a hearing on the ultimate me its oz thei'r claims to elief. Flor'da Cities have also set, forth legal grounds for granting relief. FP&L contests these grounds on the basis of its reading o the law, but these are matters for decision on the merits.

The Appeal Board in Houston Li htin'cr 'and Power Com a'nv, Docket Nos. 50-498A, 'et al., held that dizferent procedures than have been followed here should govern. As they state, infra, Florida Cities helieve that there is st-ong reason to distinguish that case from the instant one. Absent final

. determination concerning procedures, Florida Cities must appeal, to preserve "heir rights. However, Florida Cities stress here, as they have to the Commission 1/, that they seek ultimate determination on the merits. They do not press for any particular mode of resolution within the Nuclear Regulatory Commission, so long as that resolution is consistent with due process, .equity..and fairness...

Ql "Motion for Commission Clarification of Procedures" 1977; "Motion for Leave'o Respond- and Response o" Florida (MarcL'9, Cities to Florida .ower and Light Company and Staxf Answers to Florida Cities'otion for Ccmmission Clarification of procedures" (April 18, 1977).

Florida Cities filed their Joint Petition on August, 9, 1976, by delivery to the Public Document Room at 1717 H Street, N.W., in accordance with the regulations and Commission procedures. The pleading was not rejected, as would have been required had it been filed clearly in error or been insufficient on its face. Rather, a Board was established by the Commission or its delegates to rule upon the matter. Florida Cities did not specify the internal procedures the Commission should follow'in making its rulings.

There must be a means of obtaining a substantive ruling on the Joint 7etiti.on. Florida Cities bel'iev'e 'it appropriate to seek agency advice 'to ascertain what those procedures are and they have sought. such advice.'o the extent that. the actions that have been taken have been insufficient, they again seek such 'advice here.'/

Florida Cities believe that regulations should be interpreted with common sense. It has see'med to them that where there is a section of an agency es'tablished'nd expert in dealing with antitrust matters, it would be more 'appropriate to have that section rule upon issues raised by Florida Cities rather than others within the Commission. In thi's context, I

To the best of Cities'nowled'ge,. this is a case 'of first impression, although it may be affected by the South 'Te'x'as case.

The Appea'1 Board. would of course, have the authori,,ty to interpret the 'regulations 'and establ'ish 'procedures to the exten't that there are ambiguous, or. alternative choices'.'

it is understandable 'that .the 'initial reacti'on'f the 'Office of the Director of Rea'ctor Regulation whe'n Florida Cities did make an additional protective 'filing with. 'that office, was one of surprise and anticipation that the matter would be (Transcript of February 1, 1977 'ral Augment, handled'lsewhere 67}'.: ..While such is, of course, "not'inding', it speaks to "the'- c'ammnsense of the matter. 'eaction Florida Cities are aware of the Appeal Board's order of March 31, 1977, in Ho'u'ston Litin'nd P'ower'om an Docket Nos. 50-498A,.'et al. Needles's to say, to the'xten't that they seek reconsideration of that case, they'o so respectfully, in an attempt to reach 'a result that they'elieve consistent with the best interes'ts of Commission'ractice 'and the overall public inter'est; whi'ch they, as public bodies, have an obligation to serve.

II. The Licensing Board has the Authority to Order an Antitrust Hearing on the "

nOld Plants n Given the legal, factual and procedural background described above, and for the reasons given'elow, it, was error for the Licensing Board to rely upon the decision of the Appeal Board in'oust'on Li htin a'n'd'owe'r'o'm 'an (South Texas Project, Units 1 and 2}, ALAB-381, issued March 1977, because the legal and factual context of the presen't

'8, case is materially distinguishable.

The Licensing Board erred in applying the South Texas opinion to the operating plants because those plants are operating with licenses issued under $ 104 of the Atomic Energy Act. Thus, unlike the plants under consideration in the South Texas case, FPGL's operating plants were never subjected to antitrust review, nor even to published notices allowing interested parties to request an antitrust hearing.

The Appeals Board in the South Texas case put heavy emphasis upon the policy of Commission Regulation 2.717(a), 10 CFR, g2.717(a}, that "there mus be an end to litigation sometime".'outh Texas, suora, mimeo page 17.

