ML19254E473

Petition for Review of Aslab 790906 decision,ALAB-560.Urges Reconsideration,Alleging Erroneous Conclusions of Law by Aslab.Certificate of Svc Encl

ML19254E473
Person / Time
Site:	Davis Besse, Perry
Issue date:	10/22/1979
From:	Benbow T OHIO EDISON CO., PENNSYLVANIA POWER CO., WINTHROP, STIMSON, PUTNAM & ROBERTS
To:	NRC COMMISSION (OCM)
References
NUDOCS 7911010207
Download: ML19254E473 (13)

Text

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_r NRC PUDLIC DCCb'gE ROOM October 22, 1979 e  %

S N

l UNITED STATES OF AMERICA ,., y,.

7 's NLCLEAR REGULATORY COMMISSION -f Y r lh o NgT.', C f ,

5 g@ .-.2Y' ,d Before the Commission

'd "

o, In the Mat *.er of )

)

THE TOLEDO EDISON COMPANY and )

THE CLEVELAI?D ELECTRIC ILLUMINATING ) Docket No. 50-346A COMPANY )

(Davis-Besse Nuclear Power Station, )

Unit 1) )

)

THE CLEVELAND ELECTRIC ILLUMINATING )

COMPANY, ET AL. ) Docket Nos. 50-440A (Perry Nuclear Power Plant, ) 50-441A Units 1 and 2) )

)

THE TOLEDO EDISON COMPANY, ET AL. ) Docket Nos. 50-500A (Davis-Besse Nuclear Power Station, ) 50-501A Units 2 and 3) )

OHIO EDISON COMPANY's AND PENNSYLVANIA POWER COMPANY'S PETITION FOR REVIEW OF ALAB-560 Pursuant to 10 CFR S 2.786(b), Petitioners, Ohio Edison Company and Pennsylvania Power Company ("OE/PP"),

seek review of a decision by the Atomic Safety and Licens-ing Appeal Board ("ALAB") in the captioned matter which was entered on September 6, 1979 ("ALAB-560"). By order cated October 5, 1979, the Commission provided until October 22 to file this Petition.

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Tne Preceedings Below On January 6, 1977, the Acomic Safety and Li-censing Board ("hSLB") rendered its initial decision under S 105c* tnat "a situation inconsistent with the antitrust laws and the policies underlying those laws would be both created and main:ained by the unconditioned license of the Davis-Besse and Perry nuclear stations."

5 NRC at 254-55.** The ASLB found that Petitioners had engaged in conduct unich had the ptrpose and effect of restricting the competitive efforts of smaller competing systems i n Petitioners' service territories. This con-duct was deemed violative of various antitrust statutes, including sections 1 and 2 of the Sherman Act, 15 U.S.C.

SS 1, 2, as well as S 105c. The Licensing Board imposed

• Atomic Energy Act, Section 105c, 42 U.S.C. S 2135(c)

(1976)

• • In March 1973 and August 1974, Petitioners requested construction permits for tne Perry Nuclear Units 1 and 2 and Davis-Besse Units 2 and 3. These applications were made jointly with the other members of the Central Area Power Coordir.ation Group ("CAPCO"), the Cleveland Electric Illuminating Company ("CEI"), The Toledo Edison Company (" Toledo"), and Duquesne Light Company ("Duquesne"). The hearing commenced following the receipt of adverse advice letters from the Attorney General and consolidation of these applications with an earlier appl!. cation by CEI and Toledo involving Davis-Besse Nuclear Unit 1. The City of Cleveland was permittod to intervene in these proceedings and the Depal:tment of Justice and the Staff of che Nuclear Reg 11atory Commission partici-pated as complaining parties.

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ten remedial conditions requiring Petitioners, inter alia, to provide a variety of coordination and wheeling services to smaller systems in the combined CAPCO service territory, and permit such systems to obtain cwnership shares in all nuclear units, including the Davis-Besse and Perry Units, for which Petitioners seek a construction permit or oper-ating license over the next twenty-five years.

All Applicants and the City of Cleveland ap-pealed the initial decision. On September 6, 1979, in an unusual two opinion pronouncement,* the Appeal Board affirmed the ASLB with c..>tain modifications. The ALAB was divided on the appropriate scope of remedial 31 cense conditions.**

• Two members of the Appeal Board decidea to publish a draft opinion of a third, departed, member. They ruled that where they agreed with that opinion it became the Board's decision and that where they disagreed it became a dissent. This procedure may, itself, constitute reversible error since there is no provision in the Commission's Rules of Practice for two members of the Appeal Board to render a decision after the departure of the third member. 10 C.?.R. S 2.787(a); Cf. 10 C.F.L. S 2.721(d). Alternatively, adoption of this unusual procedure and the absence of full judicial interplay among the three members of the Appeal Board represent additional reasons for the Commission to scrutinize the Appeal Board's actions by granting the instant Petition.

