ML19326D346

Motion Compelling Production of Four Categories of Documents,Including pre-600101 Documents,By 720930. Certificate of Svc Encl

ML19326D346
Person / Time
Site:	Midland
Issue date:	08/16/1972
From:	Brand W, Clabault W, Leckie D JUSTICE, DEPT. OF
To:	Atomic Safety and Licensing Board Panel
References
NUDOCS 8006090768
Download: ML19326D346 (12)

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4 UNITED STATES OF Al<0RICA EEFCRE TIIE ATOMIC ENEltGY COMMISSICH In the ficteer of )

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COUSIT/.ERS PCUZR COMPANY ) Docket Nos. 50-329A

) 50-330A (I-;idiced Units 1 and 2) ) .

1>iOTIOM TO . COMPEL THE P",.0DUCTICLi 0F FOUR C,A uCO. .,..h--,.e. C3- 2.v ~ a a. . _ma L ~ ,uem.uo

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UP.ICII qY 22 CATa PRIC'. _ g0 JXJinRY 1,1960 Pursuent to the provicions of Sect.ica 2.720 of the Cornia-cicn's r.ulas of Prcetico, and further purcucnt to the ruling of

- ti.c E crd ct the prehearing ccufcrance cn July 12, l'?T2,1/ the Epnarttcat of Justice rcc[ectfully rcyecats thnt the Bacrd .i.cGac a cul.pcena to require the pecduction fcr inspection und copying of four categoriec of documents. h'c request thece itema be produced by the Applicant ch ok bafore Septer.ber 30, 1972. -

Tha nr.ture of thar.c doeur.cnta it specifically dascribed below.

Fcr brevity, the Departr.cnt incorperates by reference the definitione (SCli2DUL2, parayerph "A") and the inst-uctiors con-cerning dccurents na longer in the Cenpany's pcscession, custody or centrol (SCIiEDULE, porcLraph "3") included in the joint 1/ Prehecrirg Conference Ord2r of the ASL3 deteri August 7, 1,972 Par. 7., Par. 10.

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IHIS DOCUMENT CONTAlM 8006090hd8 + POOR QUAUTY PAGES g L

request for documents dated subsequent.to January 1, 1960, which was served on July 26, 1972.

It is requested that any dccuments within the categories described belcw, which are withheld by the Applicant or other parties by reason of any assertion of privilege, be identified individually by listing the person (s) prepcring, sending or receiv-ing the same, the subject and date thereof, and a brief staccuent of the basis for asserting privilege as to each docuncnt.

ROCIETra protr s77 n .

1. Docu=ents made cent or received since January 1, 1947 relat-ing to study, consideration, evaluation or review of pcwer pool-ing betucen Applicant and Detroic Edicon Cor.pany, including but not limited to reacons for engaging in cuch pcuor pooling, benefito end decriments of such power pooling, competitive effects of cuch power pooling cn Applicant or other persons, and relationship to other interccmpany cr industry agreements or polici~s e concerning pcuer pooling.

2. Documents made sent or received cince Jcnuary 1, 1950 relct-ing 4:o study, consideration, evaluation or revieu of power pool-ing betucen Applicant or Michigan Pool and other electric util- -

itice over the MII0 interconnections, (Michigan-Illinois-Indiana-Ohio) including but not limited to ressenc for engcging in such pcuer pooling, benefits and detricants of such power pooling, competitive effects.of such power pooling on Applicant or oth6r persons, and ralationship to other interecmpany or inducery agree-mants or policies concerning pcuer pooling.

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3. Documents relating to Section 12(b) of the centract for electric service between Applicant and~ the Alpena Power Co:pany dated June 27,(1966 and earlier contracts between said co=panieu containing a provision similar to Section 12(b), including but not limited to documents relating to reasons for its decisien, the identity of the proposer, conte = plated or actual effects of cuch proviciens.

