ML19317E310
| ML19317E310 | |
| Person / Time | |
|---|---|
| Site: | Oconee, Mcguire, McGuire  |
| Issue date: | 02/02/1973 |
| From: | Brand W, Clabault W, Leckie D JUSTICE, DEPT. OF |
| To: | |
| References | |
| NUDOCS 7912170537 | |
| Download: ML19317E310 (11) | |
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UNITED STATES OF ANERICA BEFORE THE ATOMIC ENERGY COMMISSION In the Matter of
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DUKE POWER COMPANY
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Docket Nos.JiO-269Af 50-270A,
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50-26/A, 50-369A, (Oconee Units 1, 2, and 3 50-370A McGuire Units 1 and 2)
NEW PROPOSED LIST OF SUBISSUES OF FACT SUBMITTED BY THE DEPARTMENT OF JUSTICE The Department of Justice hereby submits its new proposed list of subissues of fact to be tried in the above-captioned proceeding, pursuant to the Board's direction in Prehearing Conference Order 3, dated January 24, 1973.
We must note preliminarily that the discovery secured from Applicant Duke Power Company to date (4284 pages in all) has been limited, with minor exception, to response to the asterisked items in the First Joint Request for Documents of September 5, 1972,--i.e., data to be used in preparing an engineering study c::amining and comparing the possible alternatives for bulk power supply of Applicant's competitors and potential competitors.
This data, while critical to the timely preparation of our study, is not the detailed sort of information of Applicant's conduct toward smaller electric utilities in the Piedmont Carolinas and its comparative relationship with other large, interconnected systems that would permit framing subissues of fact herein with more specificity.
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It is our position that certain of the issues set out in the Third Draft Joint Recital previously accepted by the Board for purposes of determining the relevancy of. discovery (Order of September 20, 1972), are clearly not relevant to the Board 's determination of whether Applicant's activities under the licenses applied for would create or maintain a situation incon-sistent with the antitrust laws.
Elimination of those issues would reduce the scope both of discovery and the evidentiary hearing.
Other of the issues earlier recited appear to us readily resolvable by stipulation--they should not require detailed discovery or extensive hearing time.
We have suggested the possibility of such stipulation to counsel for Applicant.
His response was:
"You put down on paper what you want stipulated
and we will consider it.
We have a positive attitude.
We are willing to reach a stipulation on this procedure."
While this could be a feasible procedure were discovery.
substantially more complete, it is simply not practicable, given the limited information Applicant has so far produced, for the Department to prepare proposed stipulations in sufficient detail concerning relevant matters of fact (with a few exceptions',
as noted below).
If discovery is to be expedited by reducing its scope, we believe counsel for Applicant must engage now to discuss with us in some detail the subjects on which stipulation may be possible and how draft stipulations may be prepared 2
without prior extensive discovery.
If the Board considers such a procedure appropriate, it could be helpful were one or
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more of its members to mediate such a discussion.
The Department therefore proposes the following issues and subissues of fact as relevant for trial in.this proceeding, in light of the Board's comments and directions and the limited discovery already secured.
The issues we believe susceptible to resolution by stipulation without prior extensive discovery are specifically noted.
1.
Does Applicant have substantial monopoly power in e?.2ctric power supply in one or more relevant markets?
2.
What are the relevant product and geographic markets for antitrust analysis in this proceeding?
[ Stipulation should be possible on the product markets; the Department will propose
' one shortly.]
3.
What percentage of the generation in the relevant geographic market (s) does Applicant own or control?
[ Applicant's counsel has indicated that stipulation may be possible here with regard to generation located in a defined geographic ar' a.]
e 4.
What percentag'e of the high-voltage and/or extra-high-voltage transmission in the relevant geographic market (s) does Applicant own or control?
[As with generation, stipulation may be posrible concerning transmission located in a defined geogra-phic area.]
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5.
Is Applicant's control over generation and/or trans-mission a source of its alleged monopoly power in electric power supply in one or more relevant markets?
[ Stipulation may be possible concerning basic concepts of electric power supply.]
6.
Can Applicant use its alleged monopoly power over generation and/or transmission to retain and extend its alleged monopoly power in retail distribution markets or submarkets?
7.
Has Applicant monopolized electric power supply in relevant markets by abusing its alleged control over generation and/or transmission to retain and extend its alleged monopoly pover?
8.
Has Applicant attempted to prevent the establishment of alternative bulk power facilities or systems, including federal hydroelectric projects, or to cause the establishment of such facilities or systems to be on such conditions as to allow Applicant to control or influence the design or operation thereof?
[ Applicant's counsel will consider stipulating to particular facts as may be detailed by the Department in this regard.]
9.
Has Applicant, through practices not economically inevitable, prevented arrangements which would. allow municipal and cooperative systems to utilize Applicant's transmission facilities to obtain access to coordination of generation with other utilities?
10.
Has Applicant unnecessarily refused coordination of generation between Applicant and such syste=s?
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Has Applicant erected unnatural barriers to exclude competition by engaging in coordination of generation with others while denying participation to smaller systems?