• • Relying upon the ALAB's earlier decision in Consumers Power Comoany (Midland Plant, Units 1 and 2), 6 NRC 392 (1977), one member would have limited the avail-ability of the remedial conditions to electric systems acquiring access to nuclear power, wnether by owner-ship share, unit participation, or contractual pre-purchase of power. ALAB-560 at 290. The remaining members of the ALAB would not accede to this limitation.

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The Petition for Review Petitioners submit that the ALAB has erroneous-ly perpetuated or created unsubstantiated findings of fact, conclusions of law, and statements of policy which were challenged before it by Petitiera.s. The Appeal Board erroneously concluded:*

1. That Petitioners' participation in CAPCO created an identity of interests with the other.\pplicants which permitted antitrust review under 105c of all as a group r.r.d justified findings of OE/PP's vicarious respon-sibility ror the acts of other Arplicants.

2. That license conditions imposed on etitioners need not bear a reasonable relationship to any situation allegedly inconsistent with the antitrust laws which would be created or maintained by Petitioners' activities under the license.

• This is by no means an exhaustive list. Space require-ments dictate its limitation to general statements of the most significant errors of the ALAB. The substantial errors of the ASLB in each of these areas were raised before the Appeal Board in exceptions of Ohio Edison Company and Pennsylvania Power Comoany's Initial Decision dated February 7, 1979 and Applicants' Appeal Brief in Support of Their Individual and Common Exceptions To the Initial Decision, see especially pp.

212-259.

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3. That conduct scrutinized and evaluated by this Commission on antitrust grounds need not bear a rea-sonable relationship to activities under the licenses sought.

4. That the CLCT* area das the relevant geographic market for purposes of antitrust analysis of OE/PP.

5. That Petitioners refused to make available to other electric entities certain benefits which they themselves obtained through their membership in CAPCO, that the "P/N" formula was rigidly applied as a condi-tion of CAPCO membership, and that the relatively small size and poor operational records of two potential appli-cants was not itself a justification for their exclusion from CAPCO.

6. That Petitioners possess monopoly power and that they have abused that power by engaging in ter-ritorial allo:ations, improper acquisitions, attempts to fix prices, contractual restrictions, refusals to deal, restraints on alienation, and group boycotts.

7. That a per se analysis of antitrust allega-tions was appropriate in a 5 105c proceeding.

The Combined CAPCO (Central Area Power Coordination Group) Company Territories.

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8. That the S.E.C.'s review, under the Public Utility Holding Company Act, of Ohio Edison's purchase of municipal electric systems was irrelevant for purposes of S 105c.

9. That under Ohio or Pennsylvania law munici-palities are entitled to compete freely for retail loads lo';ated outside their boundaries.

10. That Petitioners acted unreasonably and in a manner inconsistent with the antitrust lass during the WCOE* negotiations and thereby denied WCOE reasonable and practical access to nuclear generation.

11. That Petitioners inflicted a " price squecze" on municipalities purchasing power at wholesale by charg-ing them significantly higher rates than Petitioners charge retail industrial customers for comparable sales and that the difference between these rates is not cost justified.

12. That Petitioners' due process rights were adequately protected.

The Commission Should Grant Review of the Decision Below ALAB-560 was only the second " full fledged"

• Wholesale customers of Ohio Edison.

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s Licensing Board antitrust decision on the merits to come before the ALAB. ALAB-560 at 5. The first, Midland,*

did not come before the Commission for review. To date all Commission decisions construing section 105(c) have been decided in the context of various procedural mat-

+ere **

. Thr=, the ALAB'S interpretation of the Commis-sion's duties under section 105, its fundamental errors in construction and application of antitrust law, and the majority's expansive view of appropriate remedies have not been reviewed by the Commission in this or any analogous proceeding.

Lack of unanimity within the Commission on these critical issues is demonstrated by the Licensing Board

• There on ALAB composed of two of the three members

' of the ALAB in the instant case reversed a decision of the, Licensing Board which found that the granting of a license for the Midland nuclear plant would not create or maintain a situation inconsistent with the antitrust laws. In reversing that decision, the ALAB in Midland tock a diametrically different approach to the law and facts than had the lower Board. The two members of the Midland Appeal Board who were members of the Appeal Board herein were those filing the majority opinion. No petition for review was filed in Midland.

