ML19274E626
| ML19274E626 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 03/12/1979 |
| From: | Dym H, Gribbon D, Grossman J COVINGTON & BURLING |
| To: | |
| References | |
| NUDOCS 7904090363 | |
| Download: ML19274E626 (16) | |
Text
f!C PUllLIC DOCUMENT ROOM
'[a s UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION
> s
/2 a l"l-'
h \YY BEFORE TIIE ATOMIC SAFETY AND LICENSING BOARD Ca **4p Y b - M Matter of )
- ) Docket No. 50-389A FLORIDA POWER & LIGilT COMPANY )
(St. Lucie Plant, Unit No. 2) )
APPLICANT'S RESPONSE TO MEMORANDA ON DISCOVERY OF FLORIDA CITIES AND GOVERNMENT PARTIES Florida Power & Light Company (the " Applicant" or
" Company") submits this memorandum in response to the memoranda on discovery filed by the Department of Justice and the Nuclear Regulatory Commission staff (the " Joint Response") and by intervenor Florida Cities (the " Cities' Response").
I. The Justifications Offered for Discovery Pre-Dating 1965 Are Inadequate Applicant recognizes the principlea. Jet forth by the Board (at pp. 12-13 of its Memorandum and Order on Discovery) concerning the appropriateness of some discovery concerning the pre-1965 period. IIoweve r , Applicant submits that the justifica-tions submitted in the Joint Response and the Citics' Response for requests pre-dating 1965 bear no relation to these principles and, accordingly, that the requests should be limited to the post-1965 period.
"/90403 0'3(3 3
Joint Requests Nos. 56, 76 In essence, all the government parties can say in support of Joint Request 56(a) -*/ and 76 is that Applicant may
.have refused to sell wholesale power or establish delivery points sometime in the past and that information concerning such events should be discoverable. But the whole point of limiting discovery in a prospective-looking proceeding such as this one is to focus attention on the existing and prospect-ive competitive situation and provide parties with some pro-tection against unreasonable and unlimited search burdens.
That the Company has been accused of refusing to sell wholesale power to Clewiston in 1952, for example, does not "readily" show whether the company possesses market power today, nor whether it has misused any market power it has in a recent, relevant period. Joint. Response, pp. 3-4.
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Similarly, the effect on present day'cond 5 o'Es of any insistence by the Company in the 1950's on "high voltage interconnections that might be more expensive to install than installation of lower voltage interconnections" (Joint Response,
- p. 5) is less than obvious. There is simply no reason for the Board to assume -- and the Joint Response provides no basis for the Board to do other than assume -- that any failures to sell wholesale power or establish delivery points that occurred as
- / Joint Request 56(b) concerns Applicant's current policy with respect to wholesale sales. As Applicant understands it, it wou.'.d be obliged to answer this question no matter what cut-of f date for discovery the Board sets with respect to Joint Request So(a).
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long as 27 years ago either shaped the existing competitive situation or had effects that would likely carry through to shape the prospective competitive situation. In such circum-stances, the burden on Applicant of conducting a search of its ,
records back to 1950 in order to respond to these requests is l not justifiable, and the requests should be denied.~*/ I The Cities make several additional arguments about
- the relevance of Joint Requests Nos. 56 and 76. Again they suffer from the flaw of not explaining why discovery with re-spect to a period of more than a quarter of a century is required. i l
It bears emphasis that that is the issue before the Board -- not i
whether discovery concerning Applicant's present policy regarding wholesale sales should be allowed.
The Cities' first point is that "since nuclear generated energy comprises a significant portion of wholesale power sales, such refusals deprive smaller systems of access to nuclear generated energy." Cities' Response, p.7. But, any wholesale power the Company might have sold in the 1950's contained no com- '
ponent of nuclear generation; the Company's first nuclear unit did not become operational until 1973. The cities' second jus-tification is that refusals to sell wholesale power might have
" forced" smaller systems to construct potentially uneconomic !
generation. For the Board o allow discovery going back to 1950 with respect to wholesale sales on this theory would require '
Applicant to engage in diccovery and present to the Board evidenca
- / In purporting to justify Joint Request No. 76 (Joint Response, pp. 4-6) the government parties appear to assert that anything a large, privately owned utility did in the past in response to a ,
request for an interconnection, other than to accept the exact terms proposed, is evidence of anticompetitive conduct. Neither discovery nor the hearing on the merits in this proceeding should proceed on that basis.