Obviously, this principle of repose has no application in the situation where there has been no antitrust hearing nor even the possibility of an antitrust hearing in the construction permit or operating license stage. Therefore, to the extent that $ 2.717(a} is a limitation upon a licensing board s authority under 52.714, 10 CFR 52.714, to rule upon a request for intervention or for a hearing, that limitation has no application to the present proceeding.

Florida Cities respectfully request, then, that the South Texas opinion be limited in application to the facts of that case. A broader application of the decision would substantially limit the access of antitrust grievants to the Commission and would run contrary to the Supreme Court's

oft-repeated declaration that there is a profound national commitment to the purposes and policies of the antitrust "aws.

Zt would belie the Congressional intent that regu'atory agencies like the Nuclear Regulatory Commission be "the first 1'ne of defense" against competitive practices that might later be the subject of judicial proceed'ngs. See Gulf S'tates U i lities Comaan r v. Federal Power Commission, 4 1 1 U. S . 747, 760 (1967) . It would also subvert the Supreme Court's t aching

'n Gulf Staten, auura, 411 U.S. at 762, th t an agency g"ran a regulatory task must have tne flexib'lity needed to mold 'ts procedures to the exigencies of tha par icular case."- 1/

There ore, the South exas case should be limited, to the procedural context in which it arose. That is, it should be construed to mean that when the licensing process for a particular plant is still on-going, a licensing board has no authoritv to order an antitrust hearing outside of the context of a construction permit hearing or an operating 1'censing hear'ng.

1/ Zn Houston Li htin arJd Poorer Co. (South Te~ Project, Units 1 and 2),

Docket Nos. 50-498A, 50-499A, citing Section 161 of the Atanic Energy Act, 42 USC f2201, the'epartment of Justice correctly states that the Gxmission has authority '!to order a he'aring anytina... to detexznine whether antitrust action by the'cnmission would be warranted".. Response of of Justice, dated April 18, 1977', pp. 1-4; 4. Courts have generally the'epartnent interpreted such "necessary and proper" clauses broadly to assure administrative power to canport with the purposes of enabling acts. ~.; Niagara.

Mohawk Power Co. v. FPC, 379 F.2d 153 (D.C. Cir., 1967). The Cczmission and its delegates have authority under Section 161, inter alia, to order the antitrust hearing requested by Florida Cities.

AltE:ough Florida C'ties disagre;rL"4 such a reading of Se mon 2.714, in ~m of the ~ses o" the Ac"', there may be justific 'cn or deci8zg t~zt cuing the hiatus" hetwe~ the cons~~action pe~t prcce~m~

and the operates'g license prcce~~ a 1'c mi~ hcavy must have express authority lcm sa"a other authorit t've cadent of ~.e Gmi,.'ssion in or& to hold an an~~mt ho m.=.; -:his is be ause we Atm,'c N~ ~>~ Act has already cutlined prcc~s or holdi.~ such antit=~t hearings cur='~

the licensing process.

Fllen howeve- f a peti tion ecues t ng an antit us hearing is received after tne licensing s age fo a part'u'ar plan , neitne the pol'cy of allowing limited repose l/ nor the desire for administrative orderliness (which would denv a licensing board "hiatus" authority to order an antitrus hear'ng), can override the Commission's mandate to enforce the antitrust laws by preventing the anticompetitive abuse of Commission licenses bv applicants. Adminis rative convenience prevailed in the South Texas opinion because a full hearing was merely delayed, thus causing no ir epa able damage to the petitioners; since the petitioners there will almost surely be afforded a full antitrust hearing dur'ng the op rating license stage, they can rest assured that the South Texas 1/ Florida Cities have amply rebutted Florida Power and Light's contention that it has an absolute right to repose from further antitrust complaints in their Reply Brief in this proceeding, dated October 15, 1976, at pages 32-40. Under traditional antitrust principles, a defendant is not immunized ran subsequen antitrust claims either because government prosecutors decided at an earlier time to acquiesce in the continuation of the questioned activities see United States v. ilew Orleans Cha ter, Associated General Contractors of America, inc., 382 U.S. 17 (1965), which reversed the lower court opinion, 238 F.Supp.

273 (E.D.La. 1968) uer curiam - or because the derendant won a prio government suit involvang the same practices. =EC v.

