ML19317G494

Forwards Notice of Receipt of Atty General Advice & Time for Filing Petitions to Intervene on Antitrust Matters. Atty General Advice Encl

ML19317G494
Person / Time
Site:	Crystal River
Issue date:	02/15/1972
From:	Mccool W US ATOMIC ENERGY COMMISSION (AEC)
To:	OFFICE OF THE FEDERAL REGISTER
Shared Package
ML19317G492	List: ML19317G491 ML19317G494
References
NUDOCS 8003180777
Download: ML19317G494 (9)

Text

_,_

.m

.\\)

os,e k UNITED STATES p

ATOMIC ENERGY COMMISSION j

%, " /

W ASH;NGTON, O C. 20547 February 15, 1972 Director.

Office of the Federal Register National Archives & Records Service c..

Wachington, D. C. 20408

[,_;,__,

j

Dear Sir:

Attached for publication in the Federal Register are an original and two certified copies of a document entitled:

FI4RIDA POWER CORPORATION Docket No. 50-302A NOTICE OF RECEIFT OF ATTORNEY GENERAL'S ADVICE AND TI?2 FOR FILING OF PETITIONS TO INTERVENE ON ANTITRUST MATTERS Publication of the above document at the earliest possible date nuld be appreciated.

Sincerely yours, 1

W. B. McCool Secretary of the Co=:nission

Enclosures:

Original and 2 certified copics fDocket-Clerk (Dir, of Reg.)

bec:

Pdfic Information

.?

Robc.; Li;dquiet, C& 5, g4 [//Ll t

Abrahee^ratt=an, digt/

g Congressional Liaison.

Joseph J. Saunders, Dept. of Justice Public Proceedings Branch -(SECY) l EGedW%d CT Files : (SECY)

.8 00s iso 777

i h. ' 'n m

q;,.

4.-

e 4

, x s

4'-

.c r,.

ATOMIC ENERGY, COMMISSION

--DOCKET NO.' 50-302A f

c FLORIDA

POWER CORPORATION y

-['

1 oNOTICE OF RECEIPT OF-ATTORNEY GENERAL'S ADVICE AND TIME l

FOR' FILING 0F PETITIONS TO INTERVENE ON 'ANTIT'lVST' MATTERS-

.x s.

.)?

'~

- lThe Comission'.has received, pursuant to section 105c of the Atomic

~

?EnergyLAct of;1954, as a' mended, a letter of advice from the-Attorney 1

[

' General of the' United States, date'd February 11, 1972, a copy of which is

' attached as'A' pend'ix A..

p

q Any person whose interest may be affected by this proceeding'may, pursuant to section 2.714 of the Commission's " Rules of Practice," 10'CFR Part 2, file a. petition for leave to intervene and request a hearing on the anti-

" trust aspects of the application.' Petitions for leave to intervene and requests.for hearing shall be filed within thirty (30)-days after publi-

-r cation of this' notice in' the' FEDERAL REGISTER, either-(1) by delivery to

. the AEC Public Document Room at '1717 H Street, N. W., Washington, D. C.,

ory (2)Lby mail _ oritelegram. addressed to Lthe. Secretary, U. S. Atomic Energy

. Commission,1 ashingtion',-D. C.

20545, Attn: Chief, Public Proceedings W

~

~:

Branch.-

i FOR THE ATOMIC ENERGY COMMISSION-a

~

.:n, a

s Lyall. Johnson, Director.-

' Divisioniof State and:

o Licensee Relations

'T a

.f w

'L 2

1 w

^ '

t,

" ' ' ^ ~.,,.a A

s s

, ' _ jih./% ~ y,[ 1s:

q[

. n.

E s

1:

M As."pO -

. x;p H 3

,pr

- 4

- - a.; 4,

.,4 ni, a...-- -. -

~+- -

+ -

y

' - G.;

February 11, 1972

-~ APPENDIX "A"-

Florida Power Corporation Crystal River Nuclear Generating Plant, Unit 3, AEC Docket No. 50-302 Department of Justice File 60-415-38 You'have requested our. advice pursuant to the pro-visions of Section 105 of the Atomic Energy Act of 1954, as recently ameaded by P.L.91-560 (December 19, 1970),

in _ regard to the above. cited application.