• • See, e.g., Florida Power & Light Co. (St. Lucie Plant, Unit 2), 7 NRC 939 (1978); Houston Power &

Light Co. (South Texas Project, Units 1 and 2), 5 NRC 1303 (1977); Louisiana Power & Light Co. (Waterford Station, Unit 3), 6 AEC 48 and 6 AEC 619 (1973). See also Ft. Pierce Utilities Authority v. NRC, Dkt.

772T925, Dkt. 7/~2101, (D.C. Cir. March 23, 1979),

cert. denied, U.S. (1979).

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decision in y'dland, the dissenting opinion below, and the "somewhat different" approach to these vital legal issues taken by the Licensing Board in Alabama Power Com-cany (Joseph M. Farley Nuclear Power Plant, Units 1 and 2), 5 NRC 804, 5 NRC 1482 (1977) (appeal pending). See Midland, 6 NRC at 997 n.407.

The Appeal Board's view of the Commission's antitrust role is particularly suspect.* That view can-not be squared with the Commission's admonition in Water-ford II, suora:

"[T]he specific standard which Congress required for antitrust review- 'whether the activi-ties under the license would create or maintain a situation inconsistent with the antitrust laws as specified in subsection 10ba'--has inherent bound-aries. It does not authorize an unlimited inquiry into all alleged anticompetitive practices in the utilty industry. The statute icuolves license

, activities, and not the electric utility industry as a whole. If Congress had intended to enact a broad remedy against all an:_ competitive practices throughout the electric utility industry, it would have been anomalous to assign review responsibility

• The Appeal Board rejected or severly limited any responsi-bility to consider or harmonize public interest considera-tions in performing its antitrust review under section 105c(5) or imposing remedial conditions under section 103c(6). (ALAB-560 at 30-40, 263-65) Rather, the Board appeared to equate its antitrust authority with that of a federal district court. (ALAB-560 at 48-57) See also ALAB-560 at 300 ("[W]e are the only administrative agency with authority to protect, under the antitrust laws, the right of the municipal and cooperative electric systems to buy wholesale power....").

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to the Atomic Energy Commission, whose regulatory jurisdiction is limited to nuclear facilities. It is the status and role of these facilities which lie at the heart of antitrust proceedings under the Atomic Energy Act." 6 AEC at 620 (emphasis in original)

The detrimental impact of ALAB-560 will be felt not only by Petitioners but in pending and future proceed-ings under section 105c. Additionally it may affect litigation in other fora. Refusing to review the decision

• will let stand a message ALAB has now twice sent to America's utilities, to wit, that application for NRC licensing approval will subject the applicant to the most extensive and unlimited antitrust review, with procedural and evidentially standards substantially less stringent than those available in federal district courts, with substantial per se treatment of alleged offenses, and with

' the likely imposition of harsh and far reaching remedies having 'little or no relationship to the proposed nuclear plant.

It is submitted that the decision below takes the Commission f ar beyond tne statutory responsibility which Congress envisioned in enacting 105c. Even assuming that

• Exercise of that discretion will seldom be more clearly mandated than in a case which contains the first " full fledged" record below.

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the Commission shares the view of the Appeal Board, it is imperative that the Commission, itself, speak to the significant legal and antitrust policy questions decided by the Appeal Board, many of which constitute issues of first impression.

Respectfully submitted, WINTHROP, STIMSON, PUTNAM & ROBERTS

1. ~

,,s#

/%4Terence H. Benbow A Member of the Firm 40 Wall Street New York, New York 10005 Tel. No. (212) 943-0700 Attorneys for Ohio Edison Company and Pennsylvania Power Company

' Dated: October 22, 1979 OF COUNSEL:

i288 023 Steven A, Berger David J. Long Steven B. Peri

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of )

)

THE TOLEDO EDISON COMPANY and )

THE CLEVELAND ELECTRIC ILLUMINATING ) Docket No. 50-346A COMPANY )

(Davis-Besse Nuclear Powar Station, )

(Unit 1) )

)

THE CLEVELAND ELECTRIC ILLUMINATING )

COMPANY, ET AL. ) Docket Nos. 50-44aA (Perry Nuclear Power Plant, ) SQ-441A Units 1 and 2) )

)

THE TOLEDO EDISON COMPANY, ET AL. )

(Davis-Besse Nuclear Power Station, ) Docket Nos. 50-500A Units 2 and 3) ) 50-501A CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing

" OHIO EDISON CCMPANY'S AND PENNSYLVANIA POWER COMPANY'S PETITION FOR REVIEW OF ALAB-560" have been served on the following by hand deliverinc copies to those persons in the Washington, D. C. area, and by mailing copies, postage prepaid, to all others, on this 22nd day of October, 1979:

Alan S. Rosentha3, Esq. Joseph Rutberg, Esq.