[Appli-cant's counsel will consider stipulating to the nature and effect of terms of Applicant's agreements with other systems.~)
12.
Was Applicant's abandonment of the CARVA pool and entry into new arrangements for coordinated development and other forms of power pooling with other large utility systems in its area such as Carolina Pcwer'& Light Company, South Carolina Electric & Gas Company, etc., done with the purpose or effect of placing small utility systems in the Piedmont Carolinas at a complete disadvantag2?
13.
Has Applicant engaged in any other activities, including litigation and attempts to influence government action,
' which may fonn part of a monopolization scheme or a combination to monopolize--or evidence an intent of Applicant to rescrain competition or show the anticompetitive character of Applicant's course of conduct?
14.
Would an arrangement providing for equal percentage of reserves as a percentage of peak load between Applicant and some or all tinicipals and cooperatives in its area be econcti-cally or techr.ically unsound or unfair to Applicant or its customers or be unlawful under the laws of the States of North and South Carolina or the Federal Power Act?
[ Applicant's counsel will study the possibility of stipulating that such an
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arrangement would not be unfair or unlawful.]
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15.
If Applicant has entered into equal-percentage reserve sharing arrangements with others, does Applicant discriminate against municipals and cooperatives in its area when it refuses to do so with them?
[ Applicant's counsel will consider stipu-lating as to the nature and effect of Applicant's arrangements with other utilities.]
16.
23 a market structure requiring purchase by a small system (such as one of the intervenors) of bulk power from its vertically integrated retail competitor conducive to effective retail competition?
17.
Has Applicant imposed a price squeeze upon its whole-sale customers-retail competitors?
18.
Is access to.the full benefits of large-scale genera-tion (including the nuclear units here at. issue) and transmission
' afforded the intervenors and Applicant's other municipal customers through Applicant's wholesale rate schedules?
19.
If Applicant's wholesale rate schedules do not afford such access, are alternatives offering comparable benefits available to the intervenors and Applicant's other municipal cus tomers ?
20.
What is the nature and extent of existing and/or potential competition in any of the relevant markets?
21.
What is the effect of federal, state and local law, and other government regulaticn on existing and/or potential competition in any of the relevant markets?
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22.
What effect has the alleged absence of access to coordination had on the ability of small electric systems to compete effectively against Applicant in any of the relevant markets over the long term?
23.
Were any small systems that failed to survive able to secure bulk power supplies to retain and/or increase their shares of any relevant market?
24.
How will Applicant's activities under the licenses applied for in installing large nuclear units and' marketing power from them in competition with small sys~ ems affect the existing competitive situation in Applicant's area?
25.
Will power from the Oconee and McGuire Units be marketed as part of the cutput of Applicant's bulk power supply system or will it be marketed separately from other power generated by Applicant?
[ Applicant has agreed to consider stipulating that power from the Oconee and McGuire Units will be marketed as part of the output of its bulk power supply system.]
26.
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 cutage of the Oconce and/or McGuire Units and vice versa?
[ Applicant's counsel has agreed to consider stipulating that the ancuer to this question is "yes."]
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27.
Was the economic feasibility of the Oconee and McGuire Units determined by planning on their integration and operation as part of Applicant's bulk power supply system?
[ Applicant's counsel has agreed to consider stipulating a "yes" answer to this question.]
- 28. Is the economic feasibility of the Oconee and McGuire Units dependent on their coordination with units of other utilities or dependent on coordination of Applicant's load growth with load growth of other utilities?
[ Applicant's counsel has agreed to consider stipulating a "yes" answer to this ques tion.~]
29.
Is the feasibility of installing and marketing large unit nuclear generation in the Piedmont Carolinas dependent on obtaining such coordination arrangements?
[ Applicant's counsel
, has agreed to consider stipulating a "yes" answer to this question.]
30.
Does Applicant's installation of the Oconee and McGuire Units continue a situation in which Applicant can market 1cw cost power from large units and preclude its competi-tors from doing so?
31.
To what extent will the Oconee and McGuire Units afford Applicant advantages not available from other kinds of generation?
32.
To what extent in the near term and the long term will nuclear generation comprise the base load capacity in Applicant's bulk power supply system?
33.
Assuming a finding that Applicant's activities under the licenses applied for would create or maintain a situacion 8
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inconsistent with the antitrust laws, could the situation be corrected in whole or in part by license conditions making avail-able to the intervenors and other small electric systems in Duke 's area any or all of 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 services to transmit this power on a nondiscriminatory basis; (c) the necessary transmission. services to transmit coordinating power and energy on a nondiscriminatory basis based only on fair compensation to Applicant and technical feasibility of the arrangement which could allow small systems to install their own large units or market power from them.
(d) other forms of coordinated development other thcn (c) above uhich would give intervenors and other small systems (1) the opportunity to construct and operate large i
nuclear generating units--such as compulsory purchases of power from smaller systems on a program of staggered development; and (2) the opportunity to construct or use l
a large scale transmission system ancillary to the foregoing l
--such as by joint transmission arrangements or wheeling; i
l (e) emergency power and maintenance power on bases similar to those utilized in its arrangements with other adjacent utilities or that ordered by the Federal Power
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Commission in Gainesville Utilities Department v. Florida Power Cornoraticn; 9
l (f) other forms of coordinating arrangements; and (g) specified coordination terms to accomplish the foregoing?
