ML19250B941
| ML19250B941 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 09/12/1979 |
| From: | Saltzman J Office of Nuclear Reactor Regulation |
| To: | Udall M HOUSE OF REP., INTERIOR & INSULAR AFFAIRS |
| References | |
| NUDOCS 7911060241 | |
| Download: ML19250B941 (1) | |
Text
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NRR Reading Inw Docket Nos. 50-445A -N
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The Honorable Morris K. Udall, Chaiman Subcomittee on Energy. and-the-Environment;v.7
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Comittee.on~ Interior and Insular. Affairs:
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United States House of Rdpresentativ'es l'
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Dear Mr. Chairman:
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This.is to inform.the Sub'comittee on.En' rgy and the Enviroment that e
the Comission has received additional antitrust advice from the Attorney
~ General:in connection with Texas: Utilities-Generating Company's operating '
1 license application for Comanche Peak' Steam Electric Station.. Units
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- -the Atomic Energy Act of,1954. as amended. '
No. 1 and No. 2.
This, advice :is rendered pursuant to section 105c of t
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.. A' copy of the Attorney General's le'tter dated September 5,.1979, ~is -
enclosed. In his' letter _ he concludes:-
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"In. light of the attached letter' referenced above, where.,
,e by the members of TMPA have agreed to be bound by the outcome of the present Comanche Peak antitrust antitrust hearing, the Department believes _that.an antitrust hearing on the application
, of TNPA to participate in the Comanche Peak units is not
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-Sincerely, j
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",/slJEROME sal.TZMAN t
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',C Jerome Saltzman, Chief
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Office of, Nuclear Reactor Regulation l
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Enclosure:
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A3331 asst aftOpht? CEsstaak amTif mus? Devitacue SEP 5 1975 Howard K. Shapar, Esquire Executive Legal Director Nuclear Regulatory Commission Washington, D. C.
20555 Re:
Texas Utilities Generating Company, Comanche Peak Steam Electric Station, Units 1 and 2, NRC Docket Nos. 50-445A and 50-446A
Dear Mr. Shapar:
You have requested our further advice pursuant to Sec-tion 105c of the Atomic Energy Act of 1954, as amended, with regard to the participation by the Texas Municipal Power Agency (TMPA) in the Comanche Peak Steam Electric Station, Units 1 and 2, NRC Docket Nos. 50-445A and 50-446A.
The Comanche Peak Steam Electric Station will consist of two units, each rated at 1150 megawatts.
The station is being built and will be operated by Texas Utilities Generat-ing Company (TUGCO), a subsidiary of Texas Utilities Company (TU). 1/ By the terms of the agreement between TUGCO and TMPA, TMPA will secure a 6.2 percent ownership interest, or 72 MW in each unit, TMPA is an agency established in 1975 pursuant to Texas law, and it consists of four Texas municipalities engaged in the generation, transmission, and distribution of electric power.
TMPA was formed so that municipal systems with elec-tric generation in Texas could join together to build new generation and to use their existing generation more effec-tively.
The present members of TMPA are the Cities of Bryan, Denton, Garland and Greenville.
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The designation "TU" comprises the Texas Utilities Company and its various operating and service subsidiary companies including Dallas Power and Light Company, Texas Electric Service Company, and Texas Power and Light Company, each of of which is a joint owner of the Texas Utilities Generating Company (TUGCO).
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~By letter to you dated August 1, 1978, the Department advised the Nuclear Regulatory Commission (NRC) that an antitrust hearing would be necessary in reference to the operating license application of TUGCO.
That antitrust hearing, currently in the final stages of discovery, is scheduled to begin in February of 1980.
The basis for the Department's recommendation that an antitrust hearing be conducted on the Comanche Peak operating license was that TU had combined with other utilities in Texas and agreed to disconnect from any other electricsl utility that commenced operation in interstate commerce.
In light of TU's dominant position in Texas, the fact that it had disconnected from other electric utilities in 1976 when those utilities went into interstate commerce, and in view of changed circum-stances in the electric utility markets in Texas, as set forth in my letter to you dated February 21, 1978, regarding the South Texas Project, NRC Docket Nos. 50-498A and 50-499A, the Department concluded that an antitrust hearing was necessary.