Raladam Co., 316 U.S. 149 (1942) . Likewise, the Atomic Fnergy Act itself gives no right to repose to a licensee faced with antitrust allegations. See especially, Sections 105(a), 105(c)(2),

183, 186, 187; and see Cities of 8tatesville v. hEC, sunra.

plants will not go into operation w'ithout appropriate antitrust limitations or conditions. See Cities of Statesville v. AEC, 441 F.2d 962 (D.C. Cir., 1969). In the present proceeding, however, Florida Cities cannot look forward to intervening in or requesting a regularly established and explicitly required antitrust hearing; instead, they must endure the continuing anticompetitive use by Florida Power and Light of the three operating plants until a hearing is granted and suitable relief ordered in light of their specific request. In such a situation, the Commission's regulations and the licensing board's authority should not be given a'imited scope where there are no express limitations in the regulations themselves; as the Appeal Board stated in Kansas Gas a Electric Com an and Kansas Cit Power and Li ht (Wolf Creek Generation Station, Unit 1), 1 NRC 559, 568 (ALAB-279, 1975):

[W]here Congress has exPlicitly mandated the type of conduct to be screened for anticompetitive effects attempts to limit the scope of that obligation by giving a narrow or artificial meaning to the statutory terms have been rejected."

The Appeal Board must interpret the Act and the Commission's 'Regulations to give coherent to the competitive objectives of that Act and the ~ssion's jurisdiction to

accomplish those objectives. '/ See Toledo Zdison Company (Davis-Besse Nuclear Power Station, Unit 1) I BLAB 323, NRCI 76/4, 334 335-36, 343 44 (Z-ril 14, 1976); and see United Gas Tm=rovemient Company v. Continental O.'1 Company, 381 U.S. 392, 403 (1965) (interpr tng -'"e Natural Gas Act) .

imiust, therefo e, limit the applica ion o= -'.'. Sou~'~ ex s ~

decision and d lare the powe cf the "censing Bo "c to scrutinize = lorida C't'es'etition and dec'ce whether c" not to ho d an ant'rus he r'ng on tho operat'ng pl nts. 2/

1/ 'e Appeal Boa d mace lt c" ea 1:l Kansas Cas anc lect 1c CciTQ anv (Wolf Cr e.'. N .cl ar Cen NRCI 76/", 293, 3D~-313. 976),

'ng St

'iat t'n, in Un't No. 1), =~~-321, analy '-.g C~ssicn r,ma-'='cns, thi c n N alz @3M e oz t.

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2.'e Viol= 'sion re'cs c~isicn~cers C ~e c P~~ng LPC r'~es b'av ..ot .M' not have ben as p.~ise ~ 's a3

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5".e gr1evK:ces i rw>>aticns 1~ra.

miust '"e C S

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ay a~~Se so as to ~~i'y acccrxccate 2/ Florida Cities also point out that the Licensing Board has authority under g2;105 of the Commission's Regulations, 10 CFR 52 '05, in combination pith. Section 2.714,. to rule upcn Florida Cia<'tit1cn Bluest'"g a P~zg. Le or~e'f Pzgust 13, 1976 by the >~".g .~~ln of the ~tcmic Safety a.d Li" miry 2ca l Panel es~~~'i~M~ a, Lic~~zing Boa~~ fcr t.'"~ pz~se oz ru.'Ling cn F3.G 'da specifiM~'ty invok~ 52.105 ar~ that order serve~ as notice to ~GL Ci~~~'etition tmt anti~~t he~~ .as m'ght be orde"~ chic ~~ a -"".e ref r nc~ dc Nets Tbo &>peals Hc-~ in Scuth Te~ s=emin3'r, t page 20 oz th mimm ~'"'cn, incluce notice cfhe-ring unde 52.105 as a pxpz sa "ce oz out'..ority zor a l~co~sz'g boar" to ra~e cmn a petition r~ ~a~~".g an ~~~z~~t he ring.

Subsection d(l) of Sectior 2.105 nak~a it cle>> 5".at an app>>cant may zile a rapest for a hmag '~ihen a proposal zor ac<on is noticed unde'2.105; therefore, i" at".pears Bat the smtion n~ not =e u~3'ze" solely whoa an app3'cant has rmest d a n.a3'caticn of its 3icoa~e, hut is a se~mie i~m~i~w~ zor det~~w~ to hold a h~wring wnich is not e~ressly required by the Act or,the Ccximission's Regulations.

III. In the Even't the Board it is Dee'med Applicable, Should Reconsider the

'outh Texas Decision.

