ML19312C481

Applicant'S Interrogatories & Document Production Request to Doj.Certificate of Svc Encl

ML19312C481
Person / Time
Site:	Oconee, McGuire
Issue date:	09/14/1973
From:	Avery G, Brunner T, Golden T DUKE POWER CO., WALD, HARKRADER & ROSS
To:	US ATOMIC ENERGY COMMISSION (AEC)
References
NUDOCS 7912160041
Download: ML19312C481 (127)

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i UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION i

In the Matter of ) ,

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DUKE POWER COMPANY ) Docket Nos. 6 269A3 50-270A l (Oconee Units 1, 2 and 3 ) W -287A, 50-369A McGuire Units 1 and 2) ) and 50-370A I.

APPLICANT'S INTERROGATORIES AND DOCUMENT PRODUCTION REQUEST TO THE DEPARTMENT OF JUSTICE i

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George A. Avery Toni K. Golden 4

Thomas W. Brunner i

WALD, HARKRADER & ROSS

1320 Nineteenth Street,N.W.

Washington, D. C. 20036 i

September 14, 1973 i

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

) Docket Nos. 50-269A, 50-270A DUKE POWER COMPANY ) 50-287A, 50-369A (Oconee Units 1, 2 and 3 ) and 50-370A McGuire Units 1 and 2) )

APPLICANT'S INTERROGATORIES AND DOCUMENT PRODUCTION REQUEST TO THE DEPARTMENT OF JUSTICE Duke Power Company (hereinaf ter " Applicant") pro-pounds the attached Interrogatories and Document Production Request to the Department of Justice pursuant to Sections 2.740b and 2.741(a) (1) of the Commission's Rules of Practice (10 C.F.R. SS 2.740 (b) and 2.741(a) (1)) with the request that the interrogatories be answered under oath.

WALD, HARKRADER & ROSS 1320 Nineteenth Street, N.W.

Washington, D. C. 20036 Attorneys for Duke Power Company By George A. Avery Toni K. Golden Thomas W. Brunner September 14, 1973 n

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

) Docket Nos. 50-269A, 50-270A DUKE POWER COMPANY ) 50-287A, 50-369A (Oconee Units 1, 2 and 3, ) and 50-370A McGuire Units 1 and 2) )

APPLICANT'S INTERROGATORIES AND DOCUMENT PRODUCTION REQUEST TO THE DEPARTMENT OF JUSTICE DEFINITIONS As used herein, " Department" refers to the Department of Justice and any department or subdivision thereof, and any persons employed by, acting for, or on behalf of th= Attorney General or the Department of Justice.

As used herein, the term " documents" means memoranda, correspondence, recordings, transcripts, contracts, agreements, books, booklets, pamphlets, catalogues, lists, periodicals and articles therefrom, newspapers and articles therefrom, letters, messages, reports, tabulations, notes, studies, analyses, pic-tures, charts, surveys, statistical compilations, polls, cen-suses, minutes of meetings, and all other writings of any kind or nature, and copies thereof, including, specifically, ques-tionnaires, letters or other written inquiries or requests from the Attorney General and all responses thereto. The term "re-

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sponsas" includes all letters, memoranda, forms, and other -

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writings of any nature containing or setting forth a respon-dent's answers to a questionnaire or written or oral inquiry or request; all documents submitted by a respondent; and all memoranda and other writings, including any documents prepared by any employee or agent of the Attorney General or Department of Custice which records or recorded a respondent's oral answer to any inquiry or request.

This request extends to all relevant, non-privileged documents presently or hereaf ter within the possession, custody or control of the Department of Justice, whether in connection with this or any other case , proceeding, or investigation, ex-J cept that it shall not be necessary, unless otherwise indicated, to produce (1) documents furnished to the Department of Justice by Applicant in this proceeding; or (2) documents which were prepared prior to January 1, 1960. The Department also need not submit documents contained in the Federal Power Commission's 1964 or 1970 National Power Surveys, except that where the information from the Surveys would be responsive, the appropriate Survey date and page reference should be specified.

If any document requested is available, but is with-held by reason of any assertion of privilege or other claim, such as work product, describe each such document, including the name, address and position of the' person preparing and receiving it, the form of the document, its title (if any)

- and the matter to which it relates. In addition, provide a m_.

brief statement of the grounds on which privilege or other claim is being asserted.

In any case where a refusal to respond to an inter-rogatory is based on an assertion of privilege or other claim, provide a brief statement of the circumstances involved, the name and address of any person concerned and the grounds on which privilege or other claim is being asserted.

As used in these interrogatories, the term " standard" means a judgmental factor, principle or guideline stated in such form and with such specificity as to facilitate comparison with other possible bases for the position taken. Thus, broad statements regarding " generally prevalent concepts" or similar formulations are not standards. Published materials may be cited as the scurce of standards but only to the extent the portions relied on are cited specifically and the Department fully endorses as the Department's position every statement made in the cited material.

SCHEDULE

1. In its letter of advice to the Atomic Energy Commission, dated August 2, 1971, regarding the Oconee 1, 2& 3 units (36 Fed. Reg. 17883) (hereinafter "the Oconee advice letter"), the Department refers repeatedly to "the area" which appears in context to mean the area in "the Piedmont Carolinas . . . [which is ] about 100 miles wide and 260' miles long, extending from Virginia on the northeast to Georgia in the~ southwest. ...

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< (a) State whether each reference to "the area" or "its area" relates to precisely the same geographic area as each other refere...e; (b) If the answer to (a) is not "yes" then state how many different " area (s]" are intended, and state as to each area which of the references quoted in footnote 1 refer to it; (c) As to "the area" if only one area is intended or as to each area identified in response to (b):

(1) state whether this area is identical to Applicant's service area; (2) if the answer La (1) is "yes," provide a map of the service area on which the Department

, relies; (3) if the answer to (1) is "no," indicate on a large-scale map the boundaries of the area; (4) state specifically the factors used in defining the boundaries of each area described and delineated in 1(c) (1) and 1(c) (3) ; -

1/ (1) "Ln area about 100 miles wide and 260 miles long" (p .1) ;

(2) "in the general. area described above" (p.1) ;

(3) "at retail throughout most of this area. " (p. " ;

(4) "many of the water powers in the area" (p. 2) ;

(5) "substantially all the water powers in its area" (p. 2) ;

(6) "on economically attractive sites in its area," (p.2) ;

(7) "all high voltage transmission in the area" (p. 2) .

(d) Define the geographic boundaries of each product market relevant to this proceeding. If a geographic market boundary corresponds precisely to Applicant's service area as described in response to 1(c) (1) , the geographic market boundary may be defined as "the Applicant's service area." Unless the geographic market boundary corresponds precisely to Applicant's service area, the boundaries of each geographic market should be indicated on a large scale map.

(e) As to each product market defined in response t.' (d) identify and describe each factor considered in determining that it is an appropriate market for antitrust analysis in this proceeding.

(f) As to each geographic market boundary defined in r( ponse-to (d), identify and describe each factor considered in determining that it is an appropriate market boundary for antitrust analysis in this proceeding.

(g) As to each reference to an " area" cited in footnote 1 which correspo;tds to no geographic market boundary defined in response to (d), describe the precise relevance to this proceeding of the area to which the reference relates. Each answer should include but not be limited to:

(1) a-statement as to whether the area l described is pertinent to the analysis of any

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market defined in response to (d) and, if so a detailed statement of how it is pertinent; and f

(2) a statement of factors considered by the Department in determining that use of the referenced area in the context in which it was used in the advice letter is appropriate.

2. In a speech by the Hon. Thomas E. Kauper, Assistant Attorney General, delivered on June 8, 1973, before i

the Western Conference of Public Service Commissions, ("the Kauper speech") it is stated " massive high voltage trans-mission facilities expand utility markets over multistate areas .... Utiliries compete with each other over vast geographic areas for municipal customers, cooperatives and industrial customers." (p. 9). Identify each of the markets described in response to question 1(d) which are multistate area markets in which utilities are competing over vast geo-graphic areas for wholesale customers and industrial customers.

3. In the Oconee advice letter (p. 1) , the Department describes the size of Applicant's physical and i

financial assets. Identify and describe the factors used by the Department in determining that these data are pertinent to the issue of "whether activities under the license will create or maintain a situation inconsistent with' the s atitrust laws. "

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4. Identify by name the "58 independent distri-bution' systems serving at retail" to which reference is made in the Oconee advice letter (p. 1) .

5. In the Oconee advice letter, the Department states "(Applicant's] evolution can be traced through a series of amalgamations and purchases which had the effect of providing it control over many of the water powers

[ sic] in the area. " (p. 2)

(a) Does the Department contend that amalgamations and purchases effected prior to January 1, 1960, are relevant to this proceeding? If so, does the Department intend to present evidence on or inquire into any of these amalgamations or purchases during the evidentiary hearing in this proceeding?

(b) Specify each step in the " evolution" of Duke Power Company which the Department claims "had the effect of providing (Duke] control over many of the water powers in the area. " The response should include amalgamations and purchases effected prior to January 1, 1960, unless in response to (a), the Department has stated that it neither considers pre-19 60 events to ;be relevant - nor intends to present evidence concerning or inquire into such events.

Further, the response should include, but not be limited

.to :

(1) a description and identification by

4 project name or comparable specific designation of the " water powers" involved; (2) the identity of the entity owning.

or controlling each water power described in (1) prior to Duke's alleged acquisition of' control and a statement as to whether the water

. power was owned or controlled by such entity; (3) the nature of the transaction by which r

Duke acquired control of each water power described in (1) , specifying particularly whether such control was acquired through amalgamation, purchase, or otherwise; j

(4) a definition of " control."

(c) State whether the Department contends that Applicant's activities regarding hydroelectric generation prior to its merger with Southern Public Utilities Co. had a substantive anticompetitive effect or intent.

(d) If the Department contends that Applicant's pre-merger hydroelectric activities had a substantial anticompetitive effect or intent, state:

(1) whether an anticompetitive effect or intent or both is contended; j (2) to what market or markets as defined in response to question 1(d) that. ef fect or intent applied,.

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(3) which activities or what incidents the Department contends demonstrate the anti-2/

competitive effect or intent  ; and (4) whether the Department contends that 4

any anticompetitive effect specified by the Department in response to this interrogatory continues to affect any pertinent market today; (i) if so, state which effect does continue to so affect any pertinent market today and specify to which market er markets as defined in response to question 1(d) that effect applies, and (ii) if any anticompetitive effect no longer affects any pertinent market, state when such effect ceased, the market which had been affected, and the factors which resulted in the elimination of such ef fect; (e) If the answer to (c) is negative, describe 2/ As to each activity or incident the response shoc d include, Eut not be limited to, (1) the representative or representatives of Duke Power Company involved, (2) other persons and entities involved, (3) the subject matter of the incident and the specific hydrogeneration facilities involved, (4) the specific actions taken by Duke Power Company, the date or dates of each action and the method employed, (5) the precise manner in which the activity or incident demonstrates the anticompetitive intent or effect and (6) the specific sources from which the Department obtained the information on which the Department relies in describing each activity or incident.

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the relevance of Duke Power Company's pre-merger (with Southern Public Utilities Company) hydroelectric activities to this proceeding, and identify the product and geographic markets in which the significance is evident and the specific facilities and activities involved.

6. In the Oconee advice letter, the Department states " Southern Public Utilities Company was developing

&long parallel lines but operating extensive retail distri-bution properties .... (p. 2)

(a) Does the Department contend that activities of Southern Public Utilities Company which took place prior to January 1, 1960, are relevant to this proceeding? If so, does the Department in*nnd to present evidence on or inquire into any of these activities during the evidentiary hearing in this proceeding? If the answers to both these questions are not "no," provide the information sought in (b) through (g) set forth below.

(b) Describe in detail the aspects of the relationship between Duke and the Southern Public Utilities Company pertinent to this proceeding. The response should include but not be limited to:

(1) a specification of the incidents involving Duke and Southern Public Utilities Company that the Department contends demonstrate

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that the two companies were " developing 3/

along parallel lines,"-

(2) a description of the standards used by the Department in determining that the two companies were " developing along parallel lines" and (3) a statement as to whether the Department contends that this parallel development reflects a substantial anticompetitive intent on the part of Duke or Southern Public Utilities Company, and (4) a statement of how parallel develop-ment is pertinent to this proceeding.

(c) State whether the Department contends that Southern Public Utilities Company's generation activities had a substantial anticompetitive effect or intent.

(d) If Southern Public Utilities Company's generation activities had a substantial anticompetitive cifect or intent, state:

(1) whether an anticompetitive effect or intent or both is contended; 3/ As to each incident, the response should include, but not be limited to, (1) the representative and representatives of Duke or Southern Public Utilities' Company involved, (2) other persons and entities involved, (3) the subject matter -

of the incident involved, (4) the specific actions taken by Duke or Southern Public Utilities Co. , the date or dates of each action and the method employed (e.g., letter or-discussion at. conference), (5) the precise manner in which the incident demonstrates the parallel development of the two companies , -

and (6) itdua specific sources from which the Department obtained its information.

(2) to what market or markets, as defined in response to question 1(d), that effect or intent applied; and (3) which activities or what incidents the Department contends demonstrates the anti-competitive effect or intent ~4/ and (4) whether the Department contends that any anticompetitive effect specified by the Department in response to this interrogatory.

continues to affect any pertinent market today; (i) if so, state which effect does continue to so affect any pertinent market today and specify to which market or markets as defined in. response to question 1(d) that effect applies; (ii) if any anticompetitive effect

-rus longer affects any pertinent market, state when such effect ceased, ' the market which had been affected, and the~ factors which'resulted 4/ A3 to each ' activity or incident the ' response should include ,

Eut not be limited to, (1) the representative or representatives of Southern Public Utilities Company involved,- (2) other persons and entities involved,; (3) the subject matter of the incident and-the specific generation or other facilities involved, (4) - the specific actions -taken' by Southern Public Utilities Company, the date or dates of.each action and'the method employed,_

(5) the precise manner in which 'the incident demonstrates

~the anticompetitive intent. or effect and :(6) the specific sources from which the Department obtained its: information.

