ML19312C635
| ML19312C635 | |
| Person / Time | |
|---|---|
| Site: | Oconee, Mcguire, McGuire  |
| Issue date: | 09/20/1972 |
| From: | Kauper T JUSTICE, DEPT. OF, ATTORNEY GENERAL, OFFICE OF |
| To: | US ATOMIC ENERGY COMMISSION (AEC) |
| Shared Package | |
| ML19312C634 | List: |
| References | |
| NUDOCS 7912190843 | |
| Download: ML19312C635 (12) | |
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UNITED STATES OF AMERICA
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$$OEI.7 BEFORE THE na N
b ATOMIC ENERGY COMMISSION In the Matter of
)
Docket Nos. 50-269A, 50-270A 1
50-287A DUKE POWER COMPANY 50-369A, 50-370A (Oconee Units 1, 2 & 3 l
McGuire Units 1 & 2)
JOINT RECITAL OF CONIESTED ISSUES OF FACT AND LAW The parties and the proposed intervenors in this pro-ceeding jointly submit the following recital of contested issues of fact and law, without prejudice to the right of any party to submit l'ater additions or modifications thereto and without prejudice to the right of any party to contend that a particular issue is not lawfully or properly before the Commission or Hearing Board:
I.
Is there a situation inconsistent with the antitrust laws in a major area of the Piedmont Carolinas?
If so, is Applicant culpable for such situation?
1.
Itave Applicant's activities violated the antitrust laws as specified in Section 105(a) of the Atomic Energy Act of 1954?
In view of the statutory test of " inconsistent with the antitrust laws," [ explained in the legislative history to include' inconsistency with the " policies cicarly underlying those laus,"] are Applicant's activities "in:onsistent with 3912190 g
the antitrust laws" if they impair the competitive opportun-ities of others, whether or not violation of the antitrust laws is established?
What are the relevant product and geographic markets?
2.
Does Applicant have substantial monopoly power in, or han it monopolized, bulk electric power supply in the relevant market (s)?
(Applicant believes issues 11 and 12 should follow immediately.)
3.
Does Applicant own or control all or substantially all generation in the relevant market (s)?
Has Applicant attempted to prevent the establishment of, alternative bulk I
power facilities or systems, including federal hydroelectric projects, in competition with it?
4.
Does Applicant own or control all or substantially
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all [high-voltage and/or extra-high voltage] transmission in the relevant market (s)?
If so, is that control a source of its alleged monopoly power in or monopolization of bulk power s
supply?
5.
Is Applicant abusing its alleged control over trans-micsior$ to retain and extend its alleged bulk power supply monopoly?
Can Applicant use such alleged monopoly to retain and extend its alleged monopoly in the retail distribution markets?
6.
Has Applicant, through practices not economically inevitabic, prevented arrangements which would allow munici-pal and cooperative systems to utilize Applicant's transmission facilities to obtain access to, coordination of generation with 2
other utilities?
Has Applicant unnecessarily refused coordina-tion of generation between Applicant and such systems?
Has Applicant erected unnatural barriers to exclude competition by engaging in auch coordination with others while denying participation to smaller systems?
Is it relevant that many smaller systems do not have or no longer have generation or transmission facilities in determining whether Applicant's actions in regard to coordination or to any other activity are inconsistent with the antitrust laws?
See issue number 11, 7.
Was Applicant's abandonment of the CARVA pool and entry into new arrangements for coordinated development and other forms of power pooling with other' 1arge utility systems in its aren such as Carolina Power & Light Company, South Carolina Electric & Gas Company, etc., entered into with the purpose or effect of placing small utility systems in the Piedmont Carolinas at a competitive disadvantage?
8.
Has Applicant engaged in other activities, such as attempts to influence government action, which may form part of a monopolization scheme or a combination to monopoliz'e --
or evidence an intent of Applicant to restrain competition or show the antichnnpetitive character of Applicant's course of conduct?
Are any such activitie's constitutionally pro-tected?
If so, are they immune from antitrust investigation?
9.
