ML19259A741
| ML19259A741 | |
| Person / Time | |
|---|---|
| Site: | 05000471 |
| Issue date: | 12/29/1978 |
| From: | Abbott W SIMMONDS, WINSLOW, WILLIS & ABBOTT |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 7901100249 | |
| Download: ML19259A741 (22) | |
Text
.
'S I M b N DS. WI N S LOW, WI LLIS & AB B OTT
- st o r E s s e o N A L assocsavson ATT O R N EY S AT L AW SO CONGRCSS STR C CT BOSTON. MASSACHuriTTS O2sO9 W ILLI A M S ABOOTT Anta Co t 6e7 523-5520 December 29, 1978 Harold R. Denton, Director Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, D.C. 20555
Dear Mr. Denton:
As counsel to one of the parties in the present NRC proceeding on the application of Boston Edison Company for a construction per-mit for its proposed Pilgrim Nuclear Station No. 2, I received a copy of a letter to you dated December 8, 1978 from Robert M. Butler, Manager, Nuclear Projects Department, Boston Edison. Said letter purported to set forth various " policy" arguments to support Edi-son's position that the Pilgrim 2 site analysis should not be re-circulated pursuant to NEFA.
In that Mr. Butler's arguments display a serious lack of can-dor, we feel that it is important for you to have a true and fact-ual picture of the various matters addressed in Mr. Butler's letter.
First, Mr. Butler asserts that the existing NRC construction permit proceeding is an adequate opportunity for the public to re-view and comment upon the NRC Staff alternate sites review. Unfor-tunately, this is not the case at all. The existing proceeding presently has only two allowed active intervenors - the Fassachusetts Attorney General's Office,and Mr. and Mrs. Alan Cleeton of Franklin whom I represent. The proceeding is completely closed, and has been since early 1974, to the full participation as a party (with rights to cross-examine, present evidence, etc.), by any other entity or person purporting to represent the public or otherwise. The right for an individual or entity to make a " limited appearance" at such proceeding consists of only the opportunity to read a statement at the hearing, but with no right at all to participate. Thus, recir-culation of the site analysis would be desirable from a policy stand-point to get full comment from the various agencies with a concern in this matter, all of which have not had such opportunity to comment on the Pilgrim 2 site analysis since 1974.
Second, Mr.. Butler asserts that the recirculation process will delay construction and operation of Pilgrim 2 by at least three 1
790110e M g j % i
' Harold R. Denton, Director December 29, 1978 Page Two . .
months, and then recites the purported costs connected with such delay.
However, his argument fails completely to take into account that Bos-ton Edison is in no position to commence construction at present, and would in all liklihood be completely unaffected by and suffer no con-struction delays on account of recirculation. Edison still must over-come other substantial reguls2ory and legal obstacles before construc-tion can begin. For example, the Massachusetts Department of Public Utilities is presently holding hearings on the capacity needs of Bos-ton Edison Company and the reasonableness of the construction program required to meet such needs. The Department indicated at the outset of these hearings last Spring that in the event Edison was unable to justify the construction of Pilgrim 2 the Department would not approve further capital financings of Edison which would be required to finance Pilgrim 2. At the conclusion of Phase 1 of this DPU proceeding in September, 1978, the Massachusetts Energy Facilities Siting Council, which was holding the hearing jointly with the DPU, found that Edi-son's forecast of its capacity needs was insufficient to justify its construction program. Accordingly, several parties to the proceeding including the DPU Staff and the Massachusetts Attorney General filed motions for judgment seeking to have the DPU declare the proposed con-struction of Pilgrim 2 unreasonable and not in the financial interests of Edison's rate-paying customers. Although the DPU has not yet ren-dered a decision upon such motions it issued an interim ruling thereon dated November 27, 1978 in which the DPU set forth its serious concerns about Edison's construction program (which consists almost entirely of Pilgrim 2) and ordered Edison to file further arguments, if any, on why the motions for judgment should not be granted. A copy of this interim ruling is enclosed herewith.