4. Eccuments made, sent er received since January 1, 1950 relating to or reviewing the work of an infercal cor=ittee appointed by the Edicen Electric Ihatitute (E.E.I.) " Presidents Co==ittee" in or about 1951 or any formal ec==ittee of E.E.I.

to consider steps to be tchen concerning the use by electric utilities of nuclear generators, ar.d docu=2ncs reisting to any meety.ng of the E.E.I. " Presidents Ccamittce" cr of any com-miteco or of any eccting spon ored er held uadcr the auspicca of E.E.I. to discuss che cc=petitiva cifcce of using joint plants or other types of coordinated develop = ants.

Arcument Item 1 and 2 documents

.ittcchment A is a cu= mary of the history of pcoling agree- l cents between the Applicant and the Detroit Edison C0=peny i prcpered by planning engineers on their respective ntaffs.

The Department of Justice believes, and ic preparing to shou at the hearing in this case, that non-engineering consideratic.ns -

play an important role in the determination of whether or not 3

to enter into cuch crrangements, and with uhem to enter them.

The Deparecent also has reason to believe that cince at least 1950, at closed meetings of precidents of certain major utilities, there were diccussions concerning the compe-titive effcets on c= aller corpetitors,of the larger utilitics entering into joint unit arrcngccents.

These matters arc clearly relevant and important becauce.

in Sherman Act Sections 1 and 2 caces the cu Lemary form of proof ic cvidence of anticerpetitive purpose or effect.

In antitrust caccc the courta permit evidence of cafend-ent's intent chore it vill cscict in determining the ent5nt er nature cf the restraint and its offccd en ec potition. [hited Staten v. Marv1.cnd & Wrcinic Milk Prosacers /:w:n.167 F. 9 799, 004 affd. 362 U.S. 453. Since the incorporcticn of the

" rule of rosson" as a principle la applying the Sharman Act, the motivos or purpose inducing dafondant's cc.. duct has bacn recogniced as a prepar, if not s.ccescary, eierr.ont in evaluating ..

the rccconableness of the conduct.

As fbnnulated in Standard 01_1 Cc.many of Nnw Jersey v.

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_tinited Sectes, 221 U.S.1, 50 (1911) the rule prohibits cnly thoce

. . . . . contracts or acts which unre unrcoconably' restrictiva of competitive conditions, either f*on 4

the nature or character of the contract or act, or where the surrounding circumstances were such as to justify the conclusion that they had not been entered into or perforced uith the legitimate purpose of reasonably for:arding personal interest and developing trade, but cn the centrary ucre of such a charceter as to give rise to the infarcnce or presumption that they had been entered into or donc uith the intent to do wron3 to the general public and to limit the right of individuals, thus restraining the free ficw of cc:xcrec end tending to bring about che evils such as enhanectanc of pricca which were considered to be against public policy.

Restating the " rule of reason" in United States v. Accriccn Tobacco, 221 U.S. 106, 179 (1911), Chief Justice White confircad the need for cn inquiry into the activation of the pnreies. The Sheracn Act proscription, he dec1cred, "enbrace[c} cete or con-tracco or agreements or cocbinations. . . uhich either because

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of their inherent nature er offect or beccuse of the evidenc

. purpecc of the cccc, etc., injuricusly restrained trade."

Chief Justico White's utsternnt of th2 rule of reiscn cs cet forth in Secndard 011 cnd Americm Tcbecco has been intor-proted by one correntator (Bork, The nulo of Reason nnd the Per se ccncent.,75 Yale L.J~. 373, 238, 389 (1966)) cs containing -

three ecces: (1) che per ce concept; (2) the intentien of the parties; and (3) the effect of the agreement. Ultinctely, thera la only one test, naccly, the effect of the agreecent and hence this tripartito division is "better vieued as guides for the litigation proccca." Not only is the intant to restrict co== cree or clininate cocpacition an olement in finding violation of tha Sherman Act, but it cay, if it is "so convincing and so separcte from other fcctual'queetion9" obvicte tha need to c::smine the 5

agreement'c effect. This vill occur, heuever, cnly in except-ional caces. More commonly, " intent cnd offcet uill be co intermingled in the fact finding proccas . . . that it would be impracticable to ceparate them."