Should the above distinguishing factors not persuade

,this Appeals Board that theSouth 'Texas opinion is inapplicabl'e to the present proceedings, Florida Cities respectfully request that the Appeal . Board reconsider that opinion. The following factors should be included in any reconsideration of the 'So'uth opinion. First, Florida Cities note that the Marbl e H'i'll 'exas case offers no support for the South Texas opinion. 'ublic Service Com an of Indiana, Inc. (Marble Hill Nuclear Generating Station, Units 1 and 2) ALAB-316, NRCI 76/3,'67 (1976}. That case merely dealt with the authority (or the discretion) of a Licensing Board specifically convened to hear safety and environmental issues to enlarge the proceedings in order to investigate antitrust issues. It certainly did not say that a licensing board specifically convened to rule upon a petition requesting an antitrust hearing could only rule that it had no jurisdiction to order such a hearing.

I In fact, the Marble Hill Appeal Board specifically stated,,at pages 173-74, that it was intimating no views on whether the petitioners had stated a claim under g105 of the Act or whether good cause had been shown for the late filing. It continued that "if such matters are to be entertained by a licensing board, the Commission must be asked to appoint one for that purpose." Id., 174. Florida

),4th a I

Cities have done just that; through the'ir Joint Petition they have requested the Commission to act upon their claims and a delegate of the Commission has appointed a Licensing Board to entertain the antitrust claims of Florida Cities.

Just as the Supreme Court in Gulf Stat'es,'su ra asserted that an agency must mold its regulations to current needs when addressing antitrust claims, the Commission itself has declared that procedural forms are not to be treated as "fetishes". See 'Consolidated Edison Co'm 'an of New Yo'rk, 'X'n'c.

A (Xndian Point Units 1, 2 and 3), CLX-75-8, 2 NRC 173,'77 (1975}. 1/ The narrow construction of the Commission's regulations given in the South Texas opinion is contrary to judicial and agency teachi'ngs as to the responsiveness this agency must demonstrate if it. is to fulfillits antitrust mandate.

1/ As stated at pp. 16-21, supra,'outh Teras is not applicable here, since it concerns filed petitions seeking conditioning of construction permits or acceleration of operating license review.

The Appeal Board decision rests largely on its reading of g2.714, which was held not to be applicable where there were no "pending" proceedings. Florida Cities believe that the effect is to read-in a limitation to Section 2.714 which is not in the regulation. Section 2.714(a) specifically states that the Commission, the presiding officer,'r a lic'ensin board de'si nated to rule on a etition may make the determination that. good cause has been shown for a late filed petition and thereafter entertain the nontimely filing. There is nothing in Section 2.714 that limits this authority to "pending" proceedings; nor is there any additional indication that such a limitation would apply merely to a Licensing Board designated to rule on a petition. Yet, the South Tex'as decision construes Section 2.714 to contain just such an arbitrary limitation.

The South Texas opinion would leave an antitrust claimant who wishes to impose conditions upon an existing license with the remedy provided in 52.206 of the Commission's rules and regulations. Florida Cities respectfully suggest that such a remedy is not sufficient to give antitrust claimants the full consideration mandated by statute. They also note that there is no explicit statement in the Commission's regulations to the effect that 52.206 is the exclusive remedy once licenses have been issued.

The Commission made it clear in the Indian Point opinion,

~su ra, 2 HRC at l75-76, that there is no appeal to an Appeal Board from a determination made under 52.206 to issue or refuse to issue a show cause order; and if the Commission exercises its inherent authority to review such a decision, it will make only a limited incruiry into whether, on the basis of the information then available, there was an abuse of discretion by the of ficer making the 52. 206 determination. Ibid. On the other hand, a decision denying or granting a request for an antitrust hearing made by a licensing board would receive full review and scrutiny as to both facts, law and policy by an Appeal Board, and perhaps by the Commission itself. The South Texas opinion, then, leaves the delicate question of whether there should be a post-licensing antitrust hearing to an officer with scant antitrust experience in a context where very limited review is available. Due to the importance of

the enforcement of antitrust laws to the public, to the claimant and to the utility licensee itself, Florida Cities respectfully suggests that it would be more appropriate for a Licensing Board, which has expertise in the area of antitrust laws, to make the initial decision as to whether an antitrust hearing snould be held in such a situation; and the ful'eview and scrutiny outlined in the Catawba opinion 1/ is the more appropriate review procedure when an antitrust proceeding is sought relating to an operating plant. Under such a scheme, a knowledgable panel could weigh and balance the many policy factors (such as the right to repose, the need for speedy resolution of antitrust issues, etc.) which are raised by such an invocation of the agency's continuing, antitrust regulatory mandate; and the Appeal Board could review any resultant order to assure that the decision comports with the Commission's policies with regard to antitrust enforcement.

