ML19312C650

Applicant'S Answer to 710929 Joint Petition of Nc Municipalities for Leave to Intervene & Obtain Antitrust Review.Petition Should Be Denied.Certificate of Svc Encl

ML19312C650
Person / Time
Site:	Oconee
Issue date:	10/14/1971
From:	Grigg W, Ross W, Watson K DUKE POWER CO., WALD, HARKRADER & ROSS
To:
References
NUDOCS 7912190858
Download: ML19312C650 (9)

Text

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LEFC RE THE

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UNITED STATES ATO:4IC ENERGY COIGIISSIO*! -r D '

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IN THE MATTER OF DUKE POWER COMPANY A[*,jij.??i}y OCOUEE NUCLEAR STATIONS UNITS 1, 2 AND 3

DOCKET NOS. 50-269 50-270 50-287 ANSWER OF APPLICANT DUKE POWER COMPANY TO JOINT PETITION OF NORTH CAROLINA MUNICIPALITIES, STATESVILLE ET AL.,

FOR LEAVE TO INTERVENE AND OBTAIN ANTITRUST REVIEW The Applicant Euke Pcwcr Cca.pany, answering the ratit;,en of the North Carolina Municipalitics. Statesville, et al., filed on or about the 29th day of September, 1971, alleges:

1. Paragraph 1 of the Petition to Intervene is admitted, I l

except that it is denied that the Town of Newton,. North Carolina, is a Petitioner. Applicant is informed and believes that the e

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Town of Newton, on or about the 3rd day of June, 1969, by resolu-tion of its Town Council, formally withdrew as an intervenor and protestant in this proceeding.

2. Paragraph 2 of the Petition is admitted, except that it is denied that the municipalities are " captive" customers of the Applicant Duke Power Company. It is further denied that "The availability and price of power to each and all of peti-tieners are initially and inextricably bound with and in the determinations in this proceeding."

3. Answering Paragraph 3 of the Petition, it is ad-mitted that the Applicant Duke Power Company together with Carolina Power & Light Company, South Carolina Electric & Gas Company and Virginia Electric and Power Company executed on July 9, 1970, and filed with the Federal Power Commission on July 10, 1970, an agreement terminating the Carolinas-Virginias Power Pool Agreement, and at the same time filed with the Federal Power Commission a series of rate schedules under which they would in the future buy fron and sell power to each other and buy from or sell to any other power supplier with whom they are interconnected. A copy of the July 9, 1970 Agreement was attached as Exhibit A to Applicant's Answer to Joint Petition, filed February 9, 1971, and is incorporated herein by reference.

t is denied that the power sales between Duke Power Company, i

. Carolina Power & Light Company, Virginia Electric and Power  ;

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, Company and South Carolina Electric & Gas Company constitute a pool or a joint venture, or that any pool or jvint venture exist since termination of the CARVA Fool Agreement. Applicant Duke J

Power Company is willing to sell power, when available, to any

, power supplier with whom it is interconnected, under the rate i schedules set forth in Exhibit A. The Limited Term Power and Energy Schedule provides for pricing power and energy in essen-

] tially the same manner that these Petitieners ' wholesale rates

{ from Duke are fixed by the Federal Power Commission. It is further f denied that " Duke , a giant utility, is unable alone to reap the full economic benefits of nuclear power." It is denied that "none of petitioners is able alone (nor by combination with one 2nother) effectively to enjoy the benefits of this low-cost source o f power. " It is denied that "Monopoli:ation of the benefits of nuclear pcwer and of electric power marketing over petitioners' geographic area by Duke appears then imminent." Petitioners themselves have publicly rapresented to the contrary. Applicant is informed and believes and alleges that the petitioners are members of Electricities of North Carolina, which together with the North Carolina Electric Membership Corporation, whose member-ship comprises'the rural electric cooperatives operating in North Carolina, have formed an organization known as EPIC (Electric Power in Carolina) which proposes to build three large scale I

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nuclear generating plants, three fouull fuel pl.uit.: .uid one pumped-storage hydroelectric plant in North Carolina, linking them with transmission grids of 500 KV and 230 KV, duplicating the generation and transmissien facilities of the Applicant Duke Power Company and Carolina Power & Light Company in North Carolina. Applicant is further informed and believes and so alleges that petitioners' attorneys , Tally, Tally and Bouknight, and their engineers R. W. Beck and Associates and Southern Engineering Company of Georgia have recommended that such a generation and transmission plan is feasibic for the long range power supply of the cities and cocperatives of North Carolina.

