ML19207B723

Requests Review of Events & Allegations Listed Re Noncompliance W/Antitrust License Conditions or Significant Change

ML19207B723
Person / Time
Site:	Grand Gulf, Waterford, 05000383
Issue date:	07/19/1979
From:	Oleary J ENERGY, DEPT. OF
To:	Hendrie J NRC COMMISSION (OCM)
Shared Package
ML19207B719	List: ML19207B723
References
NUDOCS 7909050133
Download: ML19207B723 (3)

Text

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%i Departrnent of Energy E

Washington, D.C. 20585 E

July 19, 1979 p

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Honorable Joseph.M. Hendrie 1

chm mn EE Nuclear Regulatory Commission g

Washington, D.C.

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Dear Mr. Chairman:

Certain municipal and cooperative electric utilities E

located in Louisiana have recently made allegations to of Energy (DOE) that Louisiana Power and 7

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the Department (LP&L)--a member of the Middle South L

Light Company Utilities Holding Ccmpany (MSU)--is engaging in anti-E.

cc=retitive activities.

We understand that the Muclear Regblatory Commission (NRC) is currently conducting (OL) antitrust reviews in connection Operating Licensewith two me:Joers of MSU--LP&L and Mississippi Power and (MP&L).

Further, it is our understanding Light Companyboth LP&L and MP&L have had antitrust license condi-that tiens attached to their construction permits of the Water-ferd and Grand Gulf nuclear units, respectively.

In light of both NRC's previous experience concerning the 7

co=petitive relationships anong Louisiana electric utilities and its ongoing OL antitrust reviews concerning LP&L and a separate investigation by DOE would be unnecessarily Consequently, we request that you consider

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duplicative.

events during ycur OL reviews of the MSU members whether the and allecations listed below constitute either non-compliance license conditions or a "significant wi-h their antitrust of the Atomic Energy specified in Section 105c(2) change" as Act of 1954, as amended.

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Until recently, Louisiana Changed fuel situation.

utilities were heavily dependent upon natural gas (1) for boiler fuel.

Recent and projected gas curtail-(i nents will force the utilities to seek alternative 79090 5 q u mma 7/26.. To EDO for Prepare reply for signature of EDO.

Date due Cerm: Auc. 10.

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Di s tribution: Ori9. to Docket, OPE, OGC, Logged Ex Parte.

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fuel sources.

The Assistant Attorney General, Antitrust Division noted in his letter to the Cu.d ssion dated February 21, 1978, concerning changed circumstances in connecting with the South Texas Project that similar events were occurring in Texas.

The Assistant Attorney

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General concluded that the " changing fuel situa-tion has had a significant impact on the competi-ii_.

tive posture of the various utilities in Texas.

In order to maintain their competitive viability these (smaller) systems must engage in a degree of coordinated operation and development that has not heretofore existed in the State of Texas."

(p.7).

Does the situation in Louisiana parallel the Texas situation in this regard?

The proposed acquisition of Central Louisiana ' Electric (2) by Gulf States Utilities.

CLECO has Company (CLECO) several interconnection points with LP&L including one 500 kv and two 230 kV lines (McGraw Hill Direc-tory).

Thus, CLECO could have been an alternative power source for smaller utilities, and a potential competitor of Does elimination of a potential competitor rep-LP&L.

resent a "significant change"?

Apparent refusal by LP&L to sell partial requirements (3)

The Waterford license cond'itions require firm power.

but LP&L to provide a variety of bulk power services, specifically require sales of partial equire-do not Would a refusal to supply such ments firm power.

power be in compliance with the staf f 's understanding of the intent of the Waterford license conditions?

a change Alternatively, would such a refusal represent and in the company's policies toward its competit: ors, if so, a "significanc change"?

Allegations that the MSU selectively passes through (4) e.g., fuel adjustment and transmission certain costs, charges, to its subsidiariee to the competitive detri-the Commission is currently ment of other utilities.

As conducting OL reviews of two =cmbers of the holding to investiga-this allegation could be subject ccmpany,If the allegation is verified, would this be tion.

indicative of-a "significant change"?

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(5)

Since the construction permit review, LP&L has ob-tained lease-purchase agreements with at least five of its municipal competitors.

This alone is not necessarily indicative of anticompetitive behavior.

Ecwever, when considered in the context of the (1) changed fue1 situation, (2) the proposed elimination of a potential co=petitor, (3) apparent refusal by LP&L to sell partial requirements firm power, and t:

(4) alleged selective cost pass throughs by the if parent holding company MSU, would these potential si acquisitions have anticompetitive aspects, and if

[E so, would this indicate a "significant change"?

if I will appreciate being kept informed as to whether any of -

the above concerns are revealed to have anticompetitive implications during the course of your OL reviews, and also the status of these reviews as they progress.

Thank you for your attention to this matter.

Sincerely, J'.

F.

eary Deputv ecretary.

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