Further, before any work can be commenced upon the site in Ply-mouth, there must be a final decision in the matter of the issuance of a" wetlands" permit pursuant to Mass. G.L. ch. 131 $40. This permit case, which was appealed by the Plymouth Conservation Commission and abutters to the Edison site, is presently awaiting an adjudicatory hearing to be held by Massachusetts Department of Environmental Quality Engineering. Such hearing has not yet been scheduled. Moreover, as you are perhaps aware, Edison's financial ability to construct Pilgrim 2 is very much in doubt. Bills have been filed in the Massachusetts Legislature to ban the use of CUIP. It has been reported that Edison's own management is unwilling to commence the construction of Pilgrim 2 without CWIP or some other financing gimmick - none of which would seem to be readily forthecming. This issue of financial capability will be heard by the NRC presumably sometime in 1979. In summary, the many obstacles to Edison's commencement of construction will of necessity delay such construction far beyond any three-month delay postulated in connection wi h a FES recirculation.
Finally, Mr. Butler makes the statement that "the merits of the Pilgrim site as an economical, environmentally sound location for Pilgrim 2 are not in question." This statement is false. In the NRC proceeding all intervenor parties have seriously questioned the Plymouth site because of rapidly increasing population in close
Harold R. Denton, Director December 29, 1978 Page Two .
proximity to the plant, including in the growing downtown center of Plymouth and the many attractive tourist and historic facilities within a few miles of the plant. The fact is that Plymouth is the most rapidly growing community in the Commonwealth of Massachusetts.
In the NRC proceeding itself and elsewhere in other forums a number of superior alternative sites have been proposed for the location of Pilgrim 2 -- I would be more than happy to present such list to you and to Mr. Butler if this were a relevant consideration.
As previously stated to you by my letter of November 3, 1978, we continue to believe that NEPA requires the recirculation of the alternate sites analysis FES supplement in this case, and are of the further opinion that the ASLB hearing on the alternate sites issue must not proceed until such recirculation has been completed.
Very truly yours, N'
William S. Abbott Attorney for Alan and Marion Cleeton WSA: bat cc: See Service List Attach d
SERVICE LIST:
George H. Lewald, Esquire Dr. A. Dixon Callihan Ropes & Gray Union Carbide Corporation 225 Franklin Street P.O. Box Y Boston, Massachusetts Oak Ridge, Tennessee 37830 Dale G. Stoodley, Esquire Barry H. Smith, Esquire Boston Edison Company U.S. Nuclear Regulatory Commission 800 Boylston Street Washington, D.C. 20555 Boston, Massachusetts 02199 Henry Herrmann, Esquire 151 Tremont Street, 27K Boston, Massachusetts 02111 Mr. Daniel F. Ford ADDITIONAL SERVICE LIST:
c/o Union of Concerned Scientists 1208 Massachusetts Avenue The Honorable Edward P. Boland Cambridge, Massachusetts 02138 United States House of Representatives Mr. and Mrs. Alan R. Cleeton Washington, D.C. 20515 22 Mackintosh Street Franklin, Massachusetts 02038 Mr. Robert M. Butler Boston Edison Company The Honorable Charles Corkin, II 800 Boylston Street Assitant Attorney General Boston, Massac_husetts 02199 Environmental Protection Division One Ashburton Place, 19th Floor Boston, Massachusetts. 02108 Edward Luton, Esquire, Chairman Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Dr. Richard F. Cole Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555
- f &Aum n x=>nemu w
h =a
$[jB @0110110ll[UC21$f[J Of [215521C[}1150ffs h $Ya. Y &
DEPARTMENT OF PUI3LIC UTILITIES Nh[p . N o v e m b e r.. 2 7. ,.. 1 9.7 8.
D. P. U. 19494 Investigation by the Department upon its own motion as to the capacity needs of the Boston Edison Company and the construction program l required to meet such needs. .
_________________________________________________________ l INTERIM RULING ON MOTIONS FOR JUDGMENT On October 20, 1978, the Department of Public Utilities Staff
(" Staff") filed a motion for final judgment in this proceeding. In the alternative, the Staff motion requested that the Commission issue an interim deci'sion on Phase I of the proceeding. Similar motions were filed by the Attorney General on October 20, 1978 and by Boston Clamshell on Cctober 23, 1978. Oral argument on the motions was heard by the Commission on October 31, 1978.
,At the October 31 hearing, the Company stated that it believed that the issue to be addressed at the October 31 hearing was not the merits of the motions but the propriety of their being entertained by the Commission. It argued that mere consideration of such motions represented a drastic change in standards previously established by the Commission and, as such, constituted a gross infringement on the Company's right to due process.
