ML19317E803

Applicant'S Motion for Protective Orders.Certificate of Svc Encl

ML19317E803
Person / Time
Site:	Oconee, Mcguire, McGuire
Issue date:	07/19/1973
From:	Avery G, Golden T DUKE POWER CO., WALD, HARKRADER & ROSS
To:	US ATOMIC ENERGY COMMISSION (AEC)
References
NUDOCS 7912180992
Download: ML19317E803 (13)

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

) Docket Nos. 0-269A' 50-270A DUKE POWER COMPANY ) , 50-369A (Oconee Units 1, 2 & 3 ) 50-370A McGuire Units 1 & 2) )

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APPLICANT' S MOTION FOR PROTECTIVE ORDERS To the Atomic Safety and Licensing Board:

Duke Power Company (" Applicant") moves the Board for an order limiting the production or use of certain

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documents. The relief specifically sought would permit Applicant to withhold from production all documents relating to (1) negotiations now pending for the acquisition of certain electric power facilities; (2) cost and price estimates made by Applicant in connection with actual acquisitions or those which were considered; and (3) confidential commercial information used by Applicant in its normal business dealings.

It also would permit Applicant to delete from documents to be produced any information relating to sites on which Applicant in the future may cons truct system f acilities. Applicant also seeks to limit opposing counsel from disclosing the contents of certain other documents which refer to or discuss particular individuals.

1/ This motion is made pursuant to Sections 2.730(a) and (b) and

2. 740 (c) of the Commission's Rules of Practice, 10 C.F.R. Part 2.

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Introduction Section 2.740 (c) of the Commission's Rules of Practice provides that upon motion and for good cause shown:

the presiding of ficer may make any order which .

justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: (1) That the discovery not be had; . . . (6) that . . . a trade secret or other confidential research, development, or commercial information not be disclosed or be disclosed only in a designated way . . . .

The determination of such a motion calls for the Board to weigh the Applicant's claims for protection against the need for disclosure.-2/ As is further detailed below, the nature of the information contained in the documents specified clearly constitutes the type of material for which a protective order may be obtained pursuant to Section 2.740 (c) .

Furthermore , these documents do not evidence any anti-competitive action or intent on the part of Appli 72at which would assist opposing counsel in preparing for the hearing in this proceeding. On balance, then, Applicant's claims for protection substantially outweigh any possible need for disclosure, and the relief requested should be granted.

2/ Applicant recognizes that there is no absolute privilege protecting its confidential commerci'l information from disclosure in discovery proceedings. Natta v. Lletz, 405 F.2d 99 (7th Cir.

1968), cert. denied, 395 U.S. 909 (1969); Covey Oil Co. v.

Continental Oil Co., 340 F.2d 993 (10 th Cir. ) , cert. denied, 380 U.S. 964 (1965).

3-The Specific Documents

1. Pending Negotiations Certain documents falling within item 6 (f) relate to the possible acquisition of electric power facilities presently owned by Cannon Mills, the University of North Carolina, and the State of North Carolina (Camp Butner 3/

facilities).

Negotiations in regard to the acquisition of each of these systems are presently pending and any disclosure of the related documents would substantially prejudice Applicant and seriously af fect its ability to negotiate and bargain with these entities .

The documents for the most part relate to Applicant's negotiating strategy, the price and other terms of sale being considerer and other similar utterances in regard to the general process of conducting complex and lengthy negotiations. There is little, if anything, in these documents which could assist the parties to this proceeding in their preparation for the evidentiary hearing. None of the intervenors or other parties hereto are directly involved in the possible sale of the f acilities mentioned. The negligible benefit to intervenors of disclosure is far outweighed by the prejudice to Applicant which might result from such disclosure.

1 3/ These documents have been segregated and numbered for identification as document pages 93,500 through 9 4,690.

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Because of the sensitivity of these documents to Applicant's negotiation posture, it is requested that none of them be produced.

2. Cost and Price Estimates Several documents falling within items 4(e) and 6(f) contrin detailed information indicating the methodology by which Applicant develops an offering price for those electric power facilities which it has acquired or considered acquiring.-4/

Other documents in this category, falling within item 6 (g) ,

indicate such computation for estimating the cost or value of Applicant's facilities which were acquired by others.-5/ Dis-closure of such information would cause irreparable injury in that Applicant's bargaining position in pending or future negotiations for the purchase or sale of facilities would be materially impaired.

For example, depending upon the outcome of pending litigation, Applicant may be forced to sell to High Point, an intervenor in this proceeding, all of its facilities which now are used to serve Applicant's industrial customers in that city.

Disclosure of the means by which Applicant estimates the value of these or similar facilities to city officials or thed: counsel-6/

would clearly disadvantage Applicant in any later negotiation i

involving these facilities.