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in the elimination of such effect.

(e) State whether the Department contends that Southern Public Utilities Company's vertically integrated

) operation had a substantial anticompetitive effect or intent.

(f) If Southern Public Utilities Company's vertically integrated operations had a substantial anticompetitive effect or intent, state:

4 (1) whether an anticompetitive effect or intent or both is contended; (2) to what market or markets, as defined in response to question 1(d), that effect or j intent applied; and (3) what incidents of the operation of the vertically integrated company the Department contends demonstrate the anticompetitive effect or intent;-5/ and 5/ As-to each incident the response should include, but not be limited to, 'l) the representative or representatives of Southern Public Utilities Company involved, (2) other persons

and entities involved, (3) the subject matter of the incident and those aspects of the Company's vertically integrated operation involved, '(4) the specific actions taken by Southern Public Utilities Company, the date or dates of each action and the method employed, (5) the precise manner in which the incident demonstrates the anticompetitive intent or effect and (6) the specific sources from which the Department obtained the information used in describing the incident.

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(4) whether the Department contends that any anticompetitive effect specified by the Department in response to this interrogatory continues to affect any pertinent market today; (i) if so, state which effect does continue to so affect any pertinent market today and specify to which market or markets as defined in response to question 1(d) that effect applies; (ii) if any anticompetitive effect no longer affects any pertinent market, state when such effect ceased, the market which had been affected, and the factors which resulted in the elimination of such effect.

(g) If neither Southern i'1blic Utilities Company's parallel operation with Duke Power Company, its generation activities nor its vertical integration had such anticom-petitive effect or intent, describe the relevance that its operations have for this proceeding. The response should include, but not be limited to, an identification of the markets as defined in response to quest. on 1(d) in which that significance is evident and a specification of the activities involved.

7. In the Oconee advice letter, the Department states that "the interests cf (Duke and Southern Public

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u Utilities Company] were first closely associated and then completely joined." (p. 2)

(a) Does the Department contend that the relationship between Duke and Southern Public Utilities Company as it existed prior to January 1, 1960, is relevant to this proceeding?

If so, does the Department intend to present evidence on or inquire into this relationship during the evidentiary hearing in this proceeding? If the answers to both these questions are not "no," provide the information sought in (b) and (c) set forth belov.

(b) Provide a specification in detail (including dates) of the activities engaged in by the two companies and any other means by which the interests of Duke Power Company and Southern Public Utilities "were first closely associated and then completely joined. "

(c) State whether the Department contends that the integration of these two companies had a substantial anti-competitive effect or intent. If the Department contends that the acquisition and joinder of Duke Power Company and Southern Public Utilities Company had a substantial anti-competitive intent or effect, state:

(1) whether an anticompetitive effect or intent or both is contended; (2) to what product and geographic market or markets that effect or intent applied; and

l (3) which activities or what incidents the Department contends demonstrate the anticompetitive effect or intent ~6/ and (4) whether the Department contends that any anticompetitive effect continues to affect any pertinent market today; (i) if so, state which effect does continue to so affect any pertinent market today I

and specify to which market or markets as defined in response to question 1(d) that effect applies; (ii) if any anticompetitive effect no longer affects any pertinent market, state when such effect ceased, the market which had

been affected, and the factors which resulted 1

in the elimination of such effect.

8. In the Oconee advice letter (p.2), the Depart-ment states " Duke now owns or controls substantially all the water cowers [ sic] in its area."

6/ As to each activity or incident the reponse should include, Eut not be limited to, (1) the representative or representatives of Southern Public Utilities Company and Duke involved, (2) other persons and entities' involved, (3) the subject matter of the incident (4) the. specific actions taken by Southern Public Utilities Company and Duke, the date or dates of each action and the method ~ employed, (5) the precise manner in which the incident demonstrates the anticompetitive ~ intent or effect; and (6) the specific sources from which the Department obtained its information.

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i (a) State what types of hydroelectric development the Department intends to include in this statement.

(b) . State whether this statement is intended to include undeveloped hydroelectric sites.

(c) Describe and define the standards the Department. applied in determining " control."

l (d) List all hydroelectric sites that Applicant i

does not own but " controls" by other means and as to each f specify which of the standards of control stated in response l to (c) are satisfied and describe how those standards are satisfied.

4 (e) Identify the hydroelectric facilities in i

the area now not owned or controlled by Applicant and define.the standards the Department applied in determining i that such hydroelectric facilities are not " substantial."

l 9. The following entities operate hydroelectric 4

facilities near those operated by Applicant: ,

(1) Appalachian Power Co.

(2) Carolina Power &' Light Co.

I i (3) Virginia Electric s Power Co.

(4) South Carolina Electric & Gas Co.

(5) Yadkin, Inc.

(6) Nantahala Power :& Light Co.

(7) Tapoco, Inc. ,

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, (8) Tennessee Valley Authority (9) Southeast Power Administration -

Cumberland Project

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(10) Southeast Power Administration -

Clark _ Hill Project (11) Southeast Power Administration -

Hartwell Project (12) South Carolina Public Service Authority (13) City of Abbeville, South Carolina.

As to each numbered entity listed above:

I (T) State whether the Department is familiar 1 with the location and operation of hydroelectric facilities of the entity.

l (b) State whether the entity's hydroelectric I

facilities are within "its [ Duke 's ] area" as that term is.

intended in the passage quoted in question 8. To the l

extent that the hydroelectric facilities of any entity may be partially within and partially without "its area" 3

describe which facilities are within "its area" and which-

.are outside. Such description should be by project name

'or comparable-precise specification.

(c) As to each entity which the Department states

in response to -(b) has any hydroelectric facilities within "its (Duke's] area" as

defined by the Department, identify each ownership interest, contractual provision or other method of control by which Duke's control is ' exercised.

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Contract clauses which on their face demonstrate control,

, in the Depart. ment's judgment, should be cited specifically.

As to all other methods of control, the response should explain how control was obtained and precisely how it can be exercised and should describe specifically each

! instance in which control has been exercised. -7/

(d) Does the Department contend that Duke

" controls," as that term is defined in response to 8 (c) ,

the facilities of any of the numbered entities even though such facilities are not within Duke's " area?" If so, identify each such facility and describe the method by which that control is exercised. The response should adhere to the specifications stated in (c) above regarding the description of " control" of projects within "its 4

area."

{ 10. In the Oconee advice letter, the Department states:

i 7/ As to each instance in which control was exercised, the response should include, but not be limited to, (1) the repre-sentative or representatives of Applicant involved, (2) other persons or entities involved, (3) the specific hydroelectric project involved, (4) the specific actions taken by Duke, the date or dates of each action and the method employed, (5) the precise basis on which the Department concludes that Applicant controls the project, and (6) the specific sources from which the Department obtained the information upon which it' relies in describing the . incident.

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"Since Duke owns virtually all of the water power projects on economically attractive

' sites in its area, other electric entities seeking entry into bulk power supply cannot resort to hydro-electric production which can be economically developed as isolated projects not requiring interconnection with other generating sources." (p. 2)

(a) State whether the Department believes that one or more hydroelectric sites not owned by Duke "

in its area" as defined in response to 1(c) can be economically developed. If not, what is meant by the Department 's use of the word " virtually"? If the Department does believe there are sites not owned by Duke which can be economically i

-developed, specifically identify those sites by name or comparable precise specification.

(b) Define and describe the standards the Depart-4 ment used in evaluating what are " economically attractive

.i sites." These ctandards should be stated _in terms that j

i will facilitate comparison to the standards used by the 8/

i Army Corps of Engineers, j

(1) State'whether those standards correspond-l precisely to those used by the Army in evaluating I

the feasibility of hydroelectric projects; 8/ See-Federal Power Commission, Development of Water Resources In Appalachia, Appendix B (Pcwer Supply and Requirements) ,

June 1968.

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(2) If the answer to (1) is not "yes," describe each variation between its standards and those of the Army and explain why the Department believes T

its standards to be more appropriate.

J (c) As to each of the following project sites, state whether the Department regards it as " economically attractive."

1) Junction project (Yadkin River)

2) Crumps Ford project (Rocky River)

3) Greater Blewitt project (Pee Dee River)

4) Morven project (Yadkin River) 5)-Styars project (Yadkin River) 4

6) Clinchfield project (Broad River)

. 7) Greater Gaston Shoals project (Broad Rivar)

8) Morganton project (Catawba River)

9) Courtney Island project (Catawba River)

10) Greater Lockhart project (Broad River)

11) Blairs project (Broad River)

12) Frost Shoals project (Broad River)

13) Trotter Shoals project (Savannah River)

14) Buffalo Cove project (Buffalo Creek)

15) Elk Creek project -(Elk Creek)

16) Horse Gap project (Reddies River)

17) -Upper Donnaha project - (Yadkin River)

-18) Baden project (Yadkin River) l-k l

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19) Dutchman's Creek project (Pee Dee River)

20) Tater Top Mountain project (Pee Dee River)

21) Upper Wood Run project (Pee Dee River)

22) Coleman's Creek project (Pee Dee River)

23) McCoys Creek project (Pee Dee River)

24) Long Arm Ridge project (Linville Creek)

25) Laurel Knob project (Linville Creek)

26) Chimney Mountain project (Linville Creek)

27) Ripshin Branch project (Upper Creek)

28) Phillips Branch project (Raiders Creek) 2

29) Brown Mountain project (Upper Creek)

30) Baton project (Catawba River)

31) Island Creek project (Catawba River)

32) Millersville project (Catawba River)

33) Elk Shoals project (Catawba River)

34) South Mountain project (Jacobs Fork)

35) Belmont project (South Fork, Catawba River)

36) Sugar Creek project (Catawba River) 1

37) Ebb Lake project (Catawba River)

38) Uncles Creek project (Green River) i

! 39) Saluda project (Green River) 1

40) . Ross Creek project (Broad River)

41) Greater Cherokee project (Broad River)

42) Big-Falls project (North Fork, Saluda River)

43) Reregulator project (Congaree River) i

44) Brady Lake project (Congaree River)

45) Buckingham Landing (Sautee River) i

46) Jeffries project (additional capacity)

(Cooper Canal)

47) St. Stephen project (Sautee River)

48) War Woman project (Chattooga River)

49) Sand Bottom project (Chattooga River)

50) Rogues Ford project (Chattooga River)

51) Camp Creek project (Chattooga River)

52) Battle Creek project (Chattooga River)

53) Horsepasture project (Horsepasture River)

54) Hartwell project (additional capacity) t

( Savannah River)

55) Tallow Hill project (Broad River , . Ga. )

56) Anthony Shoals project (Broad River, Ga.)

57) Burtons Landing project (Savannah River)

58) Stokes Bluff project (Savannah River)

(1) As to each project listed in (c),

specifically apply each standard identified in response to (b) above.

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(?) As to each project for which some standards favor construction of the project while others do not,. describe the -factors considered by the Department in giving predominant weight to some factors over others. Comment on each standard specifically.

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(3) As to each project which has been recommended or otherwise approved by the Army, explain specifically the method used by the Department in reaching its conclusion that it is or is not " economically attractive." Comment specifically on each factor common to both the Army and Department standards on which the Department reaches a different conclusion and on each factor considered by either the Army or the Department not considered by the other.

(d) Identify and describe by project name or comparable precise specification any hydroelectric project which could be developed economically (in the area referred to in the passage quoted) by electric entities other than Duke if such projects were interconnected with other

, generating sources. Include a detailed description of the "other generating sources" which would be included in each such interconnection and the facilities necessary to effect such interconnection.

(e) Specify all instances known to the Department in which Applicant has refused to interconnect with another entity which proposed to construct and operate a hydroelectric project. As to each instance, the response should include but not be limited to:

(1) the representative or representatives of Applicant involved; (2) other persons or entities involved; (3) the specific hydroelectric project involved; (4) the specific actions taken by Applicant, the date or dates of each action and the method ,

employed; 4

(5) the precise basis on which the Department concludes that Applicant refused to interconnect i

with the project; and (6) the specific sources from which the Department obtained the information used in describing the instance.

( f) Specify all instances in which the Department claims that a planned hydroelectric project in North or South Carolina or any neighboring state was abandoned solely or principally because of the unavailability of interconnection with another power source.

(g) As to each instance named in response 9/

to (f)  :

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' -9/ Instances fully and completely described in response to (e) may.be omitted.

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(1) identify the electric entity or entiries planning the project; (2) identify the electric entity or entities, if any, from which interconnection was actively sought; (3) describe all specific actions of the entity planning the project by which inter-connection was actively sought, including:

(i) the representative or representatives of the planning entity involved; (ii) the representative or representatives involved of the entity approached regarding interconnection; (iii) the date or dates of each action and the method employed; and (iv) the precise terms of the inter-connection sought or proposed by the planning entities; (4) describe the response received to all actions listed in response to (3), including (i) the representative or representatives of the approached entity responding; (ii) the date or dates of each response and the method employed;

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1 (iii) the specific content to the response; and (iv) the Department's view as to whether the response constituted or evidenced a refusal to interconnect which is inconsistent with the antitrust laws; if the Department so views the refusal, state the factors upon which the Department relies in reaching that conclusion.

11. Define and describe the standards used by the Department in determining that Duke " owns and controls all high voltage transmission in the area ....

(Oconee

, advice letter, p. 2) The response should include, but not be limited to:

, (a) A definition of the term " controls";

(b) A description of each high voltage line not owned but controlled by Applicant; and (c) A statement as to each controlled line not owned by Duke describing how that control was obtained and 3

how it is exercised.

1 4

12.(a) Define and describe the standards used by the Department in determining that Applicant "cwns or controls substantially all- the thermal generation in the same area." (Oconee advice letter, p. 2) The response

should include, but not be limited to:

(1) a definition of the terms " controls,"

"substantially all," and " thermal generacion";

(2) a listing, by facility name and owner,

-of all thermal generadan facilities located with-in the " area" which are not owned but are controlled by Applicant; and (3) as to each controlled thermal generation facility not owned by Applicant, a description of each contractual provision, indirect ownership interest or other method of control by which control is exercised.