_4 concerning the reasons why eighteen municipal systems constructed or did not construct particular generating facilities during the twenty-ei3ht year period from 1950 to 1978. In such circumstances this proceeding surely would become unmanageable. The Cities' third and fourth concerns -- that the Company's alleged refusals to sell wholesale power may have furthered its alleged acquisition attempts and territorial divisions -- already have been satisfied, inasmuch as the Board granted Joint Requests Nos. 29 and 30 for the pre-1965 period. These deal, respectively, with territorial allo-cation agreements and acquisitions. To come at this information indirectly, by Joint Requests Nos.56 and 76, would merely com-plicate the proceeding and increase Applicant's search burdens.
Finally, if the Cities can find no evidence of " classic tie-in practices" by Applicant in the period since 1965 (Cities' Re-sponse, pp. 7-8), they should not be-affordedmunlimited license to search for them in an earlier period, when no carry-over effect in the current period has even been suggested.
Cities' Requests Nos. 39, 40 and 42 The Cities' justification for these request 1 suffers from the same defect -- in no way does it explain why pre-1964 information elicited in response to these requests would aid the Board in evaluating either the existing or prospective com-petitive situation. These requests do not appear likely to lead to information about the structure of the existing relevant market.
Thus, to justify the greater search burdens that they would entail,
-s-Cities should be able at least to show that it is likely that the pre-1965 anticompetitive practices they allege have had a continuing impact. But this the Cities do not and cannot say, given the limited subject matter of the requests. Furthermore, Cities' Requests Nos. 39, 40 and 42 merely duplicate the inquiry made by Joint Requests No. 56 and 76. If the former are imper-missible as to the pre-1965 period, the latter are also.
Finally, Applicant respectfully requests the Board to rule on the period of time as to which it is required to respond to Cities' Requests Nos. 20 and 21. Cities' Request No. 20 seeks information going back to 1950, and Cities' Request No. 21 seeks information going back to 1955. Applicant objected to both re-quests on the basis of the period of time covered (Applicant's Objections, p.3), but the Board apparently did not rule on these
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objections. - Applicant submits that 1965 would be an appropriate cut-off date for these requests.
II. Discovery Concerning Natural Gas Should Be Limited To Matters Properly At Issue In This. Proceeding Mindful of the principles articulated by the Board in its Memorandum and Order on Discovery, Applicant has withdrawn its objections to Joint Requests Nos. 79-82, which generally
- / The Board denied objections on the grounds of overbreadth and First Amendment privilege that Applicant raised to Cities' Re-quest No. 21
deal with Appli' cant's natural gas supplies. It has done so des-pite its concern that inquiry into the so-called T-3 contract and secret agreement of March 22, 1967 will lead the Board and parties far beyond the issues which ought to be of importance here. -*/
Applicant submits that any information concerning its natural gas supplies and how they were obtained of conceivable relevance to issues properly before the Board, as articulated by the Board in its Memorandum, will be produced in response to Joint Requests Nos. 79-82. It submits that the additional materials sought by the Cities in their Requests Nos. 57-59 and 72-73 are, at best, duplicative and, at worst, an effort to utilize the dis-covery process in this proceeding to obtain information for use before other federal agencies.
Cities' Requests No. 57 Even assuming the truth and relevance of the Cities' numerous allegations concerning the natural gas supplies of Applicant and the Cities, which Applicant vigorously disputes,
- / Applicant does not contend that these matters are off-limits simply because proceedings concerning them are pending before FERC or a Court of Appeals. Applicant submits, however, that issues properly before those bodies have no place in this proceeding merely because they involve allegations that violations of the Natural Gas Act by others may have occurred.