' age two The Company's perception of the <:ntire proceeding (D.P.U. 19494) is a source of grave concern to the Commission. Indeed x _.__
the Company's arguments portray a completely different proceeding than
~
that actually instituted by the Commission. Accordingly, we think
~
that it is necessary to set the record straight. _
Specifically, the Company makes two major claims. First, it asserts that this proceeding is solely investigation _al and informational with no final order or adjudication contemplated by the Commission. Second, the Company suggests that the Commission has 11{mitedtheCompany'sopportunitytopresentevidenceinbothPhaseI and Phase II of the case.
- The Company's view of this proceeding as merely investigatory in nature is expressed i- a portion of the response made by Company counsel to a question from Chairman Levy at the October 31 hearing.
Company counsel stated:
This is an investigation into the construction program of Boston Edison Company. And this is what we endeavored to do is to amass all the materials we had in the construction program, to present it to the Department and to make witnesses available for cross-examination with respect to the construction program.
This concept of inquiring into Edison's construc-tion program or the desire for it is one that has been expressed for some time by intervenors with respect to Pilgrim II. And requests have been made at various times for the Department to look into the construction of Pilgrim II, to investigate it, to determine it, to open the thing up to public ventilation, if you will.
And this is what we conceive that the Department was doing in that it was not in connection with any other matter except under the Department's investigatory jurisdiction.
7 1/ Transcript p. 108-109.
Page Three We are at a loss to explain how the Company reached that con-closion about this case. Our concern with the Boston Edison con-struction program goes back at least as far as our decision in D.P.U. 18515 (1976). Since then our attitude and intentions have been unambiguous. We have placed a clear burden upon the Company to show that its construction program is reasonable.
Should the Company fail to meet this burden, the Commission will take appropriate action to protect ratepayers from the financial consequences of any imprudent investment. An examination of the history of this proceeding leaves no room for doubt that '.t has been instituted solely to adjudicate this issue.
The origin of this case can be found in D.P.U. 18515, our 1976 decision on the Company's rate increase request. The following excerpt from that opinion shows that our interest in the Company's construction program was motivated by a specific concern about its impact on rates rather than by any general desire for an informa-tional briefing.
It is our view that rate relief should be a last resort, and that it should be granted only after there has been a proper showing that every reasonable effort has been nade to hold expenses down and to ease the burden imposed by the construction program. Although the company contends that it has made efforts to economize, the record does not indicate that the Company has acted as vigorously as it might have to reduce or eliminate expenses incurred for non-essential services; nor does it show any substan-tial and sustained attempt to relieve the financial strain attributable to construction.
- We have elsewhere expressed concern as to whether rcte increases are justified absent a showing of efficient opera-tions. Fall River Gas Co., D.P.U. 18416 (1976). We there -
fore require that the Company affirmatively demonstrate, in any future rate case, that it has moved to improve the efficiency of its operations and the productivity of all its employees, both management and non-management. Such a demon-
Page Four stration, at a minimum, vould include a showing that employees' wages, salaries and numbers are not excessive pnd that_the-construction program is the least that will provide necessary and adequate servi ~ce. 2p In its next rate case, D.P.U. 19300, the Company submitted testi-mony and exhibits in support of its construction program. The adequacy of this evidence was a major issue in that case. Our decision in the I case included a specific finding that the Company had failed to meet its affirmative burden to show that its construction program is the minimum necessary to provide necessary and adequate service. As a result, we instituted the instant proceeding. / -
That our purpose in so doing was the adjudication of the reason-ableness of the Company's construction program is apparent. A full ten pages of our Order in D.P.U. 19300 were devoted to an analysis of the construction issues. We set forth in detail the weaknesses of the Company's presentation in support of its program. For example, of the Company's treatment of peak load pricing in its demand fotecast we said:
We share the intervenors' concern in this regard. A compelling motive for our adoption of peak load pricing was the desire to reduce the level of growth in peak demand.
The Company appears to minimice this possibility in a very brief section of the forecast. Its protestations concerning the reluctance of consumers to reduce their usage on days of summer peak demand would seem to ignore that section of our rate structure sensitive loadsOrder dealing and needle with _p/he peaks.
problems of temperature 2/ D.P.U. 18515, p 4. .
3,/
construed Our as a decision notComm:.
sign that the to withhold any rate relief can hardly be sion deemed the Company's failure to make the requisite showing to be of little consequence. Rather, we believed that the enormou y otential conseguences of a commisliion decision on the Com_ppnv+r construction program _ merited an opportunity for both the company and intervenors to address the issue free of the narrow time constraints imposed by a rate case.
4/ D.P.U. 19300, p. 72.