Contract clauses which on their face demonstrate control, in the Department's judgment, should be cited specifically. As to all other methods of control,'the response should explain how control was obtained and precisely how it can be exercised and should describe specifically each instance in which control was exercised. --10/

~10/ As to each instance in which control was exercised, the esponse should include, but not be limited to, (1) the rep-resentative or representatives of Applicant involved, (2) other persons or entities involved, (3) the specific thermal generation facility involved, (4) the specific actions taken by~ Duke, the date or dates of each action and the method employed, (5) the precise basis on which'the Department concludes that Applicant controls the thermal generation facility, and (6) the specific sources from which the Department'chtained the-information upon which it relies in describing the incident.

(b) Describe the basis on which the Department concluded that thermal generation not owned or controlled by Applicant in "the area" is not substantial. The response should include:

(1) a listing of all electric generation facilitica in the " area" other than hydroelectric facilities which are known to the Department and which the Department regards as neither owned nor controlled by Applicant; (2) a statement as to each facility identified in response to (1) describing the factors considered in determining that the facility is either not " thermal electric gen-eration" or not " substantial."

13. (a) Identify the date and ccntracting parties of each contract in which the Department claims Duke Power Company and Southern Power Company allocated markets between themselves and their wholesale customers (Oconec advice letter, p. 3) and cite the specific provisions in each contract by which such allocation was effected.

(b) State as to each contract identified in response to (a) , whether the Department contends that such

~

contract is relevant in this proceeding and whether the )

Department intends to present evidence on or inquire into such contract. ~

-I

(c) As to each contract which the Department J

contends is' relevant and intends to present evidence on or into which it intends to make inquiry, state whether the Department contends that such contract has a continuing anticompetitive effect:

(1) if so, identify the market or markets as defined in response to question 1(d) in which that effect is felt, and as to each market, state what that anticompetitive effect is and how it can be detected or measured; (2) if any anticompetitive e?fect no longer affects any pertinent market, state when such effect ceased, the market which had been affected, and the factors which resulted in the elimination of such effect.

(d) Identify and describe each instance in which Applicant specifically asserted such an allocation identified in response to (a) in any transaction with any other electric entity or actual'or potential customer. The response shoulu include, but not be limited to:

(1) the representative or representatives of Applicant involved; (2) the other electric entities and actual or potential customers, and their-respective representatives involved;

(3) the specific geographic area, class of customers or individual application for service involved; (4) the specific actions taken by Applicant that constitute the assertion of those allocations ,

the date or dates of each action and the method employed, and (5) the specific sources from which the Depa.rtment obtained the information upon which it relies in describing each instance.

14. ( a) Cite specifically each rate provision, including any rate schedule filed by Duke with the Federal Power Commission or any other regulatory commission, in effect at any time from January 1, 1965, to date which the Department claims had "the possible effect of perpetuating the market allocation effected" between Duke and its wholesale customers. (Oconee advice letter, p. 3) .

(b) State how each such rate provision specified in (a) had the effect or the possible effect of allocating any market. The response should include, but not be limited to:

(1) the identification of each market as defined in response to cuestion 1(d) which has been or may have been so' allocated;

(2) an identification as to each market identified in response to (1) of all electric entities other than Duke affected by such allocation; and (3) a statement describing how the provision effects a market allocation.

(c) State whether the Department contends that Applicant intended to perpetuate a market allocation by imposing the rate provisions specified in response to (a)  ;

(d) If the Department contends that Applicant intended to perpetuate a market allocation by imposing such rates, identify the specific sources of information upon which the Department relies in making this contention.

15.(a) Cite specifically each rate and each provision in any rate schedule filed by Applicant with ,

the Federal Power Commission or any other regulatory agency which the Department claims to have been anticompetitive.

(b) As to each rate or provision identified in (a) and on which the Department intends to rely in this proceeding, state how its effect was anticompetitive, and how that anticompetitive effect can be detected or measured.

(c) As to each rate or provision identified in (a), describe the market or markets (as defined in response to question 1(d)) in which the anticompetitive effect was c

felt, the time period during which that effect occurred and the other electric entities affected by it.

(d) As to each rate or provision identified in (a), state whether the Department contends that Applicant (1) intended the alleged anticompetitive consequences or (2) anticipated that they might arise. If the Department contends either intent or anticipation, identify the specific sources of the information upon which the Department relies in making this contention or contentions.

16.(a) Identify the "ratcheted demand" provision to which the Department refers in th- Oconee advice letter (p. 3) .

(b) State how that "ratcheted demand" feature "could serve effectively to discourage installation of thermal generating capacity by (D uke 's ] wholesale customers."

(Ibid.)

(c) State whether any wholesale customer of Duke has been discouraged from installing or operating generating capacity because of ti ratcheted demand feature identified in subpart (a) of this interrogatory.

(d) If the answer to (c) is not "no," identify each electric entity which has been so discouraged and as to each:

t 2

I.

(1) describe the specific thermal generation project or projects discouraged, (2) state the date on which each project was first proposed, (3) state the facts relied upon by the Department in contending that the ratchet provision identified in (a) discouraged each such project, including a description of each

.. i incident known to the Department in which the

} ratchet provision was cited as nn impediment i ,

to any thermal generation project, and (4) state the specific sources of the information the Department relied upon in I responding to this question.

(e) State whether any provision in Duke's wholesale rate schedules or contracts in effect at any time from January 1, 1960, to date, has discouraged any wholesale customer-of Duke from installing or operating generating t

capacity.

(f) If the answer to (e) is not "no," identify each electric entity which has-been so discouraged and as to each:

(1) describe the specific generation project.or projects discouraged,.

(2); state 1the date on'which'each project was first proposed, 1

-s

- - . * -- 2. #._=--_z-_=_._i

- _._u.2 222 _.. ..v . __ ...,m = - - 2_.

i 1

1 (3) identify the provision in the rate l schedule or contract which the Department claims l

l had such a discouraging effect and state the facts relied on by the Department in contending 1

that such provision discouraged each such project, l

l including a description of each incident known i

to the Department in which the provision was cited as an impediment to any generation project, 4

and I

i j (4) state the specific sources of the i

1 l information the Department relied upon in

'l responding to this question.

17. Provide all documents referring to or relating to each of the contracts, rate provision or rates identified in response to questions 13, 14, 15 and 16, or to any gener-ating facility identified in response to questions 16(d) and I

' 16 ( f) .

i i

j. 18.(a) State whether any of Applicant's wholesale customers ever sought to participate with Applicant in j its nuclear generation expansion program by directly seeking such participation from Duke.

(b) If the response to (a) is not "

no," identify 3

4 each customer which sought such' participation and each 6

1 4

- - , , - - - n--

incident in which such participacion was sought. As to each incident, the response should include but not be limited to:

(1) the representative or representatives of Applicant involved, (2) other persons and entities involved, 1

(3) ~t he type of participation sought, (4) the specific action by which Applicant was informed of the request, the date or dates of each action and the method employed, (5) the specific action or actions which, in the Department's view, constituted Applicant's response to the request for participation, and (6) the spocific source from which the Department obtained the information used in preparing its response.

(c) Produce all documents pertaining to any incident described in response to (b).

19. (a) State whether the Department believes the EPIC project is technically feasible without inter-connection with Applicant.

1 (b) If the response to (a) is-not "yes," then state whether' EPIC is technically feasible if interconnected I

e

, , . - , _y - e

with Applicant for purposes of reliability only. Specify what types of transactions and arrangements are considered by the Department to be necessary for an interconnection for purposes of reliability only.

(c) If the Department considers that interconnec-tion, other than interconnection for purposes of reliability only, is necessary to make EPIC technically feasible, what forms of interconnection or coordination does the Department claim would be necessary.

(1) As to each form specified, state whether it could be achieved through interconnection or coordination with a system other than Duke.

(2) Where interconnection or coordination with a system other than Duke is' feasible, identify ,

as to each form the entity through which such interconnection or coordination could be achieved.

(d) State whether the Department believes the EPIC project is economically feasible without interconnection with Applicant.

(e) If the answer to (d) is not "yes ," then state whether EPIC is economically. feasible if interconnected with Applicant for purposes of reliability only. Specify what types of transactions and arrangements are-considered by the Department to be necessary for an interconnection for purposes of reliability only.

d

(f) If the Department considers that interconnection, other than interconnection for purposes of reliability only, is necessary to make EPIC economically feasible, what forms of interconnection or coordination does the Department claim would be necessary.

(1) As to each form specified, state whether it could be achieved through inte,rconnection or coordination with a system other than Duke.

(2) Where interconnection or coordination with a system other than Duke is feasible, identify as to each form the entity through which such interconnection or coordination could be achieved.

20. In the " Initial Prehearing Statement of the Municipali. ties" dated August 9, 1972 (" Initial Statement"),

the Intervenors stated tha' " Duke has erected barriers to entry at the generation and transmission levels, in an attempt te preserve its monopoly." (p.6).

(a) Does the Department agree with this contention by Intervenors?

(b) If the response to (a) is not "no," then:

-(l) identify each such barrier to entry erected by Applicant; (2) state as to each barrier identified in. response to (1) which of the markets defined e

=

in response to question 1(d) is affected by that barrier; (3) cs to each market identified in response to (2), state which potential entrants are barred or impeded from entering that market by a barrier erected by Applicant; potential entrants should be identified by name:

(4) as to each potential entrant identified in response to (3), state which barriers identified in response to (1) affect it; (5) as to each barrier identified in response to (1) , define and describe each component of the pattern of circumstances that bars or impedes entry into any market or that contributes to such barring or impeding; (6) as to each barrier defined in response to (1) , describe each instance or activity on the part of Applicant that constitutes or demonstrates the erection of the barrier. The description should include, but not be limited to:

(i) the electric entity or entities adversely affected by the activity; (ii) the other electric entities, if any participating with the Applicant in the activity;

(iii) cne rer _coentative or representatives of App..icant and any entity involved; (iv) the specific action or actions constituting the activity, including the date of each action and the method employed (e.g., le tter ,

discussion, conference) ;

(v) a statement as to each action describing each factor considered in determining that th, action con-tributed to the erection of a barrier to entry; and (vi) the specific sources from which the Department obtained the information from which it prepared its description of the action.

(c) If the response to (a) is "no," state the rea-sons why the Departn.ent disagrees with Intervenors.

(d) Produce all documents relating to the instances or activities described in response to this interrogatory.

21. (a) Identify and describe each incident in which

" Duke spokesmen have reportedly stated publicly that they would oppose Duke's interconnecting its system with EPIC for the joint meeting of emergency load needs ....

(Oconee advice letter, p. 4) As to each incident, (including both oral and written come.cnications), the response shall include, but not be limited to:

.d 1

1 1

(1) the spokesman or spokesmen of Applicant involved, (2) a description as to whether the statement was made orally or in writing, (3) the precise event at which each i statement was made including the location,

) date and type of event, (4) the precise words purportedly used by the spokesman or spokesmen or, if the Department does not rely on a purported precise quotation, the exact language of each account of each statement the Department relies upon, and I

(5) the specific sources from which the Department obtained the information upon which it relies in responding to this question.

(b) Produce all documents pertaining to each incident described in response to (a).

i 22. (a) Identify.the "(e]vidence" available to.the Department which "tends to indicate that on occasion Duke has. bluntly warned North Carolina municipal electric systems that the' efforts.and funds that the latter could. expend in' seeking relief before regulatory agencies would be oeerwhelmed-byLDuke's resources and. resistance."' (Oconee-

~:

V i

l 1

l l

1 l l I advice letter, p. 4) As to each piece of " evidence" available:

i (1) state whether it is contained in a document or whether it was conveyed orally; (2) if the statement was contair ed in a document, furnish the document; (3) if the statement was made orally, identify by whom it was made, to whom it was made, and I

when it was made.

(b) Identify and describe each incident constituting l an " occasion" on which Duke has purportedly so warned North Carolina municipal electric systems. As to each incident, the response should include, but not be limited to:

(1) the representative or representatives 4 of Applicant involved, (2) the municipality or municipalities in-

l

_volved and the specific representatives of each municipality involved, (3) the subject matter regarding which the warning was purportedly given,

'(4) the specific' actions of Applicant constituting the warning and the date or dates of such actions, (5) the precise words purportedly used by the representative or representatives or, if the Department does not rely on a purported i

l l

l

\1

precise quotation, the exact language of each account of each incident the Department relies upon, and (6) the specific sources from which the Department. obtained the information upon which it relies in describing the incident.

(c) Identify and describe each instance of litigation or other attempt to influence regulatory action which, in the Department's view, carries out any warning given to a municipal customer by Applicant identified in reponse to (b). Such description should include:

(1) the specific incident or incidents described in response to ' (b) at which the threat carried out through the litigation or other action was made, (2) a citation to the litigation or other action,

-(3) a statement as t whether the litigation or other action was a sham in the Department's view, and (4) a statement as to whether the litigation or other action was an attempt by Applicant to deny access to others to the legislative or adjudicatory process.

I i

-l

{

l (d) Produce all documents relating to the " evidence" I

and incidents described in response to this interrogatory.

I 4

23. (a) Identify and describe each instance upon which the Department intends to rely and in which Duke has refused to deal, whether wholly or with regard to particular trans -

actions, arrangements or terms, with any of its retail competi-tors. The response should include, but not be limi_ad to:

(1) the competitor or competitors involved by name, (2) a statement as to the markets,as defined in response to question 1(d), in which j

these entity or entities compete with Applicant, (3) the type of service, transaction or other arrangement which Applicant refused to provide or enter into, i

(4) the representative or representatives of Applicant involved in the refusal, (5) any other persons or entities-involved in or potentially involved in the refusal cr in the service, transaction or other arrangement i refused, f

1 (6) the specific actions taken by the competitor in.which it sought to obtain the service or enter into the transaction refused,

J the date or dates of each action and the method employed in taking the action, (7) the specific actions taken by Applicant l that constitute a refusal to deal, the date or dates of each action and the method employed in taking the action, (8) the precise worda purportedly used by the representative or representatives of Applicant or, if the Department does not rely on a purported precise quotation, the exact language of each account of each action the Department relies upon as constituting or demonstrating the refusal to deal, and (9) the specific sources from which the Department obtained the information upon which it relies in describing the instance.