The Cities' Response leaves no doubt that the purpose of the Cities' interrogatories on nutural gas is to inquire into whether "FP&L was involved in (or at least knew of) illegality (i.e., a violation of the Natural Gas Act] concerning these arrangements" (Cities' Response, p. 6). But the Natural Gas Act is not one of the laws set forth in S 105a of the Atomic Energy Act. The question here must be whether conduct of Applicant was somehow inconsistent with the antitrust laws in a manner affecting the existing or prospective competitive condition.
Fn. cont'd
the burden of providing the level of detail called for by Cities Requests' 57(a) and (b) is an entirely independent basis for denying the requests. In a proceeding such as this, which has as its focus existing or prospective competitive conditions, the general topic of gas availability may, as the Board suggested, be a part of the background to be considered. The precise topic of how these supplies were obtained, including all " meetings, tele-phone contacts or other communication" concerning the " making, negotiation, agreement, approval or modification" of gas supply contracts (Cities' Request No. 57(a)), is not. But even if the Board were to conclude that the Cities had a legitimate need in this proceeding for information, it could allow the Cities to obta.in it more easily and directly by deposing the individuals whom Applicant will be required to name in response to Joint Request
- l No. 79 (b) . Accordingly, these requests should be denied.
There is a more fundamental flaw ~tescities' Request No. 57 (c) . If Applicant responds to Cities' Request No. 57 (d) as Cities propose to modify it, the additional information sought Fn. cont'd Moreover, the intervenors' ramblings and allegations should not be allowed to give a false impression. After protracted investiga-tions, no one except certain of the intervenors ever has suggested that the Company was involved in any way in violations of the Natural Gas Act or any related wrongdoing. The intervenors' repetition of their charges should not serve to dignify them.
- / Joint Request No. 79(b) requires Applicant to "Name all persons who had any responsibility relating to the making, negotiation, agreement, approval, continuation or modification (proposed, actual or potential) of the Company's gas trans-portation agreements including related production with either Florida Gas Transmission Company or Amoco Production Company (or any predecessors, successors, affiliates, assigns or related companies).
State the responsibility over such matters for each person named."
by their Request No. 57(c) would be useful to Cities if at all, only in an attempt to inquire into the possible liability of the It 13 named individual for violations of the Natural Gas Act.
the knowledge and action of the Company which is the proper sub-ject of discovery in this proceeding. Cities' Request No. 57(d) will provide any necessary data; Cities' Request No. 57(c) should be denied.
Cities' Request No. 58 Cities' Request No. 58 seeks a massive amount of in-formation -- all dccuments since 1965 concerning the Company's daily scheduling and use of natural gas under enumerated agree-ments, including amounts, rates and fluctuations of deliveries.
The only proferred justification for this inquiry is that the Company "should have gained constructive knowledge of [the terms of the March 22, 1967 letter] through the daily mechanics of gas delivery." Cities,' Response, p. 5. But such a justification goes only to the Cities' theory that the Company may have vio-lated the Natural Gas Act; it has nothing to do with the exist-ing or future market in Florida for natural gas.~*/
Cities' Request No. 59 All that Cities have to say in support of this request is that "it makes clear that Cities seek all documents related
- / Moreover, Applicant does not understand how deliveries to it would lead to constructive knowledge of the March 22, 1967 letter or any other agreement.
to the March 22, 1967 letter." Cities' Response, p.5. That is hardly a justification.
Applicant contends that the request is overbroad. The Cities have not explained the need for any information sought by this request over and above the information to be provided in response to Joint Requests 79-82 and Cities' Request No. 57(d) as Cities propose to reframe it. Accordingly, Applicant's objec-tion should be sustained.
Cities' Request Nos. 72-73 The Cities have not provided any justification of these requests in response to the Board's order, although they appear to press them. Cities' Response, p.2. Applicant submits that all relevant material on this dubiously relevant subject will be produced in response to Joint Requests Nos. 79-82, and that Cities' Requests Nos. 72 and 73, adding nothing, should be struck. -*/ -
III. The Modifications of Discovery Requests That Cities Propose Are Inadequate To Cure Their Defects Cities' Request No. 14 Applicant renews its objection to Cities' Request No. 14 as the Cities propose to restate it. Even assuming that discovery
- / Applicant will bear a heavy burden in complying with the dis-covery requests propounded to it. The Cities are signatories to the Joint Requests and ought to bear some responsibility for phrasing any additional requests they make in a meaningful and non-duplicative way. If Cities' Requests seek additional informa-tion, that should be plainly shown; if not, they should be with-drawn.
