ML19308B214

Answer to Joint Petition for Leave to Intervene,Motion to Dismiss Application of Duke & Memorandum in Support of to Dismiss,Filed by Piedmont Cities Power Supply & 11 Piedmont Electric Cities.W/Certificate of Svc

ML19308B214
Person / Time
Site:	Oconee
Issue date:	08/14/1967
From:	Grigg W, Horn C, Mcguire W DUKE POWER CO.
To:	US ATOMIC ENERGY COMMISSION (AEC)
Shared Package
ML19308B215	List: ML19308B214
References
NUDOCS 7912160129
Download: ML19308B214 (9)

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/@ Y In the Matter of ) DOCKET NOS. 50-259

) 50-270 DUKE POWER COMPANY ) 50-287 ANSWER OF DUKE POWER COMPANY TO JOINT PETITION FOR LEAVE TO DITERVENE, MOTION TO DISMISS APPLICATION OF DUKE POWER COMPANY AND MEMORANDUM IN SUPPORT OF MOTION TO DISMISS, ALL OF PIEDMONT CITIES POWER SUPPLY, INC. AND ELEVEN PIEDMONT ELECTRIC CITIES Applicant Duke Power Company, answering the Joint Petition for Leave to Intervene, the Motion to Dismiss the Application of Duke Power Company, and the Memorandum in Support of said Motion to Dismiss, all filed in the above captioned matter by Piedmont Cities Power Supply, Inc. and eleven

' Piedmont Electric Cities, says and alleges:

1. The matters raised in the aforesaid Icint Petition fcr Leave to Intervene , Motien to Dismiss, and Memorandum in Suppor* of Motion to Dismiss (hereinafter coll'ctively referred to as "ratition") relate to and concern issues which are .'ot pertinent to this prcceeding and which are outside of the jurisdicticn of this A*omic Safety and Licensing Board.

Section 2.714 of the Atomic Energy Commission's " Rules of Practice" requires that any person who desires to participate in this matter as a party 7912160/27

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shall file a written petition with the Commission which "shall set forth the interest of the Petitioner in the proceeding, how that interest may be affccted by Co[nmission action, and the contentions of the Petitioner."

The Petitioners ' allege only one interest in this case - the cost of electric power purchased by them as wholesale customers of Duke Power Company, which they propose to reduce by purchasing an interest in le Oconee Nuclear Station. In Section III (b)(4) of the Commission's Statement of General Policy for the conduct of proceedings relating to the issuance of construction permits for nuclear power facilities, it is stated that "the board should not permit enlarging of the issues, or receive evidence from an intervenor, with respect to matters beyond the juris' diction of the Com-mission. " .

As wholesale customers of the Applicant, the Petitioners are entitled to have the reasonableness of their electric power rates reviewed. However, the authority for such review is Part II of the Pederal Power Act, not the Atomic Energy Act. The forum for such review is the Federal Power Com-mission, not the Atomic Energy Commission.

In its " Order Denying Requests and Dismissing Protest of Piedmont Electric Cities" issued on August 9,1967, this Atomic Safety and Licensing Board ruled that the Notice of Hearing issued by the Atomic Energy Commis-sion in this matter "has specified the 1.1 sues for determination to be safety, financial, and common defense and security considerations". As the Peti-tion does.not address itself to any of these issues, it is irrelevant to these procee' dings , and it must accordingly be dismissed.

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2. The Application of Duke Power Company for construction permits and operating licenses for the Oconee Nuclear Station is properly based ucon Section 104b of the Atomic Energy Act of 1954, rather than Section 103 as alleged by the Petitioners. *

' As the basis for their intervention, the Petitioners allege that the Application should have been filed under Section 103 of the Act rather than under Section 104b "in order to preserve for Movants and the public the protection against monopoly, contracts, combinations, and conspiracies in restraint of trade and.other evils which Congress has vouchsafed to the public for the protection of Movants' interest in a commercial license appli-

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cation proceeding" . (Motion to Dismiss , p. 4). In its Order of August 9, 1967 this Board determined that alleged monopolistic practices and viola-tions of the anti-trust laws are not within its jurisdiction. Such matters are, therefore, improperly raised in the Petition.