, (b) produce all documents relating to any such refusal to deal.

2 4. ( a) Identify and describe each instance where l

Duke has dealt on discriminatory terms with any of its retail competitors (Oconee advice letter, p. 4) . As to cach instance, the-response should include,.but not be limited to:

~46-(1) a description of the actual or proposed transaction or transactions involved, 3

(2) the other persons and electric entities involved, i

(3) the representative or representatives of Applicant involved, (4) a quotation of or specific citation to the terms proposed by Duke that the Department contends are discriminatory, and the factors relied on by the Department in alleging that such terms are discriminatory, (5) the specific action or actions taken by representatives of Applicant by which the discriminatory terms were introduced in each transaction, the date of each action or actions and the method by which actions were taken, (6) a description of each other transaction or transactions relied upon by the Department in

~ determining that each transaction listed in response to (1) above is discriminatory, and (7) the specific source from which the Department obtained the information~ it relied upon in describing the instance.

(b) Produce all-documents relating c.o each instance described in response to (a). l I

- . = .

1

25. Identify and describe each instance in which l Applicant has used or attempted to use its " market power to grant or deny access to coordination." (Oconee advice letter, p. 2) The response should include, but not be limited to:

(a) a definition of " market power";

(b) a listing of each existing or former coordination arrangement to which Applicant presently has or has had the power to grant or deny access; (c) for each arrangement listed in response to (b) a listing of each entity to which Applicant has granted or

, denied access to the arrangement, indicating as to each whether access was granted or denied; (d) as to each entity listed in response to (c),

a description of the incident or incidents in which Applicant granted or denied access.to' coordination, including:

(1) the representative or representatives-of Duke and of the other entity involved, and (2) the -specific action or actions by Duke which granted or denied access, the date or dates of.each action and the method employed to take'the action; (e) 'a listing of any potential coordination rela-tionship in "the same area" to which Applicant has the power l to grant or deny access; l

l (f) for-each potential. coordination arrangement l

l

, _ ,_ _, ~ _ . -

(

listed in response to (e), a listing of each electric entity to which Applicant has denied access; (g) as to each entity listed in response to ( f) ,

i a description of the incident or incidents in which Applicant denied access to coordination, including (1) the representative or representatives of Duke and of the other entity involved, and (2) the specific action or actions by Duke which denied access, the date or dates of e

each action and the method employed to take the i

action; and 1

(h) as to each section of this question, the speci-fic sources of information relied upon by the Department in

, responding to that section of this question.

26. On page 9 of the Reply of the Department of Justice to Applicant's Answer and Motion of July 24, 1972, the Department states " Applicant has refused and refuses to coordinate its nuclear generation expansion program with its neighboring competitor utilities on non-discriminatory terms."

(a) Define " coordination of nuclear generation l expansion program", including in the definition:

l (1) a listing of each type of transaction or arrangement' involved in " coordination"; and

_ _. _ ... - _ m - . . _ _.

k (2) a statement whether each transaction l

. Or arrangement listed is essential in order to achieve " coordination" as defined by the i

Department.

l (b) Identify and describe each instance in which Applicant has refused or refuses to coordinate its nuclear 1

generation expansion plans with its neighboring competitor i utilities on nondiscriminatory terms. The response should include, but not be limited to:

(1) the other utility or utilities involved, (2) the facilities of Applicant potentially involved in the coordination arrangement, (3) the type of " coordination" transactions or arrangements sought, j (4) the specific action or actions through which coordiration was sought, the dste or dates of each action and the method ~ employed in taking the action, (5) the action or actions taken by Applicant

' ~

in response to the request for coordination, j

the date or dates of each action, and the method l  : employed in taking each action, f (6) a statement as to whether the refusal to coordinate by Applicant was l

l (i) an outright refusal or I

L

(ii) a refusal to coordinate except on discriminatory terms.

(7) If Applicant refused to coordinate except on discriminatory terms, identify each actual or proposed terra that was discriminatory and describe each factor considered in. determining that it is discriminatory.

(8) Specify the sources from which the Department obtained the information upon which it relied in responding to this question.

27.(a) State whether the Department will contend that Applicant has ever refused to interconnect with any other electric entity.

(b) If the response to (a) is not "no," identify and describe each instance in which Applicant has refused to interconnect with any other electric utility. As to each instance the reply should include but not be limited to:

(1) the other entity or entities involved; (2) the specific types of interconnection transactions or arrangements sought; (3) the representative or representatives of Applicant involved; (4) the specific action or actions by which interconnection was sought, the date of each

action and the method employed in each action; '

(5) the specific action or actions by which Applicant refused to interconnect, the method employed in each action and the date of each

, action; and (6) the sources upon which the Department relies in describing the instance.

28. (a) State whether the Department will contend that Applicant has refused ~to wheel power for any other electric entity.

(b) If the response to (a) is not "no," identify and describe each instance in which Applicant has refused to wheel power for any other electric utility. As to each instance, the reply should include but not be limited to:

(1) the other entity or entities involved; (2) the specific wheeling transaction sought; (3) the representative or representatives of. Applicant involved; e

(4) the specific action or actions by which wheeling was sought, the method. employed in each i

action and the date of each action; 1

I (5) the1 specific action or actions by w. ich Applicant refused to wheel, the method employed in"each action and'the date.of'each action;-and f

l (6) the sources upon which the Department relies in describing the instance.

29. Counsel for the Intervenors has contended that Applicant has facilitated Yadkin Incorporated's " access to

. . . things very advantageous to it." (Tr. 431-433). Identify and describe each transaction, arrangement or term (such as the sale of off-peak power or the sale of dump power) between Yadkin, Inc. and Applicant, if any, that the Department contends is relevant to this proceeding and on which the Department intends to rely. As to each transaction, arrangement or term, the response should include, but not be -limited to:

(a) the name or title and date of each agreement in effect at any time since January 1, 1960, and the specific provision or provisions of each agreement that reflects the transaction, arrangement or term involved; (b) a statement describing each factor considered in determining that the transaction, arrangement or term is relevant to this~ proceeding, and (c) a description of all incidents, if any, relating

-to the transaction, arrangement or term which affects the relevance of such transaction, arrangement or term to this 11/

proceeding.--

11/ As to each incident, the description should include, but not be limited to, (1) the representative or-representatives

'of each entity involved, (2) the specific action or actions of '

continued --

, 30. (a) State whether in the Department's view, Piedmont Electric Cities, its constituent members, or any other group or organization of municipals or cooperatives, over proposed to T

Applicant that they be allowed to purchase or otherwise obtain

{ an equity interest in any of Applicant's nuclear facilities.

(b) If the answer to (a) is not "no," identify the specific letter or letters or oral statement or statements or other communication that constituted such a request for an equity interest. Such identification shall include the author or spokesman making the request, and the group or organization 1

involved, the representative (s) of Applicant to whom the request was inade, the date on which the request was made, and the i

substance, in detail, of the request.

(c) If the answer to (a) is not "no," identify the specific letter or letters or oral statement or statements or other communication that, in the Department's view, consti-tuted Applicant's response to the request. Such identification shall include the author or spokesman making the response, the date on which the response was made, the substance, in detail, of the response, and' the person or entity to whom it was made.

Fn. continued --

each entity that affect the pertinence of the aspect to the proceeding, the method employed in each action and the date of each action, (3) as to each action listed in response to

-(2), a statement describing each factor considered in deter-mining the action as it affects the pertinence of the _ aspect

--to this proceeding, fmul (4) the sources used by the Department '

in describing the11ncident.

, - - , , - - __ . _ . _ _ .- _ __ -a . . .

(d) State whether, in the Department's view, Piedmont Electric Cities, its constituent members, or any other group

. or organization of municipals or cooperatives, ever proposed to Applicant that they be allowed to purchase unit power from any of Applicant's nuclear facilities.

l (e) If the answer to (d) is not "no," identify the i

specific letter or letters or oral statement or statements or other communication that constituted such a request for unit power.

Such identification shall include the author or spokesman making the request, and the group or organization involved, the representative (s) of Applicant to whom the request was made, the date on which the request was made, and the substance, in detail, of the request.

( f) If the answer to (d) is not "no," identify the specific letter or letters or oral statement or statements l or other communication that, in the Department's view, con-2 stituted Applicant's response to the request. Such identifi-cation shall include the author or spokesman making the response, the date on which the response was made, the sub-stance, in detail, of the response, and the person : or entity

. to whom it was made.

31. On pages 12 and 13 of a speech given on May.16, 1973, to the American Public Power Association National Conference by Donald I. Baker, Director of Policy Planning, Antitrust Division, Department of Justice, ("the Baker speech") , -

l l

it is stated that systems desiring " equal access" to " dominant" generation and power pools, must make this interest known "in a timely fashion" which means before "a system is designed and built." state as to each incident listed in response to questions 25, 26(b) and 30, in which coordination with or an interest in new facilities of Applicant was sought, whether the request involved was made before "the system is designed and built."

32. (a) State whether the Department contends that Appli- l l

cant now is a party or has ever been a party to an interconnec-tion or coordination agreement in which it agreed to joint ownership of any of its generating units with any other party, or in which it agreed to sell unit power to any other party.

(b) If the response to (a) is not "no," identify and describe each such interconnection or coordination agree-ment. The response as to each agreement should include, but not be limited to:

(1) the precise name or title of agreement and the parties thereto, (2) the effective dates of the agreement, (3) citation of the specific provision or provisions, if any, by which joint ownership is provided, (4) the party or parties , if any, obtaining

a joint ownership interest, (5) citation of the specific provision or provisions, if any, by which the sale of unit power is agreed to, and (6) the party or parties, if any, entitled to purchase unit power.

33. Identify and describe each way in which the Dep3.rtment claims that Applicant's offer to interconnect and coordinate with EPIC or any other entities, as described in a letter dated August 6, 1971, from W.H. Grigg, Esquire, Applicant's Vice President and General Cotnsel, to Joseph J. Saunders, Esquire, of the Department, differs from the type of " coordination which Duke has heretofore carried out with other electric systems in the Southeast. " (Oconee advice letter, p. 5) The response should identify specifically each coordination arrangement with another electric system referred to and as to each arrangement:

(a) name the other alectric systems included in the coordination arrangement, (b) state the effective dates of the arrangement, (c) quote or cite specifically each provision of any contract or other document relating to'the arrangement which creates or states a significant benefit to any other electric-system which would not be available under Applicant's aforementioned letter _ to the Department, . .

)

i 1

(2) the specific transaction with regard to which the instance occurred including the subject matter of the transaction, the date of the trans-action and a specific citation to any agreement or other writing recording the transaction, (3) the specific action or actions that '-

demonstrate an anticompetitive or monopolistic effect or intent, the method employed in each  !

action, and the date of each action; (4) as to each action listed in response 1

to (3) a statement as to whether it demonstrates:

(i) an anticompetitive effect; (ii) an anticompetitive intent; (iii) a monopolistic effect; or (vi) a monopolistic intent; (5) the sources upon which the Department relies in describing the instance.

(c) provide all documents, other than documents obtained from Applicant in response to the Joint Document Request, pertaining to SERC, its formation and activities

~

and Applicant's participation therein, including,' but not limited to, any documents pertaining to the decisions setting qualifications for membership and full participation.

35. -State in which respects, if any, W.H. Grigg's

i 4

7) Purported statements by Applicant regarding anticipated litigation concerning wholesale rates , made on June 22, 1967.

3) Applicant's support in 1959 for territorial limitations upon the operation of the Tennessee Valley Authority.

(b) To the extent the response to any item listed in (a) is not "no," identify and describe each factor considered in determining Applicant's activities with regard to that item which constituted a sham. To the extent the factors include actions of Applicant, the response should include, but not be limited to:

(1) the representative or representatives of Applicant and any other entity involved in the action; (2) the specific action.or actions that the Department contends ds;nonstrates the existence

] of a sham, the method employed in each action, and the date of each action; <

(3) as to each action listed in response to (2) a quotation of the precise words relied upon as demonstrating the existence of a sham or, if the Department relied on an account or accounts that does not include a precise quotation,_

the text of the account of the statement >21ied upon; and

+ ,

v - -

i i

, (4) the specific sources the Department 1

relies on in describing the statement. Ac to i

! facts that are derived primarily from objective 1 data about Applicant's operations , the response j should include, but not be limited to:

(i) a specification of each item of data relied upon and the source from which it is obtained; and (ii) a statement outlining the analysis by. which it is concluded that the data demonstrates the existence of a sham.

(c) State as to each of the activitics cited in the numbered clauses of subpart (a) of this. question, whether the Department will contend that the activity was an attempt.

by Applicant to deny access to others to the legislative or j adjudicatory process.

(d) If. the response to (c) is not "no," identify each action or representation by Applicant that it is con-tended constitutes or evidences such attempt. As to each action or representation which allegedly constitutes or evi-dences such attempt:

(1) state each element of the action or representation that constitutes or evidences the attempt'by Applicant to deny access to others=to.the. legislative'or adjudicatory process,

+ -,p 9

(2) identify the source of the information the Department relies upon in making these conten-tions, and (3) produce all documents pertaining to that action or representation and to the factual basis for contending that it evidenced or consti-tuted an attempt by Applicant to deny access to others to the legislative or adjudicatory process.

(e) If the response to (c) is not "no," state whether Applicant intended by its activities to deny access to others to the legislative or adjudicatory process.

(f) If the response to (e) is not "no," state which activities or what incidents the Department contends demonstrates such intent. --12/

37.(a) Identify and describe every instance upon which the Department intends to rely and in which Applicant has opposed " applications of other utilities for project licenses."

