ML19275A269

Responds to Request for Advice Re Participation of Brazos Electric Power Cooperative.Brazos Has Agreed to Be Bound by Outcome of Tx Utils Generating Co OL Antitrust Hearing. Hearing on Brazos OL Application Not Necessary

ML19275A269
Person / Time
Site:	Comanche Peak
Issue date:	09/25/1979
From:	Shenefield J JUSTICE, DEPT. OF, ATTORNEY GENERAL, OFFICE OF
To:	Shapar H NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD)
References
NUDOCS 7910030434
Download: ML19275A269 (4)

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U.inittb States Department of 3Iustice

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WASHINGTON. D.C. 20530 assastam? att0RNEV G4NEmak aastitmust OswsSiOpe 2 5 SEP 1979 Howard K. Shapar, Esquire Executive Legal Director Nuclear Regulatory Commission Washington, D. C. 20555 Re: Texas Utilities Generating Company, Comanche Peak Steam Electric Station, Units 1 and 2, NRC Docket Nos. 50-445A and 50-446A

Dear Mr. Shapar:

You have requested our further advice pursuant to Section 105c of the Atomic Energy Act of 1954, as amended, with regard to the participation by the Brazos Electric Power Cooperative, Inc. (Brazosi in the Comanche Peak Steam Electric Station, Units 1 and 2, NRC Docket Nos.

50-445A and 50-446A.

The Comanche Peak Steam Electric Station will consist of two units, each rated at 1150 megawatts. The station is being built and will be operated by Texas Utilities Generat-ing Company (TUGCO), a subsidiary of Texas Utilities Company (TU). 1/ By the tera. of the agreement between TUGCO and Brazos, Brazos will secure a 3.8 percent ownership interest, or 44 MW in each unit. Brazos is a generation and transmis-sion cooperative providing power to a number of member distribution cooperatives in central Texas.

By letter to you d(ted August 1, 1978, the Department advised the Nuclear Regulatory Commission (NRC) that an antitrust hearing would be necessary in reference to the 1/ The designation "TU" comprises the Texas Utilities Company and its various operating and service subsidiary companies including Dallas Power and Light Company, Texas Electric Service Company, and Texas Power and Light Company, each of of which is a joint owner of the Texas Utilities Generating Company (TUGCO). -

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operating license application of TUGCO. That antitrust hearing, currently in the final stages of discovery, is scheduled to begin in February of 1980. The basis for the Department's recommendation that an antitrust hearing be conducted on the Comanche Peak operating license was that TU had combined with other utilities in Texas and agreed to disconnect f rom any other electric utility that com-menced operation in interstate commerce. In light of TU's dominant position in Texas, the fact that it had discon-nected from other electric utilities in 1976 when those utilities went into interstate commerce, and in view of changed circumstances in the electric utility markets in Texas, as set forth in my letter to you dated February 21, 1978, regarding the South Texas Project, NRC Docket Nos.

50-498A and 50-499A, the Department concluded that an antitrust hearing was necessary.

The contractual agreements between Brazos and the TU subsidiaries, including the Comanche Peak Ownership Agree-ment and Transmission Agreement, contain restrictions which, in effect, foreclose Brazos from interconnecting with and engaging in the buying and selling of power or energy with electric utilities that operate in interstate commerce. It is TU's " intrastate only" policy and practice which is the subject of the present Comanche Peak antitrust hearing.

Resolution of the antitrust issues in that hearing will necessarily resolve any antitrust questions raised by these restrictions in the contractual agreements between Brazos and TU subsidiaries.

Brazos has agreed to be bound by the outcome of the present Comanche Peak antitrust hearing, including the resolution of the intrastate only restrictions in its con-tracts with TU subsidiaries (See attached letter). In light of this agreement, and the absence of other evidence that Brazos' participation in the Comanche Peak units would create or maintain a situtation inconsistent with the antitrust laws, the Department believes that an anti-trust hearing on this application is not necessary.

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John H. Shenefield Assi9; ant Attorney General Antitrust Division Enclosure 1093 337'

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%')G4eh ' ,.x ha r 8 The Brazes System Brazos Electric Power Cooperative, Incorporated Geptember 14, 1979 Mr. Robert Fabrikant, Esquire Assistant Chief, Energy Section .

United States Department of Justice P. O. Box 14141 Washington, D. C. 20044 Re: Comanche Peak Electric Station; N.R.C Docket Nos.

50-445A and 50-446A; your file no. DAK:FHP 60-57-0

Dear Mr. Fabrikant:

This letter is in response to the letter of Mr. Fred Farmenter to me dated September 10, 1979, concerning the anti-trust review of the above license applications by the Department of Justice and is furnished to you for the Department's use in rendering its anti-trust advice to the Nuclear Regulatory Commission for the applications in the above dockets.

I The Brazos Electric Power Cooperative, Inc., (Brazos ) is a signa-tory to contracts with subsidiaries of the Texas Utilities Company that contain language which the Justice Department has construed as preventing or limiting Brazos from operating in, or interconnecting with other elec-tric utilities that are operating in interstate commerce. In order to avoid the necessity of an anti-trust hearing on Brazos' participation in the Cc=anche Peak Steam Electric Station, NRC Docket No. 50-445A and 50-446A, Brazos makes the following representations:

1) Uhile Brazos is a party to contracts that contain intrastate only provisions, Brazos did not request that such provisions be included in the contracts and would not object to such provisions being deleted from the contracts or enjoined, should such deletion be ordered or an injunction be issued in an adminis-trative or judicial proceeding or be agreed to by the other signatories to the contracts.

2) Brazos agrees to be bound by the cutcome of the present operating license anti-trust proceeding involving the 1093 E3 PCST CFFICE SOX 6:36 WACO. TEXAS 76706 PHCNE (817) 752 2501 / GENERAL OFFICE: 2404 LaSALLE AVENUE l B AAZO3 SvSTE*.1 *.*E'.tSE AS: I

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Brazos Electric Power Cooperative, incorporated fir. Robert Fabrikant 1 Page Two September 14, 1979 s

Comanche Peak Steam Electric Station, including any conditions that are attached to the operating license as a result of that proceeding.

If you find that you need further information concerning this matter, please let me know.

Yours very truly,

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James E. Zionahan Executive Vice-President and General Manager JEM:vwc 1093 33e i

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