ML19263D245
| ML19263D245 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 03/02/1979 |
| From: | Berger M, Calhoun M, Dewey L JUSTICE, DEPT. OF, NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | |
| References | |
| NUDOCS 7903260365 | |
| Download: ML19263D245 (9) | |
Text
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NUCLEAR REGULATORY cot 1 MISSION
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BEFORE Ti!E ATOMIC SAFETY AND LICENSING BOARD
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In the Matter of
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Docket No. 50-389A PLORIDA POWER & LIGilT cot 1PANY
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(St. Lucie Plant, Unit No. 2)
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JOINT RESPONSE OF Tile DEPARTMENT OF JUSTICE AND Tile NUCLEAR REGULATORY COMMISSION STAFF TO LICENSING BOARD'S FEBRUARY 9, 1979 ORDER Pursuant to the Atomic Safety and Licensing Board's
(" Licensing Board") Memorandum and Order on Discovery
. (" Memorandum") dated February 9, 1979, in the above-styled proceeding, the Department of Justice
(" Department") and the Nuclear Regulatory Commission Staf f (" Staff") submits this Joint Response.
In its Memorandum, the Licensing Board ruled upon various objections made by Florida Power & Light Company
("FP&L") to discovery requests contained in the First Joint Request of the NRC Regulatory Staff, United States Department of Justice and Intervenors for Interrogatories and for Production of Documents by Applicant ("First Joint Request").
In addition, the Licensing Board deferred ruling on a number of discovery requests contained in the First Joint Request and invited the requesting parties to submit explanations or modifications of these par ticular requests by March 2, 1979.1/
1/
Intervenors, Florida Cities, are filing a separate res-ponse to the Memorandum.
790326 0 23 Gd7
The Licensing Board stated that "[ t] he relevance of the information requested
- u. Joint Requests 56 and 76 to the general post-1964 discovery period is not obvious."
(Memorandum at 15).
The Board then defer red ruling on these requests and gave the requesting parties an opportunity to explain their relevance.
Joint Request 56a seeks information, from 1950 to the present, relating to FP&L's policy or position regarding limitations on wholesale customer loads contained in any rate schedule or other agreement with such customers, Joint Request 56b seeks
-information relating to FP&L's present policy of selling wholesale power.
The Department and the Staff contend that Joint Requests 56a and 56b are highly relevant to the issues before this Licensing Board.
With respect to Joint Request 56a there is a substantial amount of evidence indicating that FP&L has, since the early 1950's, imposed anticompetitive terms on the sale of wholesale power.
For example, FP&L's RC wholesale schedule for service to rural electric cooperatives, which was ef fective in the 1950's and early 60's, prohibited FP&L and its cooperative customers from serving retail customers of one another, pro-hibited the cooperatives from reselling the power purchased from FP&L to municipal elec tric systems or entities that might resell that power at retail, restricted use of that power to the State of Florida and contained a pricing provision AA which provided for price increases tied to the increases in certain commodity indexes and not to the cost of service.
Furthermore, the 1959 FP&L wholecule contract with the Lee County Cooperative may have prchibited the cooperative from terminating service from FP&L if the reason for such termina-tion was to obtain power from another electric utility. 2/
It has also been alleged there is also evidence that on numerous occasions between 1952 and 1965 FP&L refused to sell wholesale power te Clewiston unless Clewiston agreed to hold a referendum on the sale of the municipal electric system to FP&L. 3/
Similarly, in 1958 FP&L apparently would not agree to sell wholesale firm power to New Smyrna Beach unless the city agreed not to order any additional generating capacity and to initiate legislation that would make it easier for FP&L to acquire that system. 4/
As can be readily seen, restrictions on the sale of wholesale power which have been imposed by FP&L are pro-bative of whether FP&L possesses and has misused i ts 2/
See wholesale contract between FP&L and Lee County Coopera-tive dated May 1, 1959.
