ML19312C607

Application for Issuance of Subpoena Duces Tecum to VEPCO, Requiring Document Production.Schedule for Insp & Copying, 710123 Util Ltr Re Nc Municipalities & Certificate of Svc Encl

ML19312C607
Person / Time
Site:	Oconee, Mcguire, McGuire
Issue date:	08/06/1973
From:	Bannan C, Brand W, Leckie D JUSTICE, DEPT. OF
To:	US ATOMIC ENERGY COMMISSION (AEC)
References
NUDOCS 7912181006
Download: ML19312C607 (10)

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

DUKE POWER COMPANY DocketNos.60-26 , 50-270A (Oconee Units 1, 2 and 3 ) 50-287A, 50-369A McGuire Units 1 and 2) ) 50-370A APPLICATION FOR ISSUANCE OF SUBPOENA DUCES TECUM ',

TO. VIRGINIA ELECTRIC AJD POWER COMPANY The Department of Justice, pursuant to Section 2.720 of the Commission's Rules of Practice,10 C.F.R. Part 2, respectfully requests the issuance of the attached subpoena duces tecum requiring the Virginia Electric and Power Company (VEPCO) to produce documents referred to in the attached schedule for inspection and copying by the Department.  :

Documents relating to attempts by the City of Belhaven, North Carolina, and ten other municipal electric systems to join the Carolinas-Virginias (CARVA) pocl or otherwise enter power pooling arrangements , the efforts of VEPCO opposing such attempts, and the decision subsequently to dissolve the CARVA pool are clearly relevant to issues in the captioned proceeding. 1 The Board's Prehearing Order Number Six, dated March 22, 1973, includes the following in its Final Statement of Subissues:

3(h) Was Applicant's participation in the

' termination of the CARVA pool and its entry into new arrangements with other large utility systems in its area . . . done for the purpose of placing small utility systems in the Piedmont Carolinas at 7912180lO N

a competitive disadvantage? If this was not Applicant's purpose in terminating the CARVA pool, but said dissolution had that effect whether antici-pated or not, is that fact relevant evidence per-taining to a situation inconsistent with the anti-trust laws? Should the term purpose include antici-pated effects?

The CARVA pool, consisting of VEPCO, Applicant, Carolina Power & Light Company, and South Carolina Electric

& Gas Company, was a mechanism to facilitate transactions in coordinating power and energy among the members. In e ffec t ,

the pool constituted a regional power exchange market (or was a substantial part thereof) . Small electric systems in the area could have obtained access to that market through member-ship in the pool; and transactions in that market could have >

reduced their cost of bulk power supply. In approximately 1967, the City of Belhaven, North Carolina, and ten other municipal electric systems asked the Federal Power Commission, in the context of a VEPCO rate proceeding, to compel VEPC0 to allow the municipals to join the CARVA pool. The hearing examiner determined to treat the rate issue and the CARVA entry issue separately. After a drawn-out proceeding in the rate matter, the cities "ran out of money" and decided not to press the issue of entry into CARVA. Documents received from Applicant reveal that the CARVA members decided at about this time to abandon the pool's multilateral arrange-ment in favor of a series of bilateral' contracts among them.

Subsequently, in 1970, CARVA'was dissolved.

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The Department believes that the purpose of Applicant I and the other members in dissolving CARVA and the effect they anticipated from such dissolution will be made clear by the requested documents from VEPCO's files.

First, while Applicant apparently was not involved directly in the Belhaven matter, it certainly was aware of the situation.

Applicant has provided the Department a list of documents withheld under a claim of privilege. Item 219 (at page 34 of List I) claims privilege for an October 10, 1967, communication authored by Carl Horn, Jr. (then Applicant's vice president and general counsel and now its president),

the subject matter of which is cryptically ' described as "Belhaven litigation." Item 633 (at page 93 of List I) claims l l

as privileged an undated communication from Charles W. Smith to Carl Horn, Jr., dealing with the "Belhaven case." (Our reference to this list should not be construed as an admission

! of the validity of Applicant's privilege claim.)