The above list reflects minor changes in organization and language and, more important, the deletion of two kinds of issues from the Third Draft Joint Recital:
(1) issues of law (which were not called for here) and (2) issues not relevant to the findings the Board must make in this proceeding.
In the first category are Third Draft Joint Recital issues I, I-1, parts o f I-6, 8, 10, 17, and 18 ; II, par t o f II-1, II-9, III, part of III-1, and III-2 and 3.
Issues contained in the Joint Recital which the Department believes irrelevant to this proceeding are I-14,15, and 16 and III-4 and 5.
The basic legal question herein is whether Applicant's activities under the licenses applied for will create or maintain a situation inconsistent with the antitrust laws.
No defense to a charge of antitrust violation or inconsistency can possibly ficw frca a showing that activities of others, including perhaps Applicant's victims, might raise antitrust issues.
Kie fer-Stewart Co. v. Joseoh E. Seagram & Sons. Inc., 340 U.S. 211 (1931).
Likewise, any tax or financing or other ccmpetitive advantages which may be lawfully enjoyed by municipal or coopera-tive utilities do not in any way operate to excuse anticompeti-t{ve conduct en Applicant's part.
Continental Bakinz Co., v.
Utah Pie Co., 386 U.S. 685,i702 (1967)~; rehearing denied 387 U.S. 949.
That some municipals and cooperatives may have 10
survived or may even be relatively prosperous despite all of Applicant's efforts cannot save its anticompetitive conduct from antitrust sanction.
Respectfully submitted,
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- . <--vi DAVID A.. LECKIE WALLACE E. BRMD WILLIAM T. CLABAULT Attorneys, Antitrust Division Department of Justice February 2,1973 Washin;; ton, D. C.
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D*D D ' T hf f e e Ju o.fl . S _ n frt _a UNITED STATES OF AMERICA BEFORE THE ATOMIC ENERGY COMMISSION In the Matter of ) ) DUKE POIER COMPANY ) Docket Nos. 50-269A, 50-270A, ) 50-287A, 50-369A, (Oconee Units 1, 2, and 3 ) 50-370A McGuire Units 1 and 2) ) CERTIFICATE OF SERVICE I hereby certify that copies of NEW PROPOSED LIST OF SUBISSUES OF FACT SUBMITTED BY THE DEPARTIENT OF JUSTICE, dated February 2, 1973, in the above captioned matter have been served on the follcwing by deposit in the United States mail, first class or air mail, this 2nd day of February,1973: Honorable Walter W. K. Bennett William Warfield Ress, Esquire Chcirman, Atcmic Safety and George A. Avery, Esquire Licensing Beard Keith Watson, Esquire Post Office Box 185 Toni K. Golden, Esquire Pinehurst, North Carolina 2S374 Wald, Harkrader & Ross 1320 Mineteenth Street, N.W. Honorable Joseph F. Tubridy Washington, D. C. 20036 4100 Cathedral Avenue, N.W. Washington, D. C. 20016 W. L. Porter, Esquire Duke Power Company Honorable John B. Farmakides 422 South Church Street Atcmic Safety and Licensing ' Charlotte, North Carolina 28201 Board Panel U. S. Atomic Energy Commission J. O. Tally, Jr., Esquire Washington, D. C. 20545 J. A. Ecuknight, Jr., Esquire Tally, Tally & Ecuknight Carl Horn, Esquire Post Office Drawer 1660 President, Duke Power Company Fayetteville, North Carolina 28302 422 South Church Street Charlotte, North Carolina 28201 Troy B. Conner, Esquire Reid & Priest William H. Grigg, Esquire 1701 K S tree t, N.W. Vice President and General Washington, D. C. 20006 Counsel Duke Power Company Joseph Rutberg, Esquire 422 South Church Street Benjamin H. Vogler, Esquire Charlotte, North Carolina 28201 Antitrust Counsel for AEC Regulatory Staff U. S. Atcmic Energy Ccr.niwier. Washington, D. C. 20545 L
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'~d l h em M m A X hl= Mr. Abraham Braitman, Chief Mr. Frank W. Karas, Chief Office of Antitrust and Public Proceedings Branch Indemnity Office of the Secretary of U. S. Atomic Energy Cocsission the Commission Washington, D. C. ' 20545 U. S. Atomic Energy Commission Washington, D. C. 20545 David Stover, Esquire Tally, Tally & Bouknight Chairman, Atomic Safety and 429 N Street, S.W. Licensing Appeals Board Washington, D. C. 20024 U. S. Atomic Energy Co:tmission Washington, D. C. 20545 Atomic Safety and Licensing Board Panel U. S. Atomic Energy Commission Washington, D. C. 20545 ,,[^ u... ', f
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DAVID A. LECKIE Attorney, Antitrust Divicicn Department of Justice Washington, D. C. 20530 l 6 e
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