The convening of a licensing board to rule upon such a petition for an antitrust hearing relating to operating plants surely is fair to the licensee. It not only gives the licensee due notice of the charges'hat have been raised against it, but it also allows the licensee to respond to those claims at a time and in a.manner which can truly af ect the decision as to whether a hearing will take place. On the other hand, the procedures outlined in 52.206 would allow the Director of Nuclear Reactor Regulation to decide upon the need for a show cause order without any input. from the affected licensee..

1/ Duke Power Comoan ~ (Catawba Nuclear Station, Units 1 and 2),

%LAB- ( 7 ~

In summary, a reasonable interpretation of the Commission's regulations (especially 2.714, 2.718(1) and 2.721(d)) fully supports the position that the .Licensing Board has the authority to determine whether Florida Cities'etition for a hearing should be granted. Ql. Such a prccedure is fair to both the petitioner and the licensee. It allows for the full consideration of all statutory policies by a body expert in antitrust matters; and it allows full review by the Appeal Board and Commission of any such decision. Therefore, the Appeal Board should remand this case insofar st the Licensing Board dismissed Florida Cities'etition as it relates to the operating plants, for a determination on the merits as to whether an antitrust hearing should be held relating to those plants.

In the alternative, the Appeal Board could itself determine, based on the pleadings below, that an antitrust hearing is appropriate at this time and order the licensing board to proceed with such a hearing. 2/

1/ he sections cited above are not exclusive. %he'oint Petition was made to the Commission in its institutional capacity. Wherever, the Commission may act, a party may, of course, request such

'ction.

2/ It should be again pointed out that the claim of Florida Cities has been found sufficient to warrant a hearing both in the now suspended So'uth Da'de proceedings, Docket No. P-636-A, and in St. Lucie Unit No. 2 proceeding, Docket No. 50-389A.

EV. Once an Antitrust Hearing Nas Ordered in the Construction Permit Proceeding for the St. Lucie 02 Plan", Ancillary Jurisdiction Existed to Order a Combined Hearing f8hich includes the Operating Plants.

Even 'f it is assumed that the licensing board had no

'ndependent ju 'sdict'on to entertain a petit'on requesting an antitrust hearing on the operating plants, the Licensing Board. surelv has the authoritv to invoke ancillary or pendent jurisdiction over the antitrust issues rela 'g to the "old" or operating plants. 1/ ln a situation where a Licensing Board undoubtedly has jur'diction to orcer an antitrust hearing, because an ongoing proceeding is in existence, it should be able to assert ancillary jurisdiction over a petitioner's claims involving similar operative facts and/or legal principles in order to achieve the most efficient, fa'r, and orderlv procedures and to achieve the legislative, judic'al and administrative goal of resolving antitrust issues as expeditiously as possible.

1/ The. judicial doctrine of ancillary jurisdiction holds that mhen a'.federal'ourt;has juri'sdiction of-'n act'on, it may as'n incident to i s disposition decide other mat ers of which it could not take jurisdiction if separately presented. An ancillary issue is one which bears they were a logical relationship to the agg egate core of operative facts which constitutes the main claim over which the court has an independent basis of federal jurisdiction. (That is, the same aggregage oz operative facts serves as the basis oz both claims or the aggregate core of facts. upon which the original claim rests activates additional legal rights in a party tnat would otherwise remain dormant.) See Revere Cooner and Brass, Enc. v..Aetna Casualt'nd Surety Com an , 426 P.2d 709 (5th Cir. 1970). The related doctrine oz pendent jurisdiction allows a federal court to adjudicate a claim which arises unde state law, which it could not otherwise adjudicate, state claim is derived from a common nucleus of operative if the fact related to the federal cia'm upon which jurisd'tion is based. See United b!inevrorkers of America v. Gibbs, 383 U.s.

