ML19270F617

in Response to NRC Request for Advice,Advises That No Antitrust Hearing on Applications Is Necessary

ML19270F617
Person / Time
Site:	Palo Verde
Issue date:	02/22/1979
From:	Shenefield J JUSTICE, DEPT. OF
To:	Shapar H NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD)
References
790223, NUDOCS 7903020351
Download: ML19270F617 (4)

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7 6I' Einiteb States Ecp3rtment of 3fustiet WASIIINGTON, D.C. 20530 A$s5T ANT A7TOHNEY GENERAL ANTITRUST Dive 510N 2 2 FEB ly9 Howard K. Shapar Executive Legal Director United States Nuclear Regulatory Commission Washington, D. C.

Re: Palo Verde Nuclear Generating Station, Units 4 and 5, Arizona Public Service Company, NRC Docket Nos. 50-592A and 50-593A

Dear Mr. Shapar:

You have requested our advice pursuant to Section 105c of the Atomic Energy Act of 1954, as amended, in regard to a revision of the above-cited application which would expand the ownership of the units to include Los Angeles Department of Water and Power (LADWP), San Diego Gas & Electric Company (San Diego), City of Anaheim (Anaheim), City of Glendale (Glendale), City of Riverside (Riverside), City of Pasadena (Pasadena), City of Burbank (Burbank), and the Nevada Power Company (NPC).

The Palo Verde Nuclear Generating Station (PVNGS)

Units 4 and 5 are two additional units planned for con-struction at the same site as Units 1, 2 and 3 currently being built pursuant to construction permits issued by the Nuclear Regulatory Commission ("Commissien") in NRC Docket Nos. STN 50-528, STN 50-529, and STN 50-530, re-spectively. 1/ The Department of Justice rendered anti-trust advice to the Commission by letter of September 13, 1/ The Department rendered antitrust advice to the Commission by letter of April 8, 1975 with respect to the proposed participation in PVNGS Units 1, 2 and 3 by Arizona Public Service Company and El Paso Electric Company, and by letter of April 6, 1976 with respect to the participation of Southern California Edison Co. in C Units 1, 2 and 3. j n gk(

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1978, with respect to the initial applications of Arizona Public Service Company, El Paso Electric Company and Southern California Edison Company regarding their parti-ticipation in PVNGS Units 4 and 5. The proposed revision will result in the eight additional participants owning the following percentage of the two units:

LADWP 11.7%

San Diego 5.2%

Anaheim 1.5%

Glendale 1.0%

Riv e r s id e 1.0%

Pasadena 1.0%

Burbank 1.0%

N PC 2.2%

LADUP has been the subject of antitrust review on two previous occasions. In connection with LADWP's par-ticipation in the San Joaquin Nuclear Project we advised by letter of November 24, 1975, that no antitrust hearing was necessary, and more recently we advised by letter of July 17, 1978, that no antitrust hearing would be required in connection with LADWP's participation in Sundesert Nuclear Plant, Units 1 and 2.

San Diego has also been the rubject of two previous antitrust reviews. We advised the Commission by letter o f July 12, 1971, that a hearing was necessary in connec-tion with Southern California Edison's participation in the San Onofre Nuclear Generating Station, Units 2 and 3, but concluded, with respect to San Diego's participation, that an antitrust hearing was no. warranted. On May 12, 1976, we rendered antitrust advice in connection with San Diego's application to build the Sundesert Nuclear Plant, Units 1 and 2. We again advised that a hearing was not necessary.

Anaheim, Glendale, Riverside and Pasadena filed applications to participate in both the San Joaquin and Sundesert plants, and the Commission was advised by let-ters of November 24, 1975, and September 2, 1977, that no antitrust hearings were necessary in connection with the participation by those cities in the San Joaquin and Sundesert plants, respectively. We also advised the Commission by letter of July 17, 1978, that no antitrust hearing would be required in connection with the City of Burbank's planned participation in the Sundesert Nuclear Plant.

Our review of the information submitted for antitrust review purposes as well as other information available to the Department provides no basis at this time to conclude that the participation in PVNGS Units 4 and 5 by the above seven entities would warrant any change in our priot advice.

The eighth applicant, the Nevada Power Company (NPC) has not heretofore been the subject of an antitrust review under section 105c. NPC is the largest electric utility in southern Nevada and in 1977 served approximately 136,000 customers (including the city of Las Vegac), with a peak load of approximately 1000 MWs. NPC's 2.2 percent interest in the PVNGS Units 4 and 5, approximately 55 MW, represents about 4 percent of its 197; generating capacity (approxi-mately 1200 MWs).

There is one municipally owned distribution system, two power distr icts, one REA cooperative, and one investor-owned distribution system in southern Nevada serving in areas adjacent to NPC's facilities, none of which have any generation in the area. 2/ The investor-owned system pur-chases power from NPC. The public systems purchase power generated at Federal hydroelectric projects on the Colorado River from the U.S. Bureau of Reclamation and the Nevada Division of Colorado River Resources.

The NPC performs central dispatching service for all of the utilities in the area, and thus, is in a position to control the ability of these other utilities to obtain power from sources outside of the area. It appears, how-ever, that all the utilities are engaged in the planning of jointly owned generating plants. Moreover, our inves-tigation uncovered no evidence that NPC has acted to fore-close or hinder the development of alternative sources of power or has otherwise placed the smaller utilities at a competitive disadvantage. Accordingly, it is the Depart-ment's view that NPC's ownership of 2.2 percent of PVNGS 2/ The investor-owned system (C-P National , formerly California-Pacific Utilities Co.) does own some generation in northern Nevada.

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Units 4 and 5 will not create or maintain a situation inconsistent with the antitrust laws and that an anti-trust hearing on NPC's application is not necessary.

Sincerely yours,

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, Jo ri n H . Shenefield'-

Ass'istant Attorney General Antitrust Division k