(Oconee Advice Letter, p. 4, fn. 1) As to each instance:

12/ As to each activity or incident, the response should include, Eut not be limited to, (1) the representative or representatives of the entities involved, (2) the specific actions taken by L

Applicant, the date or dates of each action A66 :he method employed, (3) the precise manner in which F.m incident demonstrates the intent to deny access to others to the .le s.islative or adjudicatory process, and (4) the spece t te e rces from which the Department obtained its informatiot k

(1) name the project involved and the utility making the application, (2) state the body or bodies , if any, before which Applicant opposed the application and cite the proceeding by docket number or similarly specific identification, (3) identify the document filing or

, other action, if any, by which Applicant first i

indicated its opposition to the project to the body and the date on which the action was taken, (4) if it is contended that Applicant never publicly indicated its opposition to the i

project, describe fully in what way the Department 13/

contends Applicant opposed the project,--

(5) state whether the Department contends that Applicant's opposition to the project is 13/

~ Such description should include, but not be limited to, a description of each incident known to the Department'in which Applicant evidenced its active opposition to the project including as to each incident ( 1) the representative or rep-resentatives of- Applicant involved, (2) the body or persons approached or influenced, (3) the date or dates and the method of the approach- (4) the specific content of the communication made by Applicant, and (5) the sources of all information

.used by the Department in describing the incident.

I

a sham in whole or in part, (6) if the Department contends that Appli-cant's opposition is a sham, in whole or in part, identify each action or representation by Applicant that it is contended constitutes or evidences a sham. As to each action or i

representation that it is contended constitutes or evidences a sham in whole or in part, (i) state each element of the action or representation that constitutes or evidences a sham, (ii) identify the source of the information the Department relies upon in contending that a sham was evidenced or perpetuated, and (iii) produce all documents pertaining to that action or representation and to the factual basis for contending that it evidenced or constituted a sham; (7) state whether the Department contends

- that Applicant's opposition to the project was i

an attempt to deny access to others to the legis-lative -cxc adjudicatory process ,

(8) if the Department contends that Applicant's opposition was an attempt.to deny

• access to others J

m

'-R

to the legislative or adjudicatory process, identify each action or representation by Applicant that it is contended constitutes or evidences such attempt.

i As to each action or representation that it is 3

j contended constitutes or evidences such attempt, (i) state each element of the action

. or representation that constitutes or evidences the attempt by Applicant to deny access to others to the legislative or adjudicatory process, (ii) identify the source of the informa-tion the Department relies upon in contending that an attempt by Applicant to deny access to others to the legislative or adjudicatory process was evidenced or perpetuated, and (iii) produce all documents pertaining to the action or representation and to the factual basis for contending that it evidenced or consti-tuted an attempt by Applicant to deny access to l

others to the legislative or adjudicatory process; (9). if the response to (7) is not "no,"

state whether Applicant intended in its oppo.sition

.to the project to deny access to others to the legislative or adjudicatory tribunal, and-(10) if'the response to (9) is not "no,"

state which activities or what incidents the

Department contends demonstrates such intent.--14/

(b) Identify and describe each instance in which it is alleged that Applicant made " threats to engage in ex-tensive litigation to block such projects." (Oconee Advice Letter, p. 4, fn. 1) As to each instance, (1) name the project involved and the entity proposing or ccnsidering the project, (2) identify the representative or represen-tatives of Applicant making the threat or threats, and the place or document in which the threat was made, (3) state the specific action or actions constituting the threat or threats , the method employed for each action and the date of each action, (4) quote the precise words of the threat or threats made or, if the Department is relying on an account or accounts not including a precise

{

quotation, quote the passage of each account  !

l I

i 1

14/ As to each act'.vity or incident the response should include, '

but not be limited to, (1) the representative or representatives

~

of the entities involved, (2) the specific actions taken by )

Applicant, the date or dates of each action and the' method i employed, (3) the precise manner in which . the incident demonstra tes the intent to deny access to others to the legislative or adjudicatory process, and (4) the specific sources from which the Department obtained its information.

a l

~

purportedly describing the threat or threats, (5) state whether, in the Department's view, the instance constituted or evidenced a sham, and (6) state whether, in the Department's view, the threatened litigation if undertaken would have constituted a sham, and (7) identify the sources of the information relied upon in describing the instance. As to each action or representation that it is con-tended constitutes or evidences a sham in whole or in part, (i) state each elems!nt of the action or representation that constitutes or evidences a sham, (ii) identify the source of the informa-tion the Department relies upon in contending that a sham was evidenced or perpetuated, and (iii) produce all documents pertaining to that action or representation and to the factual basis for contending that it evidenced or consti-tuted a sham.

(c) Identify and describe each instance not described in response to questions 22 (c), 36 (a) or 37 in which, in the Department's view, Applicant has engaged in conduct 1

-\

l 1

constituting or evidencing a sham attempt to influence gov-ernmental. action in whole or in part. As to each instance, the response should include but not be limited to:

(1) the subject matter of the governmental action, (2) the representative or representatives of Applicant involved, (3) other entities or persons associated with Applicant, if any, and (4) the specific actions or representations constituting the purported sham, the method employed in each action or representation and the date or dates of each action or representation. As to each action or representation that it is con-tended constitutes or evidences a sham in whole or in part, (i) state each element of the action or representation that constitutes or evidences a sham, (ii) identify the source of the in-formation the Department relies upon in contending that a sham was evidenced or perpetuated, and (iii) produce all documents pertaining to that action or representation and to the factual basis for contending that-it' evidenced or consti-tuted a sham.

(d) Identify and describe each instance not described in response to questions 22 (c), 36 (d) or 37 in which, in the Department's view, Applicant has attempted to deny others access to the legislative or adjudicatory processes.

As to each instance, the response should include but not be limited to:

(1) the subject matter of the legislative or adjudicatory process, (2) the representative or representatives of Applicant involved, (3) other entities or persons associated with Applicant, if any, and (4) the specific actions or representations constituting the purported attempt, the method employed in each action or representation and the date or dates of each action or representation. As to each action or representation that it is con-tended constitutes or evidences an attempt to deny access to the legislative or adjudicatory process ,

(i) state each element of the action or representation that constitutes or evidences such' an attempt,

-(ii) identify the source of the in- -

i formation the Department relies upon in -coatending i' l l

l

.1

that such an attempt was evidenced or perpetuated, and (iii) produce all documents pertaining to that action or representation and to the factual basis for contending that it evidenced or consti-tuted such an attempt.

38. The Department has indicated that it will contend that Applicant has imposed a "prica squeeze" or

" rate squeeze" on its wholesale customers who compete with 15/

it for industrial loads.--

(a) State whether the Department will contend that Applicant has imposed such a " price squeeze."

(b) If the answer to (a) is not "no,"

(1) state the date on which the squeeze f#.rst arose; (2) identify each wholesale and retail industrial rate schedule in effect at any time since the date indicated in response to (1) which establishes rates which create or contribute to the squeeze; l

(3) as to each rate identified in response l

15/ Reply Brief of the Department of Justice on Relationship Eetween AEC's Proceeding ... and FPC's Proceeding ..., dated February 26, 1973, pp. 3-12.

e

to 38 (b) (2) , specify whether the said rate creates the squeeze, contributes to the squeeze, or evidences an intent to create a squeeze; and (4) as to each rate identified in response to question 38 (b) (2) , state:

(i) whether the Department contends that Applicant deliberately set such rate in order to create a squeeze, and (ii) whether the Department contends '

that such rate is not justified by the principles of cost of service utility rate making, stating where the Department does so contend, the basis for this claim.

(c) For each rate identified in response to ques-tion 38 (b) (2) and for each of the 58 independent distribution systems identified in response to question 4:

(1) describe specifically the load character-istics (including billing demand, load factor and any other assumption used) of the smallest new industrial customer-from which the system would be unable to obtain revenues sufficient to recover the cost of power; (2) describe the formula or methodology by which the answer. to 38 (c) (1) was determined; T

(3) state whether the formula or methodology described in response to 38 (c) (2) would be used con-sistently for any size load in determining whether revenues would exceed the cost of power; (4) if the response to 38 (c) (3) is not "yes",

describe any changes in the formula or methodology for varying load sizes, and state the load size or sizes to which each variation applies.

(d) Describe and define the standards by which one can determine that margin over and above the cost of power which is sufficient to recover all properly allocab'le costs of serving a customer.

(e) Identify and describe all instances known to the Department in which a wholesale customer of Applicant has declined to serve a potential industrial customer or has been unable to serve an industrial customer because of an insuffi-cient margin between the ate it could obtain and the cost of electricity obtained from Applicant. As to each instance:

(1) name the wholesale customer unable or unwilling to serve and the potential industrial customer involved, (2) state the date on which service was sought by or first discussed with the potential industrial customer,

(3) describe the anticipated maximum demand and load factor of the potential industrial cus-tomer, (4) list each factor known to the Department to have been considered by either the wholesale customer or the potential industrial customer in determining who the retail supplier should be, (5) identify the sources of the Department's information relied upon in describing each .nscance, and (6) produce all documents pertaining to each j instance.

39. The Department states that Applicant may engage in " probable activities under the license which would need to be resolved by a hearing before your Commission." (Oconee advice letter, p. 4)

(a) Define and describe the standards used by the

- Department to determine that an activity is " probable.'

(b) Identify and describe each " probable. activity" referred to in _ the quoted passage and describe why it is regarded as probable. The response should include but not be limited to the application of each standard defined in response to (a) to each " probable. activity."

s

40. State the significance for this proceeding of the higher cost of electricity for the McGuire Plant than that for the Oconee Plant.

41. In the Joint Petition of . . . Municipalities

. . . for Leave to Intervene, dated September 29, 1971., it is stated that " Nuclear energy ... offers when utilized on a large scale, a source of energy lower in cost than any now available to Duke." (p. 4)

(a) Does the Department agree with this contention by Intervenors?

(b) If the response to (a) is not "no," then:

(1) state whether the Oconee plant constitutes a "large scale" use of nuclear energy; (2) state whether the McGuire plant consti-tutes a "large scale" use of nuclear energy; (3) identify each category of expenses, as set forth in the Uniform System of Accounts of the Federal Power Commission, which the Depart-ment would include in determining the " cost of energy";

(4) state as to each plant or purchased power contract listed below, what the Department will contend is the " cost of energy" for that source and the source of the information used in deter-mining that cost:

- 1

1) Riverbend Plant (Units 1 - 5) 2, Buck Plant (Units 1 - 5)

3) Clifford Plant (Units 1 + 2)

4) Dan River Plant (Units 1 - 3)

5) Lee Plant (Units 1 + 2)

6) Tiger Plant

7) Allen Blant (Units 1 - 4)

8) Marshall Plant (Units 1 - 4)

9) Greenwood Steam Plant I 10) Bridgewater Hydroelectric Plant i

11) Oxford Hydroelectric Plant

12) Cowans Ford Hydroelectric Plant (Units 1 + 2)

13) Mountain Island Hydroelectric Plant

, 14) Wylie Hydroelectric Plant

15) Cedar Creek Hydroelectric Plant i

16) WateRee Hydroelectric Plant l 17) Keowee Hydroelectric Plant

18) Purchase of Power from Carolina Power and Light Co. (FPC Rate Schedule No. 247) i 19) Purchase of Power from South Carolina Electric and Gas Co. (FPC Rate Schedule No. 8) ;

(5) state what the Department contends is the present " cost of energy" from the Oconee plant and identify the source _ of the information used in defining that cost; -

(6) state what the Department contends will be the " cost of energy" front the McGuire plant and identify the source of the information used in defining that cost; (7) state whether the Department contends that the " cost of energy" from nuclear plants to be placed in service on the Applicant's system in the period from 1978 through 1984 will be lower than the " cost of energy" from the McGuire plant.

State the basis for the Department's position in this regard; and (8) to the extent that the " cost of energy" for any source of energy listed in (4) is lower than or equal to the " cost of ene;:gy" for Oconee as listed in response to (5) o; for McGuire as listed in response to (6),

(i) identify and describe each factor that prompted the Department to disregard that source in endorsing the quoted statement; and (ii) describe the significance for this proceeding of the existence of that source as a source of lower cost " energy."

42.(a) Identify each instance in which any North Carolina municipality expressed an interest in antitrust

1 i

issues concerning "the construction of the Oconee units. "

(McGuire advice letter dated September 49, 1971, from Richard W. McLaren to Bertram H. Shur, Duke Power Company, McGuire Units 1 and 2, AEC Docket Nos. 50-369A and 50-370A,

p. 2.) As to each instance:

(1) name the representative or representa-tives of the municipality involved, (2) specify the action or actions taken which expressed such an interest, the method employed and the date of each action, (3) describe the specific subject matter of each such action, and (4) describe the sources of the Department's information relied upon in describing each instance.

(b) Provide all documents which refer or relate to the expression by any electric utility or municipality, or group thereof, of an interest in antitrust issues concern-ing the McGuire or Oconee units.

43. The Department has indicated that actions by the North Carolina Utilities Commission and the South Caro-lina Public Service Commission may have been in contraven-16/

tion of Federal law.-~~ Identify and describe each action of either Commission that the Department centends contravenes Federal law. As to each action:

16/ Justice Reply'Brief of July 24, 19 7 2 , . - p . 10.

(a) Cite the docket number and the date of the final decision or order in the said docket; (b) Identify the parties, if any, to the proceeding leading to the action; (c) Specify (by precise citation, if possible) .

the provisions of the action that contravene Federal law, and (d) Cite the provision of Federal law contravened.

44. (a) State whether the Department contends that any enactments of the legislatures of North or South Carolina regarding electric service are invalid under Federal law.

(b) If the response to (a) is not "no," identify and describe each enactment that is invalid in whole or in part under Federal law. As to each enactment, the response should include but not be limited to:

(1) a specific citation to the enactment and to the provision or provisions that are invalid, and

'(2) a specific citation to the provisions

! of Federal law that invalidate each provision of a legislative enactment.

45. (a) State whether the Department contends that Applicant has entered into any agreement which, although

on its face represents that it is undertaken pursuant to or in anticipation of action by the North Carolina Utilities Commis-sion or the South Carolina Public Suni:e Commission or in specific compliance with any law of North Carolina or South Carolina relating to electric service, contravenes Federal law.

(b) If the response to (a) is not "no," identify and describe each such agreement that contravenes Federal 4

law. As to each agreement, the response should include, but not be limited to:

(1) the name or title of the agreement and the date on which it was executed, (2) the other party or parties to the agreement, (3) a specific citation to the provision or provisions that contravene Federal law, and (4) a specific citation to the provision or provisions of Federal law contravened.