715 (1966) ~

<<28-The Indian Poi:nt case,'su ra, is instructive. 'n that case safet'y issues'ere raised which 'related both 'to a plant for which operating license procee'dings wer'e currently pending and to other plants which had already received oper'ating licenses. Although the Commission noted'hat the claims related to the operating plants "ought" to have bee'n brought under g2.206, it declares that procedural forms are 'not "fetishes". Id., 2 NRC at 177. It goes on to point out that a party should not be forced simultaneously to argue similar issues in two separate forums. And it declares that parties must be prevented from using Section 2.206 procedures as a vehicle for reconsideration of issues previously decided, or for avoiding an existing forum in which they'ore 'logically should be presented. Ibid. After pointing out tha't an operating license was currently pending before an Appeal Board, whi:ch already had dealt with several similar safety issues and contained two members who had sat on the boards which considered the existing licenses (and were therefore intimately acquainted with the safety issues in question), the Commission determined that the greatest economy of effort for the parties would be achieved, without sacrificing the quality of inquiry, if the issues related to the old plants were also referred to the sitting panel. Id., 178.'/ * ~ ~ ~ - ~ ~ ~ ~ ~ ~ . ~ ~ ~

gl It cannot be doubted that the antitrust issues'relating "ancillary" or "pendent" to the'ssues raised in to the'old" plants are regard to St, Lucie No. 2.. The'ntitrust issues raised"by Florida"Cities are surely as intertwined as were the safety issues in'Indian'Point.

The present situation is strongly analogous to that in indian Point. Neither Florida Cities nor Florida Power and Light should be put into the position o~ having to litigate the same or similar factual and antitrust issues before two forums the licensing board in the St. Lucie No. 2 hearings and any forum constituted under 52.206 or its review procedures. 1/

importantly, the Appeal Board should not allow any party to use the 2.206 procedures in order to avoid litigating antitrust matters relating to the operating plants before what is by far the more logical forum, that is, the Licensing Board, which is expert in antitrust matters.

The logic of accepting ancillary jurisdiction over matters relating to the operating plants is even more apparent when it is considered that, should Florida Cities prevail on the merits, systemwide relief would be available to them. See Du uesne Li ht Comtian (Beaver Valley Power Station, Unit 2)

ALAB-208, 7 AEC 959, 969 (1974). ln addition, any review of anticompetitive ramifications of the operation of the St. Lucie No. 2 plant will have to consider its relationship to the presently operating plants in the Company's .total system. 2/

1/ The Joint Petition seeks consolidated proceedings.

2/ Allowing the Licensing Board to combine a hearing dealing with St. Lucie No. 2 as well as the operating plants will also avoid the anomaly of having the Staff play the role of a party vis-a-vis Florida Cities and Florida Power and Light, in the St. Lucie No. 2 hearing and having to play the role of a prosecutor under g2.206, where it is the Staff that must initially decide whether or not to recuest a show-cause orSer hearing. See South Texas, supra, mimeo p. 37 (concurring opinion of member Sharfman):

Thus, this Appeal Board should conclude that the Licensing Board has the discretionaiy power to accept "ancillary" jurisdiction over the matters relating to the operating plants. 1/ Such powers, which are analogous to those exercised by federal courts, are consistent with and re-enforce the regulatory ideals expressed by the Supreme Court in the Gulf States opinion, suora, and the teachings of the Cosssission in Indian Point, that logic, economy and efficacy of procedures should win out. over strict alliance to procedural forms and the literal interpretation of regulations. And see Davis-Besse,

~su ra N,RCI 76/4 at 335-36, 343-44. The Appeal Board, then, should remand the proceedings relating to the operating plants so that the Licensing Board may decide whether or not a hearing is appropriate in relation to those plants as requested by Florida Citi s. Of course, the Appeal Board could. decide that the pleadings are sufficient for it to order the Licensing Board to hold such a hearing.

Even if the Appeal Board believes that the Licensing Board has no such discretionary authority to assert ancillary jurisdiction, the Appeal Board itself surely does have such power; under 52.785 and 52.786 of the Commission's Rules and Regulations the Appeal Board stands in the Commission's shoes and exercises the Commission's authority when reviewing 1/ In assuming ancillary jurisdiction in order to determine whether to order a hearing relating to the Old Plants, the Licensing Board will obviously have to consider and balance the many policies and issues raised by such a request. That decision will be subject to direct appeal or to a sua ~sonte review by the Appeal Board, thus ensuring that the License.ng Board will not abuse its discretion or take an action inconsistent with agency policies.