Between 1976 and 1978 TMPA. entered into two agreements with Texas Power and Light Company (TP&L), a TU subsidiary, whereby TP&L agreed to supply ready economy energy and in-terruptible off-peak economy energy to TMPA.
On January 2, 1979, TMPA entered into two additional contracts with TU subsidiaries:
the Comanche Peak Ownership Agreement and a transmission agreement.
All of the foregoing contractual agreements contain restrictions which, in effect, foreclose TMPA from interconecting with and engaging in the buying and selling of power or energy with electric utilities that operate in interstate commerce.
It is TU's " intrastate only" policy and practice which is the subject of the pres-ent Comanche Peak antitrust hearing.
Resolution of the antitrust issues in that hearing will necessarily resolve any antitrust questions raised by these restrictions in the contractual agreements between TMPA and TU subsidiaries.
TMPA has agreed to be bound by the outcome of the present Comanche Peak antitrust hearing, including the resolution of the intrastate only restrictions in its contracts with TU subsidiaries (See attached letter).
Our investigation of TMPA's application to participate in the Comanche Peak Steam Electric Station did, however, unaover the existence of an agreement entered into in 1973 between the City of Garland (Garland) and TP&L.
This agree-ment effected a territorial division of retail marketing areas within Garlanc, a market jointly served by Garland and TP&L.
In 1978 the Texas Public Utilities Commission jointly certified this market area to Garland and TP&L. 1273 163
This agreement continues to operate at the present time, and, in fact, an exchange of some of the allocated marketing areas between Garland and TP&L occurred in 1977.
The Department believes that a purely local agreement between a municipality and an investor-owned electrical util-ity operating under a franchise granted by the municipality to divide retail marketing areas within the municipality's limits and which does not bear a significant relationship to competition in the generation or transmission of electric power at the wholesale level ordinarily does not form the basis for initiatinq an antitrust hearing under Section 105c.
This is not to say, however, that such agreements should not be scrutinized by the NRC where relevant to other antitrust concerns.
It is the Department's belief that the antitrust consequences, if any, stemming from such purely local agreements on the retail level would be more appropri-ately dealt with by state utility commissions or under state or federal antitrust legislation than by the NRC.
- Indeed, the Depar tment is examining this agreement to determine whether further action'is appropriate under the federal antitrust laws.
In light of the attached letter referenced above, where-by the members of TMPA have agreed to be bound by the outcome of she present Comanche Peak antitrust hearing, the Depart-ment believes that an antitrust hearing on the application of TMPA to participate in the Comanche Peak units is not necessary.
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Shenefield i
Ass' ant Attorney General Antitrust Division Enclosure 1273 164 e
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hc S~ vmo the cities cf Bryan. Denton. Gaetand & Greenv.ne August 29, 1979 United States Department of Justice P. O. Box 14141 Washington, D.C.
20044 Attention:
Mr. Robert Fabrikant, Assistant Section Chief Energy Section, Antitrust Division Re:
Texas Municipal Power Agency Ap;.lication for Amendnent of Comanche Peah Steam Electric Station Construction Persits Centlemen:
The Texas Municipal Power Agency (TMPA) is a signatory to contracts with subsidiaries of the Texas Utilities Company that contain language which the Department of Justice has construed as preventing or limiting TMPA from operating in, or interconnecting with other electric utilities that are operating in, interstate commerce.
In order to avoid the necessity of an antitrust hearing on TMPA's participation in the Comanche Peak Steam Electric Station, NRC dockct numbers 50-445A and 50-446A, TMPA makes the following representations:
(1) While TMPA is a party to contracts that en.:ain intrastate only provisions, TMPA did not request that such provisions be included in the contracts and would not object to such provisions being deleted from the contracts or enjoined, should sach deletion be ordered or an injunction be issued in an administrative or judicial proceeding or be agreed to by the other signatories to the contracts.
(2) TMPA agrees to be bound by the outcome of the present operating license antitrust proceedings involving the Comanche Peak Steac Electric Station including any conditions that are attached to the operating license as a result of that proceeding.
Very truly yours, TEXAS MUNICIPAL POWER AGENCY ft-
.A J el T. Rodgers General Manager
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