3/
See Test ir ony of Mr. Dan McCarthy, FPC Docket E-7210 4/
See September 25, 1958 document on New Smyrna Beach Electrical System.
There may be other instances when FP&L has conditioned the sale of wholesale power on anticompeti-tive terms.
Without complete. discovery on this matter it will be impossible to identify such instances. _ = =... - -,
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market power.
Since the type of information being sough! oy Joint Request 56a is of vital importance to the contested issues in this proceeding, discovery dating back to 1950 is clearly appropr iate. See Menorandum at 15.
Joint Request 56b, seeks information relating to FP&L's present policy on wholesale sales.
Today, FP&L appears to have adopted the position that it will not sell competitively priced wholesale firm power to.any system that is not presently a customer. 5/
Since FP&L has had a long history of refusing to sell such power to
_ requesting systems 6/ the present position is tantamount to a continuation of PP&L's refusals to deal.
Since such conduct by a firm which possesses market power is highly relevant to the issues in this proceeding, Joint Request 56b is clearly appropriate.
Joint Request 76 seeks information relating to FP&L's post 1950 policy and position regarding establishing points of delivery for the sale of wholesale, emergency or other bulk power electric service.
Establishing a delivery point is the first, and_ essential step in initiating an electrical tie between two systems.
In the absence of a delivery point 5/
See Florida Power & Light Co., FERC Docket No. 78-19.
6/
It has been alleged and evidence in other proceedings involving FP&L strongly suggests that FP&L has, in the past, refused to sell wholesale firm power to Clewiston, Homestead, Starke, Winter Garden, Vero Ecach, Ft. Pierce, and New Smyrna Beach.
- See, e.g.,
Florida Power & Light Co.,
FERC Docket No. 78-19.
there would be no interconnection and it would be physically impossible for FP&L to deal with the other system.
- Thus, if FP&L has refused to establish delivery points it has e f fect ively ref used to engage in any electric power trans-
-actions with the entity that requested the establishment of such a point.
Similarly, if FP&L has attached conditions to establishing of delivery points,.these conditions may well prevent or inhibit the other entity from competing with FP&L.
The information sought by Joint Request 76 is relevant
- for the further reason that FP&L has sufficient bargaining power to insist on high voltage interconnections that might be much more expensive to install than the installation of a lower voltage interconnections.
Conversely, PP&L has sufficient bargaining power to refuse arbitrarily to intercon-nect at a higher voltage than desired by a small utility that wishes to have a low voltage interconnection in order to minimize tr ansmission cor.ts.
_ Joint Request 76 also seeks information as to whether FP&L may have insisted on limiting the number of delivery points at which it was willing to interconnect with small utilities.
Such an abuse of market power by FP&L might have unnecessarily required smaller utilities to build expensive transmission facilities.
Conversely, in order to increase the cost of power to its wholesale customers, FP&L may have needlessly required the use of multiple delivery points when one delivery point was adequate.
Since either of the above situations would be highly probative of whether or not a situation inconsistent with the antitrust laws exists in Florida, the information sought by Joint Request 76 is clearly relevant to the issues in this proceeding.
Finally, the Licensing Board has invited the parties to comment upon Joint Requests 79-82.
As required by the Licensing Board, the Staff, the Department and the Applicant have discussed these items.
All three parties accept the principles set forth on pages 32-35 of the !!emorandum on Discovery.
Appl ican t has authorized the undersigned to state that it is prepared to withdraw its objections to items 79-82 of the Joint Request on the understanding that the Staff and the Department share its view that while matters which are relevant to issues in this proceeding should not be excluded from discovery in this proceeding simply because they also relate to issues pending before another forum, matter's not otherwise relevant to issues in this proceeding should not be subject to discovery in this proceeding merely because they relate to issues arising under the Natural Gas Act.
These three parties also share the view that discovery in this proceeding should not be undertaken for the principal purpose of obtaining material to be used in another forum.