Would an arrangement providing for equal percentage of reserves as a percentage of peak load between Applicant and some or all municipals and cooperatives in its area be economically or technica11y' unsound or unfair to Applicant or its customers or be unlawful under the laws of the States of 1
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North and South Carolina or the Federal Power Act?
If Applicant has entered into such arrangements with others, i
does Applicant discriminate against the aforementioned sy tems when it refuses to do so with them?
10 Is a market structure requiring nurchase by a small system (such as one of the proposed intervenors) of bulk power supply from its vertically integrated retail competitor a situation conducive to effective retail competition?
Does acceptance for filing 'and/or approval of a wholesale rate schedule by Federal Power Commission insure against all anticompetitive conduct which could arise?
Has Applicant imposed a price squeeze upon its wholesale customers -- retail competitors?
Does regulation of Applicant's rates and practices by the Federal Power Commis-sion and state regulatory agencies limit this Commission's ability to inquire into those matters?
11.
Do Applicant's wholesale rate schedules provide
- adequate access to the benefits of large-scale generation and transmission, if any, for the proposed intervenors and Applicant's other municipal wholesale customers?
If not, are other alternatives offering comparabic benefits available to such systems?
I 12.
To what extent do federal, state and local law, and i
other government regulation prohibf.t municipal, cooperative or privately owned electric systems from competing with other "
utilities in any phase of either the wholesale or retail power market (s) or contemplate such competition?
Is there existing l
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or potential competition in the relevant bulk power supply market (s) and the retail distribution market (s); what is the effect of government regulation upon competition in these markets?
13.
Have the municipal, cooperative, and small privately owned utilities in Applicant's general area displayed a history over the years indicating competitive viability?
If so, has the alleged absence of access to coordination had any effect on such competitive viability?
Have these small systems be'en able to compete. effectively against Applicant in terms of their ability to attract new customers and their ability to operate efficiently and at reasonable profit margfus?
Were those that failed to survive, if any, able to secure bulk power supplies to retain their market share? -- to increase it?
Has Applicant accuired, or sought to acquire, small distribution systems?
14.
Are any alleged anticompetitive activities df the proposed intervenors or other whol' sale. customers of Appli-e cant relevant to the determin'htion whether Applicant is culpable" for a cituation inconsistent with the antitrust laws?
If so, do alleged ticing and other activities of the proposed inter-venors and Applicant's other municipal wholesale cuctomers permit them to compete unfairly with Applicant?
15.
Is it relevant that the Govcenment provides sub-sidies and tax and financing advantages to municipal and cicctric cooperative systems in determining whether a situation inconsistent with the antitrust laws exists?
If the answer is
.in the affirmative, is it not equally relevant to consider 5
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whether the situation inconsistent with the antitrust laws restrains competition from small privately owned electric utilities, and whether Applicant receives or is eligible for government subsidies, or tax and financing advantages?
16.
Do any existing governmental subsidies or tax and financing advantages of the proposed intervenors and Appli-cant's other municipal wholesale customers, operating separately or in a joint venture, place them in a position to compete unfairly with Applicant for wholesale or retail power loads?-
Should the Commission take account of such advantages in determining whether or not a situai. ion incon-sistent with the antitrust laws exists?
'Or is Congress the proper forum for the trial of these, issues?
17.
What is the scope of the Commission's antitrust review?
To what extent did the 1970 emendments change the scope of review established in the Atomic Energy Act of 19547 (Applicant believes this issue should precede issue I.)
18.
Is the Department of Justice requesting per se applications of the antitrust laws in this proceeding?
If so, can the criteria of Section 1 and 2 of the Sherman Act be applied mechanically to the electric power ind.,i:ry?
II. If the answer to issue I is affirmative, will Applicant's proposed activities under the license (s) in installing large nuclear units and marketing power from them in competition with small systems maintain or exacerbate this situation?
Or will said activities, when combined with the existing situation.
in effect create a new situation inconsistent with the antitrust laws?
1.
What is the relationship between Applicant's general system activities which are alle.gedly inconsistent with the 6
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antitrust laws and the proposed licensing of the Oconee and McGuire units; to what extent are issues relating to such activities (e_.g., sales contracts, coordination arrangements) relevant to.this proceeding?
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2.