Second, from the sequence of events it is reasonable to assume that the Belhaven case may have precipitated the decision of the four members to terminate the CARVA agreement.

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! CARVA, unlike the present VACAR arrangements , was a multi- y lateral agreement for the mutual advantage of its members; denial of access to such an entity raises obvious antitrust questions, while the refusa( of any one utility to coordinate, in the context of the present series of bilateral contracts raises similar though less' obvious questions.

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That Applicant envisioned antitrust problems with the CARVA agreement is indicated by a letter of Carl Horn, Jr. ,

dated January 29, 1971. It makes the following reference to the then-in-progress dissolution of the pool:

The ten North Carolina municipalities who sought to purchase a 4% undivided interest in Duke 's Oconee Nuclear Station on antitrust grounds have again requested antitrust review in connection with the proposed issuance of an AEC operating -license to Duke for Oconee Unit No.1. This review by the Department of Justice is about to begin, pursuant to the recent amendments to the Atomic Energy Act.

I am therefore anxious to bring this ' proceeding at F.P.C. to a close so that the Department of Justice will be reviewing our Short-Term and Limited Term Power and Energy Schedules, rather than the more complex CARVA Fool Agreement. (Applicant's docu-ments 75595-75596 produced on discovery, attached hereto as Appendix A.)

Since the requested material is narrowly defined, compliance by September 3,1973, should not be a burden to the subpoenaed corporation. On request of VEPCO, we will, of course, waive personal appearance in Washington by its representative and would even be agreeable to return by mail accompanied by an appropriate certificate of compliance by its chief executive officer.

Respectfully submitted, j

. M1"M$' 'w,93x C. FORREST BANNAN WALLACE E. BRAND DAVID A. LECKIE Attorneys, Antitrust Division Department of Justice Washington, D.C.

Au gus t 6, 1973

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- l SCHEDULE A. De finitions

1. " Documents" means all writings and records of every type made or dated January 1,1940, or thereafter, in the possession, control or custody of the Virginia Electric and Power Company, its directors, officers, employees or agents, including but not limited to memoranda, correspondence, reports, surveys, tabulations, charts, books, pamphlets, photographs, maps, bulletins, minutes, notes, diaries, log sheets , ledgers , transcripts , microfilm, computer printouts ,

vouchers , accounting statements , engineering diagrams ("one-line" diagrams), mechanical and electrical recordings, tele-phone and telegraphic communication, speeches , and all other records, written, e,lectrical, mechanical or otherwise.

" Documents" shall also mean copies of documents ,

, even though the originals thereof are not in possession, custody or control of the Virginia Electric and Power Company, and every copy of a document which contains hand-written or other notations or which otherwise does not dupli-cate the original or any other copy.

2. "CARVA pool" means the utilities comprising that pool: Duke Power Company, Carolina Power & Light Company, South Carolina Electric & Gas Company, Virginia Electric and Power Company.

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B. Documents Requested

1. All documents (except those filed with the l Federal Power Commission and therefore available to the public) referring or relating to any attempt by the City of l Belhaven, North Carolina, and others to join the CARVA pool and any efforts by Virginia Electric and. Power Company, by itself or with others , to exclude these cities from power )

pooling, including but not limited to the CARVA pool. l l

2. All documents referring or relating to the decision to dissolve the CARVA pool.

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.e January 23,1C71 -

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,f on antitrus: grounds have again requested antitrust review in con-t nectica 'ti:h the ,rcposed is.cuance of au 1- C opc ratin; license to f Duhe for C:onc.e en:t ..n o. 1 .. . . .

r.is t eview oy t.ne u.,npart=cnt c.