46.(a) State whether the Department contends that Appli-cant has ever entered into, proposed or agreed to an agreement or understanding to allocate wholesale customers or to allocate the right to serve wnob tale customers on a territorial basis.

(b) If the answer to (a) is not "no," identify and describe each agreement or understanding or proposed agreement t

I l or understanding so allocating territory or customers.

(1) As to each allocation by formal agreement the response should include, but not be limited to:

(i) the name or title of the agreement and the date executed or, if not executed, the date proposed, (ii) the other entity or entities entering into the agreement, or if not executed, contemplated as entering into the agreement, and (iii) a specific citation to the provision or provisions allocating wholesale customers. In addition, the response should include, but not be limited to, as to any proposed formal agreement not executed by Applicant, (aa) a statement indicating the entity originating the proposed agreement, (bb) a description of each incident in which Applicant agreed to or otherwise supported the proposed agreement--17/ and 17/ This description should include, but not be limited to, IT) the representative or representatives of Applicant involved, i

(2) the other entities involved, and (3) the specific actions taken by Applicant that constituted or demonstrated agreement i

' or support, the method employed in each action and the date or dates of each action.

b

(cc) a specification of the sources of the information the Department relies upon in answering the questions in this subpart (1).

(2) As to any understanding or proposed understanding not recorded in a formal agreement and as to any proposal for an agreement for which no draft is presently available, the response should include, but not be limited to:

(i) the representative or representatives of Applicant involved in discussions relating to the allocation or proposed allocation, (ii) the names of other entities involved in such discussions and their representatives, (iii) a statement indicating the origin of the proposal to allocate customers or territory, (iv) all specific actions by which i

Applicant participated in discussions relating l to the allocation or proposed a) location, the i

l method employed in each action and the date of i

each action, (v) a listing of each action listed in response to (iv) in which Applicant agreed to or supported the allocation of territory or customers, (vi)- the precise words used in each

l ,

l action listed in response to (v) in which Applicant agreed to the allocation of territory or customers or, if the Department does not rely on an account or accounts that records the words employed, the precise language of each account on which the Department does rely, and (vii) a specification of the sources relied on by the Department in responding to the questions posed in each subpart of this inter-rogatory.

(c) Produce all documents relating to any actual or proposed agreement or understanding to allocate customers or territory identified in response to (b) and all documents relating to any transaction in which any actual or proposed allocation of customers or territory listed in response to (b) arose'.

47. In-its " Answer ... to Applicant's Motion to Amend Prehearing Order Number Tvs," dated July 30, 1973, the Department stated that " Applicant's prolific efforts (regarding acquisition of other systems] are admitted" and " Applicant (has engaged in] a concerted program to.

acquire competing electric distribution systems-in its area." (p. 3) . .

(a) List each acquisition or attempted acquisition of an electric distribution system or a substantial part thereof that the Department contends is relevant to this proceeding and on which the Department intends to rely.

As to each partial acquisition, the msponse should indicate the date of each acquisition. As to attempted acquisitions, the response should include:

(1) the facilities involved, 1

(2) the date on which acquisition was attempted, (3) the specific document by which the attempt was made or, if no such document is known to the Department, the factual basis on which it was concluded that an attempt was made, and (4) the date on which the attempt was rejected or, if not expressly rejected, lapsed and the specific document, if any, by which the attempt was rejected.

(b) As to each acquisition or attempted acquisition listed in response to. (a) , state whether Applicant engaged in any predatory or unfair practices in acquiring or attempting to acquire the system or facilities.

(c) As to each acquisition or attempted acquisition

for which the response to (b) is not "no," identify and describe each incident that demonstrates that Applicant engaged in predatory or unfair practices. As to each inci-dent, the response should include, but not be limited to:

(1) the representative or representatives of Applicant and any other entity involved; (2) the specific action or actions consti-tuting or evidencing predatory or unfair practices, the method employed in each action and the date of each action; and (3) the specific sources on which the Department relies on in describing the incident.

(d) As to each acquisition or attempted acquisi-tion listed in response to (a), state whether Applicant's actions had an anticompetitive or monopolistic intent.

(e) As to any acquisition or attempted acquisition for which the response to (d) is not "no," identify and describe each factor considered in determining that Applicant had an anticompetitive or monopolistic intent. To the extent that those factors include instances of conduct by Applicant, the description of the factor should include, but not be limited to:

(1) the representative or representatives of Applicant and any other entity involved, (2) the specific action or actions evi-dencing an anticompetitive or monopolistic intent, the method employed in each action and the date of each a. ion, -

(3) as to each action listed in response to (2), a quotation of the precise words used by Applicant that evidences an anticompetitive intent, or in the event the account or accounts upon which the Department ' relies in describing the conduct does not include the precise words used, a quotation of the. portion of the account or accounts relied upon as evidencing an anti-competitive or monopolistic intent, and (4) the sources upon which the Department relies in describing the conduct.

( f) Provide all documents, not obtained from Applicant in response to the Joint Document Request, relating to Applicant's acquisition or attempted acquisition of any electric distribution system or a substantial portion thereof.

L--- _ _ _ _ _ - _ _ . _ - . - . .

' 8 6-

48. In the Kauper speech (p. 4) , it is stated that competition is preferable to regulation in allocating scarce resources "where sufficient firm rivalry necessary for competitive markets exists...."

(a) State whether the Department contends that

" sufficient firm rivalry" exists in any relevant market identified in response to question 1(d) to make competition preferable to regulation in said market and, if so, identify each such market.

(b) If the answer to (a) is not "no," define and describe the standards used in determining the sufficiency of firm rivalry in each market listed.

(c) Identify each market or submarket as defined in response to question -1(d) in which any action, enactment, agreement or understanding listed in response to questions 43, 44, or 45 had an anticompetitive effect.

(d) State as to each market or submarket listed i:. response to (c) whether on the effective date of each action, enactment, agreement or understanding " sufficient-firm rivalry necessary for competitive markets" existed or would have existed except for the action, enactment, agreement or understanding. A separate response for each market or submarket on-each date should be provided.

(e) As to each market or submarket identified as having " sufficient firm rivalry" in response to (a) or (c) explain the basis on which tne Department concluded sufficient firm rivalry existed. The response should include, but not be limited to, consideration of each standard defined in response to (b) as to each market or submarket.

(f) As to each such market or submarket in which sufficient rivalry does not presently exist, state whether the Department contends that creation of such " sufficient rivalry" is desirable public policy.

(g)

As to each relevant market or submarket now lacking " sufficient rivalry" in which such rivalry is desirable, state whether the relief sought in this proceeding will assure such " sufficient rivalry" (h) As to each market or submarket identified in response to (d) for which the response was not "yes,"

identify each remedy or possible group of remedies sought in this proceeding - that would assure sufficient rivalry. "

49. .The Department uses the term " unreason-18/

able discrimination" .~~ Define " discrimination" and 18/ Reply of the Department of Justice to Applicant's Answer and Motion of July 24, 1972,1 dated August 3, 1972, p. 13.

4:

4

- 8 8-

"unrearonable discrimination" as the Department uses those terms in this proceeding.

50. The Department states Applicant may possess competitive advantages comparable to the tax and financing advantages of municipal and cooperative systems. --19/

-(a) Identify each such advantage and describe its operation and source.

(b) As to each advantage identified in response to (a), state its approximate dollar value to Applicant each year since 1960 or its inception, whichever is later, up to and including 1972.

9

51. In the Oconee advice letter (p. 3 ) , the Department states that Applicant's position regarding the -

relevance of the financing and tax advantages available to other actual or potential generation and transmission systems in the Carolinas is "somewhat conflicting" with Applicant's stated position regarding interconnection with those systems (such as SPIC) .

(a) State whether the Department is contending that Applicant's stated position regarding interconnection with other systems is a false statement of its actual policy.

19/ Id.'at p. 14.

4 (b) State whether the Department contends that Applicant's stated position regarding interconnection is deceptive.

, (c) If the answer to (b) is not "no," identify and describe each element of Applicant's position that is deceptive and every element of its actual position whose exclusion from its stated position is deceptive.

(d) Unless the response to both (a) and (b) is "no,"

specify the sources of the information the Department relies upon in contending that Applicant's position is false or deceptive and produce all documents used by the Department in responding to (a), (b) and (c).

(e) Define and describe the standards used by the Department in concluding that Applicant's positions are "somewhat conflicting" and describe the application of each standard.

52. (a) As to each market or submarket defined in response to question 1(d), state whether the Department contends that the flow of resources is free of distortions despite the existence of special financing assistance (such as low interest loans or tax exempt status for interest paid on borrowings) available to some other electric entities or the complete or partial tax exemption of those entities.

e (b) As to each market or submarket defined in recponse to question 1(d), state whether such distor-tions would result from that special assistance and tax exemption, if the relief sought by the Department is granted.

1 (c) If the answers to (a) and (b) are not "no,"

describe the distortions that arise and state their signi-ficance for this proceeding. If it is contended that these distortions have no significance for this proceeding, state the basis for that conclusion.

53.(a) State whether the Department will contend that the technology of nuclear electric power generation was developed largely at public expense.

(b) If the response to (a) is not "no'," describe all projects undertaken by public agencies regarded by the Department as being for the development of nuclear-electric generation. This description should include for each:

(1) the agency expending the funds and any substantial contractors involved, (2) the stated purpose for which funds were authorized, (3) the amount expended in'each~ fiscal year.

Projects whose aggregate appropriations have been i

l l

1

under $10 million may be omitted. No classified data is sought.

(c) If the answer to (a) is not "no," describe all privately financed projects for the development of nuclear electric generation technology known to the Department.

Such description should include:

(1) the private entities involved, (2) the stated purpose for which the project was undertaken, (3) the amount of private funds expended in each year. (Fiscal or calendar years may be used as convenient, but where fiscal years are used, they should be so identified.) Projects, such as some experimental generating stations ,

i utilizing both public and private funds should be listed in response to both items with appro-priate information provided.

54. In the Kauper speech, it is stated that the application of anticrust principles will lead to increased efficiency in the electric industry and, in particular, to savings in fuel. (p. 15)  !

l (a) State whether those contentions will be made -1 in this proceeding. 1 l

1

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l

(b) If the answer to (a) is not "no," describe and define the standards used in projecting increased efficiency as a result of the application of antitrust principles in the electric industry.

(c) Apply those standards to each of the remedies proposed in this proceeding.

(d) Explain as to each proposed remedy how it will contribute to savings in fuel.

55. On page 10 of the Baker speech, an incident is described as an instance of actual competition in which

" pressure from an alternative supplier had enabled muni-cipal systems to secure lower prices and deliveries at higher voltages than had previously been possible."

(a) Will the Department rely on this instance in th; present proceeding?

(b) If the answer to (a) is not "no," identify the SEC proceeding involved and name the wholesale supplier j and wholesale customers involved.

(c) Describe the " pressure from an alternate supplier" and tha original supplier's response. State the extent to which electric' load actually shifted between-wholesale suppliers.

-(d) Describe and define the standards used to

-9 3-determine that in this instance the actions of the original supplier had a pro-competitive effect. Describe the circumstances, if any, under which similar actions would be regarded by the Department as anticompetitive.

(e) Identify and describe any instances in North Carolina or South Carolina in which pressure from an alternate supplier (including self-generation) has enabled municipal, cooperative or other public power systems to secure lower prices or deliveries at higher voltages than had previously been possible. As to each instance, the response should include, but not be limited to:

(1) the entity or entities receiving the new advantage, (2) the date on which the benefit was first received, (3) a statement describing the basis on which the Department cor.tends the benefit had previously been withheld, (4) a statement as-to the basis on which the Department contends that pressure from the alternate supplier was responsible for the avail-ability of the new advantage, and (5) the sources from which the Department l

1

obtained the information it relies upon in describing the instance.

(f)

As to each instance described in response to (e),

state whether the actions of the original supplier had a pro-competitive or anticompetitive effect and explain the basis of the Department's conclusions including, but not limited to, the application of the principles defined in response to (d).

56. On page 12 of the Baker speech certain

" general principles" are set forth. Among these are "Those who control a dominant power pool or generation facility cannot refuse equal access to all systems. "

(a) State whether the Department will seek to apply that " general principle" in this proceeding.

03) If the answer to (a) is not "no," define and describe the standards used in determining whether a pool or facility is " dominant."

(c) If the answer to (a) is not "no," define and describe the standards used in determining whether a given entity is among those who " control" a power pool.

(d) If the answer-to (a) is not "no," define and describe the standards used in determining what is " equal access." In addition to the general description here sought, k.._

state specifically:

(1) whether " equal access" can be provided if a membership standard is imposed in a power pool requiring a participating utility to have available generating capacity of potential benefit to other pool members; if not, why not; and (2) whether equal access to a dominant generat-ing facility or power pool can be provided through a fair wholesale rate; if not, why not.

(e) If the answer to (a) is not "no," explain why some form of access other than " equal access" is not the required standard.

(f) If the answer to (a) is not "no," describe each " competitive advantage" derived by those controlling dominant generation or participating in a dominant power pool.

(g) State whether the Department will contend

, in this proceeding that Applicant ever has refused access to a pool.

(h) If the answer to (g) is not "no," identify and describe each instance in which Duke has refused access to a pool. As to-each instance, the response should include but not be limited to:

(1) the name of the entity seeking access to the pool,

(2) the name or other identification of the pool to which access was sought, (3) the type of access sought and the precise terms on which such access was sought, (4) the representative or representatives of Applicant involved, (5) the identity of any other persons or entities involved, (6) the specific actions taken bi the entity by which it sought to obtain access to the pool, the date or dates of each action and the method employed in taking the action, (7) ' the specific actions taken by Applicant or others that constitute the denial of access, the date or dates of each action and the method l employed in taking the action, (8) the precise words purportedly used by the representative or representatives of Appli. cant, i l

or, if the Department does not rely on a purported )

l precise quotation, the exact language of each  !

account of each action the Department relies upon  ;

as constituting or demonstrating the denial 1

of access, j i

(9) the Department's view as to whether the response constituted or evidenced denial of access I

which is inconsistent with the antitrust laws, and if so, what factors the Department relied on in reaching that conclusion, and (10) the specific sources from which the Department obtained the information upon which it relies in describing the instance.

