ML19317E129

Answer of AEC to Motion of Piedmont Cities Power Supply,Inc for Order to Certify ASLB Denial of Right of Piedmont Cities Power Supply,Inc to Participate in Proceeding.Affirmative Relief Requested by Piedmont Should Be Denied

ML19317E129
Person / Time
Site:	Oconee
Issue date:	09/15/1967
From:	Engelhardt T US ATOMIC ENERGY COMMISSION (AEC)
To:	US ATOMIC ENERGY COMMISSION (AEC)
References
NUDOCS 7912130840
Download: ML19317E129 (13)

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In the Matter of

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DUKE POWER COMPANY

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Docket Nos. 50-269

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50-270 (Oconee Nuclear Station,

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50-287 91 Units 1, 2 and 3)

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DOCIETEO ANSWER OF T.lE AEC REGULATORY STAFF Of N

3 TO MOTION OF PIEDMONT CITIES POWER SUPPLY, INC. 2 SEP151967 > 1 FOR AN ORDER IO CERTIFY SAFETI AND LICENSING BOARD'S DENIAL OF RIGHT OF PIELMONT 0$fn'$.$Y CITIES POWER SUPPLY, INC, IO an:o PARTICIPATE IN THIS PROCEEDING 9

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Background

On August 11, 1967, Piedmont Cities Power Supply, Inc. (Piedmont) 1/

and eleven Piedmont Electric Cities filed a timely Joint Petition for Leave to Intervene (joint petition) in.this proceeding pursuant to 5 2.714 of the Commission's " Rules of Practice". The joint petition alleged, that Piedmont is a corporation not for profit organized in North Carolina for the purpose of acquiring an undivided interest in.the Oconee Nuclear Station proposed to be constructed by the Duke Powe-Company (Duke),

I and that Piedmont seeks to become a customer of, and to purchase electric j

energy from Duke and to sell it to the eleven Piedmont Electric Cities 1/ City of Statesville, City of High Point, City of Lexington, City of Monroe, City'of Shelby, City of Albemarle, Town of Cornelius,, Town i

of Drexel, hwn of Granite Falla, Town of Newton and Town of Lincolnton.

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at lower cost chan such power is presently available from Duke. The joint petition also alleged that the Commission is without jurisdiction to grant the construction permits and licenses sought by Duke under 5 104 b. of the Atomic Energy Act of 1954, as amended, (Act) because the proposed Oconee Nuclear Station, Units 1, 2 and 3 are not experi-mental in character, and do not constitute a research and development project, but are commercial activities that should be licensed, if at all, only pursuant to 5 103 of the Act.

In answers to the joint petition filed on August 14,1967, and August 25, 1967, respectively, Duke and the regulatory staff opposed the granting of the joint petition essentially on the grounds that the petitioners had not stated an interest in the proceeding which would permit intervention, that they did not have standing or interest to question the jurisdiction of the Commission; and that until the Commission made a finding that facilities of the type proposed to be constructed by Duke had practical value for industrial and commercial purposes, they could only be licensed pursuant to I: 104 b of the Act.

On August 28, 1967, the atomic safety and licensing board (board) issued an order denying the intervention of Piedmont and granting intervention to the eleven Piedmont Cities (intervenors). As the basis for granting such intervention, the board held, as a matter of law, that "any person whose interest may be affected" within the ' meaning of

. $ 189 a. of the Act included the intervenors. The board stated that l

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1 3-the courts have ruled that economic interests are sufficient basis for intervention in regulatory proceedings and since the intervenors are existing customers of Duke they have sufficient interest to intervene in this proceeding.. The board denied Piedmont status as an intervenor on the grounds that it did not have e ch an economic interest but sought only to acquire an interest.

In a " Motion Requesting Commission To Have Certified To It Question By Atomic Safety and Licensing Board" filed with the Commission on '

August 29, 1967, the regulatory staff moved that the Commission direct the board to certify to it the question of "Whether the petition to intervene filed by the petitioners (Piedmont and the intervenors] herein should be granted". This motion was. filed to provide the Commission with an opportunity to reconcile diametrically opposed decisions on the same intervention issue decided - as a matter of law by the board in this proceeding and the board in the Vermont Yankee proceeding. As grounds for its motion the regulatory staff stated its view that persons professing an economic interest which the Commission has no jurisdiction to consider under 5 104 b. of'the Act have no standing to intervene and that the board erred in its legal. interpretation of applicable statutory and regulatory provisions in admitting the intervenors.