./ Justica is t.uout to begin, pursuant to the recen: ac ::cments to the

/.tomic L.ncr .7 ici. I am tharciare anzicus to brin l tnis preceeding at i;'. P. C. to a c.:cre co t. at the z gartmen; at .;.the vint ce revtew-In y, o.,- ..e..,.v . .. ..,.. .. -... - ,.. L ....4. .. g <r e . e .. ... , 2 6. d t..' .a- r "- N. ..' <'" 1

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therefore careente your enpacitin.3 the si;ning and return to me cf the sat:!2 ment agreement, Q:iy executed by Duhe Po ver Com.cany, wnich 1 am cnclatur-r in Ray .5tedman's copy ci this lottar. I recuest that he and Geor?c discher sign same anc forvrard to Charlie'I'cuse ' '

at CPhL, for si; nature by Charlia and a Vice President of C?aL;

- that Charlic then cenc the a;rcement to George Freeman for execution by him and fitanicy .'.a;cna, and I request that George then return the

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copien to be filed with the original with the Federal Power Commissicn.

attention, I am With thanhs in advance for ;iving this mat:er your earlicct Sincerely, '

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CH:ds Enclecura to :. r. it. E. .Itedman: Original and information ecpy Encionure to .'r. 'Iarry I.. Peth, Jr. , )

?Jr. Charles 7. i'.cuce - )

2.Ir. 3:aulcy Ja;;onc )

Information con'v '

. I.Ir. George C. Freeman )

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

)

DUKE POWER COMPANY ) Docket Nos. 50-269A, 50-270A (0conee Units 1, 2, and 3 ) 50-287A, 50-369A McGuire Units 1 and 2) ) 50-370A CERTIFICATE OF SERVICE I hereby certify that copies of APPLICATION FOR ISSUANCE OF SUBPOENA DUCES TECUM TO VIRGINIA ELECTRIC AND PCWER COMPANY, dated August 6,1973, in the above-captioned matter have been served on the following by deposit in the United States mail, first class or air mail, this 6th day of August, 1973:

Honorable Walter W. K. Bennett William Warfield Ross , Esquire Chairman, Atomic Safety and George A. Avery, Esquire Lic ensing Board Keith Watson, Esquire Post Office Box 185 Toni K. Golden, Esquire Pinehurst, North Carolina 28374 Wald, Harkrader & Ross )

1320 Nineteenth Street, N.W. I Honorable Joseph F. Tubridy Washington, D. C. 20036 l Atomic Safety and Licensing Board 4100 Cathedral Avenue, N.W. J. O. Tally, Jr., Esquire Washington, D. C. 20016 J. A. Bouknight, Jr. , Esquire j Tally, Tally & Bouknight Honorable John B. Farmakides Post Office Drawer 1660 I Atomic Safety and Licensing Board Fayetteville, North Carolina 28302 : l U. S. Atomic Energy Washington, D. C. 20545 Troy B. Conner, Esquire )

Reid & Priest  !

Carl Horn, Esquire 1701 K Street, N.W.

President, Duke Power Company Washington, D. C. 20006 422 South Church Street Charlotte, North Carolina 28201 Joseph Rutberg, Esquire Benjamin H. Vogler, Esquire  !

William H. Grigg, Esquire Antitrust Counsel for AEC l Vice President and General Counsel Regulatory Staf6 1 Duke Power Company U. S. Atomic Energy Commission 422 South Church Street Washington, D. C. 20545 Charlotte, North Carolina 28201 Mr. Abraham Braitman, Chief W. L. Porter, Esquire Office of Antitrust and Indemnity Duke Power Company U. S. Atomic Energy Commission 422 South Church Street Washington, D. C. 20545 Charlotte , North Carolina 28201 7

1 David Stover, Esquire Mr. Frank W. Karas , Chief Tally, Tally & Bouknight Public Proceedings Branch  ;

429 N Street , S .W. Office of the Secretary of Washington, D. C. 20024 the Commission U. S. Atomic Energy Commission Atomic Safety and Licensing Washington, D ., C . 20545 Board Panel U. S. Atomic Energy Commission Chairman, Atomic Safety and Washington, D. C. 20545 Licensing Appeals Board U. S. Atomic Energy Commission Washington, D. C. 20545 C. FORREST BANNAN Attorney, Antitrust Division Department of Justice Washington, D. C. 20530 i

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