Chairman, Atomic Safety and Benjamin H. Vogler, Esq.

Licensing Appeal Board Roy P. Lessy , Jr. , Esq .

U.S. Nuclear Regulatory Ccmmission Office of the Executive Washington, DC 20555 Legal Director U.S. Nuclear Regulatory Comraissior Jerome E. Sharfman, Esq. Washington, DC 20555 Atomic Safety and Licensing Appeal Board Joseph J. Saunders, Esq.

U.S. Nuclear Regulatory Ccmmission Antitrust Division Washington, DC 20555 Department of Justice Washington, DC 20530 1288 924

9 Richard S. Salzman, Esq. Melvin G cBerger, Esq.

Atomic Safety and Licensing Janet R. Urban, Esq.

Appeal Board Antitrust Division U.S. Nuclear Regulatory Commission P.O. Box 14141 Washington, DC 20555 Washington, DC 20044 Atomic Safety and Licensi.ig Reuben Goldberg, Esq.

Appeal Board Panel David C. Hjelmfelt, Esq.

U.S. Nuclear Regulatory Commission Michael D. Oldak, Esq.

Washington, DC 20555 Goldberg, Fieldman & Hjelmfelt Suite 650 Mr. Samuel J. Chilk 1700 Pennsylvania Ave., NW Secretary Washington, DC 20006 U.S. Nuclear Regulatory Commission Washington, DC 20555 Jack M. Schulman, Esq.

Director of L?w Ivan W. Smith, Esq. Robert D. HL*: , Esq.

Atomic Safety and Licensing Board 1st Ass't Director of Law U.S. Nuclear Regulatory Cummission City of Cleveland Washington, DC 20555 213 City Hall Cleveland, Ohio 44114 John M. Frysiak, Esq.

Atomic Safety and Licensing Board Frank R. Clokey, Esq.

U.S. Nuclear Regulatory Commission Special Ass't Attorney General Washington, DC 20555 Room 219 Towne House Apartments Atomic Safety and Licensing Harrisburg, PA 17105 Board Panel U.S. Nuclear Regulatory Commission Donald H. Hauser, Esq.

Washington, DC 20555 Victor F. Greenslade, Jr., Esq.

William J. Kerner Docketing & Service Section The Cleveland Electric Office of the Secretary Illuminating Company U.S. Nuclear Regulatory Commission 55 Public Square Washington, DC 20006 Cleveland, Ohio 44101 Michael M. Briley, Esq. James R. Edgerly, Esq.

Paul M. Smart, Esq. Secretary and General Counsel Fuller, Henry, Hodge & Snyder Pennsylvania Power Company P.O. Box 2088 One East Washington Street Toledo, Ohio 43603 New Castle, PA 16103 Russell J. Spetrino, Esq. John Lansdale, Esq.

Thomas A. Kayuha, Esq. Cox, Langford & Brown Ohio Edison Company 21 Dupont Circle, NW 76 South Main Street Washington, DC 20036 Akron, Ohio 44308 Alan P. Buchmann, Esq.

Walter T. Wardzinski, Esq. Squire, Sanders & Dempsey General Attorney 1800 Union Commerce Building Duquesne Light Company Cleveland, Chio 44115 435 Sixth Avenue Pittsburgh, PA 15219 1288 925

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David McNeil Olds, Esq. Commissioner Gilinsky Reed, Smith, Shaw & McClay Office of the Commission Union Trust 'lilding U.S. Nucl ar Regulatory Commissio:

Rox 2009 Washington, DC 2055:

Pittsburgh, PA 15230 Commissioner Kennedy Lee A. Rau, Esq. Office of the Commissiv..

Joseph A. Rieser, Jr., Esq. U.S. Nuclear Regulatory Commissic:

Reed, Smith, Shaw & McClay Washington, DC 20555 Suite 900 1150 Connecticut Avenue Commissioner Bradford Washington, DC 20036 Office of the Commission U.S. Nuclear Regulatory Commissic:

Edward A. Matto, Esq. Washington. DC 20555 Richard M. Firestone, Esq.

Karen H. Adkins, Esq. Commissioner Ahearne Antitrust Section Office of the Commission 30 E. Broad Street, 15th Floor U.S. Nuclear Regulatory Commissic:

Columbus, Ohio 43215 Washington, DC 20555 Christopher R. Schraff, Esq.

Assistant Attorney General Environmental Law Section 361 East Broad Street, 8th Floor Columbus, Ohio 43215 Chairman Hendrie Office of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555

/ . NQ Q/

Steven A. Berger'/

Counsel for Petitioners 1288 026

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