(i)

Produce all documents relating to any denial of access described in response to subpart (h) of this interrogatory.

57. (a) State whether the Department will seek to apply its bottleneck monopoly theory to this proceeding.

(b) I2 the answer to (a) is not "no,"

state as to each market or submarket defined in response to question 1(d) , whether the Department will seek to apply the bottleneck monopoly theory to it and, as to those markets or submarkets to which the Department will seek to apply the theory, state what facilities, arrangements or other resources being withheld consticute the crucial prerequisite to entry into the market.

58. In the Baker speech (9 15), the Department states that long. term, full requiren.ents contracts in which the supplier is a monopolist or a near monopolist are

" generally illegal."

k

(a) State whether the Department will contend that any contracts to which Applicant is a party or has been a party at any time during the period of January 1, 1960, to date are illegal, full requirement contracts.

(b) If the response to (a) is not "no," define and describe the standards used in determining when a whole-sale electric supply contract or retail electric franchise is dremed " illegal."

(c) Identify any contracts entered into by Applicant i

that are " illegal" under those standards. The response should include the caption or title, date and parties of each contract.

59. In the Baker speech (p. 21) it is stated in a discussion of the scope of S105c of the Atomic Energy Act that

" interconnection of units and coordinated development is necessary to achieve economies of scale, and this applies regardless of whether the interconnected units are the Applicant's own or any other entities with which it is (or might be) inter-connected."

(a) State whether - the Department contends that interconnection with other entities will be necessary in

! utilizing the Oconee and McGuire units.

l l

(b) If the response to (a) is not "no,"

l

_99 -

(1) define and describe the standards applied in determining that inter-entity interconnection will be necessary in utilizing the Oconee and McGuire units, and (2) describe each element of the factual basis on which it is concluded that inter-entity interconnection is necessary in utilizing the Oconee and McGuire units, and (3) state the sources of the data used in responding to (2) including, where applicable, citations by title, author, date and production number of relevant documents obtained from Applicant in response to the Joint Document Request.

(c) State whether the Department contands in this proceeding that the term " activities under the license" in-cludes activities of other utilities that are interconnected with Duke.

(d) It the answer te (c) is not "no," name each other electric utility whose activities the Department contends are pertinent to determining whether' " activities under the license will create or maintain a situation inconsistent with the antitrust laws. "

(e) If the answer to (c) is not "no," identify and describe each activity that is pertinent.

-100-(f) As to each activity listed in response to (e):

(1) identify each market or submarket as defined in response to 1(d) to which it is pertinent,

.(2) state the time period (includir.g any prospective time period) during which it occurred and/or will occur, and (3) describe each factor considered in deter-mining that it is pertinent to this proceeding.

60. The Department has stated (Tr. 14) "if the competitive advantage becomes so much greater because of the addition of nuclear power that it is a new kind of competitive advantage" then the addition of nuclear power plants may create a new situation inconsistent with the antitrust laws.

(a)

Describe and define the standards used to determine:

(1) what is the impact of a new nuclear generating station on the " competitive advantages" of a utility and l (2) when the addition of a nuc' ear generating station is sufficient to create a new situation inconsistent with the antitrust laws. .

-101-(b) State whether the r e stment contends that a new situation inconsistent with the antitrust laws is created by the erection of the Oconee units, and, if so, explain how a new situation is created through the application of the standards defined in response to (a) (2) .

(c) State whether the Department contends that a new situation inconsistent with the antitrust laws is created by the crecti: of the McGuire units, and, if so, explain how a new si sation is created by application of the standards defined in response to (a) (2) .

(d) If the Department states that the Oconee and/or the McGuire units create a new situation, state the signifi-'nce for this proceeding of the creation of a new situation inconsistent with the antitrust laws rather than the maintenance of an existing situation.

61. Define the following terms as used by the Department in this proceeding:

(a) interconnection (b) coordination (c) coordinated development (d) pooling (e) reserve sharing (f) transmission (g) high voltage transmission (h) extra-high voltage transmission (i) unit power (j) firm power (k) spinning reserve (1) base load generation

-102-(m) emergency power (n) wheeling (o) bulk power supply (p) standby power (q) economy energy (r) deficiency power (s) bulk power (t) distribution (u) distribution voltage (v) transmission voltage (w) maintenance energy As to each definition that does not correspond to any edopted by the Federal Power Commission-- 20/

and/or by the Institute 21/

of Electrical and Electronics Engineers,-- state the source of the Department's definition and describe eac:h factor con-sidered in determining that it is more appropriate for this 4

proceeding.

62.(a) Identify each category of transactions, arrange-ments or operations of the Applicant relevant to this proceeding that the Department contends are not subject to pervasive regulation.

(b)

As to each category of activity identified in response to (a) ,

describe each factor considered in conclud-ing that there is an absence of pervasive regulation. Indicate as to each category whether it is contended that there is no regulation or that there is regulation but it is not per-i 20/  !

EEe Federal Power Comt.tission) , Inter-Agency Committee (Promulgated byon Water R Glossary of Important Power and Rate Terms, Abbreviations, and Units of Measurement (1965).

21/ IEEE, .

tronics TermsNational (1972).. Stat.dar d Dictionary of Electrical and Elec-t

-103-vasive. In the latter instances, identify the limits of the regulation.

(c) Produce all documents involving communications by any unit of the Department of Justice with the Federal Power Commission, the North Carolina Utilities Commission i

and the South Carolina Public Service Commission regarding the scope of those agencies' jurisdiction over Applicant or over electric utilities generally.

6 3. (a) Describe and define the term " super power systems" (Tr. 331).

(b) Describe and define the term " periphery of the Piedmont Carolinas" (Tr. 331) ar.d explain the significance of that geographic concept for each market or submarkets described in response to question 1(d) .

64. At Transcript 356, the Department indicates that the distance over which retail competition is possible varies depending upon the size of the load to be served.

State the formula or methodology by which it can be deter-mined for any given size load the distance within which competition is possible.

65. The Department has stated that "other compet-ing situations.... Come into play to determine whether to set rates on average costs or incremental costs." (Tr. 365). '

i

-104-(a) Define " average costs." Identify each element of that definition that differs from the concept of " fully distributed costs" as used in Bonbright, Principles of Public Utility Rates, Chapter XVIII (1961) and describe each factor considered in determining that the Department's concept is more appropriate for use in this proceeding.

(b) Define " incremental costs." Identify each element of that definition that differs from the concept of "short term original costs" as used in Bonbright, supra, Chapter XVII, and describe each factor considered in deter-mining that the Department's concept is more appropriate for use in this proceeding.

(c) Describe and define the standards the Department would propose to determine whether rates should be set on an

" average cost" or " incremental basis."

(d) Define "other competing situations."

(e) As to each of Applicant's rate classifications or categories of service in effect since 19,60, state whether the Department believes that rates for that classification properly could have been set on an " incremental" basis.

(f)

As to each rate classification for which rates could have been properly set on an " incremental" basis, identify and describe the basis for the Department's conclusion including, but not limited to, the application of each standard defined in response to (c).

- 105 -

t

66. (a) Define the terms " regional power exchange" I

and "sub pool" as used in the Transcript at page 492.

(b) Describe and define the standards used to determine whether a utility is a " regional power exchange" or a "sub pool."

i (c) Define the term " consolidation" as used in the Transcript at page 492.

(d) Describe how Applicant cecame a " regional power exchange by virtue of its acquistion and consolidation of formerly separate stations . . . . " The response should include:

(1) a listing of each station whose

" acquisition and consolidation" contributed to Applicant's becoming a " regional power exchange,"

the date on which such station was " acquired" as that term-is meant in the quoted passage, and the means by which it was " acquired", and (2) a statement identifying and describing each stage of integration.a utility such as Applicant passed through prior to becomi.g  !

a " regional power-exchange" and the approximate I date on which Applicant reached each stage.

67. The Department has contended that the CARVA pool "was broken up for the purposes ... of specifically l excluding out other. putative members." (Tr.'492). ,

-106-(a) Describe the factual basis for the Department's contention that the CARVA Pool was dissolved in order to ex-clude potential members. The response should include:

(1) a listing of the prospective members whose possible ownership led to the dissolution of the Pool, (2) a statement as to whether Applicant's purpose in its actions during the discussions that culminated in the Pool's dissolution was to exclude the prospective members listed in response to (1) ,

(3) a description of each statement, com-munication or incident relied upon by the Department in contending that the Pool was dissolved for 22/

this purpose ~~ and (4) an identification of the sources of the information on which the Department relies in preparing this response.

22/

As to each incident, the description should include, but not be limited to, (1) the representative or representatives of Applicant involved, if any, (2) the representatives of other electric entities involved, if any, (3) the specific action or actions taken that demonstrate the purpose of excluding potential members, by whom each action was taken, be what method and on what date, (4) the precise way in wnich each action

' demonstrates the purpose to excludo., and (5) the sources on which the Department relies in describing the incident. .

{

1 l

i

-107-i (b) Identify and describe each reason for the dissolution of the CARVA Fool other than the purpose of excluding potential members. As to each reason, the response should include:

?

(1) a statement as to which Pool members were motivated by the reason, and (2) a description of the factual basis on which the Department relies in identifying each reason and in identifying the companies motivated by each reason.--23/

(c) Produce all documents pertaining to the dis -

i solution of the CARVA Pool.

t

68. The Department has contended that "the same ki".ds of transactions are carried out" through VACAR as were formerly conducted through CARVA. (Tr. 492)

(a) Identify and describe the kinds of transactions

--23/

The response should include a description of each incident demonstrating the existence of each purpose or a company's motivation by it. The description should include (1) the repre-sentative or. representatives of each Pool company including Applicant involved, (2) othe'r entities or persons involved, (3) the specific action or- actions demonstrating a listed purpose or purposes of the CARVA dissolution, by' whom taken and by what means and on what date, (4) the precise way in which each action demonstrates the existence of a listed _ purpose or purposes, and (5) a specification of the sources on which the Department relies in describing the incident.

~

-108-under each arrangement which the Department contends are the same.

(b) Identify and describe each factor considered in determining that the transactions carried out through VACAR are the same kind of transactions formerly conducted through CARVA. In this connection, discuss separately the apparent differences between the two arrangements regarding:

(1) membership or participation, (2) joint planning and coordinated development, (3) charges for energy and accounting formulas, I

(4) required reserves, (5) procedure in the event of power shortage, and (6) decision-making procedures and requirements.

69.Ca) State whether EPIC as presently planned will be "a regional power exchange market" or a " regional power exchange," as defined in response to question 66(a).

(b) Describe "Yankec-Dixie." Such description should state the date'and circumstances of commencement of activities by this project, list all participants and the dates of their participation as set forth in the plans and actual operations of the project, explain the legal and technical relationship between participants, and state specifically the sources of the Department's information.

i l

-109-(c) Identify and describe each factor considered in determining, (1) that " Yankee-Dixie" was at one time j a " regional power exchange market," and (2) that Yankee-Dixie ceased to be a

" regional power exchange market" "when the City of Springfield dropped out." (Tr. 493) i l

70. The Department has stated (Tr. 542) "the limited kinds of coordination that Duke has agreed to . . .

do not encompass coordinated development based on long-run marginal costs, which specifically led to the Department of Justice's advice letter....

(a) Define "long run marginal costs" as that term is used by the Department. Compare each element of the definition with the concept of "long-run marginal costs" as used in Bonbright, supra, C,1 apter XVII. As to each element that differs from the concept defined in Bonbright, explain why the Department's definition is appropriate for use in i

this proceeding.

! (b) Identify by name or contract date and title i all coordinated development arrangements based on long-run marginal costs to which Applicant is presently a party, or i

to which Applicant was a party at any time from January 1, 1960, to date. As.to each arrangement: -

-110-(1) describe each factor considered in determining that the arrangement is based on "long-run marginal costs" and (2) cite each contract provision relating to the arrangement which implements or directly reflects the use of "long-run marginal costs. "

(c) State whether the Department contends that the financial arrangements of the CARVA Pool were based on "long-run marginal costs."

(d) If the answer to (c) is not "no,"

(1) describe each factor considered in determining that the financial arrangements of the CARVA Pool were based on "long-run marginal' costs," and (2) cite each contract provision relating to the CARVA Pool which implements or directly reflects the use of "long-run marginal costs."

(e) Identify and describe each incident in-the-period 1968 through 1973 to date in which Applicant has supported the use of "long-run marginal costs" in any actual or proposed interconnection or coordination with any other electric entity or entities. As to each incident, the response should include, but not be limited- to:

(1) the' representative or representatives of Applicant involved, t

-111-(2) the other entities involved, (3) the specific action or actions taken by Applicant that demonstrated support for the use of "long-run marginal costs" as a pricing device, the method employed in each action and the date of each action, (4) a statem,ent as to each action describing how it demonstrates Applicant's support for the use of "long-run marginal costs" and (5) the sources of the information the Department relies on in describing the incident.

( f) Produce all documents relating to Applicant's position regarding the use of "long-run marginal costs" as a pricing device and all documents relating to any actual or proposed coordination arrangement which the Department contends used or was contemplated as using "long-run marginal costs" as a pricing device.

71. In its Joint Petition for Leave to Intervene, dated September 29, 1971 (" Joint Petition"), Intervenors

- stated that " Duke, CP&L, SCE&G and VEPCO together monopolize the generation of electric power over a substantial geographic area in North Carolina, South Carolina and Virginia, (p. 4)

(a) Does the Department agree with this contention by Intervenors?