Introduction The Crystal River No. 3 unit, an 825 ne nuclear unit, will-be ' Applicant's first nuclear generating unit.

It is to be located at Florida Power Corporation's Crystal River Generating: Station located'in Western Citrus County, Flc rida where -it presently.has two fossil fuel units.

A hearing' on -its application for operating license was

requested onl June 2,1971 by the. Gainesville Utilities

- Department pursuant to ;the-provisions 'of Section 105c(3) of :the Atomic Energy Act of 1954, as amended.

~

Aonlicanti l Applicant' is one of three major inde lintegrated electric-utilities in Florida; pendent vertically the other two are the Florida _ Power and Light Company serving in southern and ' east _ coast Florida, and: the' Tampa Electric

Companyiserving in metropolitan Tampa and the surrounding farea.E Applicant serves central and west coast ' areas 'of

a

" f '..

- u a

s.

f g

J m

a f'

f g

y q-n-r'-

? Florida, in St. Petersburg and to the north, having a total service area in excess of 20,000 sque e' miles.

.0ther major systems in Florida include the Gulf Power-Company serving the Florida ~ Panhandle (a subsidiary of the Southern Comoany system which extends over Georgia and portions of' Alabama and Mississippi) and the large municipal systems in the Cities of Jacksonville and Orlando.

Applicant's 1970 peak load was approximately 2,000,000 kilowatts.

Applicant's total assets as of 1970 exceeded

$676 million; its electric operating revenues for 1970 were $158,145,000.

Its eight major steam generating stations with a total capability in excess of 2,000,000 kilowatts and its gas turbine stations with a total of 239,000 kilowatts are integrated into a generating system by over 3,300 circuit miles of high voltage transmission, including 698 miles -of 230 kv transmission, over a thousand miles of 115 kv transmission, and almost 1,500 miles of 69 kv trans-mission.

The foregoing transmission is virtually all the high voltage transmission in its area.

The population-in the retsil territory served by Applicant-is approximately 2,140,000 which it serves through approximately 13_,000_ pole miles of distribution facilities.

Its -bulk. power supply. sys tem is interconnected with and coordinated with bulk power supply facilities of the Southern System, the Tampa Electric Company, Florida Power and Light Company,- and the City of Orlando, through high voltage interconnections.

It also has or will soon have

interconnections with.the City of Gainesville, the City of Sebring, the City of Tallahassee, and the City of Waucht'.a.

It supplies electric power in-bulk to a -number of municipa; and. cooperative retail distribution systems operating in its general area.

~Comoetition-Flo'rida law does not require electric utilities to-restrict ' their retail cn: wholesale service areas.

Bills-which.would restrict service areas have been proposed from 7

2

. n

~

w.

8

~

.~

pp

n. > y e

o w~

y p :'

I

~ ~ -

r

[*:: y

~5

~

, zj l -

Y r

y _

s 1' i f' ! time'~toLtimefin fthe Florida legislature but have: failed to m

, pass.-- The Florida Public Service' Commission hasLcoproved lainumber of Noluntary territorial agreements reached by e

TApplicant.with several adjacent: systems.

1

'Some Lof 3he foregoing territoria14greements purported-i

~

to"coverithe provision /of power ~in bulk. LHowever,:these-provisions,were the subject of a: complaint.- filed under

- Section'14of;the~ Sherman; Actiini a District ' Court in Florida sby the Department-and in..a consent. decree n entered' August-19,-

1971?in.U.S. ;v.EFlorida Power Coro., let al,68-297, Civ. T.,

1 1971: Trade Cases 573, 637, Applicant agreed to-remove any

[

-sucht agreements 1with other electric utilities. so_. far as the' n

provision of1 electric power in bulk was concerned', including coordinatingfpower and energy.

]

p There Lis a small amount of. hydroelectric ' pover= marketed -

- from aL federal hydroelectric project on the Florida-Georgia

~

boundary. - Some of Lthe larger municipals in the area generate F

all~ or partcof(their bulk power supply but the economic

' feasibility 'of obtaining a competitive bulk supply is -

dependent-in"large-measure on'their. obtaining the economies of -scale available from access to coordination over.which -

l

- Applicant.has control; j

Market Power

Applicant ~ owns-and controls.all-the high' voltage trans-

mission in:its general? area which gives^it the ability to

~

' integrate'its.: generation and load ~into:a large_ system-and.

fthrough eits. interconnections with other utilities: (and.

cotisequent1 access; to_. major' regional -systems) to obtainl the s

seconomies fof scale and the ability to -install large i -

generating unitsi such ;as: the1 captioned _ unit.