4/ These documents have been segregated and numbered for identifi-cation as document pages 94,691 through 95,301.

5/ These documents have been segregated and numbered for identifi-cation as document pages 95394 through 95523.

6,/ Tally, Tally and Bouknight, counsel for intervenors in this pro-ceeding, represent the City of High Poinc in the pending litigation between that City and Duke.

There is no information in these documents which would be of use to the parties hereto in preparing for the evidentiary hearing in this proceeding. Indeed, many of the documents reflect only mathematical applications of cost and pricing formulas developed by Duke. Since the application of these formulas are universal to any prospective buy or sell situation, once revealed, their use by Applicant as a bargaining tool is completely destroyed and the company would be severely handicapped in such negotiations. This is especially so in the case of the particular documents relating to the High Point facilities.

For these reasons , Applicant believes the only way to assure nondisclosure of these documents which contain confidential commercial information is to exclude them completely from the production process.

3. Future-Plant Sites Certain documents responsive to item 4(c) contain descriptions of, references to and other information relating to sites on which Applicant in the future may construct system facilities.-7/ The disclosure of such information could impose a substantial barrier to Applicant's ability to negotiate reasonable prices for the acquisition of needed land or right of ways in regard to these facilities. That same information, however, would in no way assist the parties hereto in their preparation for 1

7/ These documents have been segregated and numbered for identifi-cation as document pages 95524 through 95639.

hearing. However, because of their participat!.on in EPIC, the intervenors might be able to use the information on future plant j sites as a competitive tool. Indeed, on similar grounds , EPIC has thus far refused to reveal any information on its future generation sites.

On balance, therefore, Applicant should not be required to produce any information relating to prose;ctive sites, and all references thereto should be deleted.

4. Confidential Business Strategy Four documents contain information concerning Applicant's strategy in conducting certain business transactions.~8/ Three of the documents relate to E.e company's policies concerning the removal of lines owned by other systems due to flooding resulting from construction by Applicant. The documents specifically concern Applicant's negotiations with the Blue Ridge Electric Cooperative for removal of the Cooperative's lines around the Keowee-Toxaway project area. Both the location of the lines to i

be removed and the methodology by which Applicant would reimburse

, the Cooperative for the lines removed are considered.

l This information would not assist the parties to this proceeding in their preparation for the evidentiary hearing. However, similar negotiations for line removals are likely to occur in the future. The pricing methodology and procedural steps outlined in the documents would apply to such negotiations. Therefore, Applicant's future ability to negotiate

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8/ These documents have been segregated and numbered for identifi-ation as document pages 95,302 through 95,306.

and bargain in such a situation would be seriously affected if these documents were disclosed.

The fourth document in this group is an internal memorandum dated November 10, 1970, outlining Applicant's strategy in regard to the negotiation of future wholesale contracts, particularly in light of the possible advent of EPIC.

This information, if disclosed, clearly would be of great advantage to any of Applicant's wholesale customers in their normal business dealings with Applicant; these would include the intervenors in this proceeding and because of their counsel's representation of EPIC, each of Applicant's wholesale customers which is a participant in that organization.

While the document may relate to matters at issue in this proceeding, Applicant believes it would be patently unfair to permit disclosure of the information contained in this memo-randum. It is clear that if Applicant is not required to produce this document, it will avoid giving its wholesale customers a great bargaining advantage. If, however, the Board believes that such action would unduly deprive the parties hereto of informa-tion relevant to the proceeding, it should impose strict limita-tions on counsel's use of the document and specifically provide that its contents shall not be disclosed to anyone, including the intervenors in this proceeding.

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5. Particular Individuals The last group of documents contains references to and descriptions of particular individuals.-9/ These people include both present employees of Applicant, as well as others outside the company. Many of the documents relate to the salaries being earned by individuals who were employed by systems acquired by Applicant. Others express personal views of such persons on matters of local interest. None of these documents will assist the parties hereto in their preparation for the evidentiary hearing.

Their disclosure to others except counsel appearing in the pro-ceeding, however, could be embarrassing to the individuals in-volved.

Because of these f actors , an order should be entered limiting disclosure of these documents to counsel in this pro-ceeding with the additional limitation that no further use or disclosure be made without the prior consent of the Board.

Conclusion Applicant believes it has demonstrated the good cause required by Section 2.740 (c) for the protective orders sought.

To assist the Board in this determination, however, Applicant would be willing,. if the Board so desires, to make the documents 9/ These documents have been segregated and numbered for identifi-cation as document pages 95,307 through 95,393.

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in question available for an in camera inspection.--10/ We leave it to the Board to determine whether such a procedure would be appropriate in this case.

WHEREFORE , Applicant moves the Board for an order directing as follows:

1. All documents (identified as pages 93,500 through 94,690 ) relating to negotiations now pending for the acquisi-tion of electric power facilitien owned by Cannon Mills, the University of North Carolina, and the State of North Carolina at Camp Butner may be withheld and not produced.