~
Page Five In regard to-the appropriate reliability criterion, we said:
The more crucial inquiry is the desirability of the once in ten years criterion itself. Admittedly, this stan-dard is widely used in the electric industry. Staff argues, however, that a reappraisal is overdue. The most convincing reason is the staggeringly high construction costs of future generation facilities.
- The maintenance of this traditionally high reliability was in the past.
criterion will be far more expensive than it A cost-benefit __a_na_1ysis incorporating thiL factor Eh of increased construction costs seems indicated, ye t__
C5Hpany WIs70twareTiHrany such study existed.5/
The importance which the Commission attached to these issues would be clear to even the most casual reader. 'Ihe suggestion that the Commission would respond to the Company's failure to defend its proposed construction program by holding more informational hear-ings, in the nature of "public ventilation", is not credible.
The decisian also included a restatement of our emphasis upon the ratemaking consequences of the construction program.
The Company's argument suggests that such an investiga-tion would represent a novel incursion by the Commission into the prerogatives of utility company management. This ignores our previous concern with the problems of excess capacity.
(cases cited) This case provides us with an opportunity to avoid the quandary posed in the Western Massachusetts Electric case. There, the Commission was asked to evaluate the desir-ability of a nuclear generation unit that had already been -
built at a cost of approximately $400 million. It was hardly the ideal time to address that issue.
It ceems more appropriate to inquire into the reasonable-ness of a Company's construction progran and capacity needs prior to the time when the Company's commitment to that program precludes other alternatives.
The Commission has the opportunity to do so in this case, unlike previous cases where the plant had already been built and the financial burden already incurred. 6 / _
A hearing notice initiating this proceeding was issued on March 8, 1978.
Notwithstanding our extended discussion of the issues in D.P.U.
19300, the Company included in its request for a preliminary injunction from the Massachusetts Supreme Judicial Court C'Qxrt") a claim that 5 D.P.U. 19300, p. 75.
__/ D.P.U. 19300, p. 77.
Page Six adequate notice of the issues, including the nature of the proceed-ing, had not been given. 7 / -
To dispel any doubts about the scope of this proceeding, the Commission scheduled a pre-hearing conference on April 18 1978. A ,
full thirty-four pages of the transcript of that hearing are devoted to a discussion of the issues to be addressed in D.P U 19494 and the . .
nature of the proceeding.
This record demonstrates that the Company was afforded an almost unlimited opportunity to ask specific questions about either of these two matters.
The dialogue between Company counsel and the former Chairman in no way suggests that we contemplated an informational adviso ry proceeding, indeed, it was clear that we proposed a fonm1 adjudication of the reasonableness of the Company's construction program. The following excerpts support this assertion:
'iR . LENALD:
feal. I don't think it is abstract; it is quite If we have 19me decisional an investigation, that must point to process.
think it would be not only helpful butOr maybe fitting it doesn't and but I proper for the Department to define what it believes its scope not of be.
going to action following such a hearing is or is
, tion by the Department to inform itself generally as toIs this simpl the scope of the program, or does the Department intend to do something by way of a ruling, or otherwise, follow-ing on the theforecast.
adjudicatory hearings before the Siting Council
,' I j/
This claim was expressly rejected in a memorandum issued by Justice Benjamin Kaplan on May 17, 1978 in explanatic,n of his denial of the Company's motion for a preliminary injunction.
Page Seven CHAIRMAN KEOHANE: I believe it should be clear to most people what the statutory obligations are of the Siting Council with respect to long-range demand forecasts.
I think I am speaking for Mr. Lacroix that they will issue their order under the bounds of their jurisdiction.
The Department will look at the long-range demand forecast as merely a tool in the process of evaluating the overall needs and the constraction program which the company proposes to follow to implement those needs.
MR. LEWALD: Is the Commission not answering my question because it is unable to at this point in time?
CHAIRMAN KEOHANE: What is your question, Mr. Lewald?
I have some confusion in getting your position.
MR. LEWALD: What determination, if any, is the Commis-sion going to make with respect to the adequacy of the long-range forecast? Is it going to approve it or not approve it, in whole or in part?
CHAIRMAN KEOHANE: The Department has no intention of usurping a statutory authority set down in the Siting Council statute for the approval of a ten-year loag-range demand forecast. The Department will use the long-range forecast and the analysis of it as evidentiary material in determining the reasonableness of the construction program of the Boston Edison Company.