Moreover, the Petitioners challenge the authority of ie Commission to license the Oconec Reactors under Section 104b of the Act in spite of the fact that every power reactor license issued to date has been under that section. It is, in fact, the only section under which a license may be issued for reactors of a type with respect to which the Commission has not made a finding of " practical value" under Section 102.

Section 102 provides that "Whenever the Commission has made a finding in writing that any type of ytilization er production facility has been sufficiently developed to be of practical value for industrial or cc=mercial purposes, the Commission may thereafter issue licenses fer such type of facility pursuant to Section 103". That Section 102 requires the Cc= mission to find that a type of utilization or productica facility is of practical value

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. . r as a prerequisite to issuing licenses for commercial installations of such 4

facilities under Section 103 is clear not on19 from the language of the statute, but also from its 1cgislative history. Sco Report of Ioint Committee on Atomic Energv quoted in CCH, _ Atomic Energy Law Reporter, ' Para.13,090.

Wnile a finding of " practical value" must preceed the issuance of a Section 103 license, it is discretionary with the Commission as to wheSer such a finding should be made with respect to a particular type of reactor.

In a memorandum to the Commission interpreting the requirements and impli-cations of Section 102 (see CCH, Atomic Energy Law Repcrter, Para. 3563) the Commission's General Counsel said:

"The absence of clear definition and limiting criteria in the statute and its legislative history leaves the Commission with considerable latitude in exercising the discretionary authority under section 102 Among the actions that te Com-mission might properly take in de exercise of this discretion, apart from the making of a finding of practical value, would be a decision that a finding should not be made until (1) the technical feasibility of Se reactor concept and its basic tech-nical characteristics had been adequately demonstrated and (2) there had been sufficient demonstration of the cost of construction and operation of the type of nuclear power plant as to provide a sound basis, with reasonable extrapolation, for a reliabic estimate of Se economic competitiveness of power produced in this type of plant wid power that would be produced in a comparable conventional power plant that'would be constructed at the same time and place."

On December 29, 1965 in Docket Nos. RM-102-1 and PRM-102-A, the Commission ruled in part:

. "The statutory finding of practical value, while presup-pcsing a determination of technical feasibility, also involves economic considerations, the essential economic test being the competitiveness of the nuclear power plant wii conventional power plants.

The Commission has discretion to determine that no type of production or utilization facility will be considered to be

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'sufficiently developed' within the meaning of section 102 until it has been adequately demonstrated, not only technically but also economically."

This ruling was mado in responso to a petition filed by the National Coal Policy Conference, the National Coal Association, and the United Mine Workers of America requesting a Commission rule finding that boiling light water reactors and pressurized light water reacters have been sufficiently developed to be of " practical value" for industrial and commercial purposes.

The Commission refused to make such a finding, holding that:

"Without the operating information the intermediate sized plants are expected to provide, we are not prepared to make a statutcry finding on $e basis of demonstrated results of the currently operable plants that plants at least three times larger than 200 net MW (e) are of practical value within the meaning of section 102."

A similar petition was flied by the same parties on October 18, 1966 requesting reconsideration by the Commission based on developments since December 29, l'965. Docket No. PRM-102-B. The Commission denied the second petition on December 21, 1966, on the grounds cat its December 1965 conclusions were still valid. It said in part: i Pending the completion of scaled-up plants , and the in- 1 formation to be obtained from their operation, the Commission I remains of the view that there has not yet been sufficient demon- I stration of the cost of construction and operation of light water, nuclear electric plants to warrant making a statutory finding dat any types of such facilities.have been sufficiently developed to be of practical value within the meaning of section 102 of the Act."

In view of these rulings the Cconee Reactors cannot be licensed under Section 103. In fact, as $ere has as yet been no operating experience of reactors of the type to be used in the Oconee Station a finding of their

" practical value" by the Commission at dis time would be premature. The legislative history of the Act clearly indicates that Congress intended a period l of operation under Section 104b before a particular type of reactor is qualified N - .- - -- . - . . - - . . . - -

. .' r 7; for licensing under Section 103. During debates prior to enactment of the Act, Representative Cole, then Chairman of the Joint Congress! >nal Com-mittee on-Atomic Energy said:

. . . After a reactor has been tested out under section 104(b) and its practicability as an atomic reactor has been established, and after it has been demonstrated that this force can be used economically competitively, the Commission then :re.kes a determi- "

nation that such a reactor as a type does have com:aercial utility. .