On September 5,.1967, Piedmont filed a 'tbtion for an Order to l

Certify Atomic Safety and Licensing Board's Denial of Right of Piedmont Cities Power Supply, Inc. To Participate By Intervention In This i

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Proceeding".

The stated bases for this motion are that the intervenors have already shown or will show in this proceeding that the Commission has found many times in its licensing actions that the pressurized water type of reactor proposed to be constructed by Duke has practical value for commercial use; that consequently the Commission is without jurisdiction to grant the Duke applications for research and development licenses, and that they must be dismissed; that Piedmont intends to file a competing application for a license for,0conee Nuclear Station, Units 1, 2 and 3; and that Piedmont's interests may be affected as a result of the Commission's ultimate finding of jurisdictional fact as to whether the reactors proposed to be constructed by Duke have practical value for commercial use.

In its motion Piedmont requested that the Commission direct the board to certify the board's order denying Piedmont's petition for leave to intervene, and that upon certification, that order be l

reversed.

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l Piedmont Has Not Demonstrated an Interest l

In this Proceeding Which Would Permit Intervention The law of standing to intervene in pr'oceedings subjet to the 4

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Administrative Procedure Act has been the subject of a long line of

'I 2/ While*it is not entirely clear whether the motion was made by the intervenors jointly with Piedmont, the staff has dealt with the motion -

i as if made by Piedmont alone. The staff has elected not to object to I

the action on the procedural grounds that a person who is not a party to a proceeding has no right to file a motion.

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3_/ 5 U.S.C. j 551 et. seq.

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judicial decisions. A recurrent theme of these decisions is that the agencies and the courts must look to the intent of Congress as expressed in the statutory scheme governing the substantive responsibility of each agency to determine what third parties may be admitted to a par:ticular.

proceeding within that scheme. The leading case on third parcy partici-il pation in such proceedings is F.C.C. v. Sanders Brothers Radio Station.

In holding that a competing radio station could, in accordance with

$ 402(b)(2) of the Federal Communications Act, appeal a decision of the Federal Communications Commission granting a license, the Supreme Court i

stated that

'tongress had some purpose in enacting $ 402(b)(2).

j It may have been of the opinion that one likely j

to be financially injured by the issuance of a i

license would be the only person having a suffi-cient interest to bring to the attention of the appellate court errors of law in the action of the Commission in granting the license.

It is within the power of Congress to confer such l.

standing to prosecute an appeal."

i Many other cases follow Sanders in attempting to determine the intent of Congress with respect to. participation by third parties in a particular j

agency proceeding. For example, in National Coal Association v. F.P.C.,

l' 191 F. 2d 462 (1951), the court found that under 519(b) of the Natural i

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0 Gas Act, representatives of the coal induttry and unions were competitors t

I having standing to intervene in a case involving the granting of a t

4/ 309 U.S. 470 (1940) 5,/ 15 U.S.C. I 171 et, seq.

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6-certificate of public convenience and necessity for a natural gas pipe-kl line.

Section 19(b) specifies that interested parties includes competi-tors.

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In its decision, the Court of Appeals of the District of Columbia Circuit stated as the basis for its decision:

" Congress was concerned with, and wished the Commission to consider, 'the effect of con-struction and extension (of natural gas pipelines] upon the interests of producers of competing fuels and competitive trans-portation interests'. The source of such concern was congressional recognition that the market for coal was a shrinking one and that displacement of it.by nat' ural gas would create problema directly affecting both the coal industry and the railroads which transported coal -- problems which would at least require that such competitors be. heard upon a show-ing of injury to them?

Similarly, in Scenic Hudson Preservation Conference v.

F.P.C., 354 F.

2d 608, (2nd C'ir.1965), the court held that in a proceeding under the 2/

Federal Power Act (FPA) for granting of authority to construct a pumped storage hydroelectric project, conservationist groups had the right to participate in the proceeding and appeal the matter.