MR. LEWALD: I understand that to mean the Siting Council's analysis of the forecast?
CHAIFGmN KEOHANE: I don't understand your question.
MR. LEWALD: You said you would use the analysis - - -
CHAIRMAN KEOHANE: No, the evidence that is introduced into
'this case as it related to the long-range demand forecast will be used by the Department of Public Utilities in judging the reasonableness of the proposed construction program of the Boston Edison Company.
MR. LEWALD: I guess this is part and parcel of what we don't understand. Does the Department contemplate a decision that the construction program and Pilgrim II is reasonable or unreasonable? Is this what these hearings are pointing to?
CHAIRMAN KEOHANE: That is correct, as to the general construction program of the Boston Edison Company as it relates to generating capacity.
e Page Eight MR. LEWALD: Could you also help me out with the sta-tutory authority for the DPU holding hearings to make a pro-nouncement as to the reasonal'eness or the unreasonableness at any point in time of the s;nstruction program?
CHAIRMAN KEOHANE:
morning B/ We feel that the statutes cited this and the general supervisory powers, as well as the
- specific statutes, are very clear in our jurisdiction to review that.
MR. LEWALD: To make the decision?
CHAIRMAN KEOHANE: To give us the jurisdiction to review the reasonableness of the construction program of Boston Edison Company.
MR. LEWALD: And to announce a decision as to --
CHAIRMAN KEOHANE: An order will be issued in this case.
MR. LEWALD: Thank you. 9
/
On at least one other occasion at the hearing, the former Chairman repeated the Commission's purpose in instituting these pro-ceedings.
CHAIFGUd1 KEOHANE: Just for a point of clarification, I am not aware and I believe the Commission is not aware of 1 any certificates or certifications or licenses that are before the Department of Public Utilities in this particular hearing.
The question is the reasonableness of the construction program and the investments related thereto. So that we are not talking about an issue of granting or denying a permit or a right.
We are tMkby about making a ruling on the reasonableness of the program and the investments underlining that program.
(emphasis added) 10/
a/ (See p. 293 Transcript) Among the statutory grounds cited by intervenors at the hearing were Chapter 164, Sections 14 (Security Issues) 93 and 94 ( ra tes) Transcript pp. 256-7.
9/ Transcript pp. 291-294 10/ Transcript pp. 301-302
Page Nine Toward the end of the hearing, Company counsel returned once agair to the same subject:
MR. LEWALD: I guess I would like to come back with, what turns on this, assuming that the company doesn't present any information, or assuming the company does present infor-mation?
CHAIRMAN KEOHANE: The Commission is going to rule on the current projected construction program of the company, as to its reasonableness or its lack of reasonableness. 11/
Any lingering doubts about the Commission's intention should have been removed by an examination of the D.P.U. and Siting Council's memorandum to the Court dated April 19, 1978, in opposition to the Company's motion to stay. The argument on behalf of the Department's jurisdiction to conduct this proceeding echoes our prior statements about the nature of the case:
As indicated in D.P.U. No. 19300, the Department is very oncerned about Edison's construction program because of the Company's apparent excess capacity and the staggering costs which construction of large units such as Pilgrim 2 involve. The agency's obvious and appropriate worry is that Edison may be spending, ultimately at the ratepayers' expense, vast amounts of money to build a facility which it may not actually need in order to adequately serve those ratepayers. If Pilgrim 2 were currently on line, the Department's jurisdiction to review the costs of and need for the unit would be undisputed; such a review would be a necessary part of the Department's determination whether Pilgrim 2 should be included in Edison's rate base as property used and useful to ratepayers. (cases cited) That the Department has undertaken to begin such a review before Pilgrim 2 goes on line
,does not change the result. Rather, the Department's foresight should be ccmmended, for it is simply trying to address the cost and capacity issues inevitably raised by Pilgrim 2 at a time when the Company is still in a position realistically to consider other alternatives. (cases cited)
(continued) 11/ Transcript p. 318
. . Page Ten In sum, Department there is no clear lack of jurisdiction in the construction program.to review Edison's capacity needs and generation On the contrary, insofar as (a) both these issues are inextricably linked with Pilgrim 2 , and (b) on line and include in its rate base by 1985,Pilgrin put the Department's 2
authority duties seemsto evaluate plain. the issues as part of its rate =aking 12/
In light of the foregoing, we see no rational basis to suppor t th e Company's contention that it believed we were acting solely pursuant to our investigatory powers.13/
Moreover, a close examination of the Company's request for a pre-liminary injunction reveals that this perception of the proceeding is of a rather recent origin.