It has never been contemplated, as Petitioners apparently contend, that a reactor licensed under Section 104b could not be used to generate electric power for sale. In fact, the nuclear generating plant at Parr, South Carolina (CVTR), to which the Petitioners refer (Memorandum, p. 6) is licensed under Section 104b and has generated substantial amounts of electric power for sale to the customers of South Carolina Electric & Gas Company since 1963.

In a memorandum upon which the decision in Docket No. PRM-102-A, supra, is in part based, the Commission Staff said:

"The recommendation that the Commission make the determina-tion that a statutory finding under section 102 will not be made now is in no way. inconsistent with the Commission's announced view that nuclear power has come of age, and with the Commission's confidence in Se progress of the nuclear industry. Certain types of nuclear power plants are being sold en the basis of economic competition with other ways of providing electrical power, and the staff considers that such sales constitute reasonable business risks.

It is entirely appropriate for manufacturers and utilities to base their economic estimates on forecasts rather than to await substan-tial demonstration of cost once the basic technology has been proven;

. however, the staff considers that the Commission's statutory respon-sibility under section 102 of the Act requires more than strong be-lief that the next generation of plants will operate at anticipated costs . The staff also believes that, at de present time, there is not enough informatica available from which to extrapolate technical and performance characteristics and associated economics w1s suf-ficient assurance to provide a sound basis for making Se statutcry finding of practical value."

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. i WHEREFORE, having answered the allegations contained in the Peti-tion, Duke Power Company, as applicant in the captioned proceeding, -

submits that said allegations are without merit and for the reasons set forth herein requests that the Petition be dismissed and the rchef requested in said Petition be denied.

This 14th day of August,1967.

Respectfully submitted, DUKE POWER COMPANY By \,\ N ft "[O President fi / /}

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, STATE OF NORTH CAROLINA )

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Persorially appeared before me, W. B. McGuire, who b'eing duly sworn, says that he is an officer of Duke Power Company, to wit, its President; that he has read and is authorized to sign the foregoing Answer; and that the statements contained therein are true to the best of his knowledge, information and belief.

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W. 3. McGuire Sworn to and subscribed before me this 14th day of August,1967.

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.. UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION In the Matter of ) .

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DU:G POWER COMPANY ) DOC:GT NOS. 50-269 (Unit 1)

) 50-270 (Unit 2)

(Oconee Nucleat Jtation , ) 50-287 (Unit 3)

Units 1, 2 and 3) )

CERTIFICATE OF SERVICE I hereby certify that copics of the " Answer of Duke Power Company to Joint Petition fer Leave to Intervene, Motion to Dismiss Application of Duke Power Company and Memorandum in Support of Motion to Dismiss, All of Piedmont Cities Power Supply, Inc. , and Eleven Pied =cnt Electric Cities,"

dated August 14, 1967, in the above-captioned matter, were served upon the following by deposit in the United States mail, first class or air mail, this 14th day of August,1967:

Sami2e1 W. Jensch, Esq. Thomas F. Engelhardt, Esq.

U. S. Atomic Energy Commission Trial Counsel, Regulatory Staff -

Washington, D. C. 20545 U. S. Atomic Energy Commission Washington, D. C. 20545 Dr. Ichn Henry Buck The Budd Company Stanley T. Robinson, Jr.

Phoenixville, Pennsylvania Office of the Secretary U. S. Atomic Energy Commission Dr. Hugh Paxton Washington, D. C. 20545 Los Alamos Scientific Laboratory Los Alamos, New Mexico Jack R. Harris Suite 207 Dr. Clarke Williams Stimpson-Wagner 31dg.

Deputy Director Statesville, North Carolina Brookhaven National Laboratory Upton, Long Island, New York J. O. Tally, Jr.

P. 'O. Drawer 1560 A. A. Wells , Esq. Fayetteville, North Carolina Chairman, Atomic Safety and Licensing Board Spencer W. Reeder U. S. Atomic Energy Commission ' Spencer Building Washington, D. C. 20545 St. Michaels , Maryland Honorable Robert E. McNair Reese A. Hubbard Governor, State of South Carolina . County Superviser The State House Oconee County Columbia, South Carclina Walhalla, South Carolina

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