Copy of the EPIC plan was attached as E::hibit B to Applicant's Answer to Joint Pctition, filed February 9,1971, and is incor-porated herein by reference. Except as herein admitted, the allegations of Paragraph 3 of the Petition are denied.

4. Answering Paragraph 4 of the Petition, Applicant admits that the petitioners are entitled to the " opportunity to enjoy equally with their competitors access to the miracle of

.. lear generati:n." Applicant avers that the ques'_len of . .at is petitioners' fair share of the nu:1 car generation bein~ cen-structed by Duke is a matter within the primary jurisdiction of 1 the Federal Power Commission. Except as herein admitted, the allegations of Paragraph 4 of the Petition are denied.

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5. The allegations of Paragraph 5 of tha Petition are denied. Applicant further alleges that the justnass and reasonableness of its wholesale power rates to these peti-l i

tieners, and to its other municipal and rural electric cooperative customers in North and South Carolina is now at iss ue in a pro-ceeding pending before the Federal Power Commission in F.P.C.

Docket :;o. E ~'557, In the Matter of Duke Power Company, in

• >hich proccei.ing the Applicant here is seeking a 17% increase t in its wholesale rates to these petitioners and its other 'muni-cipal and rural electr ic cooperative customers. Petitioners here are intervenors and protestants in that proceeding pending before the Federal Power Commission, which proceeding when finally concluded will of necessity dctermine the justness and 4

reasonableness of the wholesale rates of Duke Power Company to these petitioners. In this proceeding the fair share of these s

petitioners in the economies of nuclear generation, as well as their fair share of the economies of conventional generation and large-scale transmission will be determined by the well-settled

, "'e ' ' .'ility r' 7ul ?.tcry principle o f east o f service to e ac."

clans of customers. At present these petitioners enjoy the Ivwest rate of any class of customers in Duke Power Company's rate structure. It is denied that these petitioners ' wholesale power costs from Duke Power Company place them at any competitive disadvantage to Duke Power Company with respect - to new retail custcmers. -

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6. Answering Paragraph 6 of the Petition it is ad-

.mi tt ed that in the hearing on Duke Power Company's Apolication for a construction permit, these petitioners were permitted to intervenc and that they did maka formal demand upon Duka to sell these petitioners a 43 undivided interest in the entire Oconee Nuclear Station, and that the Applicant Duke Pcwer Company denied thnt demand on the grounds that (1) it would cause a 3;scrimination against Duke's other large customers similarly situated, contrary to the Federal Power Act and the Public Utility Regulatcry Laws of South Carolina; (2) under the laws of North Carolina and South Carolina the petitioners have no 1? gal authority to own an interest in the Oconee Muclear station. In response to the renewal of that request and demand in Paragraph 6 of the Petition, the Applicant Duke Power Company again denies same, and for the same reasons.

7. Paragraph 7 of the Petition is denied.

AND FOR A FURTHER ANSWER TO THE PETITION TO IMTERVEME, Applicant Duke Power Company alleges:

1. Ur.it No. 1 of the Ocenee Muclear Station is now scheduled for operaticn around the first of the year, and the capacity and energy to be produced by this unit will'be badly needed in the Applicant's service area at that time. The Appli-cant therefore requests, in the interest of its electric custcmers, including these petitioners, that if the Ccmmission determines

that a hearing on antitrust issues is necessary, that pursuant to Section 105 (c) (8) of the Act, as amended, and the Commisnion's Regulations pursuant to the Act as amended,Section VIII, Appendix A, 10 CFR Part 2, Subsection lo) , the Co.Taission issue to the Applicant Duke Power Company the operating license for Oconee Unit No. 1, conditioned upon the final outcome of the hearing on ar.citrust issues as specified in Section 50.55b of the i Reg ulations .