There the Company sought to determine whether the Department "may directly or by indirection purport to approve or disapprove of a jointly-owned regional plant." ESI It proposed to direct its arguments to five questicns.
contained The first two clear indications of the Co=pany's understanding of the proceeding: ,
- 1. May the Department, proceeding aimed at one particular jural person, proceedin i as it has nature of done here without having given any notice of the the proceedings, the issues to be considered and the nature of the final result that the proc.2 ding may yield?
2.
Is the Department vested with jurisdiction to review , and presumably to approve'6'or and, long range forecast, disapprove, an electric co=pany's mination is the Company bound? ship of the Department a j
12/ Memorandum of the D.P.U.
in opposition to the Plaintiff's Motion to Stay, pp.and Energy 10 andFacilities
- 11. Siting C 13/ Statement of Company counsel at p.
109 of the Transcript.
14/
for a Preliminary Injunction, Memorandum
- p. 2. of Boston Edison Company in Support 15/ Id. p. 4.
t
Rage Eleven Footnote six on that same page contains the following sentence:
Although, because the Department has issued no notice of the issues to be considered in DPU 19494, it is difficult to identify with any confidence the nature of the contemplated proceedings, it seems obvious that the Department seeks to determine whether a specific generating facility should be built . . , (emphasis added) .
Still later in the memorandum, the Company says:
Specifically, the Department has expressly disclaimed the power to grant or withhold any license to continue with the
' construction of Pilgrim Unit No. 2 (Tr. 362), but in so doing it has pointed for its jurisdiction to investigate Pilgraim Unit No. 2 to two sources of DPU authority: the authority to " review the reasonableness of financial offer-
~
ings, (and) the reasonableness of how ratepayers' money is spent _ in a rate case." Tr gg that adjudicatory powers w en{62. The claim seems to be the Department considers it has the authority to invoke in other hypothetical, specific contexts may now be fused ir some type of Order affecting Pilgrim Unit No. 2, but not expressly authorizing or forbidding its construction. (emphasis added) 16/
Finally, the Company expressly considers the possibility that this proceeding is precisely what the Commission has coneistently said it was:
l t
In this part and in part IV of this Memorandum we '
i assume that this Court rules that the proceeding is not merely an informational proceeding, but rather is a pre-sent adjudication, in some fashion and under some sufficient ~
source of jurisdiction, affecting the ability of Edison either to issue securities to finance its share of continued i construction, or having built and brought the facility "on line," to include it in rate base. 177 16/ Page 20. Of course, the Company disputes the jurisdiction of the Department to take such an action, but that is certainly not dis-positive of the Commission's actual L4tentions. The company also ques-tions the res judicata effect of a decision in this case on future proceedings. The mere fact that the Company is unhappy with a certain aspect of the proceeding does not change the nature of the case to meet the Company's objection. Neither of these two claims as sufficient to justify the relief sought by the Company.
17/ Memorandum of Boston Edison Company in Support of its Request for a Preliminary Injunction, p. 28.
Page %ulve Although the Company addressed the possibi.lity of an informa-tional hearing, its arguments were based on an assurption that the cmmission contemplated an adjudicatory proceeding. For example, the Company says, "If merely investigatory and informational the proceeding is both nugatory and, given the wealth of published information avail-able to the Department (including prior and subsequent decisions of the Council) wholly unnecessary." In another, the company concludes an argument on its res judicata claim by saying "But if 19494 is advi-sory, it will serve no purpose." [8/ We agree.
If, as these excerpts suggest, the Company understood the nature of the proceedings before the hearings began, we find nothing in the hearings themselves that might have changed that view. On the contrary, one would think the length of the hearings as well as the commitment of resources by both the Commission and the Intervenors betrayed more tnan an academic interest in the outcome. b!
18/ Footnote 48, p. 40.
19/ In Phase I alone, there have been twenty-four days of hearings covering more than 3,000 pages of transcripts. The Company presented the testimony of six witnesses while an additional 14 wit-nesses were offerred by the intervenors.
Page Thirteen As we said,, the essence of the Company's second claim is that the standards estalblished by the Department for this case, have limited the ability of the Company to present relevant evidence. Specifically, the Company claims that in Phase I it was forced to rely solely on its most recent long-r:ange forecast filed with the Council in December, 1977.