~

Licensing Board decisions. Bee Catawba, ~su ra, at 404. Thus, just as the Commission in Indian Point overrode the procedures under g2.206 in order to have similar issues relating to both operating and non-licensed plants heard simultaneously by a panel of experts, this Appeal Board has the authority to either order a similar consolidation of hearings (based on the pleadings below) or remand the issue to the Licensing Board for it to decide at its discretion whether such a combined hearing should be held.

CONCLUSION Florida, Cities respectfully request that the Appeal Board confirm their right to an'ntitrust hearing to determine their entitlements to substantive relief in these dockets.

Alternatively, they request, that this Appeal Board determine that, the Atomic Safety and Licensing Board had jurisdiction to determine the matter and remand for such determination.

Florida Cities recognize that, feeling itself bound by Houston Li htin and Power Com an , Docket Nos. 50-498A, et al.,

the Atomic Safety and Licensing Board did not pass upon the merits. Although this Board clearly has the power to act on the merits, in such situations it would normally remand.

However, since the factual allegations are not in contest for purposes here and were not used below, and legal questions remain,

Florida Cities suggest tha't it would be 'appropriate for thi's Appeal Board to rule on the'se 'leg'al contentions on the basis of the pleadings and record below, or any additional pleadings or procedures that this Board may order.

Without waiving the foregoing, should the Appeal Board determine that the procedures followed were inapposite, Florida Cities respectfully request a determination of the appropriate procedures for them to use to obtain a ruling on the merits of their rights to antitrust conditioning of the license 'issued for the St. Lucie Unit No. 1 and Turkey Point Units Nos. 3 'and 4 or other appropriate relief.

Respectfully Submitted, Robert. A. Jablon vid A. Giacalone Attorneys for the 'City of Fort Pierce, the'ainesville-Alachua County Regional Electric Water and Sewer Utilities, the Lake Worth Utilities Authority, the" Utilities Commission of the City of New Smyrna Beach, the Orlando Utilities Commission, the Sebring Utilities Commission, and the Cities of Alachua, Bartow, Daytona Beach, Fort Meade, Key West, Mount Dora, Newberry, Quincy, St. Cloud and Tallahassee, Florida and the Florida Municipal Utilities Assoc.

April 29, 1977

CERTIFICATE OF SERVICE I hereby certify that I have thi's day caused the foregoing Notice of Appeal and Appel'late 'Brief of Florida Cities to be served upon the following persons:

William C. Wise, Esq. Linda L. Hodge, Esq.

Robert Weinberg, Esq. Lowenstein, Newman, Reis Suite 200 Axelrad 1019 19th Street, N.W. 1025 Connecticut Avenue, N.W.

Washington, D.C. 20036 Washington, D.C. 20036 William H. Chandler, Esq. Lee Scott Dewey, Esq.

Chandler, O'Neal, Avera, Gray, Office of Executive Legal Lang 6 Stripling Director P.. O. Drawer 0 Nuclear Regulatory Commission Gainesville, Florida 32601 Washington, D.C. 20555 David A. Leckie, Esq. Chief, Docketing and Service Antitrust Division Department of Justice Section 1101 Pennsylvania Avenue, N.W. Office of the Secretary Washington, D.C. 20530 Nuclear Regulatory Commission Washington, D.C. 20555 Robert H; Culp, Esq.

Lowenstein, Newman, Reis Ivan W. Smith, Esq.

Axelrad Atomic Safety 6 Licensing 1025 Connecticutt Avenue, N.W. Board Panel Suite 1214 Nuclear Regulatory Commission Washington, D.C. 20036 Washington, D.C. 20555 Tracy Danese, Esq. John M. Frysiak, Esq.

Vice President, Public Affairs Atomic Safety 6 Licensing Florida Power G Light Company Board Panel P. O. Box 013100 Nuclear Regulatory Commission Miami, Florida 33101 Washington, D.C. 20555 John E. Mathews, Jr. Esq. Daniel M. Head, Esquire Mathews, Osborne, Ehrlich, Atomic Safety and Licencing McNatt, Gobelman 6 Cobb Board Panel 1500 American Heritage Life Bldg. Nuclear Regulatory Commission Jacksonvilleg Florida 32202 Washington, D.C. 20555 J. A. Bouknight, Jr., Esq.

Lowenstein, Newman, Reis Axelrad 1025 Connecticut Avenue, N.W.

Washington, D.C. 20036 Dated at Washington, D.C. this 29th day of April, 1977.

avid A; Giacalone