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of such political materials is permissible at all, which Applicant respectfully disputes, the " revised" Cities' Request No. 14 still shows no attempt to limit the inquiry to issues properly before the Board. While Applicant would be prepared to provide, pursuant to the Board's order, documents relating to presentation of its views in elections dealing with the grant or renewal of municipal franchises to it, it submits that requiring information with respect to its views in any state election or any election in a community in which there is a municipal electric system is plainly overbroad. ~*/
Cities' Request No. 18 The Company objected to Request No. 18 on the basis of overbreadth and burden and suggested that the Cities could obtain the information they apparently sought by deposition.
In sustaining Applicant's objection, the Board directed the Cities to utilize depositions. If the Cities do so, there would be no need for Applicant to answer Cities' Request No. 18.
Accordingly, Applicant submits that the Cities should proceed as directed by the Board, and that Cities' Request No. 18 should be denied.
- / In South Dade, the Board held that a request pertaining to legislation "possibly effecting competition between electric utilities and the State of Florida" was overbroad becausa "it could embrace all of Applicant's considerations and activities with respect to legislation." Florida Power & Light Company (South Dade Nuclear Units) , Docket p-636A, Second Prehearing Conference Order (February 23, 1977), p.4. The same defect exists here.
Cities' Request No. 20A Applicant contends that the Board correctly decided its objection to Cities' Request No. 20A and that the request for reconsideration should not be allowed. If the Board ad-heres to its ruling, Applicant would agree to withdraw its Request No. 176.
Cities' Request No. 64 The manner in which Cities propose to " limit" their Request No. 64 is totally insufficient to meet Applicant's objec-tion and the Board's concern thc c the request "could produce much irrelevant data." Memorandum and Order on Discovery, p.36. All that Cities have done is to explain what damages are referred to in the interrogatory -- which the Company already knew -- and
" limit" the request on outages and off-line time to best current projections -- which is the only information the Company would have had available.anyway. Applicant's objection and, Applicant believes, the Board's concern, were with the fact that the re-quest seeks considerabic amounts of information in addition to capacity and availability factors and cost data associated with operation of the Company's nuclear power plants. The cities' reformulation of its request does nothing to meet these problems, and therefore Cities' Request No. 64 should be denied.
IV. Denial of Cities' Requests Nos. 24, 26 and 34 Does Not Mandate Denial of Applicant's Re-quests Nos. 173-175 The Cities interpret the Board's Memorandum and Order on Discovery as rejecting "as a possible defense, a contention
that Cities' receive certain benefits as government entities. "
Cities' Response, p. 13.-*/In Applicant's view, the Board's order dealt with discovery rather than the law of this case, and should not be construed otherwise. Moreover whatever the Cities may mean by their " defense" terminology, it is clear that licensing boards have refused to ignore the competitive attributes of municipai systems, at least in fashioning relief in proceedings such as this under S 105c of the Atomic Energy Act. See, e.g., Alabama Power Company (Joseph M. Farley Nuclear Plant, Units 1 and 2), 5 NRC 1482, 1497 (1977) (appeal pending). ~~**/
In any event, denial of Cities' Requests Nos. 24, 26 and 34 provides no basis for denying Applicant's Requests Nos.
173-175, which generally relate to efforts by the intervenors to tie electric service to other municipal services. These requests are relevant to the questions of market definition, the amount and nature of retail competition present in the relevant market or markets, and Applicant's power in the relevant market or markets. If the Cities in fact follow the policy of conditioning the provision of essential municipal services on a customer's agreement to take electric service as well, retail
- / Applicant disputes that any " tie-ins" practiced by the Cities "would be related to the status of municipalities as entities vested with public authority to operate utility systems" (Cities' Response, p. 14) and therefore have the same character as the Cities' ability to engage in tax-exempt financing. The legitimacy
. of any such practices should not be assumed.