During the cource of the prehenring conference, the Depart-ment referred to engineering /cconomic studies it preposec to introduce uhich vill chou the offect of c:ccludin3 the ceniler cyctems frca peuer pcoling crrangements on their ability to plan, construct, operate, cnd market firm electric power from nuclocr generating planta. In gancral, without accccc to power pcoling arrangemente the smaller cyctcms are precluded frca undertahing macningful 1cng range coordination uith other cyctems and alco greatly hindered in expending th2ir cyntems co vast. increasing cuergy needs.

Thic general prcposition is particularly true in Michigan there the members of the Michigen Pcuer Pool centrol the vnet majority of the bulk pcuer generatien end transuiesien facili-tico. Thus, they control the opportunitics for coordinction.

If videly ccattered smaller cicctric cystema can only be tied tegother by using a trancaiccien systen conceructed colely for that purpose, a ccordinated expansion program uculd ordinarily be cecncaically infescible or, at boct, only marginally cheaper than icolated enes. Yet with all exicting trcnceiccien under j single control, the alternative of a trcncmission service, I involving c heccobable charge for the uce of the existing trans-

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miccica cystem, tay not .be availcble, wherc the cener of cuch 1

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transmicsion is also the retail competitor of the isolated o

systems. Without acccus to the Michigan Power Pool (or through pool transmission to outside systems) each of the smaller cyctces (or pools where they have manged to develop) is ccm-pelled to deal uith its va:Lous problems in isolation and fre-quently rely heavily on purchases of power from the cembers of the Michigan Pool. Therefore, they are at the mercy of the ? col membara in obtaining the necessary rec :ric porar to protect their procent customara and other types of coordinating poner

to support the larsar unit sicos needed for their load growth, encept to the limited extent they are provided relief by federal or Stcte regulation.

The inability to coordinate futura capacity planning with other utilities deprives the smaller systems of the significant alternatives for attaining econcaics of eccla that could only be realized by charing in new generating cad /or trancmiasion facilitics as part of a pool. If tho~amaller utilities are being nyatematically denied access to pool tambership for the purpcse of maintcining or enhancing tha predeminant pecition

. of existing pool members, then a situation inconcictent with the antitrut.t laus clearly c: ists. The Department recpectfully cub-mits thct the documents requested under Item 1 and 2 above may assist in explaining the purpose and effcce of such pooling acrecment anti disclose the intended effect of each of the pro-visionc in th'at agreement. Moreover, under Section 2.720 of the Rules of P/actico, sdaissibility of the document does not have 7

.o to be shown for purposes of discovery, but rather only their general relevancy. The relevency of the documents requested hora is cicar beyond question, considering the interin ruling of the Board on the scope of Section 105 c., fn. 1 cupra.

Ite a 3 and 4 dccumancs.

Section 12(b) (in Actsch=ent D) deals uith the ralatiench*p bcMtcen the rate at uhich the Applicant colla power c: uhoiccole to the Alpena Pcuer Cc=pany, a pr_vetely crned elcetric dictri-bution cyctem, and the rate at uhich the Applicant und Alpeno cach coli pcwer at retail to certain large cucto cers, cla=2nts uhich may enter into the elascic " price squeern."

At the pechaaring ccnference, Concutarc indiccted that it uill ucGe at the hearing that the analler olactric pener nyntena cheuld not attempt to entor into tha generacing and trcncaiscion bucineca, but rc.ther shculd be content to purchase their povar in bulk at uholcssle prices, from their vertically integrated competicors.

It is cic3rly rel(\ ant to that iccuc, to shcu that icportant competitive problema are inherent in cuch a carhet struccuro.

In the opinion of the Departcent, the documenta requected in Inen 3 uill chou the legiticato ccncerna of the c= aller cystan faced wich such a situation without cdequato protection, and the neces-sity to control its can poner supply if it is . effectively te corpote. .