It held that i 313(b) of the FPA applied to such groups in view of conservation 6/ 15 U.S.C. S 717(n) 1/ 16 U.S.C. $ 825 et. seq.

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. 9 matters to be considered by the Commission in such a proceeding.

Thus it is seen that participation by third parties in regulatory proceedings depends upon the statutory scheme enacted by Congress to govern matters to be regulated by an agency and upon the Congressional int =/t expressed therein or implied therefrom.

In this proceeding, the affected interests alleged by Piedmont are economic. Essentially, Piedmont alleges that its economic interests would be adversely affected by the granting of licenses to Duke in the form proposed.

l All participation by third parties in AEC licensing hearings is governed by 5 189 a. of the Act which states that in any proceeding involving licensing "...any person whose interest may be affected by the proceeding..." shall be admitted as'a party.

For Piedmont to prevail it must show that is has an interest which may be affected by this

$ 104 b. proceeding.

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The regulatory authority of the Commission in a proceeding on an i

i application for a construction permit pursrant to i 104 b, of the Act 1

in confined to matters of common defense and security and radiological health and safety. This is confirmed by a reading of the terms of I

i 8,/ See also Scripps-Howard Radio v.' F.C.C., 316 U.S. 4 (1942) (Federal Communications Act); State of Washington Department of Came v. F.P.C.,

j 207 F. 2d 391 (9th Cir.1953) (Federal Power Act); U.S. v. Public g

Utilities Commission of D.C.,151 F. 2d 609 (D.C. Cir.1945) (D.C.

Code); Reade v. Ewing, 205 F. 2d 630 (2d Cir.1953) (Federal Food, Drug and Cosmetic Act); American President Lines v. Federcl Maritime Board,112 F. Supp. 346 (D.D.C.1953) CNerchant Marine Act).

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t e $$ 104 and 189 of the Act and by consistent decisions in Commission regulatory proceedings.

Petitions for leave to intervene and other procedures which have attempted to raise questions in Commission cases outside the scope of the proceedings have been uniformly rejected. See Matter or Jorsey Central Power and Light Company, 2 AEC 446, 447 (consid-eration of thermal effects excluded); Matter of Niagara Mohawk Power Corporation, Docket No. 50-220, Initial Decision, pp. 11-12, April 1, 1965, 3 AEC (consideration of whether grant of a con-struction permit constituted support of segregation excluded);

j Matter of Consolidated Edison Company of New York. Inc., Docket i

No. 50-3, Memorandum and Order, November 24, 1965, 3 AEC (consideration of thermal effects excluded); Matter of Wisconsin Michigan Power Company, Docket No. 50-266, Order Denying Interven-tion, June 20, 1967, 3 AEC (consideration of aesthetic and l

f recreational and ladd use values of lakeshore environs excluded).

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,f Since Piedmont's stated interest in this proceeding does not ti i

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relate to mattera ' involving radiological health and safety or common hp defense and security, and involves only matters which are not f

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pertinent to this proceeding under 5 104 b.,

it does not have

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standing to participate in this proceeding.

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III The Proceeding is Properly Considered Under i 104 b of the Act' I

In its motion Piedmont argues that the Commiss.on by reason of various licensing actions prior to the filing of the Duke application l

had found that the pressurized water type reactor, although labelled

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research and development facilities, had practical value and that such' I

prior actions on the part of the Commission constitute in law a finding i

of the practical value of the pressurized water type of reactor for commercial use.

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This argument fails to. establish any LLanding on the part of Piedmont to intervene in this proceeding.

It merely raises once again the basic contentions of the intervenors that the Commission has no authority to issue licenses under 5 104 b. of the Act for the l

facilities proposed to be constructed and operated by Duke.

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As the Commission stated in its'Keuorandum and Order", dated j

September 8, 1967, in this proceeding:

f "From the pattern established by the Act for l

.the licensing of utilization facilities, Section 104 b. is the appropri.ste section for the licensing of facilities of the type l

covered by this application...The licensing i

authority under Section 103 is not appropriate l

for this application."