If this is swhat the Department was setting out to accomplish at the begi;nning, then we would have had an opportunity to have directied ourselves to that. As it was, what we are doing, we are partly presenting a statutory requirement case for a forecast that had been filed in December, 1977, and we didn't have an opportunity to amend that forecast, to change it. It was that forecast that was in issue; and had we known that the standard here was going to be different, and as is suggested today, that the Department would be looking for, say, be con-sidering a decision on a planning bracket, if you will, of what area of growth the Department might consider to be reasonable within which something could be planned, we submit our case in the forecast would have been different. But it was solely related to that forecast, and now they are trying to wrap that forecast around our necks and say that you haven't maintained your quantum of proof.
j i
The Department leaves to the Council the questicn of whether it j expects the Company's long-range demand forecast to contain all avail-able information underlying itu demand projections. More significant for our purposes is the fact that there is nothing in the record to support the Company's contention that it was so constrained. Ccapany counsel's 3/ Transcript, pp. 100-101
'Page Fourteen claim that we " latched onto . . .
a statutory proceeding before the 21/
Siting Council on a prefiled forecasts is nd:even consistent with statements in the Company's own written memorandum submitted the same day, much less with the history of the proceedings. 22 -7 It has been clear from the outset that our proceeding was wholly distinct from that of the Siting Council. At the beginning of the pre-hearing conference of April 18, the former Chairman said:
I am sure those of you who are attorneys are aware that this is a joint hearing, is in fact two separate proceedings with separate orders and separate jurisdictions, which will be heard for the 23 any delay.
convenience of the parties and in order to avoid 7
Nowhere in the Chairman's description of the scope of Phase I is there any suggestion that information outside of the 1977 long-range forecast was precluded.
On the contrary, the Chairman took special care to emphasize the flexible nature of the proceeding. .
Absolutely. First of all, the issue has to be relevant within the normal rules of evidence within this case.
that, under the general statement of today's issues, itAssuming is to give the areas of our inquiry.
so that the people have notice as to the areas There will, of course, be specific issues, and no commission and no court can sit down before a complicated case and come up with every subject issue that may be raised.
Generally, this is a general statement.
I would say to any party sittin, here particular today, issue now, if there is any question in your mind on any please ask it now, but no one will be forestalled on a related relevant issue. 2j/
Moreover, we can determine from the Coupany's memorandum to the Court that the Company well understood the Commission's intentions to conduct
_i}' Transcript, Vol I, p. 96. .
22/ Page five of the memorandum contains the following statement "The Department accordingly was joined by the Siting Council on April 18, 1978 at which time the Department through its Chairman sought to advise the parties and prospective intervenors 's to the nature of the proceedings generally and as to the issues that were to be considered.5/"
23,'
_ Transcript, p. 211.
21/ Transcript, pp. 313-314.
Page Fifteen its own independent inquiry into the Company's projections of future demand. In fact, Edison argued strenuously that the Commission should not be able to use for its regulatory purposes any forecast other than the one approved by the Council.25/
I
/ An examination of the Company's case presented in Phase I is further enlightening in this regard. The Company did not restrict itself solely to the 1977 forecast supplement submitted to the Council. Rather, it hired three expert witnesses who made liberal use of gxtrinsic evidence to support the validity of the Company's forecast.--2ofMoreover, the pre-filed testimony of Mr. Davis expanded considerably on what was actually contained in the forecast, particularly on the topic of time of day pricing, an issue of concern specifically noted by the Commission in 19300.
In addition, it is also instructive to note the timing of the Compan93 contact with at least one of these witnesses. Dr. McCarthy testified that he was not given an assignment by the Company until 21l late May or early June ,1978. Likewise, Mr. Davis, an employee of the Company, stated that he did not write his testimony until that same 28/
period. -~
25/ Memorandum of Boston Edison Company in Support of its Request for a Preliminary Injunction, p. 29.
2g/ Drs. Hill and McCarthy testified jointly on the energy fore-cast, while Dr. Rappoport testified on the demand forecast.
27/ Transcript Vol.XI, p. 907. There is no mention in the record of when Dr. Rappoport was first contacted.
28
/ Transcript Vol. VI, p. 272.
Page Sixteen The significance of these dates becomes apparent upon an examina-tion of the original schedule established by the Council for its hear-ings on the Company's annual forecast supplement.
An order issued March 30, 1978, by the Council Hearings Officer, required that pre-filed testimony be submitted April 28, 1978.