Will power from the Oconee and McGuire units be marketed as part of the output of Applicant's bulk power supply system or will it be marketed separately-from other power generated by Applicant?
3.
Will the Oconee and McGuire units be operated as an integral part of Applicant's bulk power supply system, i.e.,
will operation of the Oconee and McGuire units be coordinated with other units of Applicant's system in order to provide insurance against the risk of forced outage of the Oconee and/or McGuire units and vice versa?
4.
Was the economic feasibility of the Oconee and McGuire units determined by planning on their integration and cperation as part of Applicant's bulk power supply system?
5.
Is the economic feasibility of the Oconee and McGuire units dependent on their coordination with units of othar utilities or dependdnt on coordination of Applicant's locd growth with load growth of other utilitics?
Is the feasibility of installing and marketing large unit nuclear ganarction in the Piedmont Carolinas dependent on obtaining such coordina-tion arrangements?
6.
Does Applicant's installation of the Oconeo cr.d i
McGuire units continue the situation in which Applicant can l
l market low cost power from 'large units and preclude its com-petitorc from doing so?
Do Anolicant's competitors.have any 7
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assurance of obtaining any benefits from Applicant's low-cost power from large units in competition for new loads?
7.
To what extent are there physical or financial advantages from Applicant's'Oconee and McGuire units?
Are any physical or financial advantages of nuclear generation so great as to radically change the competitive advantage enjoyed by Applicant?
8.
To what extent in the near term and the long term will nuclear generation comprise the base load capacity in Appli-cant's bulk power supply system?
9.
Can it be said that the opportunities to use nuclear power, when combined with the existing. situation, in effect create a new situation inconsistent with the antitrust laws?
III.
If the Commission makes. affirmative -findings is it not recuired to condi :
as to I and II;s license to remedy the anti-tion Applicant conipetitive situation which Applicant's activities under the license would create or maintain?
1.
Assuming a finding that Applicant's activities under the l'icense would maintain a situati m inconsistent with the antitrust laws, should the license be granted as applied'for, without conditions; or should the Applicant be required, as a condition to the grant of the license,'to make available to the proposed intervenors any or all~ef the following:
(a) ownership of an appropriate portion of'the Oconee and McGuire units or power therefrom on an equivalent basis; (b) the necessary transmission servicea to transmit this power on a nondiscriminatory basis; (c) the necessary transmission servic ec rn :ransmit
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coordinating power and energy on a nondiscriminatog basis, l
based only on fair compensation to Applicant and technical
.i feasibility of the arrangement, so as to allow small systems to install their own large units; (d) other forms of coordinated development other than (a) above which would give proposed intervenors and other small systems (1) the opportunity to construct and operate large nuclear generating units -- such as compulsory purchases of power from smaller systems in a program of staggered development; and (2) the opportunity to construct or use a large scale transmission system ancillary to the foregoing -- such as by joint transmission arrangements or wheeling; (e) emergency power and maintenance power on bases similar to those utilized in its arrangements with other adjacent utilitics or that' ordered by the Federal Power 4,
Commission in Gainesville Utilities Department v. Florida Power Corporation; (f) other forms of coordinating arrangements, and (g) specified coordination terms to accomplish the foregoing?
2.
Do these forms of relief complement remedies avail-able under state and Federal regulatory laws, or, to the contrary, do they conflict with those laws, i.e.:
(a)
Would a~n arrangement granting some of Appli-cant's customers an ownership interest in, or other forms of I
access to, the Oconee or McGuire units be unfair, discrimina-
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tory or uni. awful under the laws of the states of North or South Carprina or the Federal Power Act?
(b)
Would the sale of unit power to, or 9
participation in the Oconee or McGuire plants,by some or all of the proposed intervenors or other municipal wholesale customers be unfair to Applicant or its customers, or be un-lawful under the laws of the states of North or South Carolina or the Federal Power Act?
3.
Are the proposed license conditions " appropriate" to carry out the purposes of the Act as provided in Section 105 (c)(6) of the Act?
4.
Is it relevant in determining whether to grant or.
condition the license that the Government provides subsidies and tax and financing advantages to municipal and coopera-tive systems?