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IV The Filing of a Competing Application Confers Upon Piedmont No Basis for Intervention In This Proceeding In its motion Piedmont stated that it would file on or before September 12, 1967 a " competing application" for licenses for Oconee Nuclear Station, Units 1 and 2 and would offer the competing application in evidence in this proceeding. On September 12, 1967, this so-called

" competing application" was tendered to the Commission. At the reconvened hearing in this proceeding on September 12, 1967, the i

intervenors offered the " competing application" in evidence. The board sustained the objections of Duke and the regulatory staff to the receipt of this evidence and rejected it.

It is the apparent premise of Piedmont that by filing a "com-peting application" for the Duke facilities that Piedmont will achieve I

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the status of a " person whose interest may be affected by the proceed-i ing" under 5 189 of the Act and thus be permitted to intervene in this proceeding.

Section 182 d. of the Act provides tha't

'The Commission in issuing any license for a utilization or production facility for the j

generation of commercial power under section 103, shall give preferred consideration to l

applications for such facilities which will l

be located in high cost power areas in the United States if these are conflicting l

l applications for a limited opportunity for i

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such license. Where euch conflicting appli-cations resulting from limited opportunity for such license include those submitted by public or cooperative bodies such applications shall be given preferred consideration."

The language of 5 182 d. of the Act is clear on its face that the concept of competing or' conflicting applications is to be con-sidered only where licensing under 5 103 of the Act is involved.

As noted above, the Duke applications involve licensing under

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5 104 b, of the Act and not 5 103. The Act does not make any provision for the treatment of conflicting applications with respect to licensing under 5 104 b. of the Act.

In any event, the legislative history of 55 182 d.and 103 of the Act indicates that the concept of conflicting applications.for facility licenses was developed in order to deal with the then envisioned potential problem of a shortage of special nuclear material. In discussing this matter while the Act was being con-sidered by Congress, the then Chairman of the Joint Committee on Atomic Energy, Representative Cole, stated that:

"...There is only one development which might

. result in the Commission's denying a license for the commercial use of'these facilities.

That is very, very remote. This would be only in the event that there is a scarcity of special nuclear material to the point where we cannot afford to allow it to be used for non-military purposes... That is the only possible situation which could result in a possible selection of applicants, for this material...n 8,/

8/ 100 Congressional Record 11023 (Daily Edition); III Leg. Hist. 2875.,

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. A similar explanation of the provision of S 182 d. was given by Representative. Prices! uring debates on the Act.1b d

1 In summary, a conflicting application is significant only in connection with licensing under 5103 of the Act; since this pro-ceeding involves 5104 b. of the Act, the submittal of a conflicting application must be considered aa irrelevant to this proceeding.

The mere submission of a " competing application" cannot be considered as giving Piedmont any standing 'to intervene in this proceeding.

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100 Congressional Record 11033 (Daily Edition); III Leg. Hist. 2885.

10,/ During the hearing the intervenors argued that the provisions of the Act relating to "non-exclusive" licenses gave the intervenors the right to "a fair participation in the license" provided they were willing to pay a fair share of the investment and operating costs (Hearing Transcript pp. 220-222). On the basis of this l

argument, it must be presumed that Piedmont and the intervenors l

interpret $ 103 b. of the Act to grant such a right.

Section 103 b. provides in pertinent part that "The Commission shall issue such licenses (commercial licenses under j 103] on a non-exclusive basis to persons applying therefore..." The term "non-exclusive" license as used in the Act is not intended to grant the rights argued by the intervenors. The purpose of

$ 103 b. of the Act as found in its legislative history is that it was intended to mean only that the granting of a license under 5 103 of the Act to one applicant in a particular geo-graphic area would not confer upon that applicant any exclusive right to a license in that area.

(See Hearings on S. 3323 and H.R. 8862, "Io Amend the Atomic Energy Act of 1946", before the Joint Committee on Atomic Energy, 83rd Cong., 2nd Sess., p. 644.)

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l CONCLUSIO_N I

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The regulatory staff has no objection to the Commission directing the board to certify to the Commission its ruling denying Piedmont's petition for leave to intervene. For the retsons stated herein,.

however, the affirmative relief requested by Piedmont (i.e., that the order of the board denying Piedmont's petition to intervene be.

reversed) should be denied.

Respectfully submitted, i

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f._ j f Thomas F. Engelhardt Counsci AEC Regulstory Staff Dated at Bethesda, Maryland this 15th day of September,1967.

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