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"The Board has concluded that a consideration of AEC's tax and other advantages is irrelevant for all purposes under the facts of the instant case .... By the same token, there is no good reason to fashion a remedy deliberately designed to extend and multiply such preexisting advantages to a situation not expressly contem-plated by Congress."
electric competition may be ef fectively foreclosed in' the areas in which such a policy prevails. The Cities' ability to require customers to purchase their electricity from a particular supplier, whether or not related to the Cities' municipal status, and the facts surrounding exercise of this ability are relevant to issues in this proceeding; accordingly, Applicant's Requests No. 173-175 should be allowed.
Conclusion For the foregoing reasons, Applicant respectfully submits that the Board should (1) deny Joint Requests Nos. 56 and 76 and Cities' Requests Nos. 39, 40 and 42 to the extent that they seek information pre-dating 1965; (2) set 1965 as the cut-off date for Cities' Requests No. 20 and 21; (3) deny. Cities' Requests No. 57-59 and 72-73; (4) deny Cities' Requests 14, 18 and 64 as proposed to be revised by the Cities, and affirm its ruling denying Cities' Request No. 20A; and
. (5) overrule the Cities' objection to Applicant's Requests Nos. 173-175.
Respectfully submitted, fev NW Daniel M. Gribbon Herbert Dym Joanne B. Grossman Covington & Burling 888 Sixteenth Street, N.W.
Washington, D.C. 20006 (202) 452-6000 J.A. Bouknight, Jr.
E. Gregory Barnes Lowenstein, Newman, Reis & Axelrad 1025 Connecticut Avenue, N.U.
Washington, D.C. 20036 (202) 862-8400 John E. Mathews, Jr.
Jack W. Shaw, Jr.
Mathews, Osborne, Ehrlich, McNatt Gobelman & Cobb 1500 American Heritage Life Building 11 East Forsyth Street Jacksonville, Florida 32202 (904) 354-0624
. Attorneys for Florida Power & Light Company March 12,1979
." UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of )
) Docket No. 50-389A Florida Power & Light Company )
(St. Lucie Plant, Unit No. 2) )
CERTIFICATE OF SERVICE I HEREBY CERTIFY that copies of the following:
Applicant's Response to Memoranda on Discovery of Florida Cities and Government Parties have been served on the percons shown on the attached list by hand delivery
- or deposit in the United States mail, properly stamped and addressed on March 12,1979.
" 4W Jdhnne B.'Grossman Covington & Burling 888 Sixtecnt,h Street, N.W.
Washington, D.C. 20006
UNITED STATES OF AMERICA
. NUCLEAR REGULATORY COMMISSION In the Matter of )
) Docket No. 50-389A FLORIDA POWER & LIGIIT COMPANY )
(St. Lucie Plant, Unit No. 2) )
SERVICE LIST Ivan W. Smith, Esq.
- Melvin G. Berger, Esq.
Chairman, Atomic Safety and Mildred L. Calhoun, Esq.
Licensing Board Antitrust Division U.S. Nuclear Regulatory Commission Department of Justice Washington, D.C. 20555 1101 Pennsylvania Avenue, N.W.
Washington, D.C. 20530 Valentine B. Deale 1001 Connecticut Ave., N.W.
- Robert A. Jablon, Esq.
Washington, D.C. 20036 Spiegel & McDiarmid 2600 Virginia Avenue, N.W.
Robert M. Lazo, Esq. Washington, D.C. 20037 Atomic Safety and Licensing Board Jerome Saltzman U.S. Nuclear Regulatory Commission Chief, Antitrust & Indemnity Washington, D.C. 20555 Group U.S. Nuclear Regulatory Docketing and Service Section Commission Office of the Secretary Washington, D.C. 20555 U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Mr. Robert E. Bathen R.W. Beck & Associates Lee Scott Dewey, Esq. Post _Offige Box 6817 Frederick D. Chanania, Esq. Orlando, Florida 22803 David J. Evans, Esq.
U.S. Nuclear Regulatory Commission Dr. John W. Wilson Antitrust Division Wilson & Associates Room 11209 2600 Virginia Avenue, N.W.
7735 Old Georgetown Road Washington, D.C. 20037 Bethesda, Maryland 20014
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