2. All documents (identified as pages 94,691 through 95,301 ) relating to Applicant's estimate of the price it offered or would have offered or of the costs of rebuilding or replacing electric power facilities which it has acquired or which it considered acquiring from municipalities, electric cooperatives or other electric utilities , as the same are defined in the Joint Document Request, may be withheld and not produced.

3. All documents (identified as pages 95394 tnrough 95523 ) relating to Applicant's estimate of the cost or value of its facilities which were acquired by others may be withheld and not produced.

10/ In order to preserve Applicant's rights, any document for which it could claim a legal privilege would not be included in such a submission.

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4. All information in documents (identified as pages 95524 through 95639 ) relating to sites on which Applicant in the future may construct system facilities may be deleted.

5. Four documents (identified as pages 95,302 through 95,306 ) containing confidential commercial information may be withheld and not produced.

6. The disclosure of certain documents (identified as pages 95,307 through 95,393 ) containing references to or discussions of specific individuals shall be limited to counsel who have entered an appearance in this proceeding and shall not be introduced in evidence or otherwise used in any phase of this proceeding or otherwise disclosed except on prior applica-tion to this Board upon a showing of good cause and with the opportunity for Applicant to object or otherwise respond thereto.

In the alternative, should disclosure be ordered of the documents itemized in paragraphs (1) through (5) above, Applicant moves for an ord ar strictly limiting such disclosure to counsel who have entered an appearance in this proceeding as of the date of this motion and prohibiting such counsel from the further use or disclosure of these documents, whether in this or any other proceeding or in any other manner, except on prior application to this Board upon a showing of good cause, and with L

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the opportunity for Applicant to object or otherwise respond thereto. Applicant also requests that such order be without preju-dice to Applicant's seeking further relief on the ground that some of the documents in question may be legally privileged or otherwise excluded or subject to a protective order based on the rulings made in this proceeding.

Respectfully submitted, George A. Avery Toni K. Golden Attorneys for Duke Power Company WALD, HARKRADER & ROSS 1320 Nineteenth Street, N.W.

Washington, D. C. 20036 Of Counsel:

William H. Grigg, Esquire William Larry Porter, Esquire Duke Power Company Post Of fice Box 2178 Charlotte, North Carolina 28201 July 19, 1973

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

) Docket Nos. 50-269A, 50-270A DUKE POWER COMPANY ) 50 -2 87A, 50-369A (Oconee Units 1, 2& 3) 50-370A McGuire Units 1 & 2)

CERTIFICATE OF SERVICE I hereby certify that copies of APPLICANT'S MOTION FOR PROTECTIVE ORDERS , dated July 19, 1973, in the above-cap-tioned matter have been served on the following by deposit in the United States mail, first class or air mail, this 19 th day of July, 1973:

Walter W.K. Bennett, Esquire J.O. Tally, Jr., Esquire P. O. Box 185 P.O. Drawer 1660 Pinehurst, North Carolina 28374 Fayetteville, No. Carolina 28302 Joseph F. Tubridy, Esquire Troy B. Connor, Esquire 4100 Cathedral Avenue, N.W. Connor & Knotts Washington, D. C. 20016 1747 Penna. Avenue, N.W.

Washington , D. C. 20006 John B- Farmakides, Esquire

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Atomic Safety and Joseph Rutberg, Esquire Licensing Board Panel Benjamin H. Vogler, Esquire Atomic Energy Commission Antitrust Counsel for Washington, D. C. 20545 AEC Regulatory Staff Atomic Energy Commission Atomic Safety and Washington, D. C. 20545 Licensing Board Panel Atomic Energy Commission Mr. Frank W. Karas, Chief Washington, D. C. 20545 Public Proceedings Branch Office of the Secretary Abraham Braitman, Esquire Of the Commission Special Assistant for Atomic Energy Commission Antitrust Matters Washington, D. C. 20545 Office of Antitrust and Indemnity Joseph Saunders, Esquire Atomic Energy Commission Antitrust Division Washington, D. C. 20545 Department of Justice Washington, D. C. 20530

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William T. Clabault, Esquire J.A. Bouknight, Jr., Esquire David A. Leckie, Esquire David F. Stover, Esquire Antitrust Public Counsel Section Tally , Tally & Bouknight Department of Justice Suite 311 P. O. Box 7513 429 N Street, S.W.

Wasl.ington , D. C. 20044 Washington, D. C. 20024 Wallace E. Brand, Esquire Antitrust Public Counsel Section '

Department of Justice P. O. Box 7513 Washington, D. C. 20044 Wald, Harkrader & Ross By:

Attorneys for Duke Power Company 1320 Nineteenth Street, N. W.

Washington, D. C. 20036