-112-(b) If the response to (a) is not "no,"

(1) state whether the Department contends that these four utilities have entered into a conspiracy to monopolize electric generation; (2) if the response to (1) is not "no,"

identify and describe each incident relied upon by the Department as constituting or evi-i dencing a conspiracy or possible conspiracy to monopolize electric generation. As to each incident, the response should include, but not be limited to:

r (i) the representative or representa-tives of each utility involved; (ii) the specific action or actions evidencing an intent to monopolize, the method employed.in each action and the date of each action; (iii) as to each action listed in response to (ii), a quotation of the precise words used by the representatives of the various utilities that constitute or evidence a conspiracy to monopolize or, if the Department is relying on an account or accounts not including a precise quotation, a quotation of the passage of each account purportedly describing the

t. ,

-113-conspiratorial actions; and

, (iv) the specific sources upon which the Department relies in describing the incident.

(3) If the answer to (1) is "no," define and describe each standard the Department uses in determining that the listed utilities " toge ther monopolize" electric generation.

72. Provide all documents which refer to, describe or evaluate:

(a) Piedmont Electric Cities Association, EPIC, Inc. and Electricities of North Carolina, and (b) the purchase by Applicant of land on the Green River comprising a part of the proposed site of FPC i

Project No. 2700.

73.(a) Identify and describe in detail any information known to the Department as to any instances in which Applicant sought to affect the price of fuel fo r other operators of electric generation in North or South Carolina. Such description should specify the sources from which the Department obtained its information.

(b) Produce all documents pertaining to any instance identified in response to (a).

j -

L f

-114- ,

74.(a) Describe each activity engaged in by Applicant on the basis of which the Department alleges or will allege that a situation inconsistent with the antitrust laws has been created or maintained. The response should include, but not be limited to:

(1) the time period in which Applicant engaged in such activity, (2) the nature of the activity, (3) the basis for its being deemed "in-consistent with the policies of the antitrust laws,"

(4) the statute or policy with which it is alleged to be inconsistent.

(b) As to each activity specified in response to (a), state whether the Department claims or will claim that the granting of the licenses applied for herein will maintain a situation inconsistent with the antitrust laws.

(c) As'to each activity identified in response to (a), state whether the Department contends that Applicant deliberately sought to create "a situation inconsistent with the policies of the antitrust laws."

(d) As to each activity listed in response to (a), to which the response to (c) was not "no," identify and describe each incident or instance of conduct upon

- - - a

-115-which the Department relies in contending that Applicant deliberately sought to create such a situation. As to each incident or instance of conduct, the response should include but not be limited to:

(1) the representative or representatives of Applicant involved, (2) other persons or entities involved, (3) the epocific subject matter of the incident or instance, (4) the specific action or actions of Applicant demonstrating this intent, the method by which the action was taken and the date or dates on which taken, (5) a statement as to each action describing how the action demonstrates the intent, and-

.j (6) the sources of the information on which the Department relies in describing the incident I

or instance.

75. In the Prehearing Brief for Intervenors On the Effect -of the Decision of the Federal Power Commission on the Present Proceeding, dated February 15, 1973, Intervenors stated that there is " evidence of monopoly consciously acquired or maintained in the past" by Applicant.

(p. 2) t

-116-(a) State whether the Department will contend that Applicant consciously acquired or maintained a monopoly.

l (b) If the response to (a) is not "no," identify 4

and describe each instance not described in answer to other interrogatories in which Applicant has " consciously acquired or maintained" monopoly. As to each instance, the response should include, but not be limited to:

(1) the identity of the representative or representatives of Applicant manifesting a conscious intention to acquire or maintain a monopoly; (2) the identity of any other person or entity involved; (3) the specific transaction in which the intent to maintain or acquire a monopoly was 24/

manifested;--

(4) the specific action or actions that manifested an intent to acquire or maintain a 24/

~~

As to any transaction evidenced by a written agreement, the transaction may be identified by a citation cf the title or

! name of the agreement and the date executed. As to all other transactions the reply should specify the subject matter of the transactica, the date on which the transaction commenced and the date on which it terminated, and the general terms of the transaction as understood by the Department.

.~

-117-monopoly, the method employed in each action and the date of each action; (5) a quotation of the precise words used by Applicant that manifests an intent to acquire or maintain a monopoly, or in the event the Dcy;a.dment ts

-In. r~ener: 2re relying on an account that does not include the words used, a quotation of the account relied on; and 4

(6) the specific sources used by the Department in describing the instance.

76. Provide all documents which refer to, describe, evaluate or comment upon:

i (a) Competition in any of the markets defined in response to question 1(d);

(b) The status of an electric utility as a natural monopoly; (c) Territorial allocations of retail or wholesale customers by any utility providing electric service in North Carolina or South Carolina.

77.(a) Does the Department contend that the structure or operation of the electric utility industry in North Carolina or South Carolina or Applicant's purchase of any electric system prior to January 1, 1960, is relevant to h

-118-this proceeding? If so, does the Department intend to present evidence on or inquire into this structure or operation of that industry or Applicant's purchase of any electric system prior to January 1, 1960, during the evidentiary hearing in this proceeding?

(b) Provide all documents which refer to, discuss, evaluate or comment upon the structure or operation of the electric utility industry in North Carolina or South Carolina, or to the purchase of any electric system by Applicant (except for those documents preduced in response i

to 47 (f) above). Such docuniants should include, but not be limited to, documents relating to:

(1) the decision by Applicant not to purchase a system; (2) the decision by any system to reject or accept an offer by Applicant to purchase its system; (3) the plans, intentions, desires or decision by any system to initiate or seek an offer from Applicant or any other system to purchase its system.

78. Provide all documents which refer to, describe, evaluate or comment upon:

(a) The actual or potential use of nuclear or .

-119-fossil fuel for the generation of electricity in the Piedmont Carolinas; (b) Projected future growth of electric power consumption in the Piedmont Carolinas; (c) Actual or potential costs of constructing or operating a nuclear power plant in North Carolina, South Carolina, or elsewhere; (d) Actual or potential outages or other technical difficulties which are or may be encountered in the construc-tion or operation of a nuclear power plant.

79.(a) Describe and define the economic benefits of interconnection and coordinated development as the same exist, or potentially may exist, for a large uti'ity. The response should include, but not be limited to, a description and definition of the scandards used in determining that

" reserve sharing, coordinated development and other types of coordination available through high voltage and extra high voltage transmission, make possible economies of scale in bulk power supply to systems participating in such 25/

coordination."-~

(b) Provide all relevant data and all documents which refer to, describe, evaluate or comment upon:

--25/

Consumers Power Company (AEC Docket Nos. 50-329A and 50-330A) advice letter, June 28, 1971, p. 4 (36 Fed. Reg. 17891) (herein- _

after, " Consumers advice letter"): as cited in the Oconee advice letter, p. 3.

. _ ~

f'

-120-(1) the existence or absence of economies of scale in the generation, transmission or retail distribution of electric power generally or by Applicant or any other municipal, cooperative or investor-owned utility in North or South carolina, or (2) the competitive benefits or disadvantages of reserve sharing, pooling, joint planning, wheeling or coordination by Applicant with any other system or group of systems.

80. Define and describe the standards used in determining that "there appears to be an irreducible minimum of cooperation among competing utilities which is essential to the long-term competitive viability of each 26/

of them."~~ The response should include, but not be limited to:

(a) The name of each utility studied in making such determination; i

(b) The nature of the competition between them;-

(c) The type and extent of cooperation deemed essential at a minimum; 26/ *

~~

' Consumers advice letter p.5 (36 Fed. Reg. 17882),

as. cited in Oconee advice letter p. 3. >

i L..

-121-(d) A definition of the number of years included in the phrase "long-term."

81.(a) Describe the effect in the Piedmont Carolinas on smaller utilities of larger utilites entering into joint unit or pooling arrangements, including identification of the utilities and arrangements involved. -

(b) Identify the " evidence" which indicates that "the smaller the utility, the more critically important is its access to the unique economic benefits of intercon-nection and coordinated development with other utilities. "-~-27/

The response should set forth, but not be limited to:

(1) the size of the utility defined by the word " smaller,"

(2) the elements comprising "the unique economic benefits" considered, and the specific source of the Department's " evidence," including detailed citations to published material to the-extent it is endorsed by the Department of Justice.

(c) Provide all documents discussing or relating in any way to the importance of access by a " smaller" utility

-to the economic benefits of ' interconnection and coordinated development. i 27/

Ibid.

1 m

J

-122-

82. In the Initial Statement, Intervenors stated

" Duke has ...

employed the substantial differentials already existing in its own internal costing to skim the cream of the retail market."

(a) Does the Department agree with this con-tention by In'arvenors? Unless the response is "no":

(b) Describe and define what the Department contends is "the cream of the retail market." The response should include the type of customer which constitutes "the cream", the standards used in making that determination, and the period of time involved.

Where those standards are quanti-fiable (e.g., load size, load factor, distance from existing facilities), they should be expressed in numeric terms.

(c) As to each type of customer identified in response to (b) :

(1) identify those costs (as defined in the FPC System of Accounts) which the Department contends were not but should have been allocated to each such type of customer, and (2) identify the customer el ss or type i

of customer to which those~ costs were aplocated by Applicant.

(d) State whether the_ Department will contend that the Applicant intended to " skim the cream of.the retail ma *. k e t . "

-123-(e) If the answer to (d) is not "no", describe each activity of Applicant that evidences an intent to " skim the cream of the retail market." As to each activity, the response should include:

< (i) the representative or representatives of Applicant participating in the activity; (ii) the specification or action consti-tuting the activity that evidenced an intent to " skim the cream of the retail market", the date of each action and the method employed; (iii) the precise words used in each action listed in response to (ii) by which Applicant evidenced an intent to " skim the cream" or, if the Department does not rely on an account or accounts that records the words employed, the precise language of each account on which the Department does rely; and (iv) a specification of the sources relied on by the Department in describing the activity.

83. Provide all documents which refer to, describe, evaluate or comment upon the efforts, desirability or feasibility of electric systems in North'or South Carolina

-124-(jointly or severally) to compete with Applicant for retail load, to obtain alternative coordination arrangements or to obtain alternative sources of bulk power supply.

84.(a) Provide all documents which refer to, describe, evaluate or comment upon the financial, operating, or past, present or future " competitive viability" of Applicant's " competitors," including, but not limited to, documents which reflect the revenues, expenditures, rates, cost of service, bill frequency analyses, cost or profit-ability analyses by customer class, peak load, load factor, load diversity or generating capacity.of any such "competi-tor" alone, in conjunction with other " competitors" or in comparison to Aoplicant.

t (b) Provide all documents discussing or relating in any way to the desirahi'.ity, effort, or feasibility of Applicant's " competitors" (jointly or separately) to construct, finance, own, or operate electric generation units, transmission facilities, or distribution systems, I

or portions of such units, facilities or systems.

(c) Provide all documents which in any way relate to the actual or potential competition, whether past, present or_ future, (including, but not limited to, price competition) .between Applicant and any other electric 4

c., , --

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-125-system for wholesale or retail customers, including, but not limited to, documents which discuss :

(1) the effect of any local or state law or constitutional provision on the ability of any municipal or cooperative system in North or South Carolina, or potential wholesale or retail customer, to construct, own (severally or jointly) or finance the construction of system facilities, or to inter-connect, coordinate, or integrate in any way with another system; (2) tax, low interest or other financial advantages benefiting municipal or cooperative electric systems in North or South Carolina or generally; (3) tax or other financial advantages bene-fiting Applicant.

85.(a) Identify and describe each instance in which any employee or agent of the Department has been in com-munication with any person or entity about Applicant, including, but not limited ta, communications about Applicant's efforts or proposed efforts to. construct, finance, or obtain necessary governmental approval for operation of the Oconee 4

or McGuire units. (Privileged communications between Department of' Justice attorneys for which the privilege

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-126-has not been waived need not be identified.) The response should include, but not be limited to:

(1) the date and identity of the parties involved in each instance, (2) the subject matter of the communications between the parties ,

(3) the source of the Department's information with respect to each such instance.

(b) Provide all non-privileged documents com-prising, reflecting or related to communications between any employee or agent of the Department and any person or entity about Applicant's activity or proposed activity as an electric utility, including, but not limited to, Appli-cant's efforts to construct, finance or obtain necessary governmental approval for the operation of the Oconee or McGuire units. All documents attached or enclosed with any such communication also should be provided.

86. Identify by name and professional affiliation each consultant or technical advisor the Department has employed or retained or plans to employ or retain in connection with this proceeding and state as to each consultant or advisor the subject matter or matters on which'the' consultant or advisor is or.will be consulted.

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^4mm UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION In the Matter of )

) Docket Nos. 50-269A, 50-270A DUKE POWER COMPANY ) 50-287A, 50-369A (Oconee Units 1, 2& 3) 50-3 70 A McGuire Units 1& 2)

CERTIFICATE OF SERVICE I hereby certify that copies of APPLICANT'S IN TE R-ROGATORIES AND DOCUMENT PRODUCTION REQUEST TO THE DEPARTMENT OF JUSTICE, dated September 14, 19 73, in the above-captioned matter have been served on the following by deposit in the United States mail, first class or air mail, this 14th day of September, 1973:

Walter W.K. Bennett, Esquire J.O. Tally, Jr., Esquire P. O. Box 185 P.O. Drawer 1660 Pinehurst, North Carolina 28374 Fayetteville, No. Carolina 28302 Joseph F. Tubridy, Esquire Troy B. Connor, Esquire 4100 Cathedral Avenue, N.W. Connor & Knotts Washington, D. C. 20016 1747 Penna. Avenue, N.W.

Was hington , D. C. 20006 John B. Farmakides, Esquire Atomic Safety and Joseph Rutberg, Esquire Licensing Board Panel Benjamin H. Vogler, Esquire Atomic Energy Commission Antitrus t Counsel for Washington, D. C. 20545 AEC Regulatory Staff Atomic Energy Commission Atomic Safety and Washington, D. C. 20545 Licensing Board Panel Atomic Energy Commission Mr. Frank W. Karas, Chief Washington, D. C. 20545 Public Proceedings -Branch Abraham Braitman, Esquire Office of the Secretary Special Assistant for Of the Commission Atomic Energy ~ Commission Antitrust Matters Washington, D. C. 20545 Office of Antitrus t and Indemnity Joseph Saunders , Esquire Atomic Energy Commission Antitrust Division Washington, D. C. 20545 Department of Justice Washington, D. C. 20530 r

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