Since this hearing schedule was not modified until April 14, 1978, and since neither Dr. McCarthy nor Mr. Davis had even begun to write his testimony as of that date, it seems fair to conclude that neither witness had planned to file direct testimony for the original Council proceeding.
The Company also claims that the Commission imposed a similar restraint on its freedom to file relevant testimony in Phase II.
Then, prior to the end of Phase I we were asked to pre-sent evidence on certain other matters by the Chairman of the DPU, delineating the matters that he would like to hear testi-mony on. So we broke our necks during the summer trying to get the testimony in at an early date so we could expedite tha -
hearings, and this was filed September 1 on schedule. True, there have been some revisions.
Now, we're being hit by the fact that this testimony which we are supplying to answer some of the Department's questions with respect to the construction program of Edison and the NEPOOL affiliations and the various relationships with the co-owners in Pilgrim II is now suddenly being challenged that it isn't suffi-cient to carry the company's burden. Now, we submit that if that is an issue on what is being filed in Phase II, then the company is being sandbagged in this proceeding, not only by a change in Commission rules and regulations promulgated at the outset of this proceeding, and now theCommission is entertaining, obviously, a change in these rules with a different result in Phase I, but we're getting a whole new set of rules that are being imposed on Phase II, after we have filed some testimony, which were based on earlier rules and requirements.
Now, if we are going to have to live up to a standard to satisfy directed verdict requirements, then that is one thing; but no one had mentioned this was a standard that Edison had to meet when Phase II testimony was called for and filed on Sep-tember 1. 29 /
29/ Transcript Vol. I, pp. 96-98.
, Page Seventeen Again, the record offers no support for such a claim . The present Chairman in no way restricted the Company's ability ot file any relevant testimony in Phase II which would justify its present construction program.
The memorandum issued by the Chairman on June 22, 1978, expressly states that the topics listed are the minimum requirements for the Company's Phase II Testimony .
When considered in the context of the actual proceedi ng, the procedural remedies pursued by the intervenors are proper and appropriate.
Quite simply, the intervenors argue that the reason-ableness of the Company's forecast depends upon a credible ection proj of growth in peak demand, The Department drew a similar conclusion based on the evidence submitted by the Ccmpany in D. P . .
U 19300.10/
The Ccmpany, itself, expresses similar logic in its memo the Court: randum to
, _ _ _ . _ _ _ . _. - ~ -- -
Principally if at all, this is so because a planned facility is revie wed, only in the context of a load forecast: will this plant it be needed when, is completed? Thus it or within a reasonably short time after the Council) is the power and responsibility (of ,
mary, reviewand of a the load power forecast,to review the forecast that is ancilla .
apart from a review of the adequacy of present On the other and future capacity, would be a meaningless exercise hand, reviewing the adecuacy of present and pro- .
posed capacity and forecasted is impossible unt21 one first determines present future demand. (emphasis added) ; 3] / .
30/ D.P.U. 19300, p. 70. i assertioninthat capacity growth innear the relatively peak usage will exceed existing generated future."
i 31/
Me=orandum of Boston Edison com Request for a Preliminary Injunction, p.pany 34. in Support of its
_ .. I
9 7
Page Eighteen By entertaining these motions, the Commission has no intention nor do of ignoring the testimony filed by the Company in Phase II, d
the intervenors suggest that we do so. 'Ihe latter are willing to ccnce e for tinse roti<rs the truth of that testimony. Even assumine that
- testimony is true, they argue, the evidence in Phase I is scfficient for final judgment.
Other intervenors,such as General Motors and et al,have disputed Massachusetts Municipal Wholesale Electric Company Moreover, if this contention. The Company is free to do the same.
i it the Company has prepared additional testimony for this proceed ng, a should inform us of that fact as well. E
'Ihe Ctrmission has already determined that it would entertain these notions. 'Ihe burden of proof as to the reasonableness of the Company's construction program is on the Company as it has been since the decison in D.P.U.
18515.33/ To provide a futher guarantee that the Company is afforded it an a full and complete opportunity to be heard, we will permit additional seven days from the date of this order to file arguments
~
in writing on the merits of these motions.
~ For the Department, Paul F. Levy Chairman In fact, we scheduled the October 31 hearing for arguments 32/
on the E5rits of the motions.
33
/ The former Chairman's remarks indicated that the i.e. be placed uponburden the of proof w3uld be handled in the usual manner, Company.