The doctxants requested in Itcm 4 are rolsvant becuuac they evalucto'and cche racccmendations or finding as to hcu nuclcse 8

generated electric power could be used to further the ccepc-titive objectivos of tha institute's neaberc, including the entent of acccca the larger electrical utilitics could be wil-ling to grant to smaller electric utilities who may wich to directly participate in the conct:uction und operation of nuclear generators, cui share in the energy produced by cuch

generators. Appliccue is ona of the Incticute'c cambers. 2/

4 Concluaicn l As demenstrated above, the documents requested are clocrly relevant, cnd contidering the noture of this procacding the

! Deparecent doce not balieve that production of the requestod 1

dccuments vould impeca cn undua burdenca the Applicant despice 4

the fact that they vcy be dated prior to January 1,.1960.

i To bet;in uith, the cpacificity of the four ec.tegoriec of dccuzcata requested shculd clicu the Applicent to quickly

] identify and segregate the rolovent doctuanto frca its files.

Further=oro, boccuce of the continuing nature of the Michigan l

Pool and othar paoling arrangementc of Ubich the Applicent ic a camber, and the continued contracting uith Alpena reuer Company, it ic renconable to accume that th2 doenncata con-corning thece activitica are already segregated frca the cacc 2/ Indeed, Appli. cant chief executive officere non hold, or ,

recently havh cecupied, key pocierons in tha In.ctituto.  ;

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of Applicant'c fileo and ccn therefore be readily located, a copied and produced.

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Accordingly, the Department of Justice respectfully requests thce the Board issue a subpoena compelling the 1

production of the documente requested on or b2 fore September 30, 1972.

Respectfully submittod,

.i i Wallace 6. drcnd ERUCE B. UILSON 97..id A. Lechie Acting Aa xctant Utifica T. Clubcult

. Actorney Gangrgl Attorna"c, Antitrr0t Divicion Antitruct DivLslen Depart = cut c4 Justice l Ucchington, n. C. 20530 Jcstph J. Saunders Attornev, Departuent of Jun'ica t

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August 16, 1972

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

) Docket Nos. 50-329A CONSUMERS POWER COMPANY 50-330A (Midland Plant, Units 1 and 2) )

CERTIFICATE OF SERVICE .

I hereby certify that copics of MOTION TO COMPEL THE PRODUCTION OF FOU2 CATECCRIES OF DOCU'EITIS II;CLUDING THOSE WHICH MAY BE DATED PRIOR TO JANUARY 1, 1960, dated August 16, 1972, in the above-captioned matter have been served on the follening by deposit its the United States mail, first class or air cail, this 16th day of August 1972:

Jeromo Garfinhel, Esq., Chair =an Abrahen Braitman, Esquire Atemic Safety and Licensing Docrd Special Acaistant for Antitruct U. S. Atemic Energy Con: mission Mattern Washingecn, D. c. 20545 Office of Antitrust and Indemnity U. S. Atomic Energy Commissicn Hugh K. Clark, Eccuire Washington, D. C. 20545 i'ont Offico Ucx 127A Mennedyville, Maryland 21645 Harold P. Craves, Escuire Vice Prcaidcut and Gcneral Counsel Dr. J. Venn Leeds , Jr. Consumers Pcuer Cc=pany Post Office Box 941 212 West Michigan Avenue Houston, Texas 77001 3 Jackson. Michigcn 49201 ..

William Uarfield Ross, Esquire Joseph Rutberg, Esquire Keith S. Satson, Esquire Benjamin H. Vogler, E quire Wald, Harkrader & Ross Antitrust Counsel for AEC 1320 19th Strect, N. W. Regulatory Staff Washington, D. C. 20036 U. S. Atomic Energy Commiscion Honorable Frank Kelly Attorney General Mr. Frank U. Karas, Chief State of Michigan Public Proceedings Branch Lansing, Michigan 48913 Office of the Secretary of the Coraiccion James F. Fair =an, Esquire U. S. Atcmic Energy Cca.minsion 2600 Virginia Avenue, N. W. Washington, D. C. 20545 Washington, D. C. 20037 G

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i Atomic Safety and Licensing Board Panel U. S. Atomic Energy Cocmission -,

l Washington, D. C. 20545 ,e

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l Uallace E. BL*anc Attorney, Antitrust Division Department of Justice Vashington, D. C. 20530 ,

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