2. Applicant opposes the Petition because it is overly broad in two crucial respects. First, the petitioners request leave to "become parties for all purposes." Since their Petition j raises only antitrust issues, its request is over-broad and should be limited to Commission antitrust proceedings held pursuant to Section 105(c) of the Atomic Energy Act, as amended, 21 U.S.C.

92135. Second, the Petition at numerous places throughout appears to contemplate consideration and decision by the Commis-sion of issues unrelated to the Commission's consideration of the above-captioned license application or to the Commission's i,~. :i. r"' whethe r Ae. r. l i:2nt's activities under said licc ?? v- :2 9 i

a create 3r maintain a situtation inconcistent with the antitrust l lawa. To the extent that the Petition sucks to raise issues unrelated to said application or said inquiry, it should be denied.

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In not opposing petitioners' intervention -in the proceeding, {

i i Applicant reserves its right to challenge, in the light of '

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govern ing law, the scope of petitioners' partici pation herein ,

includi..g, but not rostricted to, the issues posed, discove ry sought, evidence presented, and any and all other matters arising during the course of the proceeding.

Respectfully submitted, DUKE POWER COMPANY

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l By I .s uy r ( .4 'I William H. Grigg 'g Vice President and General Counsel

! 422 South Church Street

! Charlotte, North Carolina 28201 1

Attorney for Applicant WALD, HARKRADER, NICHOLSON & ROSS By , a fg. h. _ _

Wm. daril.uta Rcss e u$O Keith~S. Watson mn 1320 Nineteenth Street, N. W.

Washington, D. C. 20036 Attorncys for Applicant October 14, 1971 1

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BEFORE THE  ;

i l UNITED STATES ATO 11C ENERGY COMMISSION In t h e !!a t t e r o r )

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D Ui'E Pour.R COMPANY ) Docket Mcs. 50-269

) 50-270 l (0conec "uclear Station, ) 50-287 Units 1, 2 and 3) )

CERTIFICATE OF SERVICE .

4 I hereby certify that copies of the Ceregoing " Answer of Applicant Duke

/Jur Cenpany to .foint ?atition of North Carolina Municipalitics, Statesville al., for Leave to Intervene and Cbtain Antitrust Review" in the captioned l

mat:et have baen served upon the following by deposit in the United States mail. first class or air mail, this 14th day of October,1971:

Mr. Stanley T. Robinson, Jr. Spencer Reedce, E quire Chief, Public Proce dings 3 ranch Spencer Building Office of the Secretary of the Commission Saint Michaels, Maryland 21663

". S. Accute Energy Co:nmission Jack R. Ilarris, Esquira Washington, D. C. 20545 Suite 207, Stimpson-Cagner 31dg.

J. O. Tally, Jr., Esquire Statesville, North Carolina 28677

? 0. Drawer 1660

"ayetteville, North Carolina Dr. W. C. Bell State Planning Task Force

. :::c;;;r P. O. ?c 1?51 State Radiation Protecticn Program Raleigh, North Carolina 27602 l

rt i Cen ! ' .a Mate Ecard of Health Mr. J. 3 caner Manly, Direct r l .a le t t.n . .mr t ti tareltua 27602 State Develop :ent Scard

!!cr r.QIe Reesa A. Hubbard Hampton Of fice Building i Ccunty Supervisor of Oconee County Columbia, South Carolina 29202 i

Walhalla, South Carolina 29621 Algie A. Wells, Esquire, Chairman lir. Joseph B. Knotts, Jr. Atomic Safety and Licensing Board Panel Counsel for AEC Regulatery Staff U.S. Atomic ' Energy C=nission t U. S..Atemic Energy Com=ission Washington, D. C. 20545 i Washington, D. C. 20545 j Mr. Robert Liedquist 4 Antitrust Counsel for AEC Regulatory Staff ,

l U. S. Atomic Energy Commissien d nu dI).

Wn(. Wa'rfic14 Ross i

l Washington, D.C. 20345 Wald, Harkradcr, Nicholson & Res:

Attorneys for Applicant i .,4 a 4 4 -eem.. enam-6

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