If so, is it not equally r9 evant to consider 1
whether the situation inconsistent with the antitrust laws restrains competition from small privately owned electric utilities, and whether Applicant receives or is eligible for government subsidies, or tax and financing advantages?
5.
Do any existing governmental subsidies or tax and financing advantages of the proposed intervenors and Appli-cant's other municipaldtalesale customers, operating separately m or in a joint venture, place them in a position to compete unfairl'y with Applicant for wholesale or retail power loads?
Should the Commission.take account of such advantages in determining to grant or condition the licenses involved in these proceedings?
Or is Congress the proper forum for the trial of these issues?
9 6 e
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n 91st Cong.,1st Sess., Joint Committee on Atomic Energy, Hearings on Prelicensing Antitrust Review of Nuclear Power L>1 ants, Part 2 (1970) p. J18
[Tr. 45 line 24j Section 202(a) of the Federal Power Act, 16 U.S.C.A. 824a(a)
[Tr. 53 line 6]
Contracts are filed under Section 205,16 U.S.C.A. 824(d)(a)
[Tr. 53 line 8]
Bureau of Land Management, Princioles and Procedures. Power Transmission Lines, 43 CFR 2851.1 (a)(5)(ii)
[Tr. 53 line 15, Tr. 56 line 18]
Federal Power Commission v. Idaho Power Co., 344 U.S. 17 (195 2), lb U.S.C. /97(e); 16 U.S.C. A. 79 7(e)
[Tr. 55 line 4, Tr. 56 line 13]
Florida Power & Licht and Florida Public Service Comncny, 2 FPC 991 (1941)
LTr. 55 line 5, Tr. 56 line 15]
Florida Power & Light and City of Jacksonville, Florida, 3 FFC 712 (1942)
LTr. 55 line 5, Tr. 56 line 15]
Hecht v. Pro-Football. Inc., 444 F. 2d 931, 934-935 (1971)
LTr. 55 line 20]
"Keating Provico" see e.g. 65 Stat. 255; 66 Stat. 451; 85 Stat. J69 LTr. 56 line 19]
Sincerely yours, THOMAS E. KAUPER Assistant Attorney General Antitrust Division T
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By:
Wallace E. Brand Attorney Department of Justice cc:
Honorabic Joseph F. Tubridy Honorable John B. Farmakides All parties on the service list e
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UNITED STATES OF AMERICA BEFORE THE ATOMIC ENERGY CONMISSION In the Matter of Docket Nos. 50-269A, 50-270A DUKE POWER COMPANY 50-287A 50-369A, 50-370AL (Oconce Units 1, 2 & 3, McGuire Units 1 & 2) t CERTIFICATE OF SERVICE I hereby certify that copies of the ATTACHED LETTER, dated September 20,.1972, in the above captioned matter have been served on the following by deposit in the United States mail, first class
~or air mail, this 20th day of September 1972:
Trdy B. Conner, Esquire Carl Horn, Esquire President, Duke Power Company Reid & Priest Charlotte, North Carolina 28200 1701 K Street, NW.
Washington, D. C.
20006 William H. Grigg, Esquire vic.e rresident and General Counsel Joseph Rutberg, Esquire Benjamin H. Vogler, Esquire Duke Pouer Company Antitrust Counsel for AEC 422 South Church Street Charlotte, North Carolina 28201 Regulatory Staff U.S. Atomic Energy Commission William Warfield Ross, Esquire Washington, D.'C.
20545 Wald, liarkrader & Ross Atomic Safety and Licensing 1320 Nine teenth Street, NW.
U Board Panels. Atomic Energy Comm Washington, D. C.
20036 3
J. O. Tally, Jr., Esquire Washington, D. C.
20545 Post 0f Cice Drawer 1660 Fayetteville, North Carolina 28302 Mr. Frank W. Karas Chief, Public Proceedings Branc i
i J. A. Bouknight, Jr., Esquire Office of the Secretary of the Commission Tally, Tally & BouknirJht U. S. Atomic Energy Commission Post Office Drawer 1660 Fayetteville, North Carolina 28302 Washington, D. C.
20545 k
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