In view of this agreement, FP&L's objection to Joint Re-quests 79-82 should be considered as being withdrawn.
For the reasons stated above, the Department and the Staff urge this Licensing Board to overrule all objections to Joint Request 56, 76.
Respectfully submitted,
')lLL$t/mU >. Ibbt y C,o e e Melvin G.
Berger TLf/cl UGl b 0 : Ebc ann Mildred L.
Calhoun Attorneys, Energy Section Antitrust Division Department of Justice
\\ C2ll,hCCCh!L/iUG
_k Lee Scott Dewey
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Attorney Nuclear Regulatory Commission
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Ufd.lLt C.s b dlictaccLtRGJ Frederic D.
Chanania 4k Attorney Nuclear Regulatory Commission March 2, 1979
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMf1ISSIO!!
In the Matter of
)
)
Docket No. 50-389A FLORIDA POWER & LIGilT COMPANY
)
(St. Lucie Plant, Units No. 2)
)
Certificate of Service I hereby certify that copies of JOINT RESPONSE OF Tile DEPARTMENT OF JUSTICE AND Tile NUCLEAR REGULATORY COMMISSION STAFF TO LICENSING BOARD'S FEBRUARY 9, 1979 ORDER have been served u: ~ n all of the parties listed on the attachment hereto by hand or by deposit in the United States mail, first class or airmail, this 2nd day of March, 1979.
)ltLltdUr:[ f (Dd% c un w Mildred L.
Calhoun Attorney Department of Justice Antitrust Division h
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(
UNITED STT.TES OF AMERICA NUCLEAR REC'.TsTORY COMMISSION In the Matter of
)
)
Docket No. 50-389A FLORIDA POWER & LIGHT COMPANY
)
(St. Lucie Plant, Unit No. 2)
)
Ivan W.
Smith, Esq.
Tracy Danese, f.a q.
Chairman, Atomic Safety and
- Vice President for Public Licensing Board Affairs U.S.
Nuclear Regulatory Commission Florida Power & Light Co.
Washington, D.C.
20555 Miami, Flor id a 33101 Valentine B. Deale John E.
Mathews, Jr. Esq.
1001 Connecticut Ave.,
N.W.
Jack W.
Shaw, Jr.,
Esq.
Wa shing ton, D. C.
20036 Mathews, Osborne, Ehrich, McNatt, Gobelman & Cobb Robert M.
Lazo, Esq.
1500 Aiaerican Heritage Life
~ Atomic Safety and Licensing Building Board Jacksonville, Florida 32202 U.S.
Nuclear Regulatory Commission Washington, D.C.
20555 Robert E.
Bathen R.
W.
Beck & Associates Docketing and Service Section Post Office Box 6817 Office of the Secretary Orlando, Florida 32803 U.S.
Nuclear Regulatory Commission Washington, D.C.
20555 Dr. John W.
Wilson Wilson & Associates Joseph Rutberg, Esq.
2600 Virginia Avenue, N.W.
Lee Scott Dewey, Esq.
Washington, D.C.
20037 Frederick D.
Chanania, Esq. _
Pr<id J.
Evans, Esq.
Daniel M. Gribbon, Esq.
Office of Executive Legal Herbert Dym, Esq.
Director Covington & Burling U.S.
Nuclear Regulatory Commission 888 16th Street, N.W.
dashington, D.C.
20555 Washington, D.C.
20036 J.A.
Bou kn igh t,
Jr.,
Esq.
E.
Gregory Baines, Esq.
Lowenstein, Neuman, Reis
& Axelrad 10 25 Connecticu t Ave., N.W.
Washington, D.C.
20036 Robert A. Jablon, Esq.
2600 Virginia Avenue, N.W.
Washington, D.C.
20037 Jerome Saltzman Chief, Antitrust & Indemnity Group U.S.
Nuclear Regulatory Commission Washington, D.C.
20555