It has 1 engaged land:is now engaging in the sale'in bulk of'the E

'fullcelectric' power supply requirements. of a number 'of-

< distribution systems operating in.its service area but l

it~is : alleged..that it has at ~ other times refused to engage in?such > sale.; cit has: from' time to time ' interconnected :its-bs1k oower supply system thro 6gh high voltage interconnections for the : purpose'of sharing 1 reserves and coordinating. the

/ development of fitsisystem with that -of adjacent; systems,

. ~

jand Lengaging inf other? varieties of coordination.. It ha's

b~een: alleged;that icihas. from time to time refused ~ to-a icoordinate"its1 generation 'with that of 'some ~ of the smaller f.

A

_:wg

~

A 4

9 i

m q

g

+

[.

4-,

m

_,l

, ;l

- Q-g,"",

.h" 2 o

p p

y'x

~ M.}'

[

'V s

..w.-

,,,,,,_,'__l e

i

+ - -

U-

q 9

r z,s

. systems in~its area or has sought to condition such coordination on -the execution of a territorial allocation.

Pursuant to an order of the Federal Power Commission, the. City of -Gainesville was granted relief from Florida Power Corporation's refusal to interconnect and coordinate installed. reserves and other varieties of operating coordination.

40 FFC 1227 affd in part 425' E,2d 1196 (CA 5,1970) affd wholly, Gainesville Utilities Dent., et al v. Florida Fower Coro., 402 U.S. 515. (19 71).

However, the Eeaeral Power Commission isf limited in the varieties of coordination it may

. compel by a proviso in Section 202b of its Act which-limits compulsory coordination to that which can be effected without compelling the jurisdictional utility to increase its generating capacity.

The Applicant has voluntarily engaged in some transactions of coordinated development with major and small utilities in its' area by purchasing " unit power."

It has been alleged that

- from. time to time it has refused to engage in such transactions.

An alternative for small systems in Florida to engage'in coordinated development is by transactions with

~

other'small systems.- However, such arrangements would be

~

economically feasible only if such systems could wheel power over transmission lines of the Applicant.

The Federal-Fower Commicsion lacks authority to compel Applicant to enter 'into wheeling arrangements which might permit-smaller systems inf Applicant s area to achieve a feasible program.of coordinated development among themselves.

Although Applicant now wheels' power over its system between the ' Southeastern Power Administration's Jim Woodruff project and a number of independent systems in its area, it has been alleged that Applicant has at other times refused to engage in wheeling transactions.

' Discussion Applicant's strategic dominance over high voltage

-transmission in a major area in' Florida may give it control'over its competitors' access to a competitive

' bulk power = supply.

Such control of bulk power supply may also' impair competition'at the retail level.

RU.S.

4 h

y t

?.

-v.0tterfailPowerCo.,1971'TradeCasesj73,692

.(D. Minn.' Sept. 9.,.19 71).

Thus, Applicant s policies

.regarding whether or not it will sell power in bulk to

independent distribution systems and whether or not it

wil1~ interconnect and the extent to which it will coordinate with smaller. systems maintaining independent

generating facilities could lead to unlawful monopolization of the electric power business -in a major area of Florida, if the market -power' Applicant holds by virtue of its ownership of ' transmission were to be abused.

Small systems in this. area have represented to.the Department that the past course of conduct pursued by the Applicant has had this effect.

When these matters were raised with representatives of the Applicant, they denied'that its actions were made with the. intent to monopolize or with such effect.

However, Applicant has agreed to pursue -henceforth a course of action-which should preclude such problems arising in the future.. - Applicant has agreed to undertake commitments to interconnect and coordinate reserves with any entity in its area having a bulk power supply, to purchase and soll bulk power to any other such entity and to coordinate in the olanning of new generation and transmission, and to wheel power over Applicants' system between entities uith which it is interconnected.

These commitments, set forth

~

in the attached letter of Applicant to the Department of Justice dated December 6, 1971, collectively state a policy which should tend ~ to climinate abuses possible from. Applicant's unregulated' monopoly control over transmission.

The commitments in the attachment were explored fully-wi~th Applicant to determine whether they would provide-a satis factory basis for ' recommending issuance of a license conditioned by such commitments, without necessity for hearing.

In the course of these discussions, Applicant stated that its commitment to:

.... - interconnect with and coordinate reserves by.means of the sale and exchange of ~ emergency bulk power with' any entity orL entities in its service area engaging

-in or proposing to engageDin electric; bulk pouer supply on terms that will provide for Applicant a costs (including a reasonable

. return) in connection therewith and allow.

the other participant (s) full access to.the

. benefits of reserve coordination (Letter, paragraph no. 1)

.5

a

~

s

, ~

9_

n

n i

-. n q

~

+

T includesiinterconnection aesthe highest transmission :

~ 1 voltage available from installed facilities in 'the Jarcanwhere such arrangement -was economically feasible, Land;that-it' contemplates an' arrangement similar to that Lof: the 1"Gainesville" interconnection-~in which the smaller

- ; system's reserve-responsibility is'not. tied to'its

'largestnunit size, andLin which(emergency power supply is not : limited _ to a ; fixed amount, but would.be supplied to -the: fullest extent available where such supply does

~

Enot: impair-service to Applicant's customers.

-Applicant;also clarified its commitment to:

~

.... facilitate the exchange of bulk power by_ transmission over its system between or among'two or more entities with.which it is interconnected on terms which lwill fully compensate it for the use of its1 system to the extent 'that subject arrangements reasonably can be accommodated from a functional and technical standpoint-(Letter, paragraph no. 3) as not:being' limited to systems?to which it is. interconnected at the time - of:its commitment, but as also including those-uith which it Laight, in the : future, be interconnected, including ~those-interconnections obtained by virtue of

'~

its commitments in Paragraph No.1 of 'its attached letter.

"un., Applicant: declines to commit itself :to sales oft. power" or " deficien i

.have the same result. _1/ge in-joint ventures which could power supply, or.to enga

Itiasserts that it has never madeLany;such sales to any electric utility and has not

- engaged in ' joint ventures.

However, Applicant assures us

. that it wouldz engage in ' these transactions with' smaller -

systems fin its areaJif itsentered into such transactions

~

with 'any " wholesale 1 customer." -(In this context Applicant usesEtheLterm'" wholesale' customer" to include any:other party: to an' interconnection arrangement.)

Applicant is s agreeable toothis. understanding being reflected in the-conditions 1to the. license which-it seeks.

fl[it=asearlyas1968.Gainesville.. requested participation in.the caption

. un

. z s

6 E

E t

s T

Y'.

d y

~

k

~

.c.:,,

~As noted above, Applicant apparently has not

~

discriminated against smaller systems by engaging"in

" unit power sales" or sales.of " deficiency power to other entities at Applicant's costs laf new power supply, or by engaging in -joint ventures with-any other entity.

Also, the size and geographical distribution of smaller systems in Applicant's area lof Florida. is such that the commitments Applicant is now making and willing to have imposed as conditions to its license, particularly the commitment to wheel power contained in Paragraph no. 3 of-its letter of December 6, 1971, afford such smaller systems the opportunity to construct at least one alternative which would give them. competitively reliable and competitively low cost bulk' power.

For example,

. independent smaller systems in.the area could construct

-large units to supply their needs, protecting themselves against the risk of forced outage by typical industry

~

reserve' sharing arrangements with and through Applicant's system.

Further, they could enter into coordinated develop-ment with any other independent system reached by Applicant's transmission lines.

If e::perience under the license conditions which we now recommend shows that this result would not be obtained, this would be a factor for consideration in antitrust review of any subsequent license applications by this Applicant.

It appears that if Florida Power Corporation's commitments were to be imposed as license conditions by the-Commission, the question of accommodating antitrust

. policies with. power needs in this case would be satis-factorily resolved.

Accordingly, we recommend that the commitments proposed by Florida Power Corporation be imposed by.the Commission as license conditions as agreed to by the Applicant.

If this were done there would be no need for an antitrust hearing in this matter.

1 R

.i

,..,